Showing papers in "International Journal of Bank Marketing in 2018"

Predicting the intention to use mobile banking in India

Abstract: Purpose The purpose of this paper is to identify factors influencing the adoption of mobile banking in India and develop and empirically validate a model explaining the behavioural intention to use mobile banking in the Indian banking sector Design/methodology/approach In this study, a model is developed and proposed to explain customers’ intention to use mobile banking The model comprises six constructs, namely, perceived ease of use, computer self-efficacy, social influence, perceived financial cost, security, and trust The model also describes the relationship between perceived ease of use and computer self-efficacy, as well as that between security and trust The proposed model was tested by using a survey method, with a sample of 855 bank customers from public, private, foreign, and cooperative banks in India Structural equation modelling analysis was performed with AMOS 160 Findings The proposed theoretical model was found to predict, with statistical significance, the intention to use mobile banking, explaining 769 per cent of the variance in the dependent variable The results found that security, computer self-efficacy, perceived ease of use, and perceived financial cost, in that order of influence, affect customers’ intention to adopt mobile banking Practical implications The results obtained will help both academic researchers and practitioners explain, understand, and elucidate the status of mobile banking in India, as well as helping them formulate strategies to expedite the use of mobile banking Originality/value The adoption of mobile banking in India is in a nascent stage compared with developed countries such as the USA, the UK, and Finland, but it is expected to increase or surpass the rate of adoption of internet banking in those countries Further, only limited research to date has examined the adoption of mobile banking in India, especially the drivers and inhibitors of mobile banking adoption

Mobile-banking adoption: empirical evidence from the banking sector in Pakistan

Abstract: The purpose of this paper is to study the important factors which help explain consumer intention and use behavior in mobile banking (m-banking) adoption. All constructs of the unified theory of acceptance and use of technology 2 are studied. Non-monetary value is studied through perceived value. Trust and perceived risk are also included to predict intention.,A questionnaire was utilized to evaluate customer responses on a five-point Likert scale. A convenience sampling technique was used to collect data from a sample of 490 respondents in Pakistan. The data were analyzed using AMOS and SPSS for Cronbach’s α, CR, CMV, AVE, Harmon’s single factor test, correlation and structural equation modeling.,The results of the study show that most of the predictors of intention, including perceived value, performance expectancy, habit, social influence, effort expectancy, hedonic motivation (except for facilitating condition), perceived risk and trust, are significant. All predictors of usage behavior are significant.,A cross-sectional study was conducted due to time constraints.,Bank managers must focus on improving customers’ intentions to use m-banking as well as on providing facilitating conditions to increase its actual use. To boost mobile banking, banks’ management must consider the customers’ habits while designing their m-banking products.,The findings of this paper are not only interesting in terms of boosting m-banking diffusion rate, but also in terms of financial inclusion of the vast majority of mobile users. Further the impact of intention, facilitating condition and habit were checked on actual use behavior since people tend not always to act upon their intentions.

Digital banking, customer experience and bank financial performance : UK customers' perceptions

Abstract: The purpose of this paper is to examine customers’ perceptions of digital banking (DB), customer experience, satisfaction, loyalty and financial performance (FP) in UK banks.,The research consists of a survey of UK bank customers’ perceptions of the above themes; use of banks’ financial reports to obtain FP ratios; multivariate factor analysis; structural equation modelling; and analysis of variance tests to explore research hypotheses on the relationships among the study factors.,The main factors which determine customer experience in DB are service quality, functional quality, perceived value (PV), employee-customer engagement, perceived usability and perceived risk. There is a significant relationship among customer experience, satisfaction and loyalty, which is related to FP.,This study concentrates on UK bank customers which limits its generalisability to other banks globally. However, the fact that banks typically adopt common standards in bank financial management implies that the findings are potentially robust for global bank management. Replicating the study in banks in other countries will further enhance this robustness.,Some significant effects of customer characteristics on the study factors were observed, which have useful implications for DB, bank marketing services and bank FP.,Unlike previous studies, this study uses both Net Promoter Score and financial ratios as dependent variables, to provide a combined study of the relationships among 14 study factors, with implications for bank marketing and FP.

Trust, commitment, customer intimacy and customer loyalty in Islamic banking relationships

Abstract: The purpose of this paper is to investigate the role of trust in enhancing customer loyalty, and to test the mediation role of commitment and customer intimacy in the relationship between trust and customer loyalty.,A total of 500 questionnaires were distributed and 200 were returned (40 percent response rate), and a structural equation modeling technique was used to test the hypotheses.,The results of this study show that trust has a significant relationship with commitment and customer intimacy but no significant relationship was found with customer loyalty. Commitment and customer intimacy have a significant relationship with customer loyalty. The mediation analysis reveals that commitment and customer intimacy play a mediation role in the relationship between trust and customer loyalty.,This study indicates that commitment and customer intimacy affect customer loyalty. The role of commitment and customer intimacy as a mediator between trust and customer loyalty indicates that customers are committed to continuing and maintaining the relationships with Islamic banks.,This study provides empirical evidence on interrelationships between trust, commitment, customer intimacy and customer loyalty in banking relationships.

