Reasons to switch: empowered vs less powerful bank customers

2019 ◽  
Vol 37 (6) ◽  
pp. 1441-1461 ◽  
Author(s):  
Jeanette Carlsson Hauff
Keyword(s):  
Service Provider ◽  
Financial Services ◽  
Online Survey ◽  
Financial Institution ◽  
Service Failure ◽  
Survey Methods ◽  
Mediating Effect ◽  
Switching Behavior ◽  
Content Type ◽  
Consumer Switching

Purpose The purpose of this paper is to contribute to the existing literature of driving and impeding switching factors by operationalizing the catalyst factor of perceived power among customers. Acknowledging the importance of trust in a financial context, a trust-based framework for the analysis is used. The study explicitly analyzes factors of importance for subsequent switching of banks for empowered customers (i.e. savers) and low-on-power customers (i.e. borrowers). Design/methodology/approach The study measures factors driving or impeding switch of service provider, together with measures of trust and power using online survey methods. The sample is intended to focus on savers and borrowers, defined quantitatively as well as perception wise. Through a multi-group SEM analysis, differences between the samples of savers and borrowers are analyzed. The dependent variable was in both cases inclination to switch. Findings The paper manages to define differences between empowered and less empowered customers, such as borrowers and savers. The mediating effect of trust prevails only for borrowers: here, the only effect on switching behavior stems from a full mediation of stability through trust. For savers, direct influences of both service failure and lack of involvement on trust are of major importance. The importance of trust, however, is lacking; for the sample of savers, the link between trust and switching behavior is insignificant. Practical implications The results may be used as a tool box in order to address consumer switching behavior and mobility in the financial services market. The biggest obstacle for switching banks among savers is the low level of involvement. This has clear implications regarding how to increase switching, e.g., by raising interest. Focusing instead on borrowers, stability of the chosen financial institution turned out to be the most important factor. Originality/value This paper introduces a view on consumer switching behavior, taking into account differences regarding service provider relations (empowered savers vs less empowered borrowers) and the importance of trust in these two settings. The paper introduces trust as a mediator between switching behavior and four determinants: stability, personal relations, service failure and internet-related issues, and involvement.

Using latent commitment profile analysis to segment bank customers

2019 ◽  
Vol 38 (3) ◽  
pp. 627-641
Author(s):  
Gordon Fullerton
Keyword(s):  
Service Provider ◽  
Financial Services ◽  
Financial Institution ◽  
Panel Study ◽  
Financial Service ◽  
Continuance Commitment ◽  
Content Type ◽  
Customer Commitment ◽  
Service Relationships ◽  
Wide Range

Purpose Allen and Meyer’s (1990) three component model of organizational commitment is now well accepted in the study of consumer–service provider relationships (Keiningham et al., 2015). Commitment profiling is a “person-centered approach” to commitment (Meyer et al., 2012) which examines groups of individuals who share similar commitment mindsets. The purpose of this paper is to apply commitment profile methodology to the analysis of customer–firm relationships in the context of financial services. Design/methodology/approach This method was applied with customer data collected as part of a nation-wide panel study of consumer financial service relationships in Canada. In total, 428 banking customers participated in this study. Findings This study identified five distinct bank customer commitment profiles (fully committed, affective commitment dominant, continuance commitment dominant, moderately committed and uncommitted) that varied in both size and behaviors and intentions. Research limitations/implications This is an exploration of commitment profiling as a technique to understand the ways in which consumers differ in terms of their commitment mindsets and behavior. It has application to a wide range of service relationships beyond financial services. Practical implications This has applications for market segmentation on the basis of customer commitment mindsets in many service sectors, but banking in particular. Since financial institutions have adopted various techniques to measure customer lifetime value (CLV), it would be appropriate to understand how various commitment profiles (segments) are linked to CLV. Originality/value While commitment profiling is a well-developed approach in understanding the nature of the firm–employee employment relationships, this is an early and exploratory attempt at applying this method in the context of a customer–financial service provider marketing relationship. This is a novel way of understanding bank customer segments in terms of their felt commitment to the financial institution with which they do business.

