Retail Banking Sector Research Articles

Internal marketing: a qualitative study of culture change in the UK banking sector

This paper discusses the findings of a qualitative study carried out in the UK retail-bank sector on the implementation of Internal Marketing (IM). While the overall aim of Internal Marketing is the creation of a unified culture around the values of customer service, employee empowerment and service quality, the evidence suggests that Internal Marketing is perceived and enacted in ways that at times contradict such managerial rhetoric. The paper sheds light on what internal marketing is (its underlying principles within the organisations studied), the ways in which the banks studied use it in order to change their organisational culture as well as the difficulties encountered in implementing IM as a culture change agent. It concludes that the implementation of Internal Marketing in the banks under the study is problematic and does not result into a unified organisation culture. Indeed, implementing Internal Marketing is a process fraught with difficulty, which at times leads to divisions, ruptures and ambiguity in the newly created organisational culture.

Service Quality Scale Development in Indian Retail Banking Sector:An Empirical Investigation

The time has arrived for a re look on the research literature on service quality as the SERVQUAL instrument forms the basis on which all other works have been actualized. Interestingly, over the years, the conceptualization, measurement and applications of SERVQUAL across different industrial and commercial settings are not bereft of controversies. The current research work strives to bring to light some of the critical determinants of service quality that have been overlooked in the earlier models and proposes a revised comprehensive model and an instrument framework for measuring customer perceived service quality. Data for this study has been collected from customers of Indian retail banking sector. The present study offers a systematic procedure that could form the cornerstone for providing further insights on the conceptual and empirical comprehension of customer perceived service quality and its constituents.

Youth based segmentation in the Malaysian retail banking sector

PurposeThe purpose of this research is to address the important question of how to attract and retain a fragmented and ecologically diverse youth segment in a rapidly changing retail banking sector such as Malaysia.Design/methodology/approachThe study utilises a combination of theoretical frameworks, and quantitative techniques to ascertain the most important motivational goals for Malaysian youth when making e‐channels choices.FindingsThis study generates empirical evidence which supports the general theory that prominent cultural values such as those that stress integrity of the referent group, self‐reliance and social identity are important influencers of the likelihood of adopting selected electronic banking channels.Research limitations/implicationsFurther research is needed on all retail banking e‐channels apart from those currently most readily accessible in Malaysia. Similarly, researchers may consider other demographic segments for purposes of generating more robust theoretical frameworks.Practical implicationsService innovation characteristics as well as prominent cultural values that stress, self‐reliance, integrity of the reference group and social identity and compliance may have significant implications for marketing practice even where diverse youth segments are concerned.Originality/valueThis study is the first that seeks to ascertain the importance of prominent individual cultural values as predictors of consumer choice in the context of e‐banking services in Malaysia. Therefore, this study thus sets an important benchmark for further research in the area.

Customers' perception of electronic service delivery in the UK retail banking sector

PurposeThis study aims to explore the key factors of the electronic service quality (e‐SQ) perceptions of UK banking customers and to evaluate the customers’ perceptions of their banks’ actual performance on the identified e‐SQ dimensions.Design/methodology/approachA survey has been used to collect primary data and 135 usable questionnaires were used in the analysis. Questionnaire items were developed through a two‐stage process involving a review of the main measurement scales employed in previous studies and two focus group interviews to identify a series of attributes for assessing electronic banking service quality. Factor analysis procedure was employed to identify the underlying structure among the explored e‐SQ attributes.FindingsExploratory factor analysis uncovered six composite dimensions of electronic service quality, including the provision of convenient/accurate electronic banking operations; the accessibility and reliability of service provision; good queue management; service personalisation; the provision of friendly and responsive customer service; and the provision of targeted customer service. Further analysis using importance‐performance analysis revealed that the UK customers’ perceptions of their bank actual performance on these revealed that e‐SQ dimensions were largely modest.Research limitations/implicationsGenerally relate to the one industry focus, the exploratory factor analysis employed, and the rather generalized view of electronic banking adopted. Future research should aim to improve on these by replicating the study in multi‐industry settings, assessing the stability of the revealed factor structure, and examining whether particular e‐SQ factors vary in importance across different technology types.Originality/valueThis study has drawn on a sample of 135 UK retail banking customers in exploring the key dimensions of the relatively new electronic service quality (e‐SQ) construct, and evaluating how the survey respondents perceive their respective banks' performance on those critically regarded e‐SQ dimensions.

Service Quality Measurement in Indian Retail Banking Sector: CA Approach

Service Quality Measurement in Indian Retail Banking Sector: CA Approach

Competition and R&D in retail banking under expense preference behaviour

Cost-reducing R&D activities are examined in the context of a retail banking sector where some entities exhibit an expense preference. The results reveal that the effects from R&D interact with the effects in the previous literature in shaping the equilibrium configuration.

