Customer Loyalty and its Determinants: A study on Foreign Banks in Malaysia
Tejash Roy Chunnoo1, Ng Hui Chen2
1Tejash Roy Chunnoo, School of Accounting, Finance and Quantitative Studies, Asia Pacific University of Technology & Innovation, Malaysia.
2Ng Hui Chen, School of Accounting, Finance and Quantitative Studies, Asia Pacific University of Technology & Innovation, Malaysia.
Manuscript received on 06 February 2019 | Revised Manuscript received on 12 February 2019 | Manuscript Published on 19 February 2019 | PP: 287-293 | Volume-7 Issue-5S January 2019 | Retrieval Number: ES2157017519/19©BEIESP
Open Access | Editorial and Publishing Policies | Cite | Mendeley | Indexing and Abstracting
© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Given the changes and advancements in the current financial landscape, the loyalty of foreign banks’ customers has been on the loose ends latterly, with most individuals having a greater inclination towards local banks. Customer loyalty plays an important role on the income streams of banks and for their own survival in today’s competition oriented-environment. This study seeks to examine the factors affecting customer loyalty towards the customers of foreign banks in Malaysia. It investigates the effect of corporate image, trust, switching costs and service quality on customer loyalty by employing models such as SERVQUAL and Dick and Basu model. Through a random sampling technique, data were collected using structured questionnaires from a total of 150 individuals holding a banking account with at least one of the foreign banks operating on the Malaysian shores. The results indicate that three out of the four variables tested, i.e. service quality, corporate image and switching costs, are the main factors most likely to influence customer loyalty of foreign banking customers. The findings further prove that trust did not radiate any effect on customer loyalty. This study also holds some recommendations on how foreign banks can reverse their current situation and have a better approach at retaining their customers.
Keywords: Customer Loyalty, SERVQUAL Model, Dick and Basu Model, Foreign Banks.
Scope of the Article: e-governance, e-Commerce, e-business, e-Learning