Retail Banking Research Articles

The Relationship between Corporate Social Responsibility on Social Media and Brand Advocacy Behavior of Customers in the Banking Context.

This research study aims to investigate the relationship between corporate social responsibility (CSR)-related communication on social media and brand advocacy behavior of retail banking customers in a developing country. This study also proposes a dual mediating mechanism of customer engagement and customer-company identification in the above-proposed relationship. The data were collected from retail banking customers with the help of a self-administered questionnaire (n = 356). To test the hypothesized relationships, a theoretical model was developed in this study. For hypothesis testing, we used the structural equation modeling (SEM) technique in AMOS software. The empirical analysis results confirmed our theoretical assumption that the manifestation of CSR-related communication on social media by a bank significantly influenced the advocacy behavior of retail banking customers. Our study also confirmed the mediating function of customer engagement and customer-company identification. The findings of this study offer different implications for the banking sector. For example, our study highlights the critical role of CSR-related communication on social media for meaningful customer-brand relationships by promoting the advocacy behavior of customers.

Estimating carbon footprints from large scale financial transaction data

AbstractFinancial transactions are increasingly used by consumer apps and financial service providers to estimate consumption‐based carbon emissions. This approach promises a low‐resource, ultra‐fast, and highly scalable approach to measuring emissions at different levels of potential policy intervention—spanning the national, subnational, local, and individual level. Despite this potential, there is a lack of research exploring the validity of this approach to carbon profiling. Here we address this oversight in three ways. First, we provide a step‐by‐step description of our approach toward estimating carbon footprints from micro‐level transaction data generated by more than 100,000 customers of a large retail bank in the United Kingdom. Second, we quantitatively compare emission estimates obtained from transaction data with those calculated from a more standard data source used in carbon profiling, the largest household expenditure survey in the United Kingdom. Third, we offer a detailed qualitative comparison of the advantages and disadvantages of transactions versus alternative data sources (such as survey data), across key dimensions including data availability, data quality, and data detail. We find that financial transactions offer a credible alternative to survey‐based sources and, if made more widely accessible, could provide important advantages for profiling emissions. These include objective, micro‐level data on consumption behaviors, larger sample sizes, and longitudinal, frequent data capture.

Impact of international expansion strategy on the performance of Japanese banks

The effect of cross-border diversification on bank performance is part of the broader debate on how multinational banking and financial integration affect the global financial economy. Previous studies that examined this relationship present mixed results - namely that cross-border diversification improves bank performance but also increases bank risks that could lead to systemic failure. Even so, this line of debate has not been examined in the case of Japanese banks conducting international operations. The present study questions whether cross-border diversification improves the performance of Japanese banks and to what extent each cross-border expansion activity affects bank performance. The latter was largely ignored in previous studies. Our results show that cross-border diversification improves cost efficiency but decreases/harms the profit efficiency of the banks analyzed. In addition, we find that the expansion of foreign assets and foreign branch operations present funding risks and operational inefficiency. We offer two important recommendations. First, as a major player in international lending, the current expansion activities of Japanese banks require close monitoring and supervision to prevent systemic risk resulting from aggressive and risky overseas expansion activities. Second, the current expansion strategies of Japanese banks, especially the expansion of overseas assets and branch operations (retail banking), should be re-examined.

The Differential Impact of e-Service Quality’s Dimensions on Trust and Loyalty of Retail Bank Customers in an Emerging Market

The purpose of this study is to evaluate the differential impact of the dimensions of e-service quality (website design efficiency, fulfillment, security/privacy, and system availability) on trust and loyalty of retail bank customers in India, an emerging market. The study uses a survey questionniare to collect data from 351 retail banking customers in India to test the hypothesized relationships. Structural equation modeling technique using IBM AMOS software is used. Findings suggest that fulfillment and security/privacy influence trust while website design efficiency, security/privacy, and system availability influence loyalty. Further, trust positively influences loyalty in the context of retail banking in India.

The Differential Impact of e-Service Quality’s Dimensions on Trust and Loyalty of Retail Bank Customers in an Emerging Market

The purpose of this study is to evaluate the differential impact of the dimensions of e-service quality (website design efficiency, fulfillment, security/privacy, and system availability) on trust and loyalty of retail bank customers in India, an emerging market. The study uses a survey questionniare to collect data from 351 retail banking customers in India to test the hypothesized relationships. Structural equation modeling technique using IBM AMOS software is used. Findings suggest that fulfillment and security/privacy influence trust while website design efficiency, security/privacy, and system availability influence loyalty. Further, trust positively influences loyalty in the context of retail banking in India.

