News of the finance

Abstract:
Purpose – The purpose of the paper is to examine customer satisfaction and dissatisfaction with interpersonal vs internet service encounters in Thai retail stockbrokerage and corporate banking. Design/methodology/approach – In each of two separate projects, in-depth qualitative interviews were used to develop industry-specific survey instruments that covered the same dis/satisfaction conceptual structure. The stockbrokerage survey had 460 usable questionnaires from retail customers, and the corporate banking survey resulted in 152 usable questionnaires. Findings – Results in each case show that customers actually have slightly higher satisfaction on the internet than with interpersonal encounters, but dissatisfaction on the internet is much greater. The net is that they still largely view the interpersonal mode as superior. Research limitations/implications – The paper shows that Thailand is a highly personal relationship oriented business culture. The results are probably most directly representative of other Asian cultures. Practical implications – Gaining widespread acceptance of internet services among customers seems more a problem of eliminating dissatisfaction, rather than fostering satisfaction. Originality/value – This is one of the few papers to show with strong empirical data that customers view satisfaction and dissatisfaction as distinct dimensions. An additional contribution is demonstrating that dis/satisfaction can be measured with industry specific scales, which are nevertheless comparable across industries.

Abstract:
Purpose – The purpose of this paper is to compare and evaluate the internet banking services of Turkey and the UK. Design/methodology/approach – The paper is based on an exploratory research for a sample of nine banks from each country, a web survey is conducted to collect data for each internet bank using an analytical framework based on a three dimensional model. Findings – It is found that Turkish banks offer a wider range of services from their internet branches compared to British banks, despite the fact that the UK has a more favourable environment for internet banking in terms of the level of sophistication of its banking sector and technological infrastructure. Furthermore, a key difference is observed in the approaches of banks towards the issue of “security”. Research limitations/implications – The findings of this paper are reached by the use of a simplified model that only focuses on the transaction side of internet banking. Therefore, further research could encompass other aspects from the provider's perspective of the internet banking environment within a refined model. Practical implications – The paper suggests that there is a fundamental difference in the banks' approaches to dealing with security problems and insights can be gained from cross-country peer group analysis. Furthermore, the study assists researchers and practitioners to evaluate and build upon their e-business provision. Originality/value – The paper is the first of its kind, that the authors are aware of, to conduct a cross-country analysis of internet banking services.

Abstract:
Purpose – The purpose of this paper is to examine the main factors that motivate customers to deal with Islamic banks particularly in a dual banking environment, like in the case of Malaysia. A discussion on factors relating to corporate social responsibility initiatives as part of potential customers' banking selection criteria is also included. Design/methodology/approach – The paper presents primary data collected by self-administered questionnaires involving a sample of 750 respondents from four different regions in Malaysia. The Islamic banking criteria ranking as perceived by the respondents are analysed using Friedman Test. To further explore the customers' understanding of the banking criteria, an exploratory factor analysis is employed. Findings – This study reveals that the selection of Islamic banks appears to be predominantly a combination of Islamic and financial reputation and quality service offered by the bank. Other factors perceived to be important include good social responsibility practices, convenience and product price. Practical implications – The empirical evidence of this paper affects two aspects; first, Islamic banks must offer quality services while maintaining its Islamic credential and reputation; second, Islamic banks should also embrace good customers services policies to reap its potential as a strategic tool to achieve competitive advantage, enhance reputation and secure customers allegiance. This research will be of interest to both incumbent and potential entrants into this niche market. Originality/value – The paper reports findings from the first nationwide study carried out in the area of Islamic banking selection criteria.

Abstract:
Purpose – The purpose of this paper is to examine minor service failures in UK banking and consider the impact that satisfaction with service recovery has on customer intentions to continue their custom and make recommendations, used as measures of loyalty behaviours. Design/methodology/approach – Data were gathered on customer satisfaction with service recovery attempts, intended loyalty behaviours and the sources of service failures were gathered by means of an on-line survey from approximately 2,000 respondents. Findings – Few customers who complained about minor service failures report that they were very satisfied with the service recovery. Weak service recovery influenced customer intentions about continued custom and recommendation. Minor failures in account management and bank charges are shown to have a marked effect on intended loyalty behaviours. Research limitations/implications – This paper reports the work of a short, e-mail survey, gathering frequency data from customers of UK banks and reports the impact of service recovery on customer intentions rather than their actions. Further investigation is needed using more a more sophisticated instrument. Practical implications – In this paper low levels of satisfaction with managing service recoveries are reported, no matter which channel the customer used, no matter how the service failure is managed. Originality/value – The preliminary work in this paper demonstrates the impact that weak service recovery of minor complaints has on customers' intended loyalty behaviours in UK banking.