Measuring customer quality in retail banking

The retail banking sector makes heavy use of statistical models to predict various aspects of customer behaviour. These models are built using data from earlier customers, but have several weaknesses. An alternative approach, widely used in social measurement, but apparently not yet applied in the retail banking sector, is to use latent-variable techniques to measure the underlying key aspect of customer behaviour. This paper describes such a model that separates the observed variables for a customer into primary characteristics on the one hand, and indicators of previous behaviour on the other, and links the two via a latent variable that we identify as ‘customer quality’. We describe how to estimate the conditional distribution of customer quality, given the observed values of primary characteristics and past behaviour.

Consequences of market orientation for customers and employees

PurposeThe present empirical study intends to address a significant topic for business management, such as the influence of market orientation (MO) on the internal and external environments of an organisation. More precisely, the main objective of this paper focuses on the effect of such an orientation on employees – organisational commitment and OCBs – as well as on customers – satisfaction and perceived service quality.Design/methodology/approachStructural equation models are employed to analyse the data collected from the spanish retail banking sector in order to verify the hypotheses corresponding to the causal relationships proposed in our research model.FindingsThe results achieved in this research represent significant contributions both from a theoretical perspective as well as for management in the service industry. From a theoretical perspective, these findings reinforce the research position stressing the role of the employees in the MO relationship and the operational level of the business incorporating new evidence into this emerging field of study.Research limitations/implicationsLimitations of the study can account for the anomalous relationships that have been identified. First, the cross‐sectional nature of the study could have been an obstacle to revealing short‐term answers. In addition, the empirical study focused on one particular case in the service industry – banking – hindered the generalization of results.Originality/valueProvides further research on the role of market orientation as a major source of achieving sustainable competitive advantage.

Test of a service profit chain model in the retail banking sector

Research has shown that organizational subunits where employee perceptions are favourable enjoy superior business performance. The service profit chain model of business performance (Heskett, Sasser, & Schlesinger, 1997) has identified customer satisfaction as a critical intervening variable in this relationship. This paper examines the relationships between organizational climate, employee attitudes, customer satisfaction, and sales performance in the retail‐banking sector. The role of customer satisfaction as a mediator between employee attitudes and sales performance is examined in a large sample of bank branches, spanning multiple organizations. Mediation effects are found, which border on significance when the sample size is large, but the effects seem to be too small to be of practical importance. It is argued that alternative formulations of the service profit chain model may provide more powerful explanations of the link between employee attitudes and business performance.

Competition, risk taking, and governance structures in retail banking

This paper investigates the extent to which the linkages between bank performance and governance structure affect deposits market competition and risk taking incentives when commercial banks compete with organizations with objectives different from profit maximization. These organizations include savings banks whose corporate and ownership structure yields an objective function that can incorporate labour expenses. It is found that such objective function enables the savings banks to capture a greater market share of bank deposits and to take on relatively less risk in their portfolio of investments. The empirical evidence from the Spanish retail banking sector documents these conclusions.

The Internet and consumer power: the case of Spanish retail banking

This study aims to measure the impact of the Internet in Spain's retail banking sector, considering two fully linked key constructs: consumer power and consumer value. We define a new conceptual framework, three core propositions and 11 hypotheses, and contrast them in the context of the retail banking sector in Spain. Using a multicase method, we demonstrate that the Internet has increased the customer value of retail banking consumers and proceed to explore the causes for this. Our study constitutes a three-pronged contribution: 1. We define a new conceptual framework to explain the impact of the Internet on the customer power and customer value. 2. In the context of Spain's retail banking sector we contrast the observations made in the most recent literature on the subject, because up to now there has been little opportunity for these to be empirically tested. 3. We demonstrate, in a qualitative way, that the drivers identified in strategy and marketing literature are impacting on consumer value, though not with equal force. However, we put forward a differentiation consisting of two stages, which we denote as first transformation and second transformation. The drivers of the first transformation are the new players and the new competitive strategy (the supply side). The driver of the second transformation is consumer power (the consumer side).

Corporate social responsibility and structural change in financial services

This paper argues that when corporate social responsibility (CSR) is conceptualised pragmatically as a response by businesses to society's concerns it acts as an element of structural change with implications for the strategies of firms and ultimately for industry structure. Furthermore, industry specific aspects of CSR are important and governmental influences and financial regulation provide an added dimension to the impact of CSR on the financial services industry. As an element of structural change, CSR acts as an environmental discontinuity and forces firms to realign their positions within their operating environment. A structural change paradigm is developed to examine trends which are emerging within retail banking as a result of CSR. In the UK retail banking sector, the impact of CSR is increasingly manifest in the efforts to create a competitive advantage out of CSR strategies, the growing prominence of mutual financial institutions in government policy and collaborative efforts between a range of financial institutions.

