PREDICTING THE LEVEL OF BANKS� CUSTOMER FORGIVENESS FOLLOWING A BANKING CRISIS

Abstract

ABSTRACT In October 2008 three of the biggest banks in Iceland collapsed along with the biggest savings and loans. Many of their customers were directly harmed as a consequence. The level of customer forgiveness was low. This paper deals with the research questions, “Which factors predict the level of banks´ customer forgiveness following a banking crisis?” and “Which factor is the most important in predicting the level of banks´ customer forgiveness following a banking crisis? The methodology is quantitative, in the form of a survey. The population of interest was customers of the Icelandic banks. The findings show that six factors explain 78.5% of the variability in forgiveness. The factor that is most important in predicting the level of banks´ customer forgiveness is how well they thought they could rely on the banks to meet their expectations. Keywords Customer forgiveness; Regression analysis; Banks; Banking crisis