Research Proposal
Title
Determining the factors that influence customer loyalty in the South African banking sector
Introduction
According to the Ernst and Young Global Consumer Survey(2012) titled 'The Customer Takes Control' banks across the world are under intense pressure with a reported 40% decrease in customer confidence in the banking industry. The South African banking sector is no different as it also faces challenges to stay competitive in an ever changing business and operating landscape. The South African banking sector consists of local and foreign banks that compete for customers in their respective locations. This complex and very dynamic environment is dominated by the so called 'big four' banks which are Amalgamated Banks of South Africa- ABSA, First National Bank- FNB, Nedbank and Standard Bank. These banks will form the core of this research proposal and the main focus will be retail banking because that is the core service offered by the mentioned banks and it will more cost effective for the researcher to gather information on the retail banking rather than all the services of the aforementioned financial institutions.
The research topic is determining the factors that influence customer loyalty. The operating environment of banks and financial institutions in general is a difficult one especially as public trust is at a historic low following the global recession of 2008-09, the effects of which the populace is only starting to recover from now. There is a need to repair badly damaged relationships between the customer and their bank. Customer loyalty is defined as when a customer consistently purchases a certain product, service or brand over an extended period of time (Lovelock& Wirtz, 2011). It is all about attracting and retaining the right customer.
Within the context of this definition, it is therefore prudent to say customers are becoming increasingly disloyal to their banks. Studies have shown that customer attrition in South Africa
Determining the factors that influence customer loyalty in the South African banking sector
Introduction
According to the Ernst and Young Global Consumer Survey(2012) titled 'The Customer Takes Control' banks across the world are under intense pressure with a reported 40% decrease in customer confidence in the banking industry. The South African banking sector is no different as it also faces challenges to stay competitive in an ever changing business and operating landscape. The South African banking sector consists of local and foreign banks that compete for customers in their respective locations. This complex and very dynamic environment is dominated by the so called 'big four' banks which are Amalgamated Banks of South Africa- ABSA, First National Bank- FNB, Nedbank and Standard Bank. These banks will form the core of this research proposal and the main focus will be retail banking because that is the core service offered by the mentioned banks and it will more cost effective for the researcher to gather information on the retail banking rather than all the services of the aforementioned financial institutions.
The research topic is determining the factors that influence customer loyalty. The operating environment of banks and financial institutions in general is a difficult one especially as public trust is at a historic low following the global recession of 2008-09, the effects of which the populace is only starting to recover from now. There is a need to repair badly damaged relationships between the customer and their bank. Customer loyalty is defined as when a customer consistently purchases a certain product, service or brand over an extended period of time (Lovelock& Wirtz, 2011). It is all about attracting and retaining the right customer.
Within the context of this definition, it is therefore prudent to say customers are becoming increasingly disloyal to their banks. Studies have shown that customer attrition in South Africa