How Does CEO’s Human Capital Influence Innovation Strategy of Russian Banks?

The paper evaluates influence of human capital of top management on innovation strategy on the basis of study of innovation activity of Russian commercial banks in the period of 2017–2019. We have compiled a rating of commercial banks for retail segment innovations, selected the four least innovative banks. We have studied the key indicators of human capitalof top management in eight chosen banks. The paper has revealed the interrelation between different elements of human capital of top management and innovation strategies of Russian commercial banks. We have defined personal traits which portray a manager who exerts influence on innovations in a company.
 The paper is intended for investors in emerging markets which try to understand the evaluation mechanisms of impact of the financial companies’ current management on their future development path, for analysts engaged in forecasting trends related to optimization and automation in retail banking and assessment of corporate innovative capacity.

Determinants of bank lending rates: Empirical evidence from conventional retail banks in Bahrain

The study attempts to identify the determinants of lending rates in the Kingdom of Bahrain. It examines the impact of certain macroeconomic and banks’ aggregate data variables on the level of interest rates on loans charged by Bahraini conventional retail banks using quarterly data for the period from the 4th quarter of 2012 to the 4th quarter of 2021. The study tests the impact of a consumer price index (CPI), GDP growth rates, loan-to-total assets (loan ratio), liquid assets as a proportion of total assets (liquidity position), personal lending rate, loan-to-deposit ratio, money supply (M2) growth, non-performing loans (NPL) ratio, and return on assets (ROA) on banks’ lending rates. The study is mainly based on data retrieved from the publications of the Central Bank of Bahrain and the CEIC Data Global Database. The study uses EViews 12 The results reveal that CPI, liquidity position, the lending rate for personal loans, deposit ratio, and return on assets are the major determinants of bank lending rates to businesses. The study found that GDP growth, money supply growth, and non-performing loans ratio are insignificant in determining the lending rate to businesses in Bahrain. In addition to yielding insights to the respective authorities, this study also helps creditors, investors, and borrowers predict interest rates and thus manage their assets and liabilities more efficiently.

Use of Design Theories and Principles in Visual Brand Identity Elements in Commercial and Retail Banks

Studies on the processes that link logos and space design aesthetics to visual perception and recognition of visual brand identity (VBI) remain scant. Consequently, this study analyzed the visual correspondence between visual brand identity elements such as logos and interior spaces in commercial retail banking companies by assessing the foundations of their aesthetics formation and the role of aesthetic principles, aesthetic appraisal, and aesthetic impression. Using a qualitative approach, four commercial retail banking companies in Jeddah, Saudi Arabia were analyzed through semi-structured interviews with professional designers and design academics. A comparative method was used to determine the visual correspondence between the aesthetics of the logos and the interior spaces. The findings confirmed the importance of using design characteristics and theories for designing the elements of VBI. The results encourage the use of design for building visual correspondence between the elements of a visual identity of brands. This study provides a useful addition to knowledge on the place of design principles in the creation of VBI.

Do goal orientations really influence performance?

PurposeThe creativity of retail employees seems to be of the utmost importance for ensuring the performance of organizations in service settings. This paper contributes to the existing theory by investigating the direct and indirect effects of goal orientations on the creativity and performance of retail employees. The authors propose a framework depicting the relationships between goal orientations and employee creativity and performance, including the intervening effects of self-efficacy and customer orientation.Design/methodology/approachThe study was conducted with retail frontline employees of a large retail bank in Portugal. The sample consists of 267 valid responses. Structural equations are used by applying the maximum likelihood method to test the conceptual framework.FindingsResults are broadly supportive of the hypotheses. Learning orientation is, directly and indirectly, related to creativity, but only indirectly to performance. As to performance orientation, it is indirectly related to creativity through self-efficacy and customer orientation, and directly as well as indirectly, to performance. The authors investigate the extent to which the effects of goal orientations on creativity and performance are mediated by self-regulatory mechanisms, namely self-efficacy, and customer orientation.Originality/valueThe results recognize that learning and performance goals are neither mutually exclusive nor contradictory, which collide with past empirical evidence showing that learning goals are generally associated with more favorable outcomes and performance goals with more negative or equivocal ones. These outcomes underscore the need and relevance for managers to foster both goal orientations to promote the creativity and performance of retail employees, representing a particularly salient issue in retail businesses characterized by significant interpersonal interactions.

