Showing papers in "Journal of Financial Services Marketing in 2021"

Adoption of digital banking channels in an emerging economy: exploring the role of in-branch efforts

Abstract: The aim of this qualitative study is to analyse the role of in-branch efforts of banks on migrating customers from branch banking to digital banking in India. In-depth semi-structured interviews were conducted with bank executives representing senior management from public and private sector banks in India. Qualitative content analysis technique was used to analyse the data. Varieties of responses received during interviews were clubbed into four main themes based on data reduction, display, and conclusion-drawing processes. In-branch communication with customers, digital transformation of the branch, customer-centric initiatives, and redefined role of branch staff hold the potential to bridge the customers’ migration to digital banking. The paper suggests that the key identified factor in improving digital banking acceptance in India is the requirement of integrated cultural and organisational changes at the bank’s level to gain the customers’ confidence and trust in digital banking.

Continuance intention of baby boomer and X generation as new users of digital payment during COVID-19 pandemic using UTAUT2

Abstract: The emergence of social distancing and stay at home regulations during the COVID-19 pandemic directly affects people’s lifestyle, including baby boomers and X generation. Many of them have started using digital payments for online or offline transactions to minimize contact with others. This study aims to analyze the continuance intention of the baby boomers and X generation toward the use of digital payments using UTAUT2 (Unified Theory of Acceptance Technology). Data were collected from 320 users with an age range of 40–74 who had just started using digital payments during this pandemic. Structural equation modeling has been used to analyze the data. The result indicates that UTAUT indicators positively affect user satisfaction. User satisfaction positively affects inertia. Overall satisfaction and inertia positively affect continuance intention. Therefore, digital payment companies and banks with digital services can expand their target market beyond Millennials and pay more attention to the older generation like baby boomers and X generation. Managers can find the results of this study useful and beneficial to develop their marketing strategy and take advantage of this situation to increase digital payment users to a broader age range.

Adoption of electronic banking services in India: an extension of UTAUT2 model

Abstract: Indian banks have paid sufficient attention to recent innovations in banking services delivery such as e-banking, mobile banking, mobile payment, e-wallet, and e-money services, still the acceptance of these services among consumers is sluggish. Therefore, the present study aims to identify the intention of consumers to adopt various e-banking services. The study adopted the UTAUT2 model (Unified Theory of Acceptance and Use of Technology) and extended it with constructs such as consumer innovativeness, perceived risk, and security information availability. The extended research model was tested using a questionnaire-based response collected from 721 consumers. CB-SEM (Covariance-based structural equation modeling) was used to examine the hypotheses. An empirical examination of the model helped explain the impact of the UTAUT2 model's constructs in predicting adoption intention toward e-banking services. The study also revealed the importance and impact of newly incorporated variables in explaining consumers' adoption intention toward e-banking services. The study has provided some useful insight into the factors influencing consumers' intention to adopt e-banking services to shed new light.

Factors influencing individual in adopting eWallet

Abstract: This research examines individuals’ feasibility of adopting digital wallet also known as ‘eWallet.’ It aims at assessing the technological readiness among customers especially youth by measuring the acceptance level of digital wallet adoption in a massive implementation of the digital economy. Adoption of eWallet can potentially enhance the efficiency of financial institutions and the provision of new services for the convenience of the customers. The nature of this study was developed in the context of South East Asia focusing on Brunei Darussalam. The study using a framework for assessment based on the unified theory of acceptance and use of technology model revealed that the main construct of the model to be predictors of behavioral intention, was attitude towards using technology and anxiety. These results might be as a result of the millennial generation being in constant interaction with various types of technology, paired with the rising Internet connectivity leading to the minimal impact of the digital wallet adoption.

Creating advocates: understanding the roles of CSR and firm innovativeness

Abstract: Although previous studies revealed the positive effect of CSR perceptions on customer behaviour, the relationship between CSR and perceived firm innovativeness (PFI) has been underexplored. The purpose of this paper is twofold. First, it attempts to propose and validate a model to comprehend the relationship between CSR and PFI. Second, it aims to investigate the mediating role of corporate image stemming from CSR and PFI in order to foster customer advocacy intentions. Data were collected from 360 customers of the retail banking industry in Pakistan, and the results indicate that customers’ CSR perceptions directly and positively influence PFI. Interestingly, corporate image fully mediates the relationship between PFI and advocacy intentions, whereas it plays a partial mediation role in the CSR-advocacy intentions relationship. The findings of this research expand the corpus regarding the roles of CSR and PFI in creating advocacy intentions among customers through the corporate image.

