JOURNAL ARTICLE

Customer loyalty and trust in South African retail banking

Marko van DeventerEphrem Habtemichael Redda

Year: 2023 Journal:   Innovative Marketing Vol: 19 (2)Pages: 211-222   Publisher: Business Perspectives

Abstract

Customer loyalty and trust are key elements for the success of retail banking. For this reason, it is crucial to investigate the predictors of these elements. This study aims to model service quality, customer satisfaction, and commitment influencing customer loyalty and trust in South African retail banking. The target population is a growing banking customer segment – Generation Y. A sample of 271 Generation Y customers participated in the survey. Their responses were analyzed using AMOS, whereby a structural equation model was developed. Although the structural model suggests that service quality (β = 0.097; p = 0.175) is an insignificant predictor of customer loyalty in retail banking, the influence remains positive. Moreover, the model infers that customer satisfaction (β = 0.793; p = 0.001) predicts customer loyalty in retail banking and that customer satisfaction (β = 0.715; p = 0.001) and commitment (β = 0.257; p = 0.001) influence trust in retail banking. All the model fit indices (NFI = 0.95; RFI = 0.92; IFI = 0.97; TLI = 0.96; CFI = 0.97; RMSEA = 0.06; SRMR = 0.03) infer that the model is reliable, valid, and ultimately good fitting measurement tool of customer loyalty and trust in retail banking. The results provide insights into the most critical factors in building customer loyalty and trust among Generation Y customers in South African retail banking. Moreover, they can help to develop marketing and customer service strategies to improve these outcomes.

Keywords:
Structural equation modeling Business Loyalty business model Customer satisfaction Loyalty Marketing Retail banking Service quality Customer retention Customer advocacy Customer delight Population Customer to customer Service (business) Statistics Mathematics Medicine

Metrics

10
Cited By
4.69
FWCI (Field Weighted Citation Impact)
43
Refs
0.92
Citation Normalized Percentile
Is in top 1%
Is in top 10%

Citation History

Topics

Customer Service Quality and Loyalty
Social Sciences →  Business, Management and Accounting →  Organizational Behavior and Human Resource Management
Consumer Retail Behavior Studies
Social Sciences →  Business, Management and Accounting →  Marketing
Technology Adoption and User Behaviour
Social Sciences →  Decision Sciences →  Information Systems and Management

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