Impact of Online Banking on consumer retention strategies of banking and finance industry

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Acknowledgement

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Table of Contents

ACKNOWLEDGEMENTII

DECLARATIONIII

CHAPTER 1: INTRODUCTION1

Background1

Problem Statement2

Research Aim2

Research Question2

Objective of the Research3

Layout of the Report3

Chapter 24

Chapter 34

Chapter 44

Chapter 54

CHAPTER 2: LITERATURE REVIEW5

Introduction5

Online banking6

Strategies of Increasing Customer Retention8

Satisfaction8

Switching Costs8

Contributuion of Online Banking to the Financial sector9

CHAPTER 3: RESEARCH METHODOLOGY10

Research Design10

Outline of the overall strategy10

Research Instrument used11

Sample11

Data Collection Method11

Data Analysis11

Underlying assumption12

CHAPTER 4: ANALYSIS AND DISCUSSION13

CHAPTER 5: CONCLUSION14

REFERENCES15

CHAPTER 1: INTRODUCTION

The study at hand deals with the impact of a value added service on the customer retention strategies of the customers. One of these services, the service of online banking plays a significant role in retaining the customers in the organization.

Background

It is possible for the banks to increase their profits by acquiring new customers, augmenting profitability from existing customers by enhancing their one time purchase volume, and enhancing the duration of customer retention (Veloutsou, Daskou, & Daskou, 2004, pp. 113). In the past, most of the financial institutions focused on the first two approaches. However, those strategies have been found not to be very effective and efficient in markets that are saturated. Recently, in both marketing theory (academia) and practice (industry), the emphasis in relationship marketing has shifted to long term customer relationship management (Ahmad & Buttlr, 2002, pp. 5). Managers and researchers have emphasized the importance of customer retention, the dynamics of customer relationship, and customer lifetime value (Reinartz and Kumar 2003) for which customer retention is an important component (Gupta, Lehmann, and Stuart 2004). Customer retention has been suggested as an important antecedent to financial outcome (Delong & Rice, 2004, pp. 52). Compared to short-term customers, long-term oriented customers could offer substantial benefits to a company.

The businesses these days attain to achieve their objectives by attracting more and more customers and retaining them in the market. The concept of a value-added service (VAS) is very popular in telecommunication and other industries. However, the idea can be utilized in any industry providing services to the customers for the purpose of promoting their basic business.

The value-added services are provided to the customers either through the operator of mobile networks or by the in-house suppliers themselves (Pfeifer, Haskins & Conroy, 2005, pp. 11). Besides this, another source for the provision of these value added service include the third-party value-added service provider (VASP), also known as a content provider (CP) such as All Headline News or Reuters. Typically, the link the VASPs typically connect to the operator using protocols like Short message peer-to-peer protocol (SMPP), connecting either directly to the short message service centre (SMSC) or, ...