The effect of perceived security and grievance redressal on continuance intention to use M-wallets in a developing country

Abstract: Many developing countries, including India, are committed to curbing black money from the economy. Therefore, these countries are focusing on a transparent online transaction facility. M-wallets are one online option facilitated by various companies using a mobile application. The purpose of this paper is to investigate the impact of perceived usefulness, perceived security, perceived ease of use, trust, grievance redressal and satisfaction on young users’ intention to continually use M-wallet in India.,A research framework based on the expectation–confirmation theory has been formulated and tested empirically using data from M-wallets young users in India using structural equation modeling.,The analysis reveals that perceived usefulness and perceived ease of use significantly affect user satisfaction and intention to continually use M-wallets. The effect of perceived security on user satisfaction is significant, and grievance redressal mediates the effect of perceived security on intention to continually use M-wallets.,The outcome of the research will help M-wallet service providers and policy makers in planning the service and increasing customer’ continuance intention.,The uniqueness of this research is that it adds two important constructs for mobile payment systems (grievance redressal and perceived security) that were missing in the earlier model proposed by Zhou (2013). The addition of the two constructs helped in formulating a better model.

Using artificial intelligence to create value in insurance

Abstract: Recent technological and digital developments have opened new avenues for customer data utilization in insurance services. One form of this data transformation is automated chatbots that provide convenient access to data leveraged through a discussion-like interface. The purpose of this paper is to uncover how insurance chatbots support customers’ value creation.,Three complementary theoretical perspectives – artificial intelligence, service logic, and reverse use of customer data – are briefly discussed and integrated into a conceptual framework. The suggested framework is further shown through illustrative case examples that characterize different ways of supporting customers’ value creation.,Chatbots represent a new type of interaction through which companies can influence customers’ value creation by providing them with additional resources. Based on the proposed conceptual framework and the illustrative case examples, four metaphors are identified that characterize how insurance chatbots can support customers’ value creation.,The study is conceptual in nature, and the case examples are used for illustrative purposes. No representative data from those users who will eventually determine whether chatbots are of value was used.,Using the suggested framework, which is aligned with provider service logic, insurance companies can consider what kind of a role they wish to play in customers’ value-creating processes.,Automated chatbots provide convenient access to data leveraged through a discussion-like interface. This study is among the earliest to address their value-creating potential in insurance.

Shari’ah supervisory board characteristics effects on Islamic banks’ performance: Evidence from Malaysia

Abstract: Purpose Islamic banks (IBs) must stay Shari’ah compliant to enhance their customer loyalty and obtain a competitive edge. Given the performance of Shari’ah supervisory board (SSB) continues to be a matter of concern especially for IBs across countries that have a different regulatory environment, the purpose of this paper is to examine the effects of SSB characteristics on IBs’ performance in Malaysia being a country that applies the most extreme intervention of regulatory agencies (pro-active model). Design/methodology/approach A sample of 15 Malaysian IBs is used to test the study hypotheses for the period from 2008 to 2015 using the Generalized Method of Moments estimator. Findings The results reveal strong support for a significant association between SSB size, doctoral qualification, change in the SSB composition and performance. In addition, the study supports the view that SSB with cross-membership and reputation is very important in improving the performance of IBs. Research limitations/implications First, the paper focused only on Malaysia which adopts a pro-active model, and therefore, extending the investigation to include countries that adopt the different models may provide a better view of the best Shari’ah governance (SG) practices for IBs. Second, there is a need for more empirical analysis regarding the optimal SSB size of IBs. Practical implications This paper provides empirical evidence for regulators and policy makers in Malaysia, to understand how to enhance the performance of IBs using SG. Furthermore, marketers of Malaysian IBs should focus on SG practices as an important element for attracting Muslim customers, especially as there is a lack in this aspect. Originality/value To date, it seems there is no empirical study that has examined to what extent the impact of SSB characteristics on IBs performance can be affected by the degree of agencies intervention, whether extreme or slight. Malaysia has been chosen as the only country that adopts the most extreme model.

