Determinants of customer recovery in retail banking—lessons from a German banking case study

Hübner, Felix; Herberger, Tim Alexander; Charifzadeh, Michel

doi:10.1057/s41264-023-00224-w

Cited by 3 publications

(1 citation statement)

References 52 publications

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“…The financial industry, as a highly relationship-related industry, is in dire need of improving customer brand experience (BE) as well as facilitating customer engagement (CE) [16] to increase customer inertia and loyalty and thus achieve long-term customer retention. However, to date, the measures implemented by conventional retail banks have not demonstrated adequate in motivating customers and maintaining long-term customer loyalty [17]. At this juncture, some efficient methods, such as visualization, data mining, and machine learning, play an important role.…”

Section: Introductionmentioning

confidence: 99%

The causes of bank customer churn based on XGBoost and LightGBMmodels: the evidence from the Kaggle dataset

Cai

2024

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As the digital economy continues to grow, the expansion of Internet finance introduces new challenges for the conventional banking industry. Banks must deal with multiple pressures, such as digital transformation, declining customer loyalty, and fintech competition. Analyzing the potential factors of bank customer churn from multiple perspectives and constructing models for predicting churn can help bank managers understand the causes of churn, identify problems, detect potential churn customers promptly, and develop efficient retention strategies based on customer characteristics and preferences. In this paper, we used a combination of visualization, data mining, and machine learning methods to analyze the factors used to predict bank customer churn from multiple perspectives, such as feature selection (Random Forest Feature Importance Ranking), feature extraction (PCA), visualization, etc. We also constructed two churn prediction models based on the gradient boosting tree algorithms, XGBoost and LightGBM, compared the evaluation measures before and after feature selection and before and after tuning parameters, and interpreted the model through SHAP methods. After the paper, the following conclusions were drawn: (1) Total Trans Amt, Total Trans Ct, and Total Revolving Bal are pivotal in analyzing and predicting customer churn; (2) the SHAP Summary Plot can react to the visual analysis of predictors of customer churn to a certain extent; (3) the effect of feature selection on the assessment of the results is sometimes insignificant; (4) tuning parameter settings can enhance model performance to a certain extent, but the optimal parameters may vary based on the preprocessing method employed. These conclusions will assist banks in comprehending customer churn factors more deeply, constructing a higher performance churn prediction model, and conducting a comprehensive result synthesis analysis.

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Section: Introductionmentioning

confidence: 99%

The causes of bank customer churn based on XGBoost and LightGBMmodels: the evidence from the Kaggle dataset

Cai

2024

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Pay-per-click (PPC) advertising and continuous banking service intentions

Rezaei,

Amin,

Herjanto

2024

J Financ Serv Mark

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Despite the increasing popularity of pay-per-click (PPC) advertising and search engine optimization within the financial industry, there is a notable lack of research on the effectiveness of PPC on bank customers' continuous search intention and banking services intention. This study aims to fill this gap by investigating the use of PPC as a tool on customers' search intention and continuous services intention in a retail banking context. Utilizing a quantitative design, we collected data and employed maximum likelihood estimation (MLE) for path analysis to analyze the empirical data. Our findings reveal several substantial results. Firstly, continuous search intentions significantly influence continuous banking services intentions. Secondly, attitude toward PPC advertising significantly affects both continuous search and banking services intentions. Thirdly, satisfaction with PPC advertising is crucial in shaping attitudes toward PPC, continuous search intention, and continuous banking services intention. Fourthly, perceived usefulness directly influences attitudes toward PPC, satisfaction with PPC, and continuous search intention. Lastly, while PPC advertising's perceived ease of use and perceived confirmation are linked to perceived usefulness, they do not directly affect attitude toward PPC. By adopting a dual intentions approach, this study contributes to banking literature by highlighting the importance of understanding the distinct roles of PPC attributes in shaping short- and long-term customer behavioral intentions.

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The role of persuasion by significant others and engagement in bank-switching intention

Bortne,

Bjornestad,

Arnestad

et al. 2024

J Financ Serv Mark

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A person’s beliefs in individual abilities, such as self-efficacy or perceived behavioral control, profoundly affect emotion, cognition, and behavior. However, the influence of such beliefs is not apparent in current research on bank-switching intention and behavior. Moreover, the relationship between bank-switching intention and the sources that promote self-efficacy and perceived behavioral control has received even less attention. In a study with a representative sample of 1245 adults in the Norwegian market, we looked at the role of four promotional sources of self-efficacy, i.e., enactive mastery experience, vicarious experience, verbal persuasion, and physiological and affective states, in bank-switching intention. In line with past research, we found a negative association between customer satisfaction and bank-switching intention. However, bank-switching intention was positively associated with promoters of self-efficacy in bank-switching behavior, particularly persuasion from significant others and a feeling of engagement. This feeling of engagement also interacted with customer satisfaction on bank-switching intention. Our findings suggest that bank-switching intentions cannot be attributed solely to customer dissatisfaction. They also involve social cognitive aspects promoting individual self-efficacy and human agency. The effects of significant others and internal emotional activation are important when decoding bank-switching intention.

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Determinants of customer recovery in retail banking—lessons from a German banking case study

Cited by 3 publications

References 52 publications

The causes of bank customer churn based on XGBoost and LightGBMmodels: the evidence from the Kaggle dataset

The causes of bank customer churn based on XGBoost and LightGBMmodels: the evidence from the Kaggle dataset

Pay-per-click (PPC) advertising and continuous banking service intentions

The role of persuasion by significant others and engagement in bank-switching intention

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