The impact of corporate fairness on the bank‐SME relationship

Abstract

Purpose

The United Kingdom Financial Services Authority's treating customers fairly initiative has drawn attention to a current trend that involves regulators using regulatory principles to enhance the relationship between financial institutions and customers. The term corporate fairness is introduced to facilitate the understanding of the construction of fairness. The purpose of this study is to investigate corporate fairness as a means of achieving customer satisfaction.

Design/methodology/approach

This study is based on a sample of 359 small and medium‐sized enterprises (SMEs) in Sweden. LISREL, a structural equation modelling technique, is used to analyse the empirical data.

Findings

The present study emphasises the importance of treating customers fairly in the financial sector. By being embedded in the strategy and structure of the bank organisation, corporate fairness enables individual bankers to act in a relational manner towards their customers, thereby resulting in higher customer satisfaction.

Originality/value

Corporate fairness is a topic usually reserved for consumer research, this study shows the impact of corporate fairness on the SME community. The study shows how corporate fairness is linked to customer satisfaction, and how perceived fairness can be improved.

Citation

Vegholm, F. and Silver, L. (2008), "The impact of corporate fairness on the bank‐SME relationship", Journal of Financial Regulation and Compliance, Vol. 16 No. 4, pp. 352-364. https://doi.org/10.1108/13581980810918413