Assessing the intentions to use internet banking: The role of perceived risk and trust as mediating factors

Abstract: The purpose of this paper is to examine the relationships among five dimensions of service quality towards the overall behavioural intentions to use internet banking in Thailand and explain the indirect effects between service quality and behavioural intentions to use internet banking using perceived risk and trust as the mediating variables,A multi-stage sampling procedure was performed to select the 505 respondents for this study The participants were selected based on their experiences using internet banking in Thailand The data obtained from the participants was analysed using a structural equation modelling approach,The results show that service quality, perceived risk and trust influence behavioural intentions to use internet banking This study primarily aims to find out whether perceived risk and trust worked as a mediator variable between service quality and behavioural intentions to use internet banking The study will be useful for the developers of internet banking, when they are implementing and developing a system that is in accordance with the needs and lifestyles of the potential users; and CEOs, to create strategies and relevant policies to achieve competitive advantage,Literature has focused on understanding service quality dimensions that influence the behavioural intentions to use internet banking By expanding on the previous research in internet banking, this paper empirically examines the overall direct and indirect influences between service quality, perceived risk, trust and behavioural intentions

Intention to use e-banking services in the Jordanian commercial banks

Abstract: The purpose of this paper is to investigate the essential factors influencing the adoption and use of e-banking services as perceived by customers of the Jordanian commercial banks.,This paper adapts and modifies the unified theory of acceptance and use of the technology model. Modifications were made to explain intention to use e-banking services.,The modified model explained 0.887 of behavior intention variance and 0.516 percent of the intended degree of e-banking services use variance. Three constructs are found to be good predictors: effort expectancy (EE), social influence, and perceived e-banking services quality. Performance expectancy and hedonic motivation are not significant predictors. However, all three predictors were significantly moderated by age only.,As with any research in the field of IT adoption and consumer behavior, researchers should take into consideration the generalization of their empirical findings. The generalization could be enhanced if future research uses the Jordanian baking sector which includes Jordanian and non-Jordanian banks. Finally, the current research findings are based on the cross-sectional research method. Taking this fact into consideration, the relation between intention and actual use may raise questions. One solution is to study intention and actual use at different points in time by conducting longitudinal research to access and test the research hypotheses.,Managers need to focus on promoting e-banking services in terms of consumer’s EE, social influence, and e-banking service quality. Since young consumers are early adopters, Jordanian banks need to introduce added entertainment values for youth and extra convenience for older consumers.,The main contributions revolve around developing a better understanding of the essential factors influencing the adoption and use of e-banking services. This research incorporates a new variable: perceived e-banking quality. Thus, the proposed model provides better explanatory power than previous research.

Perceived overall service quality and customer satisfaction: A comparative analysis between local and foreign banks in Malaysia

Abstract: Foreign and local banks in Malaysia are competing in terms of skilled staff, innovative products and services, rendering quality services and customer satisfaction. The purpose of this paper is to examine the overall service quality and customer satisfaction of both foreign and local banks.,The data used to test the hypothesis were collected from 748 foreign and local bank customers in Malaysia. The research model was analysed using a structural equation modelling technique.,Results show that knowledge and staff competencies, as well as convenience of the bank is more significant for local bank customers while bank image and internet banking are important components for foreign bank customers. The results also reveal that foreign bank customers have higher satisfaction as compared to local bank customers.,No analysis is undertaken of any difference in the service quality dimensions between banks of different size. Further research on banking services could usefully test services quality dimensions across banks of different sizes.,The findings serve as a valuable reference for local banks understand service quality challenges they may face from foreign banks in this competitive industry. Findings suggest that, to provide high-quality services, financial institutions need to heighten customer satisfaction differentiation strategies.,The outcomes of this study enhance the knowledge on the performance of both local and foreign banks in Malaysia as well as customer satisfaction, which are invaluable to all bank managers and industry players in improving their services.

Investigating the relationship between service quality dimensions, customer satisfaction and loyalty in Turkish banking sector: An application of structural equation model

Abstract: Using the attitudes of students toward ideal banking services, the purpose of this paper is to examine the structure of banking-related SERVQUAL service dimensions with first-order and second-order confirmatory factors analysis. Following this, a study model was suggested to describe the relationship between the perceptions of students regarding the services provided by their banks and their overall level of satisfaction with the bank.,The sample group for the study comprised students from the Faculty of Economics and Administrative Sciences of Eskisehir Osmangazi University. The sample included 441 students, and was designed according to a stratified and proportional distribution. The first-order and second order confirmatory factor model used to confirm the structure of the SERVQUAL service dimensions presented in the study was found to be suitable and compatible. The relationship of the SERVQUAL service dimensions based on the actual perception of banking services by the students with the students’ satisfaction and loyalty to their banks was investigated using a structural equation modeling (SEM) analysis.,Based on the study results, it was concluded that the confidence inspired by the banks, the reliability of their services, and the physical appearance and accessibility of the bank all have an effect in increasing customer satisfaction.,Conducting this study using university students, who represent a specific group, will help in determining whether the quality of banking services provided to students is, in itself, sufficient to make them prefer these banks. Furthermore, the study will also shed light on various other aspects, such as the banks’ efforts at reviewing and developing the services they provide to students.