The Impact of Mobile Banking Adoption on Retail Banking in Germany

Zusammenfassung Dieses Paper analysiert mögliche Änderungen im Privatkundengeschäft der Kunden nach der Einführung von Mobile Banking. Es wird auf einen qualitativ hochwertigen Datensatz auf Einzelkundenebene von einer deutschen Genossenschaftsbank zurückgegriffen und eine Differenz-von-Differenzen-Analyse für die Gruppe der Anwender und eine gematchte Stichprobe der Nicht-Anwender durchgeführt. Es kann ein starker Anstieg der Online-Banking-Transaktionen nach der Einführung des Mobile Banking beobachtet werden, während Transaktionen an Geldautomaten, Callcentern und Bankfilialen weniger häufig genutzt werden. Darüber hinaus überweisen Kunden häufiger Geld über digitale Kanäle und zahlen bargeldlos, nachdem sie Mobile Banking freigeschaltet haben, was zu Lasten von Offline-Geldüberweisungen und Bargeldabhebungen geht. Schließlich ist erkennbar, dass es wahrscheinlicher ist, dass Nutzer von Mobile Banking die von der Bank beworbenen Produkte kaufen und die aktive Nutzung von Mobile Banking die Loyalität der Kunden gegenüber der Bank erhöht. This paper analyzes potential changes to clients’ retail banking behavior after they have adopted mobile banking. We draw on a high-quality data set at the level of the individual client, which we obtain from a German

When and why does competitive psychological climate affect employee engagement and burnout?

Managers and scholars now more than ever recognize the importance of emphasizing and urging improved performance among employees. Extant literature and prior work highlight that perceived interpersonal competition in the workplace is influential in determining employees' career outcomes by shaping their job or career development experience (i.e., more or less engagement and burnout at work). However, our current understanding of when and why competitive psychological climate contributes to more or less engagement and burnout at work is limited, particularly from a work-specific, behavioral regulation perspective. Drawing on conservation of resources (COR) theory, and using multisource data collected from 306 employees and 37 supervisors in the retail bank sector, our results show that competitive psychological climate, when supported by contingent reward, facilitates exploratory learning, which in turn leads to more engagement and less burnout at work. In contrast, when aligned with contingent punishment, competitive psychological climate promotes exploitative learning, which in turn contributes to more burnout at work. Our work contributes to vocational theory and practice by specifying the work-specific conditions in which and behavioral processes through which employees respond positively and negatively to competitive psychological climate. Our findings provide managers with novel insights into their influential roles in facilitating the specific type of work behaviors employees adopt in response to competitive psychological climate, and how they subsequently feel at work.

Predicting Churn of Credit Card Customers Using Machine Learning and AutoML

Nowadays, a major concern for most retail banks is the risk that originates from customer fluctuation and that increases the cost of almost every financial product. In this work, the authors compared different approaches and algorithms to predict the relevant features that affect the customer churn, which means we can find ways to reduce the customer churn and create financial inclusion. This research was conducted by applying different machine learning techniques like decision tree classifier, random forest classifier, AdaBoost classifier, extreme gradient boosting, and balancing data with random under-sampling and random oversampling. The authors have also implemented AutoML to further compare different models and improve the accuracy of the model to predict customer churn. It was observed that applying AutoML highest accuracy model gave the accuracy of 97.53% in comparison to that of the decision tree classifier, which was 93.48% with the use of low processing power. Important features were ‘total transaction amount' and ‘total transaction count' to predict customer churn for a given dataset.

The role of internal market orientation on the adoption of external market orientation in retail banking

PurposeThe purpose of this study was to investigate the role of internal market orientation on the adoption of external market orientation among the retail banks in the United Arab Emirates (UAE). This study adds to the previous research regarding external market orientation. It also develops an empirical model on the basis of the results.Design/methodology/approachThis study used a self-administered structured questionnaire to collect data from the front-line marketing and non-marketing employees from the banks. Data were collected from 98 branches of all the 49 banks that operate in the UAE. Two major emirates of the UAE, namely, Abu Dhabi and Dubai, were considered for data collection. Each bank contributed responses from a minimum of two branches, and 113 completed questionnaires were received out of 196 respondents approached for data collection. The reliability, convergent and discriminant validity issues of the data were assessed, and the results of these confirmed the appropriateness of the data used in this study.FindingsDirect entry regression and multivariate analysis of variance were used for identifying the conclusions surrounding the hypotheses of the study. The results measured the extent of internal market orientation and employees’ organisational commitment. They both confirmed their positive role on the adoption of external market orientations among the retail banks in the UAE. The results of the study further provided evidence that once an external market orientation focus is adopted, this benefits customer loyalty and satisfaction in addition to overall positive business outcomes for the banks concerned.Originality/valueThe findings of this study support the theoretical arguments of the role of employees and internal market orientation on the adoption of external market orientation. This study further identifies the reason why the adoption of external market orientation is critical for the success of banks.