Classifying potential users of live chat services and chatbots

Abstract: Live chat services and chatbot functionalities are experiencing significant growth within companies in the financial sector and growing consumer interest But which consumers (segments) are more or less interested in these tools? Companies with an online presence would be well advised to profile potential users of these two important tools This study seeks to classify potential users of live chat services and chatbots A telephone interview questionnaire is administered to 342 panelists of a recognized Canadian research firm A two-step cluster analysis is used to reveal natural groupings in the data set Research conducted identifies four distinct segments, namely Women divided interest, Men partially interested, Age 35–44 partially interested and Older disinterested This study brings to the fore information essential to the development of effective marketing strategies for reaching the different segments [eg develop and evidence an online end-to-end purchasing process for segment (1); provide good Web visibility for segment (2); ensure the presence of competitive offers and Web comparators for segment (3); and, pursue a more traditional approach for segment (4)] This study represents the first ever classification of individuals based on their interest in emerging services (live chat services and chatbots)

Assessing the effectiveness of Covid-19 financial product innovations in supporting financially distressed firms and households in the UAE

Abstract: Covid-19 has affected the global economy, influencing firm and household financial decisions worldwide. The Central Bank of the United Arab Emirates (CBUAE) released an AED 256 billion stimulus package to provide banks with sufficient capital to support economic activities and development by providing temporary relief to large corporations, small- and medium-sized enterprises, and households. New financial products have rapidly appeared, including relief packages for rent, mortgages, personal loans, credit cards, SMEs, and corporate entities. Regression analysis explores the effect of such relief packages on UAE firm and household finances. Using online survey data gathered via convenience sampling of UAE households, econometric analysis confirms that select demographic factors and financial instruments positively relate to effective financial decision-making. Our results guide policymakers on which relief packages effectively manage firm-level and household financial distress during a health pandemic.

Determinants of mobile bank usage among the bank users in North India

Abstract: This manuscript purports to assess the determinants of service quality and their implications for continuance intention of usage of mobile banking. Our research model investigates the moderating influence of trust between service quality and user’s satisfaction, and mediating impact of satisfaction on service quality—Continuance Intention relationship. The study used a sample size of 258 respondents from North India. All hypotheses were tested using SPSS and PROCESS Macro (Hayes). A positive connection was found between all study constructs. Furthermore, results revealed that trust did not moderate the impact of service quality on satisfaction; satisfaction partially mediated the service quality—Continuance Intention relationship. Findings of the study suggest that banks must emphasise on user-friendly interface for the m-banking application as well as the relevant service processes related to perceived ease of use. It is advisable that the user interface looks orderly and is easy to navigate. Also, results derived from the study suggest that banks must consider mobile security as a very important issue in order to protect the customers from fraud, and thus encourage use of m-banking application. The results cannot be generalised since data was collected only from northern part of India.

Implications of the COVID-19 pandemic on market orientation in retail banking

Abstract: This qualitative study examines the implications of the COVID-19 pandemic on the implementation of market orientation (MO) in the context of retail banking. The findings show that MO was significantly reflected in the behaviors of banks upon encountering the COVID-19 situation, with the banks increasing their MO in response to the crisis. This study finds subcategories based on the empirical data that explain the implementation of MO in more detail. Overall, the findings provide valuable conceptual and managerial insights into the modus operandi of banks during a crisis and offer new best practices for the banking industry.

Exploring usage of mobile banking apps in the UAE: a categorical regression analysis

Abstract: The banking sector has seen major changes with advances in technology. Electronic financial transactions are gradually taking over traditional banking services in terms of transferring funds, utility payments, insurance premium, mortgages and even stock trading. Despite the widespread popularity of smartphones and the advantages of mobile banking, the adoption rates of the mobile apps have been very low all over the world. Our study explored the consumer acceptance of mobile apps in the United Arab Emirates (UAE) by using a structured online questionnaire that was designed using standard variables from the Technology Acceptance Model. Principal component analysis was used to identify and score these factors for the subsequent categorical regression analysis. Consumers were assigned numerical categories depending on their level of usage of the app, and the CATREG nonlinear technique was used to determine the significance of technology acceptance factors. The results show that almost two-thirds of the sample were currently using Mobile Banking apps, and they predominantly belonged to the 30–40 age-group. Perceived usefulness and available information were identified as the main factors influencing acceptance and level of usage of mobile banking apps. This study makes a significant contribution to the existing literature by identifying consumers according to their level of usage and adopting the categorical regression model, which has not been attempted earlier. The results provide important insights for banking professionals in the UAE, in terms of marketing initiatives, information technology and customer service.

