Customers Of Financial Services Research Articles

Evaluating end‐users' digital competencies and ethical perceptions of AI systems in the context of sustainable digital banking

AbstractIn the pursuit of fostering sustainable digital banking (SDB), this study investigates the nexus between end‐users' digital competencies, perceptions of artificially intelligent systems, and sustainable practices. With a focus on addressing inclusivity barriers and promoting ethical considerations, expert interviews were employed to provide nuanced insights. The study's foundation rests on the significance of sustainable development goals, digital competencies, and artificial intelligence (AI) ethics in shaping the future of digital banking. An interview schedule was developed and distributed online to IT experts and researchers in the field of AI. The instrument examined the major challenges faced by customers in accessing digital banking, the expected timeline for the complete digitalization of the South African banking sector, customers' anticipated competency, and comfort levels with a 100% digital banking interface, and their perspectives on the overall impact of such a transition on humanity. The interview gathered participants' views on AI‐based banking systems that determine credit scores and creditworthiness. The study also included questions to obtain expert opinions on customers' digital capabilities, access to resources, and the impact of AI trust issues on financial service customers. The findings of this study provided valuable insights for stakeholders, including governments, NGOs, and financial institutions. Implications derived from expert perspectives illuminate strategies for enhancing digital competencies, addressing inclusivity hurdles, and ensuring ethical AI integration. This study contributes to the sustainable development discourse by offering actionable recommendations for stakeholders in the pursuit of a more inclusive, digitally competent, and ethically responsible digital banking landscape.

Phishing Detection with Machine Learning

Abstract: The goal of our project is to implement a machine learning solution to the problem of detect- ing phishing and malicious web links. The end result of our project will be a software product which uses a machine learning algorithm to detect malicious URLs. Phishing is the technique of extracting user credentials and sensitive data from users by masquerading as a genuine website. In phishing, the user is provided with a mirror website which is identical to the legitimate one but with malicious code to extract and send user credentials to phishers. Phishing attacks can lead to huge financial losses for customers of banking and financial services. The traditional approach to phishing detection has been to either to use a blacklist of known phishing links or heuristically evaluate the attributes in a suspected phishing page to detect the presence of malicious codes. The heuristic function relies on trial and error to define the threshold, which is used to classify malicious links from benign ones. The drawback to this approach is poor accuracy and low adapt- ability to new phishing links. We plan to use machine learning to overcome these drawbacks by implementing some classification algorithms and comparing the performance of these algorithms on our dataset. We will test algorithms such as Logistic Regression, SVM, Decision Trees and Neural Networks on a dataset of phishing links from UCI Machine Learning repository and pick the best model to develop a browser plugin, which can be published as a browser extension.

Ochrona konsumentów usług finansowych w Polsce. Efektywność systemu i perspektywy rozwoju

The paper brings brief description of the financial services customer protection model and its evolution in Poland. The efficiency of this three-fold model, where the responsibilities are distributed to the 3 agencies: Financial Supervision Authority (KNF), Financial Ombudsman (Rzecznik Finansowy), Competition and Customer Protection Office (UOKiK) is discussed. The author discusses the project of merging the institution of the Financial Ombudsman with UOKiK and puts forward the thesis that an idea more relevant to the current needs of protecting financial services customers in Poland would be to maintain the institution of the Financial Ombudsman and transfer some competences of the President of UOKiK to the Financial Ombudsman. Finally the author presents his recommendations for the improvement of the model with a call for the strengthening of the institution of Financial Ombudsman in Poland.

Exploring the relationship between lifestyle, digital financial element and digital financial services experience

