The previous section has highlighted some of the difficulties that customers encounter in the purchase of financial services. In this section we examine briefly some of the existing empirical research relating to buying behaviour, and consider the extent to which it corroborates the issues discussed in the previous section. The results of a variety of studies of buying behaviour for both personal and corporate financial services are summarized in Tables 7.1 and 7.2. Most of the work to date has emphasized specific aspects of buying behaviour, such as factors affecting the choice of bank, usage of financial services and customer loyalty, rather than attempting to
Author(s) Field of study Geographic area Key finding(s)
Laroche et al. (1986) Factors influencing choice of bank Canada Importance of location convenience, speed of service, competence and friendliness of bank personnel Jain et al. (1987) Customer loyalty in retail banking USA Customer loyalty is a useful construct; bank non-loyal
segment swayed by economic rationale, whereas greater emphasis placed on human aspects of banking by bank loyal segment
Joy et al. (1991) Link between ethnicity and use of Canada Ethnicity should be considered as a construct having strong
financial services potential impact on consumption
Leonard and Spencer Importance of bank image as a USA Preference for banks amongst students as providers of (1991) competitive strategy for increasing financial services; greater confidence in large to medium-
customer traffic flow sized banks; importance of courtesy of personnel,
competitive deposit rates, loan availability
Lewis (1991) International comparison of bank UK/USA Very high expectations of service quality and high perceptions
customers’ expectations and of service received, yet gaps did exist
perceptions of service quality
Ennew (1992) Consumer attitudes to independent UK More importance may be attached to image and reputation
advice of an independent financial adviser than their status
Chan (1993) Banking services for young intellectuals Hong Kong Financial sophistication of youth market
Boyd et al. (1994) Consumer choice criteria in USA Reputation and interest rates (loans/savings) more important financial institution selection than friendliness of employees, modern facilities, drive-in
service
Harrison (1994) Segmentation of market for retail UK Distinct segments identified based on financial maturity
financial services (based on likely range of product holdings) and perceived
knowledge of financial services
Burton (1996) Ethnicity and financial behaviour UK Evidence of considerable variety in the take-up of pensions according to ethnic origin; suggests that financial services providers have not yet accommodated the needs/
expectations of distinct ethnic groups
Kennington et al. (1996) Study of banking habits and bank Poland Consumers in a transitional economy select banks using choice in a transitional economy the same criteria as consumers in other countries, although
pricing concerns do appear to be particularly significant Levesque and Determinants of satisfaction Canada Satisfaction influenced by service quality, service features,
McDougall (1996) in retail banking service problems and service quality; these variables also
affect intentions to switch bank
Veloutsou et al. (2004) Determinants of bank loyalty Greece Examines role of satisfaction, perceived quality and image as drivers of bank brand loyalty
Verma et al. (2004) Understanding customer choices US Suggests customer swilling to pay more for an online service
in E-Financial Services that gives offline value and online benefit
Pont and McQuilken Customer satisfaction and loyalty Australia Investigated retirees and university students; no significant
(2005) across two divergent bank segments difference in satisfaction levels between segments, but
a significant difference on three behavioural intentions dimensions – loyalty, pay more and customer relations
Author(s) Field of study Geographic area Key finding(s)
Turnbull (1982a) Purchase of international financial UK Greater effort required to understand the nature of customer services by large/medium-sized needs and bank/customer relationships through detailed
UK companies with European application of the Interaction theory
subsidiaries
Turnbull (1982b) Role of branch bank manager in UK Lack of customer orientation amongst bank branch managers bank services marketing
Turnbull (1982c) Use of foreign banks by UK companies UK High concentration of decision-making and extent of split banking; crucial importance of development and maintenance of a company-bank relationship
Turnbull (1983) Relationship between banks’ corporate UK Small/medium-sized companies do not always consider major customers and their sources of UK banks as an appropriate source for all financial services financial services
Turnbull and Gibbs Relationship between large companies South Africa Predominant bank selection criteria: importance of quality of
(1989) and its lead and closest service, quality of staff and price of services; split banking
substitute bank common
Chan and Ma (1990) Corporate customer buying behaviour Hong Kong Great importance attached to banks understanding their clients’
for banking services. attitudes in order to serve them better
File and Prince Purchase dynamics of SME market USA Existence of three distinctive sociographic segments adopting
(1991) and financial services innovations in bank services: return seekers, relevance
seekers and relationship seekers
Edwards and Current and future use of foreign banks UK Very conservative approach to domestic banking, with foreign
Turnbull (1994) by UK middle corporate market banks used as secondary banks
Zineldin (1995) Bank–company interactions Sweden Smaller companies tend to have stable relationships with a single bank, but larger organizations operate with a variety of banking relationships; there is evidence of low levels of satisfaction among smaller companies
Ennew and Binks Customer involvement in banking UK Greater degrees of customer involvement in a banking
(1996b) relationships relationship result in improved service quality
Turnbull and Empirical research using a sample UK Suggests likely polarization in industry structures. Major players Moustakatos (1995) of investment banks and their large will be full service investment banks with a worldwide
corporate customers. capability accompanied by specialist niche players on a
geographical or product basis
Mols et al. (1997) European corporate customers’ choice Europe Differentiation between the service offering as perceived by of domestic cash management banks managers towards individual and business customers;
evidence of superior service experience of individual rather than business customers
Athanassopoulos The nature relationships between Greece Evidence that profitable firms resist cross-selling; need for and Labroukos corporate companies and financial relationship marketing to expand scope; product-bundling
(1999) institutions not sufficient to ensure lasting relationships
Lam and Burton Bank selection and share of the wallet HK/Australia Firms in both countries view a bank’s willingness to
(2005) among SMEs: apparent differences accommodate their banking and credit needs as being
between HK and Australia important. Hong Kong firms appear to give this factor higher priority, while Australian firms appear to place higher emphasis on long-term relationships.
examine the buying process as a whole. This largely reflects the difficulties associated with testing decision-process models in their entirety.
Empirical studies relating to the personal market highlight the importance of factors such as confidence, trust and customer loyalty. Some of the common choice criteria in bank selection include dependability and size of the institution, location, convenience and ease of transactions, professionalism of bank personnel, and availability of loans. It would appear, therefore, that the personal consumer is more interested in the functional quality dimension of financial services (i.e. how the service is delivered) than in the technical quality dimension (i.e. what is actually received as the outcome of the production process) (see Grönroos, 1984). This is hardly surprising, given the difficulties consumers have in evaluating services.
In contrast, work relating to corporate customers places much greater emphasis on the importance of interaction and understanding. This is consistent with the notion that issues such as passivity, complexity and problems of comparison are perhaps less important to corporate decision-makers, but that the intangibility and the lack of search qualities means that personal relationships, trust, confidence and reliability continue to be important influences within the purchase process.