Preconceptions about Service

Recent research has suggested that customer evaluation of service encounters depends not only on the attributes of the particular service rendered but also on other cognitive and affective factors. This article sets out to investigate the effects that preconceptions about service types have on customers’ perceptions and on their overall evaluation of service encounters. The study is founded on Categorization Theory and Perception Distortion Theories and poses and tests three hypotheses on a customer sample taken from the Spanish retail banking sector. The results show a strong effect of preconceptions about the service category on the perceptions of quality during the service encounter; however, their direct effect on the overall evaluation of the service is unsubstantiated in our study.

Retail Banking and Customer Behaviour: A Study of Self Concept, Satisfaction and Technology Usage

Prior research has investigated the effects of self-image congruence on satisfaction and brand preference. With the help of empirical research, the paper argues that, while self-image congruence may be related to customer satisfaction in a normal context, it may not necessarily affect satisfaction levels when customers are using technology-based self-services. Furthermore, during encounters involving self-service technologies, customers might experience satisfying or dissatisfying incidents which may not be related to their overall satisfaction and brand preference levels. The paper discusses implications for brand managers in the retail banking sector and suggests future research directions.

The impact of different media channels on consumers and the wastage of potential advertising opportunities through existing customer communications

The first section of this paper investigates the impact of different media channels on the consumer, including television advertising, direct mail, direct Email and SMS advertising. It reveals that existing customer communications such as bills, statements and customer service letters top the survey commanding an average 38 seconds of consumer attention time. The second half of this report looks into the wastage of existing customer communications as an advertising tool. The research indicates that £365m of potential advertising opportunity is wasted by the financial services sector each year, which is the largest wastage of the industries surveyed. The retail banking sector wastes the highest proportion, with credit card issuers coming second. Direct insurance providers fare much better, although the number of customer interactions is far fewer than with credit card issuers or banks.

Developing retail credit infrastructure: a network perspective

This paper explores theoretical and practical aspects (i.e. resources allocated, activities undertaken, actors/decisions involved) of corporate “parenting” in the development of a retail lending network. A review of the relevant corporate strategy, supply‐chain, networks and services management literature underpins a preliminary content (capability; market orientation) and process (top‐down; bottom‐up) typology of network parenting. This provides the structure for discussion of findings from extended analysis of a UK retail banking sector case study. Analysis of the case data suggests that a richer conceptualisation of different forms of “network parenting” is needed to provide both practical guidance and support further theoretical developments. A preliminary typology (with contingent management mechanisms) is developed and used to represent the parenting trajectory described in the case study. The paper concludes with a discussion of possible directions for future work.

FACTORS INFLUENCING CUSTOMER SATISFACTION IN THE RETAIL BANKING SECTOR IN PAKISTAN

Customer satisfaction is a significant issue for most marketers. Previous research has identified various factors that determine customer satisfaction in retail banking sector in Western countries. The current paper reports findings from a survey, which looked into determinants of customer satisfaction in the retail banking in Pakistan. A total of 300 questionnaires were randomly distributed to customers of a specific bank in Pakistan. Results indicate that there was a strong relationship between service quality and customer satisfaction. There was, however, no relationship between customer satisfaction and tangible aspects of the service environment. The paper discusses implications for bank management.

Internal Marketing in the UK Retail Banking Sector: Rhetoric or Reality?

Internal Marketing in the UK Retail Banking Sector: Rhetoric or Reality?

Internal Marketing in the UK Retail Banking Sector: Rhetoric or Reality

The article sheds light on the relationship between internal marketing rhetoric and its practice within the UK retail bank sector and addresses a deficiency in the current internal marketing literature particularly in terms of implementation. A practitioner view is explored through data generated by in-depth qualitative interviews with thirty-five branch managers and twenty-one employees. The study produced some interesting findings structured in the form of relationships which highlighted the distinct nature of the internal marketing practice within the specific sector. This article sheds light on the six emergent relationships. The examination of the relationship between the rhetoric and practice of internal marketing within the UK retail bank industry raises some criticisms regarding the motives behind the adoption of internal marketing and the current implementation approach adopted by these organizations. The study’s conclusions can be used as an outline agenda for future research aimed at strengthening internal marketing’s legitimacy in the academic literature and highlighting its contribution to practitioners.

Insights into customer motivations for switching to Internet banking

The main objective of this paper is to provide an insight into some factors which explain why customers in the retail banking sector might consider switching from traditional methods of conducting their banking activities to Internet banking, either partially or fully. In particular, the customers' satisfaction, or otherwise, with various elements of traditional banking offerings, along with various demographic factors, are compared to their propensity to use Internet banking. Results suggest that, perhaps surprisingly, customers' general level of satisfaction with bank charges and overdraft interest rates have no significant influence on their propensity to use Internet banking. Satisfaction with the bank's efficiency and responsiveness to remote enquiries is associated with a higher propensity to use Internet banking, as is satisfaction with availability and reliability of ATMs and lower satisfaction with elements of 'in-branch' service.