PurposeThe purpose of this study is to explore digital financial services experience, investigate the antecedents to digital financial services experience and examine familiarity as a moderator.Design/methodology/approachThe study uses dual methods: qualitative and quantitative. Multiple case studies are applied as a qualitative method to explore and capture recent development in rapidly changing digital finance. An empirical, survey-based approach is used to collect data from 258 respondents about their experiences with digital financial services experience using constructs, such as perceived ease of use, timeliness, lifestyle and digital financial element. The study used structural equation modeling using smart-PLS.FindingsUsing word count, hierarchy chart, items clustered by similarity and qualitative analysis by applying NVivo 12, the study validates the constructs and captures recent developments. Using smart PLS, the structural equation model reveals that the digital functional element positively affects the digital financial services experience. It is observed that lifestyle mediated between perceived ease of use and timeliness with digital financial services experience. Further, familiarity moderates the relationship between the digital financial element and digital financial services experience. Moreover, while this research analyzed the relationship regarding financial services customers, we suggest a comparative study between different entities.Originality/valueThe study can be considered one of its kind using qualitative and quantitative research methods. It integrates theory from both the information system and marketing domain. As the increased number of digital channels and interfaces has increased, companies need to understand how to improve the digital financial services experience.

Building blocks of financial inclusion through customer experience value at financial touchpoints in Southern Africa

PurposeThis paper aims to examine customer experience value orchestrated by non-banks' financial touchpoints to understand how they enhance the financial inclusion of low-income consumers.Design/methodology/approachTwo independent but related studies were conducted using qualitative comparative analyses (QCA) research design with semi-structured interviews to compare and contrast customer experience value at two rural locations in Southern Africa. The interview transcripts were analysed using ATLAS.ti, which is a powerful operating system for analysing qualitative data.FindingsThe results indicate that non-banks in the two countries design financial services that include functional, economic, humanic, social and mechanic customer experience value dimensions.Research limitations/implicationsThe data for this study was collected from financial services customers of retailers and mobile phone network operators in only one research setting in each country. Further research could extend the comparative context for qualitative studies across similar markets. Other limitations are discussed in the paper.Originality/valueThis paper contributes to the body of knowledge by highlighting the salient and germane dimensions and components found to be important in understanding financial inclusion using customer experience value. To the best of the authors’ knowledge, this is the first study that incorporates customer experience value dimensions in understanding the financial inclusion of low-income consumers at the base of the social and economic pyramid in emerging markets.

U-8 The Concept, Need and Significance of Sharia rating in Islamic Financial institutions in the perspective of Credit Rating Agencies

Sharia compliance is considered the basic component of Islamic financial industry as sharia permissibility is one of the basic motive for majority of the customers of Islamic Financial services. Presently the assurance regarding the sharia compliance of Islamic financial institution is given by the Sharia Advisor or Sharia board of respective Islamic financial institution. But there is no process, similar to the credit rating agencies, which provides the public an independent assessment of the commitment of different Islamic financial institution as regard to follow sharia injunctions in true letter and spirit for comparison with other Islamic financial institution.
 In this paper, the concept of credit rating, its origin, importance and advantages are discussed. In the light of the credit rating agencies practices, the concept of sharia rating and its importance are elaborated. It is observed and recommended that sharia quality rating will be very beneficial for all the stakeholders of the Islamic financial institutions as well the Islamic financial industry hence regulatory bodies of Islamic financial institutions, IFI’s and Credit Rating Agencies shall work together to further refine the concept for implementation of Sharia rating in the industry.

СПРАВЕДЛИВІСТЬ ЯК ПРИНЦИП БАНКІВСЬКОЇ ДІЯЛЬНОСТІ

Досліджено особливості прояву принципу справедливості в механізмі правового регулювання відносин за участі комерційних банків і клієнтів — споживачів фінансових послуг. Зазначається, що однією з причин падіння довіри населення України до фінансових установ є недостатньо повно опрацьований правовий режим охорони та захисту прав слабкої сторони договірних правовідносин, до категорії яких належать клієнти банків. Це вказує на те, що справедливість наразі ще не набула повноти свого прояву в правовому регулюванні банківської діяльності. Установлено незадовільний стан економічної та правової науки щодо рівня теоретичного обґрунтування справедливості як одного із принципів банківської діяльності.
 Наведено конститутивні ознаки принципу справедливості, серед яких: рівність правових можливостей суб’єктів правовідносин, рівність дії правових вимог, рівність масштабу юридичної оцінки актів поведінки суб’єктів правовідносин.
 Аналіз банківського законодавства України вказує на позитивну динаміку щодо запровадження в ньому системи правових норм, покликаних вирівняти дисбаланс між можливостями комерційних банків та їхніх клієнтів, що є свідченням прояву політичної волі законодавця стосовно поступового втілення принципу справедливості в національне банківське законодавство України.
 Вказується на необхідність проведення в Україні послідовної та довготривалої просвітницької роботи з метою підвищення рівня економіко-правової грамотності населення. Одним із елементів такої роботи має стати популяризація правил ведення правового діалогу клієнтів — споживачів фінансових послуг з комерційними банками чи іншими фінансовими установами. Наголошується на потребі залучення до такої роботи представників економічної та правової науки.
 Підбито підсумки про необхідність проведення спеціальних наукових досліджень щодо подальшого розроблення механізму правового регулювання банківської діяльності через призму дії принципу справедливості.