Modeling the key factors influencing the adoption of mobile financial services: an interpretive structural modeling approach

Abstract: Mobile financial services are widely appreciated worldwide, but a considerable fragment of the population is resisting the technology. Therefore, the purpose of this paper is to identify and analyze the contextual relationships among a set of measures that influence the adoption of mobile financial services (MFSs). The paper employed the interpretive structural modeling technique to formulate a multilevel structural model with experts' knowledge and experience. Using MICMAC analysis, the factors were classified into four clusters: autonomous, linkage, dependent, and driving based on their dependence and driving power. The outcome shows that facilitating conditions is the most crucial factor in influencing the MFS adoption and demands special attention by authorities for better implementation of the technology. The findings will help the bank managers and telecom companies to direct their resources in significant areas.

Mediation between financial risk tolerance and equity ownership: assessing the role of financial knowledge underconfidence

Abstract: Investing in equity is not an easy task. People with varying levels of financial risk tolerance would demonstrate a different level of equity investment. However, investors' tendency to underestimate their financial knowledge is likely to mediate the association between financial risk tolerance and equity ownership since people tend to underestimate their knowledge and take a lower risk when the task is hard to execute. The purpose of the study is to evaluate the mediating role of underconfidence on the association between financial risk tolerance and equity ownership. Confirmatory factor analysis (CFA) and structural equation modeling (SEM) were used to evaluate the conceptual model. The results show that it is possible to assess underconfidence using objective and subjective financial knowledge, and underconfidence has a significant mediating effect between financial risk tolerance and equity ownership. Although it is challenging to change a person’s risk tolerance, financial services professionals may help their clients by addressing underconfidence.

A comparison of conventional versus Islamic banking customers attitudes and judgment

Abstract: This investigates the impact of customer attitude and judgment regarding conventional and Islamic banking system in Pakistan. This study attempts to find out, how the customers of Islamic banks perceive about Islamic banking practices in terms of Shariah compliance and conventional banking system regarding earning more profits. This study consists on primary data through a well design questionnaire. Four hundred and thirty (430) questionnaires were distributed among different customers of all three types of banking, such as Islamic, conventional and stand-alone branches in order to investigate customer’s attitude and judgment toward banking system. The findings indicate that overall 28% of Islamic banking customers don’t know the essential concept of Islamic financial institution’s in Pakistan. Furthermore, 54% customers of conventional banking show their interest to convert their accounts toward Islamic banks.

Fast, furious and focused approach to Covid-19 response: an examination of the financial and business resilience of the UAE logistics industry

Abstract: While many other countries around the world were struggling to mitigate the immense health and economic effects of the global Covid-19 pandemic, the UAE Government ensured that no shortage of the supplies of goods and services affected the country. This has been attributed to the government’s robust financial support to the supply chain and logistics industry during the pandemic (Atayah et al. 2021). The UAE imports over 90% of its commodities from overseas—including foods, drinks, pharmaceuticals, automobiles, clothing, electronics, building materials, logs, paper, plants, machinery, tools, and raw materials. All these products pass through the operations of the country’s supply chain industry, which depends heavily on the financial institutions. Due to the above assertion, we found it necessary to empirically examine the challenges, threats and successes of the country’s supply chain operators in order to ascertain their financial and business resilience during the pandemic based on the survival strategies and financial resources they received and employed during the unrelenting pandemic. Accordingly, this research has examined the financial and operational resilience of the country’s supply chain organizations as reflected in their ability to maintain efficient financial strategies and stable business operations despite the scourging pandemic. Our initial findings indicate that Covid-19 pandemic interruptions on the nationwide distribution of goods and services in the UAE have been very minimal due to the government’s robust financial support to the logistics industry, and consequently the business resilience developed by the industry operators.

