The relationship between Islamic Financial Literacy (IFL), Halal Brand Awareness (HBA) in customer decisionmaking to choosing Islamic bank : a SEM-PLS study

Abstract

The study reveals that the measurement model meets the required validity and reliability criteria, with all indicators showing satisfactory external loadings and AVE values. The structural model indicated a significant relationship between latent variables. The R Square value shows moderate to high explanatory power, and the SRMR value of 0.06 indicates suitable model fit, with a Goodness of Fit (GoF) Index of 0.662 categorizing the model fit as high. Using the SmartPLS software program, PLS-SEM analysis evaluates the outer and inner models. Assessment of measurement models emphasized the validity and reliability of indicators on measures such as outer loading, Cronbach's Alpha, Composite Reliability, AVE, and measures of discriminant validity, including the Fornell-Larcker criterion and cross-loading. Structural model estimation tests hypothesis testing, effect size, and predictive relevance using R Square, Q Square, SRMR, and PLS Predict measures. By using online survey data distributed to 1,027 respondents in 34 provinces in Indonesia, this study examines the application of PLSSEM to explore the relationship between latent variables in the Islamic Financial Literacy (IFL) framework and Halal Brand Awareness (HBA). The influence of these variables on consumer decision-making when choosing Sharia banking products and services is also explored. In conclusion, this research provides empirical evidence supporting the clarity of the PLS-SEM approach in examining the factors influencing consumer behavior in Islamic finance.