The influence of customer perceptions on financial performance in financial services

Abstract

Purpose -The purpose of this study is to develop and empirically test a model examining the relationship between customer perceptions (product attributes, benefits, customer satisfaction, trust, commitment and customer behavioral loyalty) and financial performance of a merchant bank. Design/methodology/approach -Based on the SEM tool of Linear Structure Relation (LISREL), this study develops and empirically tests a model examining the relationships between customer perspectives (product attributes, benefits, customer satisfaction, trust, commitment and customer behavioral loyalty) and the financial perspective (financial performance). A cross-department study in the financial services industry was conducted based on three consumer samples (department of Loans, Deposits, and Credit Cards) drawn from XYZ bank, one of the most famous banks providing merchant banking services in Taiwan. Findings -SEM results indicate that: customer perceptions positively affect financial performance; and customers purchase financial services with dissimilar benefits, all of which come with corresponding attributes, and hence result in different levels of customer satisfaction and behavioral sequence, which is important in reinforcing customers' trust, commitment, repurchase intentions and corporate financial performance. Practical implications -The findings suggest that financial service managers could consider treating consumers as partners in their provision of existing services or their quest to develop successful new services. Reciprocal behavior will foster a positive atmosphere, remove barriers arising from risk, and enable relationships to progress, ultimately improving financial performance. Originality/value -The research proposes an empirical model of the customer perceptions in the consumption of financial services that has a positive impact on the financial performance of the company. The findings are based on data from one company across three product departments.

The relationship among customer satisfaction, loyalty and financial performance of commercial banks

“…On the other hand, the localization of a branch, its accessibility and layout are supposed to have only a marginal impact. Matzler et al (2007) argue that the relationships between customer satisfaction and its determinants tend to be nonlinear, infl uence each other among themselves or can be found only in some segments. Munari et al (2013) summarize all the explored factors to date in one concept divided into two levels.…”

“…Association between qualitative factors in contingency tables is analysed by Pearson's statistics (Belás, Cipovová, & Demjan, 2014). Models which contain latent constructs are often examined by Factor Analysis (Fraering & Minor, 2013;Arbore & Busacca, 2009 or by Structural Equation Modelling approach (e.g., Fatima & Razzaque, 2014;Matzler et al 2007). Preferred data acquisition way is a questionnaire survey.…”

Development and validation of the Perceived Investment Value (PIV) scale

“…Recently many studies have adopted consumer behavior theories and techniques to provide a more holistic view of investing, the preferences that affect it, and also financial behaviors in general (Beal et al, 2005;Clark-Murphy & Soutar, 2005;Canova et al, 2005;Hsee et al, 2008;Liang et al, 2009;Lovett & MacDonald, 2005;Meier et al, 1999;Sullivan & Miller, 1996;Wärneryd, 1999). This approach posits that consumers may desire and obtain certain outcomes from investments that have not been anticipated in mainstream finance and economic literature.…”

The Red Flags of Tax Reporting on the Market Value

“…Thus, if the potential investors rely on these types of reporting, the risk of financial losses among potential investors will be higher (Zulfiqar, Shah, Butt, & Tariq, 2011). Furthermore, the aggressiveness of tax reporting activities will also create uncertain outcomes for the potential investor because these kinds of activities are usually used to dress up a company's financial position and will not guarantee their future profits (Liang, Wang, & Farquhar, 2009). Therefore by considering the previous research on tax reporting issues, the aim of this particular study is to investigate the possible impact of tax reporting on the market value of Shariah compliant companies on Bursa Malaysia.…”