Telecom microfinance banking versus commercial banking: a battle in the financial services sector

Abstract: The purpose of the study is to compare the growth rate of commercial banks with microfinance banks, under the shadow of financial exclusion, and to provide a way forward for commercial banks. As we are living in the age of transformation, businesses cannot survive without evolution and necessary transformation. The Telecom sector of Pakistan suffered at the hands of Over-The-Top services, so is happening with the commercial banking. Telecom companies have chosen microfinance banking as their alternative revenue stream which is affecting commercial banks. Microfinance banks, typically mobile phone banking, are showing more growth in deposits and loans than commercial banks. Along with the analysis of industry reports, commercial banks’ managers are also interviewed to perform an accurate analysis of the situation. It has been concluded that commercial banks are suffering due to financial exclusion and their deposits and lending rates are also decreasing due to microfinance banks. It is important for commercial banks to formulate their strategies and introduce new services according to the needs and preferences of their customers and they also need to increase banking awareness of their potential customers.

Brand credibility and customer-based brand equity: a service recovery perspective

Abstract: The aim of this paper is to examine the impact of perceived justice on satisfaction with service recovery and how this satisfaction with service recovery can increase both Lebanese banks’ brand credibility and customer-based brand equity. The questionnaire was completed by a total of 403 bank customers. The findings of this paper indicate that perceived justice strongly influences satisfaction with service recovery. Similarly, satisfaction with service recovery affects both Lebanese banks’ brand credibility and customer-based brand equity. Moreover, the regression analysis demonstrates that satisfaction with service recovery partially mediates the relationship between perceived justice and brand credibility and customer-based brand equity.

The influence of marketing communications strategy on consumer purchasing behaviour in the financial services industry in an emerging economy

Abstract: The financial services sector is characterised by a high level of consumer perceived risk and irrational behaviour in decision-making, which is predominantly influenced by the effect of communication and the application of heuristics as a function of communication in consumer decision-making. This situation promotes marketing communication as one of the most essential activities that financial institutions rely on to mitigate the perceived risks and to satisfy consumers’ quest in understanding financial products. Hence the importance of this research is to establish the effects of marketing communication on consumer purchasing behaviour in emerging economies that are experiencing expanded financial markets but limited corresponding research insight. To achieve the aim of this study, the research uses data from 360 customers of selected financial institutions in Ghana. The hypotheses are tested using the structural equations modelling technique. The results of the study reveal marketing communication strategies evaluated have positive and significant impacts on consumer purchase behaviour. However, amongst the marketing communication strategies tested advertising and celebrity endorsement were found to have an insignificant relationship with consumer purchase behaviour. The study offers practical and theoretical insights into understanding the dynamics and nuances of the integrated marketing communication mix and how they influence the purchase behaviours of consumers.

Customer readiness to co-production of mobile banking services: a customer-only co-production perspective

Abstract: This paper aimed to identify the antecedents and corollary of customer readiness for co-production in customer-only co-production services using mobile banking services as a context. Using a structured questionnaire, data were gathered from a sample of mobile banking customers in Ghana and the UK and the data analysis was facilitated by structural equation modelling. From the findings, the antecedents were customer socialisation, customer self-efficacy and customer motivation and the corollary was service productivity. The findings provide managers of customer-only co-production or technology-based services particularly mobile banking services with the specific factors that can be managed strategically and tactically to enhance customer readiness for co-production and service productivity. This study is one of a kind to conceptualise and empirically identify the antecedents and corollary of customer readiness for co-production within the customer-only co-production context. However, as the study was limited to mobile banking services, future studies might test the research model in other customer-only technology-based services.

Insurance-based marketing (IBM): a prevalent marketing strategy

Abstract: Insurance-based marketing (IBM) is the marketing of products and services as being available for free or at a strongly reduced price due to coverage by clients’ insurance plans. This paper introduces IBM, identifies its main characteristics and presents a theoretical model that can explain IBM’s marketing function. A taxonomy with examples renders more insight into the different formats that IBM takes on in practice. Two studies into the prevalence of IBM for windshield repair and flu vaccination in different countries across the world provide evidence for the prevalence of IBM. Finally, a discussion of the ethical considerations highlights the benefits of IBM for clients’ information provision, but also the risks of higher premiums through the encouragement of moral hazard. Diverse kinds of stakeholders can find value in thinking through their options to include IBM in their marketing mix.