How am I doing financially compared to expectations? An experimental comparison of messaging strategies in investor newsletters

PurposeThis study aims to investigate which messaging strategies employed in personalised newsletters could be used for improving the propensity of individuals to save or invest and secure their financial well-being.Design/methodology/approachThe authors conducted a field experiment with 4,782 clients at an Estonian retail bank. For three months (after measuring baseline levels for a month), the participants received personalised monthly newsletters with either a praising or a scolding message based on comparing their recent investment decisions to their past decisions.FindingsTheir results suggest that newsletters could serve as an encouragement for those who already invest significant amounts each month and a reminder for those who have stopped regular investing for a month. The newsletters robustly increased investments in securities accounts for these groups.Research limitations/implicationsThe authors contribute to the marketing literature by examining praise and scolding messaging strategies within the same channel and company, focussing on the individual's past behaviour. They raise several hypotheses to be tested in future randomised controlled trials (RCTs).Practical implicationsThe authors’ results show the importance of investor behaviour analysis as the effectiveness of the newsletter intervention largely depended on the type of customer it was served to. This highlights the importance of personalisation.Originality/valueThe results show that a given message tends to influence only specific groups of investors. Identifying these groups is valuable information for messaging strategies.

Ireland

The FSAP took place against the background of a fast-evolving financial sector in Ireland and heightened uncertainty in the global economy. The Irish financial landscape has undergone significant changes since the global financial crisis with increasing divergence between an innovative and fast-growing international finance sector and the retail banking sector that has been consolidating and faces post-GFC operating restrictions and increasing competition from non-bank players. In the meantime, both the global pandemic and Brexit have left uneven marks across the economy, while there are risks from the unwinding of public support that has softened COVID-19 shock’s impact on the economy. Going forward, various ongoing and emerging risks, such as persistent inflationary pressures, fueled by supply bottlenecks, and the war in Ukraine, may impede recovery, and magnify vulnerabilities to downside shocks.

Cooperative Banking: A Way for Inclusive Growth Through Co-Operative Micro Financing

Abstract: A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposits. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks. In most countries, banks are regulated by the national government or central bank. Banking is defined as the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to conduct economic activities such as making profit or simply covering operating expenses. Cooperative Microfinancing a new option for Government & Development Organizations. Micro financing is the provision of financial services to poor and low-income households without access to formal financial institutions. Microfinance is described as banking for the poor. Microfinance programs provide Micro credit/loans, Micro savings, Micro insurance, training to group members and other financial services to low income and poor people for use in small businesses. In Cooperative Micro Financing we are essentially looking at a "double bottom line"— social gains and commercial success. Conventional Micro financing setup is somewhat also lying on the same concept however Cooperative financial system naturally focus on welfare aspect. This paper tries, to inclusive growth among poor people through Co-operative Micro financing. This paper is an attempt to introduce an innovative and productive banking system in Kerala through co-operative micro financing. The author is aiming for the evolution of banking system in India especially in Kerala having an inclusive growth and upfilment and empowerment of poor by introducing new ways in the existing co-operative banking structure through Kudumbashree

Factors affecting satisfaction and intention to repurchase retail banking services in Vietnam

Retail banking services of Vietnamese commercial banks are developing along with economic growth, improving the repurchase behavior of customers helps banks maintain a competitive edge in the market. Therefore, the research was conducted on factors affecting satisfaction and intention to repurchase retail banking (RB) services. This study builds and validates the Structured Equation Model (SEM) to assess the causal effect of factors such as service quality, brand reputation and customer trust on customer satisfaction and repurchase intention RB services of commercial banks in Vietnam. Survey results of 605 customers have shown that 6 factors affect positively the intention of individual customers to repurchase banking services. In the transition from satisfaction to intention to repurchase the services, there are two moderating variables included in the study, which are switching costs and commitment from the relationship. The research results can be suggestions to help customers improve their intention to use the services again at Vietnamese commercial banks.

