Customer switching behaviour in Greek banking services using survival analysis

Abstract

PurposeThis paper aims to examine customer switching behaviour in Greek banking services. More specifically it aims to investigate predictors of churn behaviour as part of customer relationship management (CRM).Design/methodology/approachThe enhancement of existing relationships is of pivotal importance to banks, since attracting new customers is known to be more expensive. The paper discusses survival analysis based on data collected from customers of a leading financial services company. It examines a number of variables, which represent characteristics of the customers and of the offered services and products. By using life tables, it estimates the contribution of each separate factor in customers' switching behaviour in different periods of time.FindingsA hazard proportional model is built to determine the risk of churn behaviour, which is the end‐result of all the examined factors.Practical implicationsBank's management team could use the findings of our study, in order to determine specific attributes in designing financial services and products, which would add in customers' satisfaction.Originality/valueThe approach and results have significant implications for enlarging the duration of the relationship among customer and bank.