IDEAS home Printed from https://ideas.repec.org/a/sae/vikjou/v43y2018i2p92-105.html
   My bibliography  Save this article

Antecedents of Customer Loyalty in Banking Sector: A Mediational Study

Author

Listed:
  • Suhail A. Bhat
  • Mushtaq A. Darzi
  • Shakir H. Parrey

Abstract

Executive Summary The competition among the organizations is increasing continuously and there has been a rapid shift in the business process deliverance. Financial service firms are striving to improve their business processes by liaising with customers to survive and compete successfully. The literature has obstinately emphasized on the utmost importance of trust and loyalty to survive in the financial sector. This study aims to explore the role of customer knowledge management (CKM) and satisfaction as antecedents of customer trust in the retail banking sector. The causal relationships existing between CKM, satisfaction, trust, and loyalty are explored. The mediating role of customer trust in the knowledge–loyalty and satisfaction–loyalty relationships is also explored. The data has been collected randomly from 412 customers of a private bank through survey by questionnaire. The research instrument has been developed and purified through factor analysis (confirmatory factor analysis). Structural equation modelling (SEM) has been employed to examine the causal relationship and fitness of the proposed model. The findings of the study reveal that CKM and satisfaction positively impact customer trust, and customer trust has a significant impact on loyalty. Besides, trust partially mediates the effect of knowledge and satisfaction on loyalty. The findings of the study are valuable to managers and strategists in understanding customer need in order to formulate the relevant customer loyalty programmes. However, the study focused on retail banking sector and uses data from a single bank only. Future research may evaluate the generalizability of findings across other banks as well as other nationalities. The main contribution of this study is to the loyalty literature by empirically validating the identified antecedents and demonstrating their role in managing loyalty. Furthermore, the study provides some valuable insights into the relational exchanges between variables wherein some inferences are derived from results regarding trust and loyalty.

