Banks’ distributional channel strategies, customer satisfaction and mediating role of trust


  • Haruna Isa Mohammad Department of Business Administration, Modibbo Adama University, Yola. Adamawa State- Nigeria https://orcid.org/0000-0001-7982-9863
  • Kamarudeen Babatunde Bello Department of Business Administration, Modibbo Adama University, Yola. Adamawa State- Nigeria https://orcid.org/0000-0002-5316-3546
Keywords: customer satisfaction, distributional channel strategies, trust, banks, Nigeria

Abstract

The purpose of this paper is to investigate the impact of perception of banks’ distributional channel strategies (Human Teller, ATM-Banking, POS-banking, Mobile banking, internet banking) on customer satisfaction; and the mediating effects of trust in these relationships.  Cross-sectional (survey) data was obtained from a sample of 352 retail bank customers in north-east region of Nigeria, using pre-validated measures. The ADANCO 2.0.1 analytical package was employed in conducting the tests of hypotheses. Results indicate that only the human teller and internet banking channels influence customer satisfaction directly and indirectly through customer trust; while the influence of mobile banking channel on customer satisfaction is fully mediated by trust.  The research findings have further confirmed the irreplaceability of the human element in the delivery of banking services. Bank managers should emphasize continuous training and orientation of employees towards effective service delivery and relationship building. The findings also point to the need for bank managers to devise innovative means of improving the quality of services through self-service channels (ATM, POS and Mobile), and communicate such to customers; while putting measures in place to win the trust of customers for the channels and the entire services of the banks. This paper contributes to the body of knowledge on customer perceptions and response in a multi-channel banking environment, and the mediating role of trust, particularly from developing country perspective. 

 

JEL Classification: L1, M31, M32.

References

Adewoye, J. O. (2013). Impact of Mobile Banking on Service Delivery in the Nigerian Commercial Banks. International Review of Management and Business Research, 2, (2), 333-343.

Adeyemi, O. A., Ola, O. S. &Oyewole, F.A (2014). Internet Banking Functionality in Nigeria and Outcomes of Customer Satisfaction: An Empirical Investigation. International Journal of Academic Research in Business and Social Sciences,Vol. 4, No.8, pp.195-205.

Amin, M.(2016). Internet banking service quality and its implication on e-customer satisfaction and e-customer loyalty. International Journal of Bank Marketing, 34, (3).280-306

Ankit, S. (2011). Factors influencing online banking customer satisfaction and their importance in improving overall retention levels: an Indian banking perspective. Information and Knowledge Management, 1(1), 45-55.

Alaba, S.O. (2011). The adoption of automated teller machine in Ille-Ife, Osun state: factors, rate, problems and challenges. Journal of Basic and Applied Scientific Research, 1(9), 1089-1093.

Al-Hawari, M., Ward, T, and Newby, L. (2009) The relationship between service quality and retention within the automated and traditional contexts of retail banking, Journal of Service Management 20 (4), 455-472

Al-Hawari, M. A., (2011),"Automated service quality as a predictor of customers' commitment", Asia Pacific Journal of Marketing and Logistics, 23 (3), 346 - 366

Anderson, E.W. & Fornell, C. (1994). New Directions in Theory and Practice. Thousand Oaks, Ca: Sage Publications

Anderson, E.W., Fornell, C. & Lehmann, D.R. (1994). Customer satisfaction, market share, and profitability: findings from Sweden. Journal of Marketing, 58 (3), 53- 66.

Bagozzi, R. and Yi, Y. (1988) On the Evaluation of Structural Equation Models. Journal of the Academy of Marketing Sciences, 16, 74-94.

Bagozzi, R.P., Yi, Y. & Phillips, L.W. (1991). Assessing construct validity in organizational research. Administrative Science Quarterly, 36(3), 421-458.

Barsky, J. D. (1992), Customer Satisfaction in the Hotel Industry: Meaning and Measurement Journal of Hospitality & Tourism Research 1992 16: 51 - 73

Baron, R.M. & Kenny, D.A. (1986).The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173-1182.

