Factors That Influence E-Loyalty of Internet Banking Users

By Al-Agaga, Ameen M.; Nor, Khalil Md | International Journal of Electronic Commerce Studies, July 1, 2012 | Go to article overview

Factors That Influence E-Loyalty of Internet Banking Users


Al-Agaga, Ameen M., Nor, Khalil Md, International Journal of Electronic Commerce Studies


ABSTRACT

The objective of this study was to examine factors that influence customer e-loyalty. In this respect, we identified three factors that may influence customer e-loyalty, namely trust, customer satisfaction, and sense of belonging. We used Internet banking as the target technology and college students as subjects for this study. One hundred and nineteen questionnaires were used for the data analysis and multiple regression analyses were conducted to analyze the data. Trust, customer satisfaction, and sense of belonging were found to have a significant impact on customer e-loyalty in Internet banking.

Keywords: Customer E-loyalty, Trust, Customer Satisfaction, Sense of Belonging

1. INTRODUCTION

The revolution in information technology has a direct influence on the way business is conducted. In the banking industry, one of the most notable and momentary developments has been the introduction of Internet banking. Internet banking offers customers the flexibility of 24-hour access to banking services without the need to visit the bank for most services and transactions1.

The banking sector has witnessed major developments over the past three decades, especially in the automation of banking services and the use of banking technologies to achieve cost goals and better serve their customers2. Pikkarainen et al.3 pointed out that Internet banking is one of the cheapest channels for banking products. According to Reichheld et al.4 and Reichheld and Schefter5, the high costs associated with winning new e-customers, which is essential for banks to maintain their current customers and make them loyal. Meanwhile, customer loyalty in the Internet banking era has become a critical issue because it has a constructive and positive influence on banks' long-term profitability6. Therefore, there is a need to determine what influences customer e-loyalty. As such, the main purpose of this study was to investigate whether trust, customer satisfaction, and sense of belonging influence customer e-loyalty in Internet banking.

2. LITERATURE REVIEW

Customer e-loyalty is a new concept and is considered to be a branch of concept of loyalty, which is implemented in the e-commerce domain. This was introduced first by Reichheld and Schefter5. Additionally, Sohn and Lee7 defined e-loyalty as "customers' behaviour to visit and revisit the specific website and make transactions comfortably." E-loyalty was also defined as "a customer's favorable attitude toward the e-retailer that results in repeat buying behavior" by Srinivasan et al.8. The high competitiveness in the online retail environment has resulted in enhancing e-loyalty, which has become a key for the survival of online retailers, as competition is just 'a mouse click away'5.

Trust has been indicated as one of the major determinants of e-loyalty in most retailing environments8, 9. Lewis and Soureli10 defined trust as "a feeling of security, based primarily on the belief that one party's behavior is guided by favorable intentions towards the best interest of the other." Moorman et al.11 define trust as "the willingness to rely on an exchange partner in whom one has confidence." As such, trust in e-retailing is the belief or expectation that the retailer can keep promises and can be depended on12. In the context of online banking, trust assists in removing perceptions that are related to risk and insecurity among online customers when they are engaged in online financial activities. To gain and sustain a competitive advantage, online providers need to create trust, which later enhances e-loyalty5. Prior studies13, 14 have indicated that trust is considered to be an important aspect to developing long-term customer relations. Floh and Treiblmaier15 showed that the relationship between trust and customer loyalty is directly proportional.

Another driver of e-loyalty is customer satisfaction16, 17. Customer satisfaction is defined as "an overall evaluation based on the total purchase and consumption experience focused on the perceived product or service performance compared with pre-purchase expectations over time"18. …

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