Why do bank customers switch? A systematic literature review

Ngau, Christine Mening; Zins, Andreas H.; Rengasamy, Dhanuskodi

doi:10.1108/ijbm-10-2021-0475

Cited by 6 publications

(3 citation statements)

References 92 publications

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“…In previous research, variables like dissatisfaction (Bansal et al ., 2005; Hsieh, 2021), quality (Bansal et al ., 2005; Fan et al ., 2021; Kuo, 2020), trust (Bansal et al ., 2005), risk (Handarkho and Harjoseputro, 2020; Hsieh, 2021; Yusfiarto et al ., 2023) and value (Bansal et al ., 2005; Loh et al ., 2021; Yusfiarto et al ., 2023) have predominantly been utilized as push factors. In the banking industry, the most significant reason for leaving their current bank is widely recognized as low customer satisfaction (Mu and Lee, 2022; Ngau et al ., 2023; Zhao et al ., 2022).…”

Section: Research Model and Hypothesismentioning

confidence: 99%

Understanding switching intentions between traditional banks and Internet-only banks among Generation X and Generation Z

Park,

Yoo,

Cho

et al. 2024

IJBM

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PurposeThis study aims to understand the reasons for individuals switching from traditional banks to Internet-only banks and examine how switching intentions differ between Generation X and Generation Z. Notably, Generation Z, being digital natives, exhibits distinct characteristics compared to Generation X, who often referred to as digital immigrants. Given the technology-driven nature of Internet-only banks, a multi-group analysis between these two generations was conducted.Design/methodology/approachThis study utilizes Bansal’s push–pull–mooring model as a framework to analyze switching intention. The study collected survey data from 383 Korean participants, consisting of 198 participants from Generation Z and 185 participants from Generation X.FindingsThe findings indicate that low satisfaction and discomfort are factors that push people to leave traditional banks. Specifically, Generation Z shows a significantly higher inclination to leave traditional banks due to discomfort. On the other hand, relative advantage, compatibility, observability and trialability are factors that pull people to switch to Internet-only banks. Generation X is more likely to consider adopting Internet-only banks when compatibility is high and complexity is low.Originality/valueThis study is the first to explore unique motivators for Generation Z, such as their discomfort with interpersonal interactions in the retail banking sector. These findings challenge earlier research emphasizing human interaction’s importance in technology adoption, offering insights into their future adoption of contactless services.

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Section: Research Model and Hypothesismentioning

confidence: 99%

Understanding switching intentions between traditional banks and Internet-only banks among Generation X and Generation Z

Park,

Yoo,

Cho

et al. 2024

IJBM

View full text Add to dashboard Cite

show abstract

“…These developments have encompassed identifying socioeconomic and psychological factors associated with bank switching. These variables have included age, education, place of residence and the often negative situational triggers unique to each customer switching decision (Ngau et al. , 2023).…”

Section: Bank Switching and Vulnerable Customers: A Reviewmentioning

confidence: 99%

“…, 2016; Waddams Price and Zhu, 2016; Ashton and Gregoriou, 2017; Van der Cruijsen and Diepstraten, 2017; Lappeman et al. , 2022; Ngau et al. , 2023).…”

Section: Introductionmentioning

confidence: 99%

“One size doesn't fit all”. Bank switching decisions and customer vulnerability in Europe

Fernández-Gutiérrez,

Ashton

2023

IJBM

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PurposeThis paper examines the relationships between bank switching and both customer vulnerability and consumer-oriented policies (financial education and disclosure practices).Design/methodology/approachThe analysis employs microdata from the Special Eurobarometer on Financial Products and Services, for 24 European nations. It carries out a probit estimation on the factors explaining propensity of bank switching, focusing on three characteristics associated with customer vulnerability: an advanced age, low educational attainment and residence in a rural or a relatively poor region.FindingsThe authors report that the probability of bank switching is significantly lower for three groups of vulnerable customers: the elderly, the less educated and those living in deprived regions. Further the authors identify that national financial education policies and disclosure practices have no significant effects on bank switching.Research limitations/implicationsBased on these results, the authors propose more targeted policies recognising customers' heterogeneity are required to increase bank switching behaviour.Originality/valueThis paper exploits a unique source of information on bank switching behaviour and customer characteristics across European nations. These data are complemented with information about consumer financial education policies and disclosure practices from the World Bank and geographical, market and regulatory factors at the regional and national levels. The paper contributes to two academic areas. First, it presents further evidence on heterogeneity of bank customer switching behaviour, addressed at improving the understanding of customer vulnerability in banking services. Second, it examines the efficacy of consumer-oriented policies (financial literacy and disclosure practices) in encouraging bank switching.

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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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Why do bank customers switch? A systematic literature review

Cited by 6 publications

References 92 publications

Understanding switching intentions between traditional banks and Internet-only banks among Generation X and Generation Z

Understanding switching intentions between traditional banks and Internet-only banks among Generation X and Generation Z

“One size doesn't fit all”. Bank switching decisions and customer vulnerability in Europe

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

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