Bello, K.B., Alkali, A.U. (2020), “Customer rights knowledge in technology-enhanced banking environment: empirical evidence from bank customers in Yola”, ATBU Journal of Accounting and Finance, 1 (1), 92 – 102.

Bello, K. B, Danjuma, I, and Udo-Imeh Phillip. (2014) “Innovative ICT-based Services: Drivers of transition to cash-less society and competitive advantage in the Nigerian banking industry”, Management and Administrative Sciences Review, 3, (5), 744 – 752.

Berry, L. L., "Relationship Marketing of Services - Growing Interest, Emerging Perspectives", in Sheth, J. N. and Parvatiyar, A. (Ed.), Handbook of Relationship Marketing, SAGE Publications, Thousand Oaks, pp. 149-170.

Blau, P.M. (1964) Justice in Social Exchange. Sociological Inquiry, 34, 193-206.

Chen, R.F, Hsiao, J.L &Hwang, H.G (2012). Measuring customer satisfaction of internet banking in Taiwan”: scale development and validation Total Quality Management and Business Excellence, 23:7-8 749-767

Chin, W.W., Marcolin, B.L. & Newsted, P.R. (2003). A partial least squares latent variable modeling approach for measuring interaction effects: results from a Monte Carlo simulation study and an electronic-mail emotion/adoption study. Information Systems Research, 14(2), 189-217.

Chu, P., Lee, G., and Chao, Y. (2012), “Service quality, customer satisfaction, customer trust, and loyalty in an e-banking context, Social Behavior and Personality, 40(8), 1271-1284.

Crosby, L. A., Evans, K. A. and Cowles, D. (1990), "Relationship quality in services selling: An interpersonal influence perspective", Journal of Marketing, 54 (7), 68-81.

Dauda, S Y., and Lee, J., (2016) "Quality of service and customer satisfaction: a conjoint analysis for the Nigerian bank customers", International Journal of Bank Marketing, 34 (6), 841-867

De Wulf, K., Odekerken-Schroder, G. & Iacobucci, D. (2001). Investments in consumer relationships: A cross-country and cross-industry exploration. Journal of Marketing, 65 (4), 33-50.

Delacroix, E and Guillard, E (2016) Consumers who avoid relationships: social anxiety in commercial contexts Journal of Consumer Behaviour, J. Consumer Behav. DOI: 10.1002/cb.1582

Delgado-Ballester E. (2004), Applicability of a brand trust scale across product categories: a multigroup invariance analysis, European Journal of Marketing, 38, 5, 573-592.

Dwyer, F.R., Schurr, P.H. & Oh, S. (1987). Developing Buyer-Seller Relationship. Journal of Marketing. 51(2), 11-27.

Falk, R.F. & Miller, N.B. (1992). A Primer for Soft Modelling. Akron (OH): The University of Akron Press.

Fornell, C. and Larcker, D.F. (1981), “Evaluating structural equation models with unobservable variables and measurement error”, Journal of Marketing Research, Vol. 18 No. 1, pp. 39-50.

Ha, K.-H., Canedoli, A., Baur, A.W. & Bick, M. (2012). Mobile banking-insights on its increasing relevance and most common drivers of adoption. Electronic Markets , 22 (4), 217-227.

Harington, C.&Weaven,S.(2009)., “E-retailing by e-service quality and its importance to customer satisfaction”; European Journal of Marketing 43(9/10)12230-1231.

Henseler, J., Hubona, G. and Ray, P.A. (2016), “Using PLS path modeling in new technology research: updated guidelines”, Industrial Management and Data Systems, 116 (1), 2-20.

Henseler, J. (2017). Adanco 2.0.1. User Manual. Kleve: KG, Composite Modeling GmbH & Co.

Hair, J.F., Hult, G.T., Ringle, C.M. & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). 2nd Edition. Los Angeles: Sage Pu- blications, Inc.

