Does CSR Enhance Young Bank Customers’ Satisfaction and Loyalty in a Developing Economy? The Mediating Role of Trust

Abstract

The role of corporate social responsibility (CSR) on firm performance is well documented in the literature. Although the majority of the evidence available points to a positive association between CSR and determinants of company performance such as monetary performance, personnel commitment and corporate identity, findings still remain rather inconclusive as negative or no correlation results are also reported. In addition, little is known about how CSR is perceived from a bank customer’s point of view and studies examining its effect on customer satisfaction and loyalty in developing economies are scanty. Drawing insights from the stakeholder and signaling theories, this study examines the effect of CSR on customer satisfaction and customer loyalty. The study also examines the mediating role of trust on these relationships. Data from 348 bank customers in Zambia indicate that CSR positively affects satisfaction and loyalty. It was also established that trust has a significant mediating effect on the relationships. With the increase in complexity and dynamism of today’s business environment banks are advised to be more socially responsible as one way of building trust and customer satisfaction and loyalty.

Effect of Corporate Social Responsibility on Consumer Satisfaction and Consumer Loyalty of Private Banking Companies in Peru

“…Likewise, customers who feel satisfied with services provided by banks are more likely to repeat the transactions and work as advertising for the firm by recommending it to more people [34,46]. Other investigations indicated that CSR activities from banks indeed affect customer satisfaction and loyalty [47,48]. The accomplishment of consumers' expectations and necessities increases their loyalty.…”

Analysis of Bank Customer Default Risk Based on Embedded Microprocessor Wireless Communication

“…In the process of evaluating and analyzing the default risk of bank customers, strengthen the implementation of "three inspections," reformulate the punishment mechanism, and strictly implement the new punishment mechanism, so as to not only take credit performance as the reward standard [21,22]. In terms of short-term economic development, high-risk and high interest bank credit will indeed produce good profit space, but in the long run, the default risk of bank customers is increasing, which is not conducive to long-term stable development.…”

The impact of CSR performance and CSR disclosure readability on investors’ earnings estimates

“…For instance, prior literature has documented that socially responsible firms have lower equity capital costs (Dhaliwal et al, 2011, 2012; Torugsa et al, 2013), enhanced profitability (Kumar et al, 2016), good corporate reputation (Ozdora‐Aksak et al, 2016) and risk profile (Cui et al, 2018), receive more recommendations from analysts (Ioannou & Serafeim, 2015) and better reactions from investors, particularly in controversial industries (Christensen, 2016; Lackmann et al, 2012). Moreover, social responsibility activities will increase stakeholders' (e.g., investors) perception of trust in the organisation as well as their financial information (Kim et al, 2012), which then results in better organisational performance, such as larger market share, higher customer satisfaction and greater profit creation (see Brammer & Millington, 2008; Carmeli et al, 2007; Kim et al, 2012; Zulu‐Chisanga, 2019). Even during the financial crisis of 2008, a firm's CSR efforts have also been confirmed to help them successfully re‐establish trust between themselves and their investors (Giannarakis & Theotokas, 2011).…”