Examining emotions linked to live chat services: The role of e-service quality and impact on word of mouth

Abstract: The purpose of this article is twofold: (1) to investigate the emotions experienced by banking customers when using live chat services and their impact on positive word-of-mouth intentions; and, (2) to identify which dimensions of e-service quality (accessibility, customer service and support, perceived security/privacy and design) impact these emotions. A survey was conducted with 682 members of a Web-based panel. Findings demonstrate that emotions, both positive and negative, significantly impact word of mouth. Results further reveal that customer service and support followed by design of live chat services mostly influence consumer emotions. On a practical level, the recommendations provided will improve consumer experience and encourage consumers to use live chat services. This is all the more important since such services are now part of the promotion and contribution of a sustainable mode of consumption that is accessible to all.

Measuring price fairness and its impact on consumers’ trust and switching intentions in microfinance institutions

Abstract: Although price fairness has been intensively studied for decades, the measurement of its multidimensionality has not yet reached any consensus. Its impact on consumers’ trust and switching intentions in financial institutions has been less frequently analysed. This paper fills both gaps and has two objectives. First, it aims to develop a reliable and valid measurement scale for price fairness in microfinance. Second, following the equity and social exchange theories, it tests the impact of price fairness on consumers’ trust and switching intentions. Data were collected from 324 customers in six microfinance institutions (MFIs) in Bukavu, Democratic Republic of the Congo, and tested using exploratory and confirmatory factor analyses, as well as structural equation modelling. The results confirm that price fairness is a multidimensional construct with six dimensions, revealing that the construct has not been comprehensively captured in prior research. Furthermore, findings suggest that price fairness significantly affects customer trust and satisfaction, and that both variables mediate the relationship between price fairness and customer switching intentions. These results confer a strategic role of price fairness, trust and switching intention in the microfinance industry, which is currently subject to customer sensitivity to interest rates and mistrust towards MFIs.

Understanding bank employees’ perception towards technology enabled banking: a developing country perspective

Abstract: The purpose of this study is to identify and validate the underlying factors influencing bank employees’ perception towards technology enabled banking and examining the association between the identified factors and demographic profile of the bankers. A quantitative approach is adopted in the study and data is collected from 210 respondents through a well-structured questionnaire. The empirical results show that relative advantage, employee convenience, operational efficiency, and technical support are the main factors influencing the perception of bankers towards technology adoption in India. The perception of bankers differs significantly in terms of the availability of technical support by type of bank. The novelty of the study is that the perception about the implication of technology enabled banking services and the influence of demographic variables on technology adoption in context to Indian bank employees has been analysed. The results will help the banks from India as well as other developing countries in doing strategic planning to improve the adoption of technology enabled banking services. Banks can use the findings to encourage their employees to promote the use and adoption of digital banking in India.

Antecedents of brand loyalty in South African retail banking

Abstract: With new banks entering the South African market and consumers generally not satisfied with their current bank, brand loyalty in the banking sector is receiving greater attention. A gap in the literature exists regarding the issues of bank loyalty and their antecedents in South African retail banking because of the few studies available in the South African context, the new competitive environment in the banking sector, the multi-cultural nature of the market, and the likely switching behaviour by customers. The South African context is a multi-cultural environment and therefore offers a unique background as most previous brand loyalty studies have been in mono-cultural contexts. The purpose of this study was to investigate the antecedents of brand loyalty, including satisfaction, brand relationship quality, customer advocacy, and brand trust in retail banking. We report on a survey of 351 banking customers through SEM using AMOS. While the findings are generally supportive of previous studies, some surprising results are discussed and implications for both theory and practice are highlighted.

Classification of m-payment users’ behavior using machine learning models

Abstract: The purpose of this study is to classify mobile payment (m-payment) users’ behavior and determine the relative importance of influencing factors by using support vector machine and logistic regression. By using survey data of 426 users who had transferred payments frequently in previous one year, classification of users and non-user is estimated by using machine learning classifiers. The findings of the confusion matrix confirm that the accuracy of support vector machine is better than the logistic regression. The research confirms perceived value as the most important predictor of usage behavior through both the models, while other predictors as told by Theory of Acceptance and Use of Technology 2 (UTAUT2) varied slightly in each model. This manuscript provides insights for technology managers who are designing services involving m-payments which ultimately help them with a strategy to better address the users’ forfeiture and switching to other brands.