Hair, J.F., Sarstedt, M., Hopkins, L. & Kuppelwieser, V.G. (2014). Partial Least Square Structural Equation Modeling (PLS-SEM), An emerging tool in business research. European Business Review, 26 (2), 106–121.

Holjevac, I.A., S. Markovic and S. Raspor, (2013). “customer satisfaction measurement in hotel industry: Content analysis study”. 4th International Scientific Conference" Planning for the future learning from the past: Contemporary Developments in Tourism, Travel & Hospitality available at: http://bib.irb.hr/ datoteka/397335.PAP039.pdf.

Hulland, J. (1999). “Use of partial least squares (PLS) in strategic management research: a review of four recent studies”, Strategic Management Journal, Vol. 20, Issue 2, pp 195-204.

Huurne, M. Ronteltap, A. Corten, R and Buskens, V (2017). Antecedents of trust in the sharing economy: A systematic review J Consumer Behav. 1–14. DOI: 10.1002/cb.1667

Islam, R., Ahmed, S., Rahman, M. and Al Asheq (2020). Determinants of service quality and its effect on customer satisfaction and loyalty:an empirical study of private banking sector. The TQM Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/TQM-05-2020-0119

Jun, M., &Cai, S. (2001). The Key Determinants of Internet Banking Service Quality: A Content Analysis. International Journal of Bank Marketing , 19 (7), 276-291.

Karanja, E., Zaveri, J., and Ahmed, A. (2013). How do MIS researchers handle missing data in survey-based research: A content analysis approach. International Journal of Information Management, 33, 734– 751.

Kaura C. S. V., & Sharma D. P. S., (2015). Service quality, service convenience, price and fairness, customer loyalty, and the mediating role of customer satisfaction. International Journal of Bank Marketing, 33(4) 1-27

Kim, D.J., Ferrin, D., and Rao, H., (2003) “A study of the effect of consumer trust on consumer expectations and satisfaction: the Korean experience”, Proc. International Conference on E-Commerce, Pittsburgh, USA, 2003, 310-315.

Kotler, P. (2003) Marketing Management. 11th Edition, Prentice-Hall, Upper Saddle River.

KPMG international cooperative (2017) banking customer Satisfaction survey. Available at https://assets.kpmg/content/dam/kpmg/ng/pdf/advisory/2017-BICSS-Survey-Highlights.pdf

KPMG international cooperative (2018) annual banking customer satisfaction survey (BICSS)-12th edition available at https://assets.kpmg/content/dam/kpmg/ng/pdf/BICSS-2018-Survey-Report.pdf

Lee, K. C & Chung, N (2009). Understanding factors affecting trust in and satisfaction with mobile bankingin Korea: A modified DeLone and McLean’s model perspective Interacting with Computers 21, 385–392

Leonard, M. & Spencer, A. (1991). The importance of image as a competitive strategy: an exploratory study in commercial banks. International Journal of Bank Marketing, 9( 4) 36-40

Liao, Z. & Cheung, M.T.( 2008). How to lengthen deepen and broaden customer-firm relationships with online financial services. Communication of the ACM 51(4)47-51

Mainardes, E.W, Rosa, C. A D. and Nossa, S.N (2020). Omnichannel strategy and customer loyalty in banking. International Journal of Bank Marketing, 38 (4), 799-822

Makanyeza, C. (2017) Determination of Consumers’ Intention to Adopt Mobile Banking Services in Zimbabwe. International Journal of Bank Marketing, 35, 997-1017.

Mark G., & Luiz M.,, (1995). The effects of free banking on overall satisfaction: the use of automated teller machines. International Journal of Bank Marketing, 13 (4) 33 - 40

Manon A., Sandrine P.T., Isabelle B.,&Lova R., (2017). Mobile banking service quality and customer relationships. International Journal of Bank Marketing, https://doi.org/10.1108/IJBM-10-2015-0150

Moghavvemi, S., Lee, S.T and Lee, S.P (2018). Perceived overall service quality and customer satisfaction: A comparative analysis between local and foreign banks in Malaysia. International Journal of Bank Marketing 36 (5), 908-930

Mohammad, H.I.,(2015). 7PS Marketing Mix and Retail Bank Customer Satisfaction in North East Nigeria. British Journal of Marketing, 3(3), 77-88.