Does CSR Help to Retain Customers in a Service Company?

The main aim of this paper is to analyze the influence of service companies’ corporate social responsibility (CSR) actions on final customer’s loyalty. A theoretical model of loyalty formation based on CSR was proposed and a sample of 1125 final customers of financial services in Spain was studied. Structural equation models were used to verify the hypothesized relationships. Based on the CSR theory oriented to stakeholders, this work justifies the direct and positive relationship between the perception of CSR actions in the shopping experience and customer trust. We also verified a positive indirect influence on loyalty. The services industry was chosen to conduct this research due to its own particularities (intangibility, inseparability, heterogeneity and perishability). As it is impossible to evaluate a service before its consumption, a high level of trust in the supplier will be necessary to motivate the purchase decision. We conclude that CSR becomes a key strategic asset for determining trust and loyalty among consumers. As major findings, we have verified the special importance of CSR in the services market. CSR improves customer trust in the service provider. Thus, this paper has significant managerial implications. Through CSR strategies, both the perception of the customer’s purchasing experience and trust can be enhanced, resulting in more loyal customers. As a limitation, this research was carried out among financial services. Further research should test the model across different industries and countries in order to determine the generalizability and consistency of the findings of this study.

Determinants of Financial Literacy: with Special Reference to Consumers in Financial Service Industry

The financial literacy is a key dimension which determines the demand of the financial services in the economy. However, most of the previous studies and financial decision makers believe financial literacy in different perspectives. Therefore, it is timely important to identify the main determinants of the financial literacy among potential customers in financial service industry. Accordingly, present study is mainly focused on identifying and verifying the key determinants of the financial literacy in the customer’s point of view in the financial service sector. The study adopted the positivism epistemology and quantitative approach. At the initial phase of the study, the extensive literature review was carried out with the purpose of identifying the determinants of financial literacy. In the second phase, a survey was conducted among 500 potential financial services customers representing nine provinces in Sri Lanka, with the assistance of a researcher administrated questionnaire. The sample was selected based on the multilevel mixed sampling method and the unit of analysis was the head of households in Sri Lanka. Furthermore, a partial least squares structural equation model (PLS-SEM) was employed as the principle data analysis approach, and Smart PLS 3 was employed as the main analytical software. Degree of financial literacy was tested based on 22 items identified by previous researchers and Principle Component Analysis was employed to determine the key factors of financial literacy. The reliability of scales was measured by Cronbach’s Alpha coefficients. The findings revealed that in general, all financial literacy dimensions have significant impact to determine the level of financial literacy. However, when it considers under separate dimensions, financial knowledge is the most significant determinant among the other determinants to determine the level of financial literacy. Therefore, researcher concluded that financial knowledge can be considered as a main determinant of financial literacy among potential customers of financial services in Sri Lanka. And the financial awareness is identified as the least significant determinant. Finally, the researcher provides some suggestions for marketing practitioners of financial service industry and government policy decision makers to develop financial literacy level by promoting financial knowledge for absorbing more consumers towards formal financial system and products of financial services.