Suggested Citation

  • Suhail A. Bhat & Mushtaq A. Darzi & Shakir H. Parrey, 2018. "Antecedents of Customer Loyalty in Banking Sector: A Mediational Study," Vikalpa: The Journal for Decision Makers, , vol. 43(2), pages 92-105, June.
    • Handle: RePEc:sae:vikjou:v:43:y:2018:i:2:p:92-105
    DOI: 10.1177/0256090918774697
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0256090918774697
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0256090918774697?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lee, Ruby P. & Naylor, Gillian & Chen, Qimei, 2011. "Linking customer resources to firm success: The role of marketing program implementation," Journal of Business Research, Elsevier, vol. 64(4), pages 394-400, April.
    2. Verhagen, Tibert & Meents, Selmar & Tan, Yao-Hua, 2006. "Perceived risk and trust associated with purchasing at Electronic Marketplaces," Serie Research Memoranda 0001, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Erin Anderson & Barton Weitz, 1989. "Determinants of Continuity in Conventional Industrial Channel Dyads," Marketing Science, INFORMS, vol. 8(4), pages 310-323.
    4. Corina PELAU, 2008. "Power and satisfaction in the retailer-producer relationship," Management & Marketing, Economic Publishing House, vol. 3(1), Spring.
    5. Naidu, G. M. & Parvatiyar, Atul & Sheth, Jagdish N. & Westgate, Lori, 1999. "Does Relationship Marketing Pay? An Empirical Investigation of Relationship Marketing Practices in Hospitals," Journal of Business Research, Elsevier, vol. 46(3), pages 207-218, November.
    6. Johnson, Devon & Grayson, Kent, 2005. "Cognitive and affective trust in service relationships," Journal of Business Research, Elsevier, vol. 58(4), pages 500-507, April.
    7. Simona-Mihaela TRIF, 2013. "The influence of overall satisfaction and trust on customer loyalty," Management & Marketing, Economic Publishing House, vol. 8(1), Spring.
    8. M García-Murillo & H Annabi, 2002. "Customer knowledge management," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(8), pages 875-884, August.
    9. Gruen, Thomas W., 1995. "The outcome set of relationship marketing in consumer markets," International Business Review, Elsevier, vol. 4(4), pages 447-469.
    10. Chakravarty, Sugato & Feinberg, Richard & Rhee, Eun-Young, 2004. "Relationships and individuals' bank switching behavior," Journal of Economic Psychology, Elsevier, vol. 25(4), pages 507-527, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mokgadi Cleopatra Taoana & Emmanuel Silva Quaye & Russell Abratt, 2022. "Antecedents of brand loyalty in South African retail banking," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 27(2), pages 65-80, June.
    2. Shuchi Gupta & Nishad Nawaz & Abhishek Tripathi & Saqib Muneer & Naveed Ahmad, 2021. "Using Social Media as a Medium for CSR Communication, to Induce Consumer–Brand Relationship in the Banking Sector of a Developing Economy," Sustainability, MDPI, vol. 13(7), pages 1-16, March.
    3. Ephrem Habtemichael Redda & Marko Van Deventer, 2023. "Retail Banking Service Quality and Customer Loyalty: The Role of Trust and Commitment as Mediators," International Review of Management and Marketing, Econjournals, vol. 13(5), pages 18-25, September.
    4. Muneer M. Abbad & Ibrahim Hussien Musa Magboul & Faten Jaber & Wasfi Alrawabdeh, 2022. "User Antecedents, CRM Implementation, and Impact on Customer Outcomes in the Jordanian Service Industry," International Journal of Customer Relationship Marketing and Management (IJCRMM), IGI Global, vol. 13(1), pages 1-24, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zur, Andrew & Leckie, Civilai & Webster, Cynthia M., 2012. "Cognitive and affective trust between Australian exporters and their overseas buyers," Australasian marketing journal, Elsevier, vol. 20(1), pages 73-79.
    2. Huang, Yimin & Wilkinson, Ian F., 2014. "A case study of the development of trust in a business relation: Implications for a dynamic theory of trust," jbm - Journal of Business Market Management, Free University Berlin, Marketing Department, vol. 7(1), pages 254-279.
    3. Odekerken-Schroder, Gaby & De Wulf, Kristof & Schumacher, Patrick, 2003. "Strengthening outcomes of retailer-consumer relationships: The dual impact of relationship marketing tactics and consumer personality," Journal of Business Research, Elsevier, vol. 56(3), pages 177-190, March.
    4. Sheth, Jagdish N. & Parvatiyar, Atul & Sinha, Mona, 2012. "The conceptual foundations of relationship marketing: Review and synthesis," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 13(3), pages 4-26.
    5. Vithya Leninkumar, 2017. "The Relationship between Customer Satisfaction and Customer Trust on Customer Loyalty," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(4), pages 450-465, April.
    6. Abosag, Ibrahim & Lee, Joong-Woo, 2013. "The formation of trust and commitment in business relationships in the Middle East: Understanding Et-Moone relationships," International Business Review, Elsevier, vol. 22(3), pages 602-614.
    7. Verhagen, T., 2008. "Investigating the impact of C2C electronic marketplace quality on trust," Serie Research Memoranda 0008, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    8. Manolis, Chris & Nygaard, Arne & Stillerud, Bård, 1997. "Uncertainty and vertical control: An international investigation," International Business Review, Elsevier, vol. 6(5), pages 501-518, October.
    9. Lee, Liane W.Y. & Tang, Yiming & Yip, Leslie S.C. & Sharma, Piyush, 2018. "Managing customer relationships in the emerging markets – guanxi as a driver of Chinese customer loyalty," Journal of Business Research, Elsevier, vol. 86(C), pages 356-365.
    10. Qu, Hailin & Lee, Haeyoung, 2011. "Travelers’ social identification and membership behaviors in online travel community," Tourism Management, Elsevier, vol. 32(6), pages 1262-1270.
    11. Osama Sohaib & Kyeong Kang & Mohammad Nurunnabi, 2018. "Gender-Based iTrust in E-Commerce: The Moderating Role of Cognitive Innovativeness," Sustainability, MDPI, vol. 11(1), pages 1-16, December.
    12. Lionel Nicod & Sylvie Llosa, 2018. "How should customers be trained in their role as coproducers? The influence of training and its characteristics on the benefits of coproduction," Post-Print hal-03513344, HAL.
    13. Gordon Liu & Catherine Liston-Heyes & Wai-Wai Ko, 2010. "Employee Participation in Cause-Related Marketing Strategies: A Study of Management Perceptions from British Consumer Service Industries," Journal of Business Ethics, Springer, vol. 92(2), pages 195-210, March.
    14. Edwards, Chase J. & Bendickson, Joshua S. & Baker, Brent L. & Solomon, Shelby J., 2020. "Entrepreneurship within the history of marketing," Journal of Business Research, Elsevier, vol. 108(C), pages 259-267.
    15. Hoang Linh VU & Dominique BONET FERNANDEZ, 2014. "Proposition d’un modèle de relations producteur-distributeur : une application à la gestion des conflits en contexte interculturel," Working Papers 2014-231, Department of Research, Ipag Business School.
    16. Marcus Adam, 2018. "The Role of Human Resource Management (HRM) for the Implementation of Sustainable Product-Service Systems (PSS)—An Analysis of Fashion Retailers," Sustainability, MDPI, vol. 10(7), pages 1-27, July.
    17. Jung Lee & Jae-Nam Lee & Bernard C. Y. Tan, 2015. "Antecedents of cognitive trust and affective distrust and their mediating roles in building customer loyalty," Information Systems Frontiers, Springer, vol. 17(1), pages 159-175, February.
    18. Yadong Luo & Yi Liu & Jiaqi Xue, 2009. "Relationship Investment and Channel Performance: An Analysis of Mediating Forces," Journal of Management Studies, Wiley Blackwell, vol. 46(7), pages 1113-1137, November.
    19. Artz, Kendall W. & Brush, Thomas H., 2000. "Asset specificity, uncertainty and relational norms: an examination of coordination costs in collaborative strategic alliances," Journal of Economic Behavior & Organization, Elsevier, vol. 41(4), pages 337-362, April.
    20. Faqih, Khaled M.S., 2016. "An empirical analysis of factors predicting the behavioral intention to adopt Internet shopping technology among non-shoppers in a developing country context: Does gender matter?," Journal of Retailing and Consumer Services, Elsevier, vol. 30(C), pages 140-164.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:vikjou:v:43:y:2018:i:2:p:92-105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.