Factors of Customer Loyalty in Banking Industry

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1.1 Introduction Banks are playing a very important role in the economic development of a nation. The healthiness of the economy is directly connected to the soundness of its banking system. The role of banks has placed them as a very valuable partner in the process of economic development. Nowadays, banks are very useful for the utilization of the assets of a nation. If there would be no banks then a large segment of assets in the country would stay idle. It is possible to attaining long-term success in the banking sector by providing excellent customer service. It is an effective strategy for taking full advantage from the engagement between customers with organizations and also offering a competitive edge to survive in this…show more content…
In this challenge lies a chance for the industry to write down a new, more concrete and sustainable base for growth. For most of the retail banks, the best way ahead will be organic growth embedded in strong customer relationships and the economic rewards they deliver. Like any other business that systematically sets out to change customers into advocates, the most efficient companies put customer loyalty at the center of their development strategies. They embrace new management regulations, employed new metrics to track customer behavior and relocate their organizations from the executive suite to the frontlines on improving the customer experience. They also build the infrastructure, information systems and training programs that allow them to make customer feedback a fundamental part of how they operate. According to Foo, Duglas & Jack (2008), retail banking sector is a progressively more competitive industry where the level of differentiation in banking products and services is still very low. In this sense, Barnes & Howlett (1998) noted that a lot of financial services provider are offerings similar product, it can be explained that a customer is likely to be slightly impressed by core product provides when all businesses are providing similar products or services(Chang, Yao & Ying, 2009). The study had shown various trends telling that customer loyalty is low in many banks, such as
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