Inertia in services: causes and consequences for switching

2017 ◽  
Vol 31 (6) ◽  
pp. 485-498 ◽  
Author(s):  
David M. Gray ◽  
Steven D’Alessandro ◽  
Lester W. Johnson ◽  
Leanne Carter
Keyword(s):  
Service Provider ◽  
Online Survey ◽  
Structural Model ◽  
Switching Costs ◽  
Service Providers ◽  
Switching Behavior ◽  
Service Firms ◽  
Actual Behavior ◽  
Path Modeling ◽  
Content Type

Purpose This paper aims to examine the antecedents of customer inertia (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customer inertia is said to reduce the incidence of service provider switching; however, little is known about the antecedent drivers of inertia. Design/methodology/approach The conceptual model was tested by a longitudinal/discontinuous panel design using an online survey research of 1055 adult (i.e. +18 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimate both the measurement and structural components of the model to determine the nature of the relationships between the variables. Findings Findings of the PLS structural model provide support for the direct relationship between customer inertia and its antecedents (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs). The results show that customer inertia has a moderate negative effect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other than indirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of the antecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results also show that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonably robust given past switching behavior and contract status of consumers. Research limitations/implications The authors find evidence which explains some of the causes of inertia, and show that it has both direct and moderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, support was found for its indirect role through intent as an influence on switching behavior. Importantly, the authors find that inertia has lingering effects, in that it influences the perception of switching difficulties and, hence, behavior up to 11 months in the future. Practical implications Managerial implications are that service firms can profit from customer inertia through a reduction in churn. However, high levels of customer inertia over the longer term may increase the level of customer vulnerability to competitor offers and marketing activities, as satisfaction with the provider does not in itself explain switching intentions or behavior. Originality/value This study is the first study to contribute to an understanding of the antecedent drivers of customer inertia with respect to service provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, the long lasting latent effect of inertia in indirectly influencing service switching behavior was found to persist some 11 months later.

Interest free liquidity management scheme (time-weighted debt units)

2017 ◽  
Vol 10 (1) ◽  
pp. 60-76 ◽  
Author(s):  
Ahmed Taha Al Ajlouni
Keyword(s):  
Financial Services ◽  
Financial Management ◽  
Financial Institution ◽  
Money Market ◽  
Current Paper ◽  
Open Market ◽  
Lender Of Last Resort ◽  
Liquidity Management ◽  
Content Type ◽  
The Rich

Purpose This paper aims to develop an instrument that helps in managing liquidity. Liquidity is one of the most critical issues to be considered by the financial management of the business firms to meet its financial obligations. It is more vital for banks because of the liquid nature of its assets and liabilities, along with the fact that the confidence in the bank and degree of risk depends heavily on liquidity as an indicator of its wellbeing. Islamic banks (IBs) look at the liquidity issue from the same side as the traditional banks. IBs – the most apparent Islamic financial institution – suffered from the problem of not benefiting from the lender of last resort that Central Banks (CBs) offer to traditional banks because IBs cannot borrow from the CBs at interest. The experience of Institution(s) offering Islamic Financial Services[1] (IIFS) regarding the establishment of Islamic money markets did not show a tangible success instead of the early studies done by some scholars. In spite of the rich experience of some countries in creating new money market instruments or configuration of the interest-based ones according to Islamic - Sharī’ah[2], the designs of these instruments have many limitations in terms of their tradability and flexibility, restricting their use for open-market operations by CBs. Design/methodology/approach The purpose of calculating the time weighted debt units (TWDUs) is to find the equivalent amount of money that the supplier can borrow to the lender in the future for a maturity that differs from the first credit contract. It is a swap between an amount of credit for a particular period of time and another amount for another period. The scheme are called traditionally as reciprocal (mutual) loans, reciprocal (mutual) deposits, swapped conditional loans and “I lend you, provided you lend me” (Hammad, 2010). It is also well known in Pakistan as time multiple counter loan (TMCL), and known within some Arabic IBs as specks (Nomar = numbers) system. This contract will be called the reciprocal loans in the current paper. Findings The current paper represents a blue print of suggested money market instrument (scheme) that is based on the idea of Al Qardh El Hasan (interest-free loan) – called TWDUs. This instrument does not promise any revenue for the supplier and no charge for the lender. Research limitations/implications The suggested model is known in traditional and contemporary writings of Islamic economists and - Sharī’ah scholars. It is accepted by many - Sharī’ah Boards in IBs (Merah, 2011) and was accepted by the Council of Islamic Ideology in Pakistan in 1980 through the TMCL. Despite that, it is still not discussed in depth by international - Sharī’ah boards as the International Islamic Fiqh Academy – in addition to the wide spread of opponent viewpoint that considers this contract as a kind of riba. Originality/value TWDUs is presumed to help IBs and other IIFS to add more flexibility in liquidity management in the side of risk management[3] (represented by the potential loss to IIFS arising from their inability either to meet their obligations or to fund increases in assets as they fall due without incurring unacceptable costs or losses) in addition to avoiding the case of hoarding surplus funds in the short term. Also, the suggested instrument will not be exclusive to IBs or IIFS; it can be developed to be used at a later stage by them as a mean of overdraft between IBs and their clients. Moreover, beside its viability to help in liquidity management for other firms in business sector (non-financial) or government agencies in liquidity management, TWDUs look for Islamic financial theory as an alternative to the traditional financial theory that is based on interest. Moreover, TWDUs is expected to play an important role in monetary policy in a totally Islamic financial system or even in a mixed one (Islamic and capitalistic).