Mohammad, H. I., (2019). Mediating effect of organizational learning and moderating role of environmental dynamism on the relationship between strategic change and firm performance. Journal of Strategy and Management, 12 (2), 275-297.

Mohammad, I.H (2020). Outsourcing and public universities performance in Nigeria, the mediating effect of trust Journal of Global Operations and Strategic Sourcing 13, (3), 275-300

Mols, N.P. (1998). The Internet and the banks’ strategic distribution channel decisions. International Journal of Bank Marketing, 17 (6)245-300

Morgan, R. & Hunt, S. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58 (3) 20-38.

Moutinho, L. & Brownlie, D.T. (1989). Customer satisfaction with bank services: a multidimensional space analysis.International Journal of Bank Marketing, 7 (5), 23-7.

Moutinho, L. & Smith, A. (2000). Modelling bank customer satisfaction through mediation of attitudes towards human and automated banking”, International Journal of Bank Marketing, 18(3), 124-134

Murdock, G. W & Franz, L (1983).Habit and Perceived Risk as Factors in the Resistance to Use of ATMs”, Journal of Retail Banking, 5( 2) 20-29

Murowaniecki, Ł., (2015), “Banking services and distribution channels – evolution and prospects, JACSM 2015, 7, (2), 105 – 115.

Narteh, B. (2013). Service quality in automated teller machines: an empirical investigation; Managing Service quality. An International Journal, 23(1)62-89

www.ncc.gov.ng/statistics-reports/subscriber-data - Nigerian Communications Commission – Statistics and reports

Nitzl, C. (2016), “The use of partial least squares structural equation modelling (PLS-SEM) in management accounting research: directions for future theory development”, Journal of Accounting Literature, 37, 19-35.

Nitzl, C., Rold_an, J.L. and Cepeda, C.G. (2016), “Mediation analysis in partial least squares path modeling: helping researchers discuss more sophisticated models”, Industrial Management & Data Systems, 116 (9), 1849-1864.

Okechi, O. & Kepeghom, O. M. (2013). Empirical Evaluation of Customers’ Use of Electronic Banking Systems in Nigeria, African Journal of Computing & ICT, 6(1), 7-20.

Olanipekun, W.D, Brimah, A.N &Ajagbe, S.T (2013). Role of Electronic Banking in Enhancing Human Resource Performance and Customer Satisfaction: Evidence from Guaranty Trust Bank PLC, Nigeria. International Journal of Business and Behavioral Sciences, 3(4), 36-44.

Oliver, R. L. (1980). A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of Marketing Research, 17, 460-9.

Oluwagbemi, O., Abah, J., Achimuga, P. (2011). The Impact of Information Technology in Nigeria banking industry. Journal of Computer Science and Engineering, 7(2), 63- 67.

Osuagwu, L. (2008): Marketing Principles and Management. 3rd Edition. Lagos. Grey Resources Limited.

Patricio, L., Fisk, R.P., and Cunha, J.F. (2003) Improving satisfaction with bank service offerings: Measuring the contribution of each delivery channel Journal of Service Theory and Practice, 13 ·( 6 ), 471-482

Pemartín, M., and Rodríguez-Escudero, A. I (2021), Is the formalization of NPD collaboration productive or counterproductive? Contingent effects of trust between partners Business Research Quarterly 2021, 24(1) 2–18

Pikkarainen, T, Pikkarainen,K, Karjaluoto, H &Pahnila, S (2004). Consumer acceptance of online banking: an extension of the technology acceptance model. Internet Resarch, 14(3), 224-235

Podsakoff, P.M., MacKenzie, S.B., Lee, J.-Y. & Podsakoff, N.P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879-903.