Abstract:
Purpose – This research seeks to explore the factors predicting customer loyalty in retail banking. Loyalty was measured in terms of a customer's willingness to recommend a bank and their intention to remain with their main bank short-term (in the next six months) and long-term (from six months to five years). Design/methodology/approach – The study was based on a mail survey of 1,951 individuals. Potential predictors were drawn from the literature and included in three separate regression models to model different types of loyalty. Findings – The results indicate that willingness to recommend is best predicted by affective attitude, overall satisfaction and empathy. Short-term behavioural intentions, however, were best predicted by overall satisfaction and responsiveness, while long-term intentions were predicted by overall satisfaction, affective attitude and empathy. The three models explained a substantial amount of the variation in the dependent variables: 71 per cent for willingness to recommend, 43 per cent for short-term intentions and 46 per cent for long-term intentions. Research limitations/implications – The study adds to the discussion of the relationship between perceived satisfaction, service quality and a customer's intentions to recommend a bank and/or remain a customer. The results also contribute to the development of more parsimonious models, suggesting that affective attitude, overall satisfaction, empathy and responsiveness together explain a large percentage of the variation in customers' intentions. Practical implications – Based on this study's findings, banks can profile customers with potential for defection based on only four variables. Originality/value – The results demonstrate the importance of satisfaction measures and some SERVQUAL dimensions in predicting loyalty in retail banking. It also found evidence that not all five SERVQUAL measures are needed to profile customers and predict loyalty.

Abstract:
Purpose – The paper aims to provide an examination of the concept of bancassurance – the combined selling of insurance and banking products, from the viewpoint of a leading figure within the AEGON Financial Services Group. Design/methodology/approach – This is a short and accessible account of the concept and history of bancassurance and the principles that AEGON apply to it, to make it successful for them. Findings – Since it began in the 1980s, bancassurance has had mixed success not only in different markets but among different companies in the same market. The author argues that pursuing a specialised, local approach to bancassurance is the most effective way in maximising its benefits. Originality/value – The paper provides an interesting insight into bancassurance from the perspective of AEGON Financial Services.

Abstract:
Purpose – The 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/approach – The 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. Findings – This 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/implications – Further 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 implications – Service 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/value – This 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.

Abstract:
Purpose – The purpose of this research is to undertake an examination of the impacts of socio-demographic and economic variables on the probability of purchasing financial products. There is relatively little empirical research that has been taken to understand how the underlying economy affects customers' subsequent financial product purchase behaviours. Understanding this influence would improve prediction of when purchases will occur and hence is important for the Customer lifetime value models of financial service organisations. Design/methodology/approach – Two proportional hazard modelling approaches – Cox and Weibull – are compared in terms of predictive ability on a data set from a major insurance company. The risk factors for purchase are both economic and socio-demographic. Findings – The results show that the external economic environment is an extremely important influence in driving customers' financial products purchasing behaviours. Furthermore, the results also indicate that Cox's proportional hazard models are superior to Weibull proportional hazard models in this case because of an annual purchase effect. Practical implications – Financial organisations need to consider the current economic conditions before determining how much marketing effort to undertake. Originality/value – The originality of this paper is that it considers economic conditions and socio-demographic variables in modelling the long run purchase behaviour of customers for insurance and savings products. It has a large data set from a major insurance company. It is also one of the first papers to make a detailed comparison between the semi-parametric and parametric proportional hazard models in the bank marketing area.

Abstract:
Purpose – The purpose of this research is to analyse how different dimensions of perceived service loyalty including price sensitivity explains the consumer defection in retail banking. Design/methodology/approach – Empirical tests were conducted with survey data from nearly 1,700 consumers in Finland. Findings – The findings support previous suggestion that service loyalty can be determined by following four dimensions, although a shade of interference in the unidimensionality of the service loyalty instrument in question was observed: purchase intention; word-of-mouth communication; price sensitivity; and complaining behaviour. Originality/value – It was found that only the price sensitivity dimension – in which reliability and unidimensionality was strongly verified – was related to the likelihood of defection in the case of low-price and limited product range driven sales offers. Results show that loyal customers are also open to attractive marketing information. This outcome is important since the willingness to acquire information on the rival offer was related to customer defection.

Abstract:
Purpose – The purpose of this paper is to study the attributes that influence perceptions of customer service in the retail banking setting from a non-customer perspective. Design/methodology/approach – This research employs a mystery shopping approach to identify and measure key service attributes that predict the likelihood of an individual's choosing a banking location. Findings – The measures employed accurately predicted positive and negative outcomes based on respondent choices. The data suggest that personal elements of service may be of critical importance in cultivating new customer relationships. Originality/value – Existing research related to bank service primarily focuses on customers in the context of their existing institutional relationship. This study examines a largely unexplored area of service, specifically, the issues most important to prospective customers with regard to banking choices.