Complaint behaviour in multichannel retailing: a cross-stage approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marta Frasquet ◽  
Marco Ieva ◽  
Cristina Ziliani
Keyword(s):  
Online Survey ◽  
Latent Class ◽  
Service Failure ◽  
Service Recovery ◽  
Content Type ◽  
Multichannel Retailing ◽  
Synergy Effects ◽  
Lock In Effect ◽  
Lock In ◽  
Post Purchase

PurposeThis paper analyses how the purchase channel and customer complaint goals affect the sequential choice of post–purchase complaint channels when customers experience a service failure followed by a service recovery failure (double deviation).Design/methodology/approachAn online survey involving a scenario manipulation was conducted with 577 apparel shoppers. The study employs multi-group latent class analysis to estimate latent customer segments within both online and offline groups of shoppers and compare latent classes between the two groups.FindingsThe results show that the purchase channel has a lock-in effect on the complaint channel, which is stronger for offline buyers. Moreover, there is evidence of channel synergy effects in the case of having to complain twice: shoppers who complain in store in the first attempt turn to online channels in the second complaint attempt, and vice versa. Complaint goals shape the choice of complaint channels and define different shopper segments.Originality/valueThe present study is the first to adopt a cross-stage approach that analyses the dependencies between the purchase channel and the complaint channel used on two subsequent occasions: the first complaint after a service failure and the second following a service recovery failure.

Municipal-owned community bank: capital raising dilemma

2019 ◽  
Vol 9 (2) ◽  
pp. 1-23
Author(s):  
Tobias Aloisi Swai
Keyword(s):  
Commercial Bank ◽  
Financial Services ◽  
Banking Sector ◽  
Financial Institution ◽  
Order Theory ◽  
Individual Investors ◽  
Bank Capital ◽  
Regulatory Capital ◽  
Content Type ◽  
Community Bank

Learning outcomes The case introduces student to basic understanding of banking sector in Tanzania as well as the strategies and struggle to raise capital through shareholders’ funds. Application of Banking theory and Pecking order theory is evidenced from the case. The case outlines why the bank struggled to raise capital and what triggers the capital raising strategies. It also give students an opportunity to think about applicable theories of capital structure and bank capital, and strategies the bank could use to rescue its capital crunch in the future. Case overview/synopsis The case provides details of how the Capital Community Bank (CCB) raised its capital through strategic financial engineering which enabled it to raise the minimum regulatory capital required to be licensed as a financial institution unit, to a regional financial institution, to a fully fledged commercial bank. The bank started with a paid up capital of TZS 472.3m in 2002, involving four Local Government Authorities and individual investors. Capital raised to TZS 31.3bn in 2014 and down to TZS 20.6bn at the end of 2016. The minimum regulatory capital required is TZS 15bn, while paid up capital was 16.9bn. With the change of the management team in 2017, the bank is looking for avenues to raise further capital to meet the regulatory limits and continue to survive as a commercial bank, given dramatic changes in the banking sector in Tanzania. Complexity academic level The case is suitable for third year students in Bachelor of Commerce/Economics specializing in banking/financial services. It also suits postgraduate/master's students seeking a Postgraduate Diploma or Master of Business Administration in financial institutions/banking course. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 1: Accounting and Finance.