A cocriação e a coprodução geram valor e satisfação ao cliente? Análise da percepção de clientes de instituições financeiras

Objetivo do estudo: O objetivo deste estudo foi analisar os efeitos da coprodução e da cocriação na cocriação de valor e na satisfação do consumidor de serviços financeiros.Metodologia/Abordagem: Utilizou-se de modelagem de equações estruturais (structural equations modeling – SEM) para a avaliação empírica do modelo teórico que investiga o valor resultante da interação na produção ou criação conjunta e se o engajamento na cocriação e na coprodução possui efeitos positivos na construção do valor e da satisfação.Principais resultados: O modelo apresentou estatísticas próximas dos valores aceitáveis, porém não suficientes para afirmar que há efeito da coprodução e da cocriação sobre o valor cocriado e a satisfação do cliente. É possível afirmar que há correlação entre as variáveis de coprodução e de Cocriação, mas o baixo poder de explicação aponta para necessidade de ajuste no modelo ou revisão dos constructos.Contribuições teóricas/metodológicas: Ressalta-se a relação entre coprodução e cocriação, pois o modelo amplia o conhecimento sobre os constructos da coprodução e da cocriação aplicadas ao contexto financeiro, com categorias e proposta de modelagem, ao refinar as ideias de coprodução, cocriação, cocriação de valor e valor percebido (LDS).Relevância/originalidade: O estudo constrói parâmetros de medição do valor cocriado na cocriação e coprodução de serviços e indica que os clientes de serviços financeiros coproduzem ou cocriam na extensão do fornecedor, e não do cliente.

Mediation effects of service features on rapport–dependency link in emerging market

PurposeThe purpose of this paper is to explore the mediation impacts of core, relational and tangible service-quality features on the relationship between customer–frontline employee rapport and customer dependency in an emerging market context. The study examines the moderating effects of relationship age and frequency of customers’ physical visits.Design/methodology/approachPartial least squares-based structural equation modelling was used to analyse data from a survey of 290 financial services customers in Dhaka, Bangladesh using the convenience sampling technique.FindingsResults show that relational service-quality features had the largest mediation impact on the rapport–dependency relationship, followed by core and tangible service-quality features. Relationship age was not found to be a significant moderator for any relationship. However, the moderation effect of the frequency of customers’ physical visits to the service premises was significant, but only for the link between relational service-quality features and customer dependency and not for the other two types of service-quality features.Research limitations/implicationsData collected from several other emerging markets would provide more rigorous findings: this is recommended as an avenue for further research.Practical implicationsPractitioners can manipulate specific relational or tangible service-quality features to increase customer dependency on their firms, thus ensuring longer-term customer retention.Originality/valueThis study is the first one to examine the relative significance of the impacts of relational features vs tangible features of services on customer dependency in the emerging market context, with rapport serving as an antecedent.

Artificial Intelligence in Financial Services: Customer Chatbot Advisor Adoption

The growing sophistication technology has helped us exchange Information at our fingertips, eliminating the need for human support.” A platform designed to understand, learn and converse like a human and answer ad-hoc queries in real time is commonly referred to as a Chabot”. Chabot advisor is Artificial intelligence (AI) computer program that impersonates human communication in its natural format including text or spoken language using a technique such as NLP, image processing or video processing along with the end task completion as instructed by the user [1]. The purpose of the paper was to examine what are the drivers for Chabot advisor services adoption (CBA), focusing on financial services. This study presents the explanatory Chabot advisor services factors by extending the Technology Acceptance Model (TAM). The construct in the research are like perceived privacy, perceived security, enjoyment and social influence. This empirical study was conducted in Pune city in India by collecting primary data from 310 online financial services customers. Data collected was analyzed using structural equation modeling using PLS-SEM.The outcome of this study is vital to financial companies like banks, policymakers, technology services adoption literature and provide customer-centric financial services.

Customer Equity Drivers, Customer Experience Quality, and Customer Profitability in Banking Services: The Moderating Role of Social Influence

Financial service organizations are increasingly interested in ways to improve the service experience quality for customers, while customers progressively perceive the commoditization of banking services. This is no easy task, as factors outside the control of the service firm can influence customers’ perceptions of their experience. This study builds on the customer equity framework to understand the linkages between what the firm does (customer equity drivers: value equity, brand equity, and relationship equity), the social environment (social influence), the customer experience quality, and its ultimate impact on profitability. Using perceptual and transactional data for a sample of customers of financial services, we demonstrate the central role played by factors under the control of the firm (value, brand, and relationship equity) and those outside its control (social influence) in shaping customers’ perceptions of the quality of their experience. We offer new insights into the moderating role of social influence in the linkages between the customer equity drivers and the customer experience quality. The managerial takeaway is that the impact of customer equity drivers on the customer experience quality is contingent on the influence exerted by other people and that enhancing customer experience quality can be a way to increase monetary returns.

