THE EFFECT OF MOBILE BANKING ON CUSTOMER RETENTION: EVIDENCE FROM PRIVATE COMMERCIAL BANKS

Abstract

The research helps to assess factors that affect customer retention and compare the practice of ten private commercial banks which implement mobile banking service that adds customer value through providing convenience and flexibility using a cost-effective method. For this reason, the research aimed at investigating the effect of mobile banking on customer retention: evidence from private commercial bank. To attain the objective, the study used explanatory research design method using quantitative approach. Both primary & secondary data were used, to collect primary data 384 questionnaires were distributed among them only 352 were obtained & used for the research. The study used both descriptive and inferential analysis methods using multiple regression models. To beat a high competition due to the provision of identical services among banks, Banks face problems on distinguishing themselves. The study found that customer retention is positively affected by all variables. Among all customer satisfaction, service quality & delivery, customer awareness level has the highest effect and the other three variables (switching cost, corporate image & relationship quality, and information technology & security/privacy) have the least effect on customer retention in mobile banking service. Therefore to increase customer retention the bank management should implement programs that support awareness creation, customer satisfaction, brand image and reputation by continuously assessing the service quality & delivery of mobile banking services provided to their customers.