Editorial

Citation

Eriksson, H.E.a.K. (2013), "Editorial", International Journal of Bank Marketing, Vol. 31 No. 7. https://doi.org/10.1108/IJBM-07-2013-0067

Editorial

Article Type: Editorial From: International Journal of Bank Marketing, Volume 31, Issue 7.

The pursuit of customers, profitable exchanges, and satisfied service delivery is at the heart of modern bank marketing. The competitive environment in which banks operate requires close attention to be given to customer experiences, not only during the service encounter but also following it. How customers form their impressions of a bank, how these impressions affect their interpretation of a bank's quality of service, and how the overall experience may influence what they communicate to others can dramatically influence the financial and market performance of a bank.

For this reason, the papers chosen for inclusion in this issue of the International Journal of Bank Marketing (IJBM) have a very customer-centric focus. In two of the papers featured in this issue the critical topic of word-of-mouth (WOM) activity is examined in detail. Known in many contexts to be more powerful than traditional advertising, the nature of WOM communications that takes place among customers in financial markets can significantly help or hurt the brand perceptions of a financial institution. Often negative WOM can be detrimental to a bank's brand identity. The banking crisis in Cyprus this spring also showed how WOM market analysis can be useful for the assessment of financial stability. Furthermore, the nature of how a bank engages its potential customers prior to them becoming users of its services, and how well the acquired customers are served can influence the customer's experience quality with the bank and eventually the propensity of the customer to remain loyal to the bank. These outcomes also have direct financial impact on bank performance.

In the first paper in this issue of IJBM, Klaus, Gorgoglione, Buonamassa, Panniello, and Nguyen examine the concept of customer experience in a bank marketing context. They quantify the quality of customers’ experience with a bank as being on a continuum by developing and utilizing a unique measurement scale. This is an important undertaking since customer experience is known to have a direct impact on the performance of many financial institutions. Institutions whose customers have less positive experiences tend to be less profitable and exhibit poor customer metrics on a range of criteria. To quantify the quality of customer experience in banking, the authors develop a unique scale. In the process they separate out customer experience into three stages: pre-purchase brand impression formation, service experience while using the bank's service, and post-service experiences. Utilizing both in-depth interviews and survey methods involving over 300 customers of an established Italian bank the authors find that the quality of customer experience is affected by pre-purchase brand perceptions. Customer experience quality is also found to be affected by the quality of service provided and post-purchase experiences. Moreover, the authors find that customer experience quality can directly influence a bank's marketing metrics such as WOM activity, customer satisfaction, and share of wallet. These are critical findings at a time when banking institutions worldwide are in pursuit of means to improve financial and market performance.

Building on the issue of WOM formation, Choudhury examines the unique context of banks in India. As the author notes, the retail banking experience is highly affected by customers’ perceptions of the quality of service along a range of dimensions. The summation of these perceptions influences critical business outcomes such as bank profits, customer loyalty, customer satisfaction, and WOM activity. Given the highly persuasive nature of WOM activity, Choudhury focuses on the drivers of service quality in a retail banking environment and how WOM activity is affected by them. The established scale SERVQUAL is modified and used in order to quantify customers’ service quality perceptions of over 800 customers from six major banks in India. The results show that customers’ WOM activity is driven by tangibles, convenience, competence, and employee attitudes. Some of the more important dimensions that drive WOM activity was found to be employees’ attitudes towards the customers and the customer orientation of the frontline employees. The author provides specific suggestions as to how banks can drive positive WOM activity by dissecting the drivers of overall service quality into its sub-dimensions and focusing on those that most positively influence WOM.

Amin, Abdul Rahman, and Abdul Razak extend the focus of inquiry to the unique context of Islamic home banking. They study how financing for homes in an Islamic banking context is influenced by customers’ perceptions of various aspects of the banking exchange. Specifically, they study how dimensions such as simplicity, relative advantage, compatibility, and subjective norms affect the adoption of Islamic home financing. This is an important question for several reasons. One reason is that the volume of Islamic home banking has grown steadily over the years, despite general slowdowns in other sectors of finance. A second reason is the unique context in which Islamic banking services are offered, guided by Shariah laws and uniquely catered to the specific needs of customers who seek financial solutions that meet Shariha guidelines. The authors examine this issue in the context of Islamic banking customers in Malaysia – a country with a great presence of Islamic banking institutions. Using data from a sample of over 200 respondents they find support for an integrative model which takes into account key concepts from innovation diffusion theory and the theory of planned behaviour. Their study also provides prescriptions for how Islamic banks can increase their market appeal and improve their ability to market home financing products to existing and potential customers.

Building on the issue of customer-centric marketing of financial services, Ben lallouna and Chemingui examine the use of mobile financial services. Recognizing the numerous conveniences that mobile financial services offer consumers, the authors examine the sources of consumer resistance as well as motivational factors that influence consumers’ propensity to adopt mobile banking services, specifically in the context of Tunisian customers. Their findings suggest that one of the main adoption barriers is consumers’ gravitation to traditional forms of bank interactions and resistance towards accepting transactional means that do not involve human interactions. Adoption, however, is found to improve with increased consumer perceptions of compatibility and trialability of the technology. This study is important as it examines traditional barriers that prevent financial services providers from providing improved channels for delivering their services. In doing so, it also identifies specific opportunities for increasing the rate of adoption of mobile financial services, through improved market communications.

The papers included in this issue of IJBM have a highly customer-centric focus, with the intent of aiding marketing managers in banks improve the quality of their customers’ experiences. These studies demonstrate that not all components of the service experience have equal impact on critical bank performance metrics, and that bank managers need to pay close attention to identify those aspects of their services that have the greatest potential for positively impacting customer experiences. Such a focused approach is not only likely to help banks fulfill their mandate of servicing the public well, but as has been shown in the research profiled in this issue of IJBM, it can produce profitable exchanges for banks across the globe.