Modelling Bank Loyalty

Abstract

Financial service institutions today recognise that customer commitment is a notion that can no longer be treated casually in today’s banking environment. More than ever, customer retention is regarded as a critical component of long-term profitability and survival in the financial services sector. Competition within the banking sector has caused financial services institutions to introduce permanent measures aimed both at maintaining and retaining profitable customer relationships. Yet keeping customers appears to be more and more difficult as the industry continues to change at an increasing rate. Much of the revolution is technology driven, and Internet banking will continue to play a key role in a plethora of new products, services and brands aimed simultaneously at wooing new customers and retaining existing ones. Consequently, insight into brand switching behaviour amongst financial services customers is central to understanding how retention can be affected in the new economy.