Polatoglu, V.N & Ekin, S. (2001). An empirical investigation of the Turkish consumers’ acceptance of internet banking services. International Journal of Bank Marketing, 19(4), 156-165

Ramseook-Munhurrum,P.& Naidoo, P.(2011), Customer perspectives of service quality in internet banking. Service Marketing Quarterly, 32(4)247-264.

Raza, S.A. &Hanif, N. (2013), “Factors affecting internet banking adoption among internal and external customers: a case of Pakistan”, International Journal of Electronic Finance, 7 (1), 82-96.

RizanM., Warokka A., &Listyawati., (2014). Relationship Marketing and Customer Loyalty: Do Customer Satisfaction and Customer Trust Really Serve as Intervening Variables. Journal of Marketing Research and Case Studies, 2014 (2014), 12

Rod, M., Ashill, N. J., Shao, J., & Carruthers, J. (2009). An Examination of the Relationship Between Service Quality Dimensions, Overall Internet Banking Service Quality and Customer Satisfaction: A New Zealand Study. Marketing Intelligence &Planning, 27 (1), 103-126.

Sanda, M.A and Arhin, E.(2011). Using ATMs as a work load relievers for Ghanian bank tellers: the customer behavioral challeng. Journal of Economics and Behavioral Studies 3(1) 13-21

Sampaio, C. H., Laderia, W. J., and Santini, F., (2017), Apps for mobile banking and customer satisfaction: a cross-cultural study, International Journal of Bank Marketing, 35, 1133-1153

Seck, A.M and Philippe, J, (2013) Service encounter in multi-channel distribution context: virtual and face-to-face interactions and consumer satisfaction, The Service Industries Journal, 33:6, 565-579

Shaikh, A. &Karjaluoto, H. (2015). Mobile banking adoption: a literature review. Telematics andInformatics, 2(1), 129-142.

Strydom, K., and Fourie, C.J.S (2018), “The perceived influence of diversity factors on effective strategy implementation in a higher education institution”, Heliyon 4, Iss. 4

Tam C., & Oliveira T, (2017). Literature review of mobile banking and individual performance. International Journal of Bank Marketing, https://doi.org/10.1108/IJBM-09-2015-0143

Teo, T.S.H., Srivastava, S.C. and Jiang, L. (2008), “Trust and electronic government success: an empirical study”, Journal of Management Information Systems, 25 (3), 99-132.

Thakur, R. (2014). What keeps mobile banking customers loyal? International Journal of BankMarketing, 32( 7) 628-646.

The Punch.com, 2021 - https://punchng.com/78-of-transactions-performed-on-mobile-devices-nibss/ 78% of transactions performed on mobile devices – NIBSS, Accessed 22 June, 2021

Tijani, J. A. &Ilugbemi, A. O.(2015). Electronic Payment Channels in the Nigeria Banking Sector and its Impacts on National Development, Asian Economic and Financial Review, 5(3), 521-531.

Urban, G., Sultan, F. & Qualls, W. (2000). Placing Trust at the Center of Your Internet Strategy. Sloan Management Review , 42(1), 39-48.

Veloutsou, C., Gilbert, G. R., Moutinho, L. A., Goode, M. M. H., (2005), Measuring transaction-specific satisfaction in services: Are the measures transferable across cultures? European Journal of Marketing 39 (5/6), 606-628

Vlachos, P. A., Tsamakos, A., Vrechopoulos, A. P., and Avramidis, P. K. (2009). Corporate social responsibility: attributions, loyalty, and the mediating role of trust. Journal of the Academy of Marketing Science, 37(2), 170-180.

Zsofia, T (2009), “Approaches to consumer trust in banking sector, with special regard to young consumers” in: Laszlo Aron Koczy (ed.), Proceedings of FIKUSZ ’09, 205-211, Obuda University, Keleti Faculty of Business and Management
Published
2022-06-14
How to Cite
Mohammad, H. and Bello, K. (2022) “Banks’ distributional channel strategies, customer satisfaction and mediating role of trust”, Management and Entrepreneurship: Trends of Development, 2(20), pp. 31-49. doi: https://doi.org/10.26661/2522-1566/2022-2/20-03.