Abstract
The rapid development of fintech during the pandemic, has led to advancements in digital-only banking. However, the rapid technology-driven innovation has created a gap between technological services and customer experience. Even with the constant improvement of fintech, current banking services are still poorly differentiated. Digital Branding is not yet fully effective to increase customer loyalty. The purpose of this study is to investigate the impact of digital-only banking experience on customer loyalty. The research process applied a mixed method of qualitative and quantitative approaches in two stages. First, exploratory research was conducted through interviews to establish the research framework An adopted research model for digital-only banking based on the S-O-R theory was proposed. Second, quantitative research of questionnaires were executed to discuss the correlation between service quality, perceived value, and loyalty. To validate the hypothesis, Partial Least Squares Structural Equation Modelling analysis was employed. Furthermore, a cross-sectional analysis based on Net Promoter Scores were conducted to examine the difference between three customer loyalty levels. The results showed that Functional and Spiritual values of digital-banking services significantly influence customer loyalty. In addition, Service and Environment experience has a strong influence on perceived value. The importance of this research includes the establishment of the framework to explore customer experience and deepen insights into customer internal needs. From a practical perspective, the NPS cross-section analysis could guide companies considering the customer loyalty conversion strategy and reflecting on the appropriateness of the offerings by design with limited resources.
Keywords
Digital-only Banking, Customer loyalty, Customer Experience, Perceived Value, Banking Service Quality
DOI
https://doi.org/10.21606/iasdr.2023.410
Citation
Lien, Y.,and Tang, H.(2023) Exploring the Relationship between Customer Experience and Loyalty in Digital-Only Banking, in De Sainz Molestina, D., Galluzzo, L., Rizzo, F., Spallazzo, D. (eds.), IASDR 2023: Life-Changing Design, 9-13 October, Milan, Italy. https://doi.org/10.21606/iasdr.2023.410
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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
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Exploring the Relationship between Customer Experience and Loyalty in Digital-Only Banking
The rapid development of fintech during the pandemic, has led to advancements in digital-only banking. However, the rapid technology-driven innovation has created a gap between technological services and customer experience. Even with the constant improvement of fintech, current banking services are still poorly differentiated. Digital Branding is not yet fully effective to increase customer loyalty. The purpose of this study is to investigate the impact of digital-only banking experience on customer loyalty. The research process applied a mixed method of qualitative and quantitative approaches in two stages. First, exploratory research was conducted through interviews to establish the research framework An adopted research model for digital-only banking based on the S-O-R theory was proposed. Second, quantitative research of questionnaires were executed to discuss the correlation between service quality, perceived value, and loyalty. To validate the hypothesis, Partial Least Squares Structural Equation Modelling analysis was employed. Furthermore, a cross-sectional analysis based on Net Promoter Scores were conducted to examine the difference between three customer loyalty levels. The results showed that Functional and Spiritual values of digital-banking services significantly influence customer loyalty. In addition, Service and Environment experience has a strong influence on perceived value. The importance of this research includes the establishment of the framework to explore customer experience and deepen insights into customer internal needs. From a practical perspective, the NPS cross-section analysis could guide companies considering the customer loyalty conversion strategy and reflecting on the appropriateness of the offerings by design with limited resources.