A new study by Massey University and Curtin University researchers shows that banks can’t rely on the strength of their
technology platforms to create loyalty with their business customers.
Massey Business School’s Associate Professor Henry Chung will present the findings of his co-authored paper at the
International Symposium on Branding in the Business-to-Business Context at Massey University this week.
Mobile and online technologies have revolutionised banking, Dr Chung says, but no one has studied if technology creates
brand loyalty like face-to-face relationship building. Dr Chung and his colleagues collected data from 336 New Zealand
small and medium-sized businesses and compared their commitment to local and national-branded banks with their
commitment to foreign-branded banks.
“Self-service technologies are now an integral way for banks to deal with customers and they offer an opportunity for
large, foreign banks, with their strong brands and superior infrastructure, to penetrate markets that have been
traditionally dominated by banks with a local presence,” Dr Chung says.
“We analysed participants’ e-loyalty – their preference for interacting with their bank by using mobile and online
platforms – and found that e-loyalty is a critical component of doing business because it offers advantages like 24x7
access and instant payments.
“But we also found that the self-service technologies widely used by banks have become fairly standardised so those
services are now expected, rather than offering a significant competitive advantage to foreign banks.”
What was interesting, Dr Chung says, was the impact building strong face-to-face relationships had on e-loyalty. The
study found that good, personalised relationship building led to an increase in e-loyalty and all the cost advantages
that brings to banks.
“Our research shows that foreign banks like Citibank and HSBC can’t rely solely on their superior technological
platforms to provide a competitive edge,” he says. “If locally-branded banks have a good self-service offering and also
build strong face-to-face relationships with their business customers, they will create both e-loyalty and greater trust
in their brand.
“So, in an industry increasingly dominated by technology, relationship building can still bring a competitive advantage
– as long as there is a good level of satisfaction in their e-banking offering.”
Dr Chung will be attending the International Symposium on Branding in the Business-to-Business Context from Monday to
Tuesday this week. Please leave a message on his phone and he will respond in the conference breaks.
ENDS