Bank selection criteria and satisfaction of retail customers of Islamic banks in Bangladesh

Abstract: The purpose of this paper is to argue that “being Islamic” is already embedded in the decision frame of the Muslim consumers when choosing their Islamic banks, and hence, the bank selection criteria of these Muslim consumers will be dominated by non-faith-based factors.,This study took the context of retail consumers of Islamic banks of Bangladesh—the fourth largest Muslim populated country in the world, having great potential of developing an Islamic ecosystem. The study employed survey method using structured questionnaire on 311 respondents from 35 branches of six Islamic banks in Dhaka—the capital city of Bangladesh. Exploratory factor analysis, followed by multivariate regression analysis, was conducted to identify the determinants of satisfaction among Muslim retail bank customers.,The study forwards three important findings. First, faith-based bank selection criterion (i.e. Islam) is not a stand-alone factor anymore; rather, the items of this factor are embedded into other non-faith-based factors. Second, among the non-faith-based factors, commitment of the bank, competence and compassion of the bank employees have topped the list of bank selection criteria. Third, competence, commitment and corporate image of the bank had relatively more influence on satisfaction when compared to compassion and convenience.,Since Shari’ah compliance is already embedded in Islamic banking system, Islamic bankers should now focus on strategic targeting of their customers based on non-faith-based operational determinants.,This study presents that non-faith-based selection criteria are more influential in Islamic bank selection decision.

Perceived value, relationship quality and positive WOM intention in banking

Abstract: The purpose of this paper is to explore the proposed relationships between perceived usefulness (a dimension of perceived value), the relationship quality factors (competence trust and continuous commitment) and positive word-of-mouth intentions in an electronic banking setting,A survey was conducted among 511 electronic banking customers,Continuous commitment was found to mediate the relationships between perceived usefulness and competence trust with positive word-of-mouth intention, respectively,The results indicate the role of perceived value and relationship quality in contributing to positive word-of-mouth intention,The findings could also guide banking institutions in managing their existing electronic banking customers more appropriately and to encourage them to engage in word-of-mouth behaviour that will convince other potential users of the benefits of the service,Little is known on a mediated model noting the connection between perceived value, the relationship quality factors competence trust and continuous commitment and positive word-of-mouth intention The findings provide more insight into the matter and accordingly contribute to the developing body of knowledge on perceived value, relationship quality and behavioural intention and their importance to the stream of research on positive word of mouth

A model of mobile payment usage among Arab consumers

Abstract: The purpose of this paper is to investigate the impact of perceived satisfaction with mobile payment applications based on use experience, and subsequent stated expectations on brand loyalty and future use behavior using a theory-based research integrative model of factors that influence Arabs’ intentions to use mobile payment application(s).,A conceptual model was developed using the mixed research method approach. The focus group approach was used for the qualitative study and structural equation modeling for the quantitative study. Primary data were collected online. Participants were 305 Arab consumers from nine countries in the Middle East.,Satisfaction with the quality of mobile payment application(s) increased use experience and enhanced consumers’ expectations, which in turn positively affected loyalty and purchase intentions.,The study encompassed mobile payment application(s) in nine countries rather than focusing on one market, or on one product type and business. The paper did not perform a comparative study between sampled Arab countries, but rather it sees all countries and respondents just as Arabs.,Service providers should build mobile application(s) based on the features of usability, availability, reliability, adaptability, accessibility, responsiveness and security.,This study is one of the first studies that empirically examines mobile payment consumer’s usage behavior from nine countries of the Arab world where there is scarce research on the topic in the region.

Perceived risk and intention to use internet banking: The effects of self-confidence and risk acceptance

Abstract: The purpose of this paper is to analyze the moderating role of self-confidence and risk acceptance on the relationship between perceived risk and intention to use internet banking,A survey was conducted with 180 Brazilian banking customers The Johnson-Neyman test was used to verify the moderation and significant regions along self-confidence and risk acceptance levels,Self-confidence and risk acceptance moderate the relationship between risk perception and intention to use internet banking For individuals with high self-confidence, the effect of perceived risk on intention to use internet banking is lower than it is for individuals with low self-confidence In the same way, for individuals with high risk acceptance, the effect of perceived risk on intention to use internet banking is lower than it is for individuals with low risk acceptance,This research contributes to the understanding of the conditions (two personal factors) under which risk perception does not influence intention to use a technological tool,This paper provides insights for marketing managers to encourage customers to develop greater risk acceptance and self-confidence to minimize the negative effects of perceived risk of the adoption of internet banking,Although risk perception can contribute to customers’ avoidance of internet banking, this is the first paper to verify how acceptance of risk and self-confidence can moderate the effects of perceived risk on intention to use internet banking

Consumers’ acceptance and use of plastic money in Harare, Zimbabwe: Application of the unified theory of acceptance and use of technology 2

