The robust growth of Islamic banking alongside conventional banking in Malaysia has provided consumers with greater choices of financial products and services. In Malaysia’s dual-window banking system, a conventional bank is allowed to offer both Islamic and conventional banking products under the same roof. Dual window Islamic banks are now one of the nation’s largest economic contributors. In the face of intense market competition and highly similar financial products, the need to build close relationships with customers has gained increased prominence in the business strategy of dual window Islamic banks. The importance of relationship marketing stems from the economic advantages of retaining existing customers as opposed to acquiring new ones. A loyal customer contributes towards an organization’s profitability by lowering its customer acquisition costs and increasing revenue per customer. Various studies have shown that relationship quality is one of the most important antecedents of customer loyalty. While relationship quality has been identified as an important predictor of customer loyalty, perceived value is also likely to influence relationship quality. However, little is known on the inter-relationships between these variables especially in the context of dual-window banks. Therefore, this study intends to investigate the relationships between perceived value, relationship quality, and customer loyalty. Data collected from Islamic bank customers of the dual-window banks in the northern region of Malaysia was analyzed using Partial Least Squares. Results of this study show that relationship quality mediates the relationship between perceived value and customer loyalty.

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