Banks, which aim to attract a vibrant segment of competitive market, must identify the criteria based on which potential customers determine their bank selection decision. The study focuses on examining the bank selection criteria preferred by Labuanese. Seven parameters, viz., image, services offered, influences, incentives, security, conveniences, and the advancement of technology, were chosen to investigate the customers' attitude towards selecting banks. A total of 200 questionnaires were distributed; however, only 185 questionnaires were returned (54% male and 46% female) which served as the sample for the study. Respondents were selected randomly; however, care was taken to choose only those who were working or had their own income, as they were believed to possess the purchasing power to be in need of bank transaction. The study shows that Labuanese preferred banks that could offer and promise efficiency, and a wide range of services, including Automated Teller Machines (ATMs). They also gave preference to banks that were strictly regulated by the central bank and financially stable with a strong brand name.

With the growing competitiveness in the banking industry (Grady and Spencer, 1990) and the similarity of services offered by banks (Holstius and Kaynak, 1995), it has become very important for banks to identify the selection criteria that their potential customers consider in choosing the financial services provider. The success and competitive edge of a bank, to a large extent, are determined by its customer-focused orientation.

The Pearl Island of South China Sea, known as Labuan, is a developing island that is surging ahead as an International Business and Financial Center (IBFC). Geographically, Labuan lies 8 km off the coast of Borneo and adjacent to Sabah, Malaysia and Brunei Darussalam within the Asia-Pacific region. The total combined area of the island is 92 sq. km and it has a population of about 78,000 people (Wikipedia, 2007). Keeping with its IOFC (International Offshore Financial Center) status, Labuan offers plenty of business and investment opportunities, particularly in oil and gas, manufacturing, trading, cargo handling, bunkering, deep sea fishing and education (Labuan Malaysia, 2001). With the active and integrated economy, banks in Labuan are facing intense competition for the limited customer base. The study focuses on examining the bank selection criteria employed by the working class people in the Federal Territory of Labuan.

The population of this research is the working class people in the Federal Territory of Labuan. The respondents were selected based on `convenience sampling', with the intention of generalizing it to the population. The questionnaires were distributed to 200 respondents regardless of the status or designation as long they were working. The questionnaire was designed using a five-point Likert scale that consisted of eight sections respondents' demographic details, image, line of service, influences, incentives, security, convenience, and technology.

Bank Management Journal, Bank Selection Decisions, Automated Teller Machines, ATMs, Commercial Banks, Financial Services Provider, Private Companies, E-banking, Banking Transactions, Retail Banking, Bank Marketing.