Abstract: The purpose of this paper is to apply unified theory of acceptance and use of technology 2 to determine factors influencing acceptance and use of plastic money in Zimbabwe.,Using a cross-section of 528 consumers, respondents were randomly intercepted as they walked out of five major supermarkets in Harare, Zimbabwe. Random selection of consumers was done in order to ensure a representative sample. Consumers were asked to complete a structured questionnaire. Structural equation modelling was applied to test research hypotheses.,Results show that performance expectancy, effort expectancy, hedonic motivation and habit all positively influenced behavioural intention to adopt plastic money. Social influence, facilitating conditions and perceived financial cost all did not have a significant effect on behavioural intention to adopt plastic money. Behavioural intention positively influenced consumers’ use behaviour on plastic money.,This study is among the pioneers of research in this field in Zimbabwe and other developing countries. Likewise, caution must be taken when researchers try to generalise findings from this study. It is, therefore, recommended that more studies of this nature be conducted in other developing countries in order to have a more solid understanding of consumers’ adoption of plastic money.,The study advises banks to pay particular attention to performance expectancy, effort expectancy, hedonic motivation and habit when devising strategies to increase the adoption of plastic money.,Factors that influence the adoption of plastic money are not widely researched under circumstances such as those existing in Zimbabwe. The Zimbabwean financial sector provides a unique environment to conduct studies of this nature.

Enhancing brand equity through emotions and experience: the banking sector

Abstract: The banking sector is devoted to attracting Generation Y customers with their particular tastes and interests. The purpose of this paper is to explore for the first time how bank experience influences emotions and perception of brand equity. Using the stimulus–organism–response (S–O–R) framework, the authors consider the perception of brand equity as the outcome.,A panel based on the method of Walsh and Beatty (2007) with completed and usable questionnaires was used to test the proposed model. The authors selected a sample of 211 respondents. After eliminating some inconsistencies, a final data sample consisted of 205 usable survey participants (male: 58 percent; female: 42 percent).,Executional excellence, staff engagement and value for money are the most relevant indicators in shaping the overall bank experience. Pleasure is the positive emotion that most enhances the perception of brand equity.,This study extends the S–O–R model by employing dimensions of experience as stimuli and brand equity as response. The study demonstrates the role of emotions (particularly pleasure) in enhancing brand equity among individuals from the Generation Y.

Measuring the impact of corporate social responsibility practices on brand equity in the banking industry in Bangladesh

Abstract: The banking industry in Bangladesh is now conducting business under the growing pressure to conform to every aspect of corporate social responsibility (CSR) for the welfare of their clients and society. The value of CSR practices is attributed to the relationship between corporate image, brand awareness, brand equity (BE), competitive advantage and financial result. The purpose of this paper is to measure the impact of CSR on BE and to establish the moderating impact of corporate image and brand awareness.,Structural equation modeling was used to test the proposed hypotheses using a sample of 200 public and private bank customers in Bangladesh.,The results of this study demonstrated that CSR has a significant direct effect on the corporate image, brand awareness and BE. The results also confirm that corporate image and brand awareness partially mediate the relationship between CSR and BE.,The findings indicate that successfully CSR practices will enhance a bank’s image in the mind of customers. Customers will feel that they are contributing to social causes because they are receiving services from socially responsible organizations. CSR practices also create customer awareness regarding the financial services provided by a bank. Consequently, good reputation and brand awareness contribute to building strong BE for banks.,This research shows the mediating role of brand awareness and corporate image with CSR and BE in the context of the banking industry in Bangladesh which is rarely studied. Therefore, the findings of this study will add value to the existing literature.

Customer empowerment and firms’ performance: The mediating effects of innovation and customer satisfaction

Abstract: The purpose of this paper is to examine the effect of customer empowerment (CE) on financial performance and the role of innovation and customer satisfaction as mediating variables in this relationship,To empirically test the conceptual model and research hypotheses, data were collected through a survey from 216 branches of 14 commercial banks in Tunisia Results were analyzed using exploratory factor analysis and structural equation modeling,The results indicate a significant and a positive impact of CE on firms’ financial performance Customer satisfaction, exploitative innovation and exploratory innovation mediate the relationship between CE and firms’ financial performance,These findings provide useful insights for practitioners, particularly bank managers who can improve their financial performance, customer satisfaction and innovation by empowering their customers and integrating them in the products and/or services conception process Conclusions emphasize practices to be encouraged within banks such as services customization which are acquired by customers themselves, the expression of opinions, customers’ needs and the interaction among bank customers,Several studies in the literature have studied the CE and its impact on business performance However, few research studies have focused on the variables that mediate this relationship So far, this paper not only integrates mediating variables such as customer satisfaction and innovation to study the link CE-firm performance but also makes the distinction between exploitative and exploratory innovation which is seldom made by researchers

Personnel capability and customer satisfaction as predictors of customer retention in the banking sector: A mediated-moderation study