Criteria affecting Taiwan wealth management banks in serving high-net-worth individuals during COVID-19: a DEMATEL approach

Abstract: Wealth management services for high-net-worth individuals in Taiwan have grown rapidly over the last decade. This study used a decision-making trial and evaluation laboratory approach to identify the criteria affecting the performance of Taiwan wealth management banks during the coronavirus disease (COVID-19) period. This research surveyed 17 executives from Taiwanese banks using 13 criteria covering three dimensions: bank performance, professionalism, and customer relationship. The results indicated that customer relationship and professionalism have an influence on key performance. Customer involvement (in customer relationship), innovative products and services (in professionalism), and customer satisfaction (in key performance) are the most influential criteria. The results suggest that banks can attract and retain customers by increasing their uses of products and services, developing innovative products, and improving customer satisfaction despite the negative effect of COVID-19. The findings of this study benefit wealth management bank managers in sustaining fee and commission income from high-net-worth customers in the midst of adverse social and economic events.

The role of financial literacy in describing the use of professional financial advisors before and during the COVID-19 pandemic

Abstract: This paper documents the effect of the COVID-19 pandemic on the use of profession financial advisors across a broad sample of financial decision makers (N = 16,431). Findings show that financial literacy played a significant role in describing the use of financial advisors in the USA before and during the pandemic. Those who exhibited higher levels of financial literacy were more likely to use the services of professional financial advisors. Based on a series of regression tests, it was determined that the effect of COVID-19 on the use of financial advisors was, to some extent, moderated by financial literacy.

Characteristics of random responders in a financial risk-tolerance questionnaire

Abstract: The possibility of random response occurring, which can result in Type II errors, is possible whenever a financial risk-tolerance questionnaire is administered. This study was designed to apply inter-item standard deviation (ISD) scores, as introduced by Marjanovic, Holden, Struthers, Cribbie, and Greenglass (2015), to identify responders to a financial risk-tolerance questionnaire as hyper-consistent, conscientious, or random. Hyper-consistent responders were found to be more likely to be older married men who make their own financial and investment decisions. Those classified as hyper-consistent exhibited the lowest risk-tolerance scores. Conscientious responders were more likely to report having a high level of attained education and to rely on someone else when making financial and investment decisions. Financial risk-tolerance scores for conscientious responders fell between scores for hyper-consistent and random responders. Random responders were found to be younger, single, less well educated, and more likely to hold cash in their portfolio. Random responders also exhibited the highest financial risk-tolerance scores among participants in this study.

HARI: Characteristics of a new defined lifestyle (DL) retirement planning product

Abstract: Approximately 16% of the world's population lives in countries with some concept of a financial retirement plan. Of the remaining population, many do not have access to a Western-style retirement system, and the concept of Dharma subliminally influences them. Dharma, an Eastern philosophical system, recommends Sanyasa (renunciation), instead of comfortable retirement life, as a life goal. This paper proposes a new defined lifestyle retirement planning instrument, referred to as Holistic Annual Retirement Investment (HARI), a standardized, tradable, futures contract that can alter the way individuals think of and plan for their retirement according to their belief system. HARI is a hypothetical product based on the Eastern value system and needs improvement ideas from other researchers. So, the reader is urged to be imaginative and forgiving.

Business cycles influences upon customer cross-buying behavior in the case of financial services

Abstract: Customer cross-buying behavior (CCBB) still represents a key marketing topic for professionals and academics. Marketing research identified several customer cross-buying determinants during the last few decades. However, some studies have pointed out that research remains silent about potential business cycles influences upon CCBB. Building on business cycles influences upon motivational orientations, this investigation extends previous literature on CCBB performing a longitudinal study on a bancassurance leader database. Combining transactional data and aggregated perceived measure of the economic environment, this research elucidates how business cycles influence CCBB in the case of financial services. The statistical model used, accounts simultaneously for business cycles global effects and unobserved heterogeneity. The results confirm that business cycles, economic contractions and expansions, exercise significant and various influences on CCBB. In addition to overcoming a theoretical gap, findings provide novel insights for practitioners who should consider business cycles when designing cross-selling strategies.