Service quality versus service experience: An empirical examination of the consequential effects in B2B services

The present study investigates the role of service experience in B2B services vis-a-vis service quality. In particular, the study addresses the question: how do the relative effects of service quality versus service experience in a B2B setting influence the immediate (satisfaction and perceived value) and subsequent customer outcomes (loyalty and word of mouth)? To this end, three surveys were conducted (with a combined sample size of 626) of customers of financial consultancy services. The collected data is subjected to factor analysis and structural equation modeling to test the study hypotheses. Major findings indicate a stronger influence of service experience on satisfaction and perceived value as compared to service quality. Results also show a stronger indirect effect of service experience on loyalty and word of mouth (via satisfaction) compared to service quality. In addition, service experience was found to influence both perceived utilitarian and hedonic value derived from service while service quality was found to influence only utilitarian value. The findings underline the importance of service experience in a B2B setup.

Investor segmentation: how to improve current techniques by incorporating behavioural finance concepts

This article proposes an improved model of individual investor segmentation. The approach employed consisted of a broad review of studies published in renowned journals in recent decades on the segmentation of individual customers of financial services and on factors that influence financial decision making. The new segmentation model proposed adopts a hybrid approach which combines demographic and psychographic variables that previous research revealed to be the most important. After being tested and improved through future quantitative research, this new model may contribute to the improvement of financial institutions' customer acquisition methods and the services they provide, of investors' selection of investments and of the regulations that currently govern the financial sector, in particular, those which regulate prior suitability verification of investors. The new segmentation model proposed here innovates by incorporating psychographic variables ('rationality', 'risk aversion', 'overconfidence' and 'optimism') from psychology and the increasingly recognised behavioural finance area.

Investor segmentation: how to improve current techniques by incorporating behavioural finance concepts

This article proposes an improved model of individual investor segmentation. The approach employed consisted of a broad review of studies published in renowned journals in recent decades on the segmentation of individual customers of financial services and on factors that influence financial decision making. The new segmentation model proposed adopts a hybrid approach which combines demographic and psychographic variables that previous research revealed to be the most important. After being tested and improved through future quantitative research, this new model may contribute to the improvement of financial institutions' customer acquisition methods and the services they provide, of investors' selection of investments and of the regulations that currently govern the financial sector, in particular, those which regulate prior suitability verification of investors. The new segmentation model proposed here innovates by incorporating psychographic variables ('rationality', 'risk aversion', 'overconfidence' and 'optimism') from psychology and the increasingly recognised behavioural finance area.

THE IMPACT OF PERCEIVED CORPORATE AFFINITY FOR TECHNOLOGY ON SERVICE OUTCOMES: A SIGNALING THEORY PERSPECTIVE

Congruity theory suggests that customers’ attitudes toward technology limit the benefits service firms accrue from publicizing their technological relationship, but signaling theory suggests the opposite. Both are used to develop and test hypotheses regarding the relationships between customer perceptions of corporate affinity for technology (PCAFT) and service outcomes. The study reveals that there are differences between customer types. For traditional financial service customers, PCAFT is driven by customers’ personal affinity for technology consistent with selective attention theory and PCAFT is positively related to service performance perceptions. For younger customers, personal affinity for technology moderates the link between PCAFT and service performance perceptions.

The influence of coproduction’s factors and corporate image toward attitudinal loyalty