Abstract: The purpose of this paper is to report the findings of a study undertaken to understand customer satisfaction and customer retention in business-to-consumer markets. The study investigates the effect of personnel capability and customer satisfaction on customer retention in the banking sector. The influence of the control variable (gender) on customer retention and mediating role of customer satisfaction has also been examined.,The study has used structural equation modeling (SEM) for data analysis across a sample of 409 bank customers of a private bank operating in Jammu and Kashmir state of India. Questionnaires were distributed and respondents were selected through a cluster sampling technique.,The empirical analysis through SEM has confirmed that personnel capability and customer satisfaction have a significant positive impact on customer retention. Customer satisfaction partially mediates the effect of personnel capability on customer retention. Moderation analysis was performed and established that gender moderates the effect of personnel capability on customer satisfaction. It was also found that gender has no effect on other relations. Furthermore, the study shows that personnel capability has a stronger impact on customer retention as compared to customer satisfaction. However, the relationship between personnel capability and customer satisfaction is significant.,The study has been conducted on the customers of a private bank in India. Therefore, generalizations may be limited. As personnel capability is the predictor of satisfaction and retention, individuals with proper social and technical skills – in addition to other skills – should be hired for managing relationships with customers.,The study has added to the understanding of the relationship which exists among the following variables: gender, personnel capability, customer satisfaction and customer retention. These variables have not been studied together previously.

Predicting customer experience and discretionary behaviors of bank customers in India

Abstract: Banks in India are underperforming on customer-centric measures. The existing mechanisms used by Indian banks for evaluating their customer interface are efficiency measures which are limited in deciphering bank’s success in fulfilling customer needs. The purpose of this paper is to build a case for banks to evaluate their processes on the dimension of customer experience (CE).,The study performs in-depth review of literature to identify the factors of CE and uses confirmatory factor analysis to confirm these factors in Indian retail banking context. Post factor confirmation, it uses discriminant analysis to test the predictive strength of the CE factors for discretionary behaviors of customers.,CE factors are categorized as functional clues (convenience and credibility), humanic clues (employee competence and compassion) and mechanic clues (service context). The study finds that the functional clues are the most significant predictors of customers’ discretionary behaviors followed by humanic clues while the mechanic clues are only hygiene factors for customer behaviors.,The study highlights CE factors which could be developed into potential competitive advantages for banks. Banks can prioritize their investments in these factors for improved economic performance.,There is no clear definition of CE in the extant literature particularly, in the context of retail banking. A factor-level study of CE for discretionary behaviors of bank customers is an attempt to provide specific inputs to those banks which are looking forward to use CE as a means to win and retain customers in markets characterized by intense competition.

Subjective and objective financial literacy, opinion leadership, and the use of retail banking services

Abstract: The purpose of this paper is to explore the relationship between consumers’ subjective and objective financial literacy (OFL) – the necessary knowledge and skills to make effective personal financial decisions – and their effects on opinion leadership and the use of retail financial services.,In total, 486 US participants were surveyed. The demographical profile of the sample roughly resembled that of the USA population.,On average, consumers with moderate levels of OFL report lower subjective financial literacy (SFL) compared to those with low or high levels of OFL. Moreover, while SFL and opinion leadership are positively correlated, consumers with moderate levels of OFL reported lower opinion leadership compared to those with high or low levels of OFL. The paper introduces financial literacy miscalibration as the discrepancy between consumers’ objective and SFL. Financially illiterate respondents who perceived themselves as financially knowledgeable reported high opinion leadership. Finally, a greater percentage of financially – literate consumers reported owning checking and savings accounts, using online and mobile banking for diverse purposes, and making fewer phone calls to customer services, compared to others.,The paper integrates literature from financial literacy, consumer knowledge, and opinion leadership to explain these findings and to further enhance our theoretical and empirical understanding of objective vs SFL.,The discrepancies between objective and SFL may significantly influence consumers’ financial decisions and the degree to which they expose themselves to the pertinent risks. The paper discusses implications for public policy makers as well as marketing managers and researchers.,The study is the first to empirically explore the research questions following the conceptual development.

The effects of the elaboration likelihood model on initial trust formation in financial advisory services

Abstract: Purpose In order for financial institutions to cope with increased competitive pressure from the financial technology companies, offering digital services such as a mobile service system (MSS) targeted for high net worth individuals (HNWIs) becomes critical. Despite long-term trustworthy relationships between HNWIs and financial advisors, studies suggest that the formation of initial trust poses a significant challenge. The purpose of this paper is to identify various features related to initial trust antecedents. Design/methodology/approach The study was conducted using the survey data, and employs variance-based structural equation modeling (SEM) techniques to test hypotheses. Findings The findings from a closed experiment with 107 participants suggest that compared to more traditional service systems, customers are more prone to the construct of service quality, and specifically professional, prompt, dependable and timely financial advice. Originality/value The study validated key constructs that positively influence the initial trust formation process and ultimately the intention to use in an MSS for the financial advisory. The authorts particularly emphasized the rebalancing and monitoring steps in the financial planning process between HNWIs and client advisors.

