A comprehensive hierarchical model of retail banking

Abstract

Purpose The purpose of this paper is to develop and test a comprehensive hierarchical model of behavioural intentions in the Malaysian retail banking industry. Design/methodology/approach The data were analysed using EFA, CFA and structural modelling. Findings The findings illustrate that customer satisfaction is the most important determinant of behavioural intentions, followed by switching costs, corporate image and perceived value. Service quality is indirectly related to behavioural intentions and customer satisfaction mediates the relationship between the two constructs. Customer satisfaction is strongly influenced by service quality, corporate image and perceived value. Service quality is also an antecedent of perceived value, corporate image and switching costs. The empirical results also support a hierarchical and multidimensional approach for conceptualising and measuring customers’ perceptions of service quality. Research limitations/implications The comprehensive hierarchical model developed in this research can be used as framework for additional studies on the banking industry. Practical implications The findings provide Malaysian bank managers with empirically-based insights into behavioural intentions and offer guidelines for assessing and improving service quality. Originality/value This is the first study that uses comprehensive hierarchical modelling to synthesise the effects of service quality, customer satisfaction, perceived value, corporate image and switching costs on the behavioural intentions of retail bank customers.

National culture and bank risk-taking

“…9 Most recent academic papers use hierarchical models when dealing with multilevel cross-country data (e.g., Bakar et al, 2017;Dong and Stettler, 2011;Kayo and Kimura, 2011;Ketelhöhn and Quintanilla, 2012;Li et al, 2013;Mihet, 2013). However, it is also common to run OLS regressions with country and/or firm dummies, to capture country/firm time-invariant (fixed) effects.…”

Multiple Mediating Effects on the Quality of and Loyalty to Banking Services

“…Scholars have now spent a considerable amount of time debating the concept of service quality, and after several decades, most define it as a comparative judgment of perceived expectations-actual service performance (Parasuraman et al, 1985); it is likely that this is positively associated with customer loyalty (Bakar et al, 2017;Hapsari et al, 2017;Yilmaz et al, 2018). Bakar et al (2017) argued that service quality, although exerting no significant impact on behavioral intentions, is the prime determinant of customer satisfaction, followed by switching costs, corporate image, and perceived value. Wang (2010) also reports that service quality is a strong predictor of customer loyalty, while Sigit (2018) asserts it is an important influence on customer satisfaction, retention, and loyalty.…”

“…In fact, numerous studies have proved that service quality is the principal factor in customer loyalty (Bakar, Clemes, & Bicknell, 2017;Sigit, 2018;Yilmaz, Ari, & Gürbüz, 2018;Zeithaml, Bitner, & Gremler, 2018), as well as a strategic tool for achieving excellence in service performance (Zeithaml et al, 2018) and acquiring a competitive advantage (Ladhari, Ladhari, & Morales, 2011). Ladhari et al (2011) found that a 5% increase in customer retention led to a 25%-85% increase in profits.…”

“…Ladhari et al (2011) found that a 5% increase in customer retention led to a 25%-85% increase in profits. Furthermore, several studies have shown that service quality exerts a significant positive impact on both corporate image and perceived value (Bakar et al, 2017;Zameer, Tara, Kausar, & Mohsin, 2015), which in turn notably affect behavioral intentions, such as long-term relationships, word-of-mouth marketing, and re-patronization (Bakar et al, 2017;Lewis & Soureli, 2006;Nguyen & Leblanc, 1998). As a result, service quality indirectly affects behavioral intentions via customer satisfaction (Cronin, Brady, and Hult, 2000;Lewis & Soureli, 2006;Nguyen & Leblanc, 1998) as well as on customer satisfaction and loyalty through corporate image and perceived value (Cronin, Brady, and Hult, 2000;Lewis & Soureli, 2006;Ozkan, Süer, Keser, & Kocakoç, 2019).…”

Examining the Determinant Factors on Consumer Switching Intention Toward Islamic Bank in Central Java, Indonesia

“…Religion shows its followers in the form of a series of beliefs, impressions, and values in interacting with certain communities(Mathras et al, 2016). Religiosity is defined as a person's level of trust and obedience to God accompanied by a commitment to follow the principles adopted through religious practices in everyday life(Mansour & Diab, 2016;Bakar et al, 2017;Nurhayati & Hendar, 2019). In other words, religiosity is an indication of someone to choose and consume a product that is in accordance with the principles of their religion (Mathras et al, 2016; Suhartanto et al, 2019).In Islam, the level of religiosity, in general, can be assessed with the frequency of someone to pray and worship in accordance with the principles of the teachings of Islam(Nurhayati & Hendar, 2019).…”