Factors Influencing Customer Loyalty in the Retail Banking Sector: A Study of Financial-Banking Services in the Republic of Moldova

Abstract

Purpose of this research is to identify the nature of loyalty, the valence/dimensionality of this concept, and the factors that determine customers of banking products/services in the Republic of Moldova to establish long-term relationships with the bank and remain loyal to it, thereby proposing targeted measures the banks could take to keep their customers. Online survey data of 363 customers of financial-banking products/services in the country was extracted, counted, and analyzed, and the statistical results reveal that loyalty to a banking service is similar to that in interpersonal relationships, and bank-client relationships can generate friendships or even lasting partnerships over time due to proper behavior. Based on analysis results, this paper identifies manifestations of loyalty, figures out factors for developing loyalty and trusting relationships and for improving customer attitude, and innovatively proposes a few suggestions for financial institutions to formulate customer loyalty problems and develop long-term relationships with their customers, including measuring customer loyalty level to identify genuinely loyal customers, ensuring the bank's efforts to build customer loyalty is recognized in the entire institution, relating the value of each customer to the value of rewards provided in the loyalty program, and rewarding customer loyalty according to customer priorities. Research results attained in the paper could assist bank managers in the Republic of Moldova in making managerial decisions to prevent customers from migrating to competitors and establish long-term relationships with them, and the conclusions and suggestions might be applicable to banks in other counties with similar problems around the globe.

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