Nexus between financial literacy and financial inclusion

Abstract: Premised on the argument that cognition structures the way how individuals think and make decisions, the purpose of this paper is to test the interaction effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural Uganda.,The study used cross-sectional research design and quantitative data were collected and analyzed using Statistical Package for Social Sciences. Baron and Kenny guidelines were adopted to test for existence of moderating effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural Uganda. Furthermore, ModGraph excel software was used to establish the magnitude of moderating effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural Uganda.,The results revealed that cognition significantly moderate the relationship between financial literacy and financial inclusion of the poor in rural Uganda. In addition, both cognition and financial literacy also have direct effects on financial inclusion of the poor in rural Uganda.,The study adopted cross-sectional research design and data were collected by use of only questionnaires. Future studies through longitudinal research design may be employed. Besides, further studies using interviews may be adopted. Furthermore, this study collected data from only tier 3 financial institutions, thus, ignoring the other financial institutions. Future studies could focus on financial institutions under the other tiers.,The findings from the study enlightens policy-makers, managers of financial institutions, and financial inclusion advocates on the importance of cognition in enhancing financial literacy among the poor, especially in rural Uganda. Cognition combined with financial literacy helps the poor to make wise financial decisions and choices toward consuming financial services and products provided by formal financial institutions. This leads to increased scope of financial inclusion of the poor in rural Uganda. Therefore, advocates of financial literacy should assess community cultural cognition and utilize them to design and fashion effective financial literacy interventions that can promote financial inclusion.,The study uses Baron and Kenny and ModGraph excel software to test for the interaction effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural Uganda. While several studies exist worldwide on financial inclusion, this study is the first to test the interaction effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural areas in a developing country context.

The effects of service recovery and relational selling behavior on trust, satisfaction, and loyalty

Abstract: The purpose of this paper is to investigate the relationship between service recovery and relational selling behavior on trust and satisfaction in the banking industry. Specifically, the mediating role of trust and satisfaction on the relationship between service recovery, relational selling behavior and loyalty is empirically examined.,Hypotheses are developed based on the literature review. The conceptual model is tested using SEM on survey data collected from 560 customers of 12 banks in Taiwan, including local banks and foreign banks.,The model test results indicate that the influences of service recovery and relational selling behavior on trust and satisfaction are both significant. In addition, the influences of trust and satisfaction on loyalty are significant.,For bank managers, it is crucial to have well programs to identify service failures and handle recoveries efficiently and effectively. Furthermore, bank managers should place a high value on increasing salesperson’s customer-oriented behaviors to discern potential problems that customer concerns and provide suitable solutions that customer needs. By creating these better customer experiences, greater trust, satisfaction and loyalty can be yielded.,This study aims to provide a superior understanding of the relationship between service recovery, relational selling behavior, trust, satisfaction and loyalty in the banking industry. The research findings can contribute to forming targeted strategies and gaining competitive advantages for bank managers.

Image, performance, attitudes, trust, and loyalty in financial services

Abstract: The purpose of this paper is twofold: first, to determine the extent to which hedonic and utilitarian attitudes and loyalty are influenced by perceived financial performance (PFP) and executive compensation plan image (ECPI) in financial services; second, the authors evaluate relationships among hedonic and utilitarian attitudes, trust, and loyalty.,Using a quasi-experimental design in Study 1 the authors test the relationship between antecedents (PFP and ECPI) and relational elements (attitudes, trust, and loyalty) to address the first objective. To accomplish the second objective, the authors employ structural equation modeling in Study 2 to test the relationship among hedonic and utilitarian attitudes, trust, and loyalty.,Study 1 confirms that PFP and ECPI positively impact both hedonic and utilitarian attitudes but do not directly affect loyalty. Study 2 demonstrates a positive association between utilitarian attitudes and trust, although the hedonic attitudes-trust relationship is negative. Hedonic attitudes are also significantly related to utilitarian attitudes. Finally, trust mediates the relationship between attitudes and loyalty.,Building customer trust is an important correlate of loyalty, and emphasizing an attribute-based aspect of perceived financial service generates greater trust compared to enhancing a non-attribute aspect (i.e. minimizing negative effects on image of executive compensation plans).,The authors link attitude research to service/relationship quality research and discover that attitudes are indirectly related to loyalty through increases in trust. The findings suggest that perceived image and performance of financial services are important to relationship quality when applied to financial services.

