Factors of Customer Loyalty in Banking Industry Essay

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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…
This concern is not about the bank service quality has declined, but in numerous case it has improved due to fact of customer expectations have changed. The complex financial setting and the immense investments, especially by retailers and airlines, have continually developing more sophisticated loyalty systems, and resulted higher customers expecting from their banks. With the accessibility of information on the internet, customers are allowed to make decisions about where to bank based on their specific financial needs.

Furthermore, the occurrence of committed and often inherited relationships between a customer and his or her bank is becoming increasingly scarce (Levesque & McDougall, 1996). Even though there is a lot of companies have customize loyalty as a key strategy to survive, but they seem do not really understand the meaning and how to use it in an effective way. Many authors believe that determinants of loyalty are complex and dynamic, changing and growing over time (Johnson, Herrmann, and Huber, 2006). There are still numerals of essential gaps in understanding of the loyalty and other relationship marketing constructs (Taylor, Hunter, and Longfellow, 2006).

In order to survive in this competitive environment, banks should provides their customers with something fresh and relatively low-priced, this is because the competitive edge of a bank is basically explained by the level of its conformance to
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