Too busy to wait in line, just click and bank online : Customer Loyalty in Web-Only Banks
Traditionally, banks have always had a close relationship with their customers. They often knew them as individuals, and satisfied their needs through personal customized services. Recently, the development of electronic banking or e-banking has influenced the increasing competition within the banking industry. E-banking customers are nowadays just “a click away” from the competition. In addition, a few years ago, traditional banks started to face new competition with the development of web-only banks. In such banks, there are less personal relationships, with no face-to-face contact. Those banks do not have physical branches.There is a trend among banks towards a focus on the new electronic relationship. It is necessary for banks offering online services to confront a different kind of loyalty (e-loyalty), the loyalty being derived from the relationship an electronic customer has with electronic commerce, as a great deal of customers will do their banking mainly if not completely on the internet. To reach these electronic customers and to satisfy them, in order to make them loyal, will impose a major challenge.The purpose of this paper is to examine how web-only banks achieve customer loyalty. To fulfill our purpose we have studied two cases, one web-only bank on the German market, ING-DiBa and one on the French market, Covefi. We conducted two interviews with employees in the customer analysis and service department to find out what they do to manage customer loyalty. With a frame of reference and two qualitative case studies as a foundation, we have been able to draw important conclusions about customer loyalty in web-only banking.Both banks understand what a loyal customer is, but they do not have a strategy to manage customer loyalty over the Internet. Both banks accomplish in making sure preconditions for customer loyalty, like satisfaction and trust are met. We conclude that it is more difficult to achieve loyalty over the Internet. Nevertheless it is just as important as customer loyalty in traditional banking encounters. Furthermore, we see room for improvements for both banks. We presented recommendations in the end how obtaining loyalty over the Internet can be facilitated.
School:Högskolan i Jönköping
Source Type:Master's Thesis
Keywords:e service loyalty banking
Date of Publication:06/26/2006