Personality traits and internet addiction among selected financial institution employees

2019 ◽  
Vol 35 (2) ◽  
pp. 260-271 ◽  
Author(s):  
Ainin Sulaiman ◽  
Kay Yin Shin ◽  
Nina Rofaie
Keyword(s):  
Job Satisfaction ◽  
Personality Traits ◽  
Internet Addiction ◽  
Financial Institution ◽  
Mediating Effect ◽  
Psychological Disorder ◽  
Local Context ◽  
Content Type ◽  
Measurement Tools ◽  
The Relationship

Purpose The purpose of this study is to investigate the relationship between personality traits and internet addiction behavior. Within the same industry background, job satisfaction was measured to test whether there is any mediating effect toward the relationship between personality traits and internet behavior. Design/methodology/approach A sample of 271 employees from financial institutions was selected, and IBM SPSS was used to perform descriptive statistic, correlation analysis and partial regression analysis, to test out three main hypotheses developed in this study. Findings The results indicate that personality traits, namely, agreeableness and emotional stability are negatively related to internet addiction behavior. However, job satisfaction does not mediate the influence of personality traits toward internet addiction behavior, even though the results indicated personality traits, namely, agreeableness, conscientiousness and emotion stability are positively related to job satisfaction. Research limitations/implications The main implication includes better understanding on internet addiction behavior in local context and to predict internet addiction behavior through personality traits for better outcome of awareness and prevention toward this psychological disorder. Originality/value The study contributes in understanding internet addiction behavior in Malaysia occupational context, as most of the local researches focused in validation of measurement tools. Hence, the finding provides an empirical evidence for organizational psychology study in recognition of internet addiction as part of occupational hazards.

scholarly journals Linking global consumer culture and ethnocentric consumerism to global citizenship: exploring the mediating effect of cultural intelligence

2020 ◽  
Vol 40 (7/8) ◽  
pp. 659-675
Author(s):  
Aluisius Hery Pratono ◽  
Denni Arli
Keyword(s):  
Consumer Culture ◽  
Structural Equation ◽  
Cultural Intelligence ◽  
Online Survey ◽  
Global Citizenship ◽  
Equation Model ◽  
Mediating Effect ◽  
Content Type ◽  
The Impact ◽  
Consumer Culture Theory

PurposeThis article attempts to understand the impact of global consumer culture and ethnocentric consumerism on global citizenship by identifying the mediating effect of cultural intelligence.Design/methodology/approachThe proposed structural equation model explains the relationship between global consumer culture, ethnocentric consumerism, and global citizenship. The empirical analysis involves an online survey targeted young people in Indonesia context.FindingsThe empirical evidence broadly supports the view that cultural intelligence strengthens the impact of global consumer culture and ethnocentric consumerism on global citizenship. There is a strong tendency in this study to suggest that global consumerism will not be able to contribute to global citizenship unless cultural intelligence provides as a mediating variable. However, the results do not support the mainstream literature, which suggests that ethnocentric consumerism harms global citizenship.Originality/valueThis study extends the discussion on achieving sustainable development by examining global citizenship leads to a better understanding of consumer culture theory.

Fundraising campaigns via social media platforms for mitigating the impacts of the COVID-19 epidemic

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Saeed Awadh Bin-Nashwan ◽  
Meshari Al-Daihani
Keyword(s):  
Social Media ◽  
Structural Equation ◽  
Online Survey ◽  
Mediating Effect ◽  
Internet Technology ◽  
Equation Modeling ◽  
Content Type ◽  
Social Media Platforms ◽  
Intrinsic And Extrinsic Motivations ◽  
Online Donations