Major Opportunities, Challenges, Financial Technological Implications of Fintech in Indian Context

India, which has a population of around 1.3 billion, is a growing market for fintech. India is an exciting global market for financial innovations due to the country's high percentage of unbanked and underbanked citizens. Fintech is viewed as a paradigm shifter and disruptive innovation that has the power to upend the established financial markets. In the previous five years, fintech has expanded quickly in India, and in the near future, more growth is anticipated. The essay begins by concentrating on the fundamental categories of financial technologies and their roles. It then goes on to analyze the potential and challenges these technologies present in the Indian corporate climate. This study looks at the specifics of the financial technology sector, the definition of FinTech, and possible classifications for the financial technology solutions used by businesses. FinTech, also referred to as financial technology. Typically, start-ups focused on challenging less softwaredependent businesses and financial processes are called financial technology companies. Fintech is not just for start-ups. The term "fintech" refers to a new area of financial services that has emerged in the twenty-first century. With the help of PwC's knowledge and expertise in this field, this research seeks to offer important insights into the development of the FinTech sector in India. PwC claims that Financial Services and Fintech are cooperating rather than competing as much. In its Global Fintech report, PwC examines the FinTech’s expanding impact on the financial services industry. With the help of PwC's knowledge and expertise in this field, this research intends to offer important insights into the development of the FinTech sector in India. It uses cutting-edge technologies to give customers and financial institutions a variety of contemporary tools to manage their accounts as it encompasses advancements in investment, retail banking, investment management, and even cryptocurrencies like bitcoin.

The requisite role of emotional intelligence in customer service in the retail banking sector

PurposeThis study aims to descriptively identify and refine the role of emotional intelligence (EI) in the retail banking employee–customer contact context, and prescriptively use this knowledge to develop a framework for improving true customer service without excess organizational cost, in Lebanon.Design/methodology/approachThe research adopts the classical interpretive/constructivist ontology and the interpretivism/constructivism epistemology, and it rests on a tripod of methodological foundations. The first leg is the theoretical work that sets the extant scientific ground for the empirical work to develop. The second incorporates the main (qualitative) empirical tools, i.e. 40 interviews with customers and HR managers (NVivo-analyzed), plus a critical incident technique study. The third includes the supportive tools of secondary data and an expert panel composed of industry and scholarly specialists.FindingsEI was empirically shown to modulate the levels of customer satisfaction and to hold a critical role in the company–customer interface, albeit one that is currently and unjustly both undervalued and ineffectively controlled. The findings identify the key factors and exhibited behavioral attributes of EI within the customer service process, and they integrate all into a comprehensive framework of both scholarly and executive worth.Originality/valueThis study provides distinct theoretical elucidations and conceptualization that have identified and interrelated the relevant works on the subject; empirically refines the variables involved in the EI context of retail banking customer service; and culminates in the form of the proposed framework that incorporates and interrelates the findings into an empirical-data-based composition of both scholarly and executive orientation and worth.

Salesmanship: the influence of social networks on sales-service ambidexterity

PurposeAlthough social networks play an important role in individual ambidexterity, few studies have examined the impact of salespeople's social networks on sales-service ambidexterity. The purpose of this paper is to explore how salespeople's internal and external social networks affect sales-service ambidexterity.Design/methodology/approachThe unique data of 331 salespeople from 39 units in retail banking industry and insurance industry were collected, and the hierarchical linear model was adopted to test the hypotheses. Finally, the alternative measure of the dependent variable and the alternative estimation method were adopted for robustness test.FindingsThe results show that the strength of salespeople's internal social networks and the extensiveness of salespeople's external social networks could facilitate sales-service ambidexterity of salespeople separately and synergistically. Salespeople's role breadth self-efficacy partially mediates the influences of internal and external social networks on sales-service ambidexterity, while empowerment climate and transformational leadership positively moderate the aforementioned mediational process by strengthening the relationship between salespeople's role breadth self-efficacy and sales-service ambidexterity.Practical implicationsPractical guidelines are provided for managers to shape ambidextrous salespeople by facilitating salespeople's internal and external social networks, promoting transformational leadership and creating empowerment climate within the unit.Originality/valueTo the best of the author's knowledge, this paper is the first to systematically examine the impact of salespeople's social network on sales-service ambidexterity. Drawing from social cognitive theory and the ambidexterity literature, this research reveals the mechanism of how salespeople's internal and external social networks contribute to sales-service ambidexterity.