PurposeIslamic banking system has become mainstream with the increasing popularity and demand of its products and services, including that of non-Muslims and even among the Western market. This paper aims to attempt to explore the factors that influence the co-production of services as well consumer attitudinal loyalty based on consumers’ perception of Islamic financial banking services. It also tests how co-production and customer loyalty as well as corporate image relate to each other. The present study is set up in the context of Islamic financial banking service industry in Malaysia.Design/methodology/approachThe data were collected using the survey method. Convenience sampling was used to collect 502 usable responses via self-administered questionnaires.FindingsThe hierarchical regression results show that communication and commitment have a significant influence on co-production of services, but competence has an insignificant relationship. Co-production and corporate image have a significant influence on the consumer attitudinal loyalty, whereas corporate image has significant influence on consumer commitment. The study findings show that the co-production fully mediates the relationship between the communication and attitudinal loyalty, whereas it partially mediates the relationship between commitment and attitudinal loyalty.Research limitations/implicationsFurther research is required to determine other additional and broader range of constructs. Further testing is therefore required before any generalization of these results can be undertaken, and it would be useful to conduct future studies in other types of industries. There are four segments of Islamic financial services customers, namely, religious conviction group, religious conviction and economic group, ethical observant group and economic rationality group. It is interesting to examine these segments related to the current study on how each segment influences the co-production process and loyalty among them.Originality/valueThe sustainability of a service organization depends on understanding customers’ needs but it also relies on the involvement of its customers. Although similar to-production, value co-creation has been regarded as one of the most prioritized research topics in service and marketing; thus, future researchers might model the relationships based on this concept. Despite these, few studies have been conducted to understand the nature and implications of co-production concept in Islamic financial banking services. This study contributes to the knowledge, in particular, in the context of Islamic financial banking services, especially by integrating additional constructs in determining customers’ loyalty such as the corporate image. To a certain extent, it offers some important insights on the subject of co-production and customer loyalty that eventually will lead to value creation and sustainability of businesses.

A model of protecting financial service clients in the UK

Aim: The purpose of the paper is to describe changes occurring in the UK in consequence of the financial crisis with regard to protecting financial service customers, which prompts towards the answer to the question about the optimum protection model when it comes to protecting financial market customers. The author analyses whether regulations in use in the UK are sufficient to ensure cohesion between the public supervision of the financial market and customer protection. In practice, these value may be in opposition. Design / Research methods: The basic research method used in the paper is analysing sources of law and the literature of the subject. Conclusions: The most recent financial market crises undermined the assumption that public and legal supervision is a sufficient tool preventing market turbulences. The financial market supervision should expand beyond professional financial service providers. At the same time, it is also necessary to ensure customer protection. Having conducted the research, the Author recognises that the model used to supervise the financial market and protect financial service customers adopted in the UK deserves to be multiplied on the basis of Polish law, with a particular focus on transferring the supervisory function to the central bank. Originality / value of the article: The topic is pertinent and important as, in the EU member states, adaptation of new legal solutions in the area of financial supervision is considered. However, the problem tackled in the paper has not received any wider coverage in the literature of the subject. The UK regulations may and, according to the author - should serve as a model for the Polish legislator who is planning to challenge the issue of organising supervision over the Polish financial market in the near future.

FACTORS OF UKRAINIANS’ CONFIDENCE IN THE NATIONAL AND FOREIGN CURRENCIES: ASPECT OF BEHAVIOUR

Introduction. Customers of financial services react to economical conjuncture by behaviour, which can indicate the confidence both in own national currency and bank system in whole. The factor of hryvnia domination in national economy that is an official national currency remains relevant. On the one hand, when volume of the foreign currency rises sharply in the market or savings, then it means not only failure of trust to hryvnia but also the hidden economy dollarization. It causes the plunge of hryvnia value, inflation, and other crisis symptoms. On the other hand, behaviour of financial services customers can be not only the response but also the factor that effects the economic development. Purpose. The article aims to analyse factors that form Ukrainian household preferences in choosing type of currency for saving money on the bank accounts; to investigate factors that affect general behaviour of depositors during the period from January 2006 to November 2017. Method (methodology). Dynamic rows comparison in comparable currencies for the analysis of changes in gross domestic product per capita is used in the research. Such indicators as average salary per one full-time employee, foreign currency deposits, dollarization level, regression coefficients are analysed in compared rates of currencies to have relevant results about household behaviour. Graphical method is used to demonstrate the results of analysis. Results. The trend of declining of household deposits in all types of currencies since 2014 has been analysed. Low cost of hryvnia has pushed households to put money on deposits in stable foreign currencies. However, the recession tendencies have been observed even in the volumes of deposits in stable currencies. Changes in income level of the population have become the main course of deposits fluctuations.