Abstract
Studies that examine green banking practice from the relationship marketing perspective are limited. Bearing in mind the importance of loyalty to managers in the banking industry, and the increase in the call for greater sustainability performance from banking firms by customers, our study explore customers’ perception on green banking practice and its effect on bank loyalty. It also investigates the mediating effect of green image and bank trust in the relationship between green banking practice and bank loyalty. Through a quantitative survey, data for this study was adopted from 551 customers of the retail banking sector in North Cyprus. The structural equation modeling technique was used to test the relationship between the study variables. Results from the structural equation modeling analysis conducted indicated a direct and significant influence of green banking practice on green image, bank trust, and bank loyalty. Green image significantly affects bank trust and bank loyalty. No significant relationship exist between bank trust and bank loyalty. Green image mediates the relationship between green banking practice and bank loyalty, while bank trust does not mediate the relationship between green banking practice and bank loyalty.
Highlights
Issues relating to the environment is considered to be a very important factor in marketing [1]
Green image mediates the relationship between green banking practice and bank loyalty, while bank trust does not mediate the relationship between green banking practice and bank loyalty
This study systematically examines the perspective of customers on green banking practice and its effect on bank loyalty
Summary
Issues relating to the environment is considered to be a very important factor in marketing [1]. Adopting green approaches could be viewed as a socially responsible strategy, which reaffirms a company’s commitment to their corporate social responsibilities, and serves as a yardstick which could be used in fortifying a firm’s performance [5]. This is considered to be a challenge for most industries globally regarding the adoption and implementation of appropriate and effective green strategies [6], which are vital measures for modern-day business [7]. Over 30 billion dollars have been invested in clean energy as a way of promoting green banking [12]
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