Understanding undergraduates’ money management behaviour: a study beyond financial literacy

Abstract: The money management behavior of undergraduates determines their smooth transition into adulthood Economic, social and psychological factors also affect undergraduates’ money management behavior Therefore, the purpose of this paper is to investigate how undergraduates manage and respond to economic, social and psychological factors affecting their money management behavior, and to examine whether this response changes as they make progress in their degree,Adopting a qualitative exploratory approach, this study examined Australian undergraduates as they face many challenges to their money management behavior The data were collected using six focus group discussions, held in three Australian universities, in which 47 undergraduates participated,The findings have shown that their approach to manage spending, income, saving, peer relationships and stress changes as they make progress in their degree However, they shared similar approaches to investment, followed parental money management advice and used technology for cost reduction, irrespective of the progress in their degree,This study was conducted with the data collected from a relatively small sample of respondents and was limited only to undergraduates Moreover, this study was conducted in Australia, indicating that some of the results might be specific to the Australian context,The findings of this study can be utilized by governments, financial institutions, educational institutions and parents who are interested in inculcating prudent money management behavior in undergraduates,This study extends the scope of the literature beyond financial literacy, and has shown how undergraduates respond to economic, social and psychological aspects relating to money management behavior and how these responses vary as they make progress in their degree This study has applied a qualitative exploratory approach, in contrast to quantitative methods which have generally been applied for studies relating to undergraduates’ money management behavior

Measuring customer based corporate reputation in banking industry: Developing and validating an alternative scale

Abstract: The purpose of this paper is to develop and validate a reliable and valid alternative scale to measure customer-based corporate reputation (CBCR) specific to the banking industry only, where high risks and uncertainties of choosing a service provider exist.,Both qualitative and quantitative methods were employed to develop and validate an alternative scale to measure CBCR in the banking industry. Following Churchill’s (1979) paradigm and other prominent scale development studies, a scale development procedure was generated, which consists of three main stages: scale generation and initial purification, scale refinement and scale validation.,As a consequence of the current study, a reliable and valid multidimensional scale was obtained, consisting of 20 items and four dimensions to measure CBCR in banking industry: financial performance and financially strong company, customer orientation, social and environmental responsibility and trust.,This study provides insight to managers to comprehend and manage their CBCR. Since this study has empirically demonstrated that the four dimensions of the CBCR are associated with the five important customer outcome variables, the study provides further support toward the importance of corporate reputation in strategic marketing decisions in the banking industry.,Numerous different disciplines have focused on corporate reputation measurement by adapting different perspectives and approaches. However, a reliable and valid measurement tool has been proposed here to evaluate corporate reputation from customers’ perspective specific to banking industry.

Positive moods and word-of-mouth in the banking industry: A moderated mediation model of perceived value and relational benefits

Abstract: The purpose of this paper is to examine the mediating effect of functional value and symbolic value between positive moods and word-of-mouth (WOM) referrals in the context of Taiwan’s banking industry. In addition, this study investigates the moderating effect of relational benefits on the relationship between perceived value and WOM.,The research model was tested using data collected from customers (n=362) of the top 10 domestic banks in Taiwan. Structure equation modeling was employed to test and validate the conceptual model.,Positive moods are found to be an important predictor of functional value, symbolic value and WOM in this banking service study. Four types of relational benefits are identified including social, special treatment, confidence and face. Note that two distinct segments of bank customers are identified in terms of relational benefits: those who appreciate face benefits (n1=169), and those who appreciate general relational benefits (n2=193). The findings reveal the existence of partial mediation between a banking customer’s mood and WOM through functional value and symbolic value in the overall sample (n=362). However, it was found that functional value partially mediates the influence of positive moods on WOM among respondents in the “general relational benefits” segment only. That is, relational benefits are found to moderate the relationship between functional value and WOM.,This study expands the existing body of knowledge on customers’ perceptions of value by differentiating types of value perceptions.

Just how loyal are Islamic banking customers

Abstract: Purpose The purpose of this paper is to determine the rate difference required to persuade Islamic banking customers to switch to conventional banks. Design/methodology/approach A choice-based conjoint analysis survey was administered to 300 UAE Islamic banking customers. Customer utilities for Islamic and conventional banks, products and prices were developed to test hypotheses while a market simulation estimated the impact of rate changes on choice shares. Findings Overall, Muslim customers of Islamic banks strongly preferred Islamic banks and products. However, 43 percent were willing to switch to conventional banks to obtain better rates. Indeed, the share choosing conventional banks rose from 25 percent when rates were the same to 68 percent when conventional products offered 2 percent better rates. Research limitations/implications This research requires replication and extension in appropriate contexts such as Malaysia and Indonesia. Moreover, the existence of price sensitivity tiers implies underlying benefit segments that should be studied. Practical implications As so many Islamic banking customers would switch to conventional banks for better rates, it seems that conventional banks compete with Islamic banks for most clients. Islamic banks should price accordingly. Originality/value This is the first study to quantify the loyalty of Islamic banking customers in terms of price and, consequently, the first to demonstrate the existence of price sensitivity tiers. It is also the first in this field to apply conjoint analysis and market modeling.