Purpose The rapid outbreak of coronavirus 2019 (COVID-19) has triggered unprecedented restrictions on not only human movement but also a wide sphere of economic activities, disrupting livelihood, welfare and business worldwide. In response, some Muslim communities have launched fundraising campaigns to mitigate the socio-economic impacts of the virus on the front-liners and the most affected segments of vulnerable populations. The purpose of this study is to explore the intrinsic and extrinsic motivations of donors to these campaigns who contribute via social media platforms (SMPs). Design/methodology/approach This study adopts a cross-sectional research design using an online survey conducted in a typical Muslim community such as Kuwait. A total of 565 samples of data (356 women, 209 men) were used for analysis. Partial least squares-structural equation modeling was used to estimate the research model and extract meaningful conclusions. Findings The results show that charitable projects, internet technology features, SMP features and religiosity are significant motivations that influence attitudes toward online donations related to COVID-19 response. All these relationships are indirectly related to intentions to donate via SMP through a significant mediating effect of attitude. Practical implications The outcome of this study could support the efforts of governments, non-profit organizations and communities to focus attention on suitable proactive strategies to boost online fundraising campaigns for those affected by epidemic diseases. Originality/value This study enriches the literature by integrating both intrinsic and extrinsic motivations of online donations into a new and unique related context such as SMP, especially amid the COVID-19 crisis.

Psychological engagement drives brand loyalty: evidence from Malaysian ecotourism destinations

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Farzana Quoquab ◽  
Jihad Mohammad ◽  
Anis Makhillah Mohd Sobri
Keyword(s):  
Brand Loyalty ◽  
Structural Equation ◽  
Online Survey ◽  
Tourism Industry ◽  
Mediating Effect ◽  
Content Type ◽  
Brand Quality ◽  
Psychological Engagement ◽  
Destination Brand ◽  
Practical Implications

Purpose The present study attempts to shed some light on tourists’ destination brand loyalty (DBL) in the Malaysian ecotourism context. More specifically, this study aims to examine the relationships between electronic word of mouth (eWOM), destination brand quality (DBQ), destination brand image (DBI), psychological engagement (PE) and DBL. Design/methodology/approach Based on the Stimulus–Organism–Response theory and buyer black box model, this study developed a framework to address tourists’ loyalty towards ecotourism destinations. An online survey was carried out to collect data, which yielded 210 completed usable responses. Structural equation modelling – partial least squares was used to test the study hypotheses. Findings Findings from this study revealed that eWOM and destination product quality affect DBI. Moreover, data support the mediating effect of PE between DBI and DBL. Practical implications This study provides valuable insights for practitioners and policymakers of the tourism industry in creating a DBI, keeping tourists psychologically engaged and retaining their loyalty to the ecotourism destinations. Originality/value This study is amongst the first to examine the effect of eWOM and DBQ on DBI in the ecotourism context. It also examines PE in relation to the DBI, which is a comparatively new area in the literature.

scholarly journals Bursting the filter bubble: the mediating effect of discussion frequency on network heterogeneity

2020 ◽  
Vol 44 (6) ◽  
pp. 1161-1181
Author(s):  
Nadine Strauß ◽  
Laura Alonso-Muñoz ◽  
Homero Gil de Zúñiga
Keyword(s):  
News Media ◽  
Online Survey ◽  
Ordinary Least Squares ◽  
Public Affairs ◽  
Mediating Effect ◽  
Cross Sectional ◽  
Content Type ◽  
Network Heterogeneity ◽  
Mediation Analyses ◽  
Filter Bubbles

PurposeThe purpose of this study is to identify the structural processes that lead citizens to escape their common social circles when talking about politics and public affairs (e.g. “filter bubbles”). To do so, this study tests to what extent political attitudes, political behavior, news media consumption and discussion frequency affect discussion network heterogeneity among US citizens.Design/methodology/approachSupported by the polling group Nielsen, this study uses a two-wave panel online survey to study the antecedents and mechanisms of discussion network heterogeneity among US citizens. To test the hypotheses and answer the research questions, ordinary least squares (OLS) regressions (cross-sectional, lagged and autoregressive) and mediation analyses were conducted.FindingsThe findings imply that political discussion frequency functions as the key element in explaining the mechanism that leads politically interested and participatory citizens (online) as well as news consumers of traditional and online media to seek a more heterogeneous discussion network, disrupting the so-called “filter bubbles.” However, mediation analyses also showed that discussion frequency can lead to more homogenous discussion networks if people score high on political knowledge, possibly reflecting the formation of a close network of political-savvy individuals.Originality/valueThe survey data give important insights into the 2016 pre-election situation, trying to explain why US citizens were more likely to remain in homogenous discussion networks when talking about politics and public affairs. By using two-wave panel data, the analyses allow to draw tentative conclusions about the influential and inhibiting factors and mechanisms that lead individuals to seek/avoid a more heterogeneous discussion network.

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