Emergence of social media as new normal during COVID-19 pandemic: a study on innovative complaint handling procedures in the context of banking industry

Abstract

Purpose Banking industry has no option but to remain observant and redraft the contagion playbook as per the situation evolves owing to COVID-19. Therefore, this study aims to develop a model to examine empirically how effectively complaints are handled to control customer retaliation and negative e-word of mouth (eWOM) in such a pandemic situation, where banking institutions are using social media as a key platform. Design/methodology/approach A self-administered questionnaire was distributed among 309 participants who had encountered service failure and experienced complaint handling on Facebook. This study draws upon prevailing literature to test a series of hypotheses through structural equation modeling. Findings The findings show that effective complaint handling has a negative influence on customer retaliation in the social media environment. As a result, customer retaliation was found to have a positive association with negative eWOM. Therefore, this study has revealed that effective complaint handling will lead to decrease in customer retaliation and negative eWOM. Practical implications This study carries an understanding of effective complaint handling efforts by leading banks in the social media environment during the COVID-19 pandemic. This study recommends that customized and effective efforts by the banks can influence customer retaliation and negative e-WOM. Originality/value The study is conducted during COVID-19 pandemic considering the impact of COVID-19 on banking sector, which is a new phenomenon. This study has highlighted how banks have modified their working methodology during pandemic situation by using Facebook as a prominent platform to redress customers’ issues and complaints.

Guest editorial: Advancing theory on innovating in Asia from multiple perspectives

“…The first paper in this direction is “Emergence of social media as New Normal during Covid-19 pandemic: A study on innovative complaint handling procedures in the context of banking industry” by Agnihotri et al (2021). This paper conducts a study on Facebook users and highlights the negative impact of effective complaint handling on customer retaliation in the social media environment.…”

Investigating the role of celebrity institutional entrepreneur in reducing the attitude-behavior gap in sustainable consumption

“…For this, celebrity institutional entrepreneurs can use social media to deprecate the unsustainable practices in the society and can achieve marketplace legitimacy through metamorphosis in consumer attitudes toward SCB (Scaraboto and Fischer, 2013). As engagement on social media is considered to be an effective technique for influencing the attitudes and behaviors of individuals (Scholtz, 2016; Agnihotri et al. , 2021b, c).…”

Factors Affecting Non-performing Loans in Pakistan during the Covid-19 Pandemic: A Case of Micro Finance Banks

“…The following variables are significantly associated with non-performing loans: GDP growth is associated with a decrease in non-performing loans (Jamil et al, 2021;Ltifi & Hichri, 2022). Furthermore, Babouek and Janar identified a positive relationship between non-performing loans, bank specific factors, and macroeconomic factors are associated with a decrease or increase in the rate of non-performing loans (Agnihotri et al, 2021;Banna et al, 2021;Mezghani et al, 2021).…”

“…The Operational Model It makes use of a panel data regression model to investigate the impact of different factors on non-performing loans of microfinance bank in Pakistan. When the same individual is monitored over a period of time, the panel data regression model is used (Agnihotri et al, 2021). It is composed of time series and cross-section data, and it is called panel data (Banna et al, 2021).…”

“…An increasing number of non-performing loans has been identified due to insufficient effective preventative and control measures (Agnihotri et al, 2021). A more in-depth discussion was had on the role that stress testing plays in aiding in the monitoring of financial stability and interconnections in the financial system.…”