Customer Retention and Customer Satisfaction in Relation to E Banking

Abstract

In recent years, the banking industry around the world has been undergoing a rapid transformation and the Indian financial market is also witnessing a significant change in its growth pattern The intensification of information technology has facilitated better tracking and fulfillment of commitments and multiple delivery channels for online customers. In India too, the wave of deregulation in the early 1990s has created heightened competition and greater risks for banks and financial intermediaries. Today, customers demand higher quality services from banks which, if fulfilled, could result in significantly improved customer satisfaction levels. Customer satisfaction and customer retention have received considerable attention from banking and marketing researchers and have been studied extensively in offline banking. With the emergence of tech-savvy environment and proliferation of electronic commerce, there is both a need and opportunity to examine Customer satisfaction and Customer retention in relation to online banking. Previous banking studies on customer retention focused narrowly on customer loyalty and customer satisfaction without attempting to link them in a model to further explore or explain customer retention. If retention criteria are not well managed, customers may still leave their banks, regardless of how hard bankers try to retain them. This study empirically examines the potential constructs in customer retention and customer satisfaction. So there was a need to present a comprehensive, integrated and holistic approach for designing a structural model for enhancing customer satisfaction and customer retention. The current research uses a questionnaire-based primary data to uncover the determinants of customer satisfaction and customer retention. For conducting customers survey, Likert scale based questionnaire was developed after review of literature and discussions with bank managers as well as academicians.