Factors Affecting Customer Loyalty of Using Internet Banking in Malaysia

Abstract

Internet banking (IB) has become one of the widely used banking services among Malaysian retail banking customers in recent years. Despite its attractiveness, customer loyalty towards Internet banking website has become an issue due to stiff competition among the banks in Malaysia. As the development and validation of a customer loyalty model in Internet banking website context in Malaysia had not been addressed by past studies, this study attempts to develop a model based on the usage of Information System, with the purpose to investigate factors influencing customer loyalty towards Internet banking websites. A questionnaire survey was conducted with the sample consisting of Internet banking users in Malaysia. Factors that influence customer loyalty towards Internet banking website in Malaysia have been investigated and tested. The study also attempts to identify the most essential factors among those investigated: service quality, perceived value, trust, habit and reputation of the bank. Based on the findings, trust, habit and reputation are found to have a significant influence on customer loyalty towards individual Internet banking websites in Malaysia. As compared to trust or habit factors, reputation is the strongest influence. The results also indicated that service quality and perceived value are not significantly related to customer loyalty. Service quality is found to be an important factor in influencing the adoption of the technology, but did not have a significant influence in retention of customers. The findings have provided an insight to the internet banking providers on the areas to be focused on in retaining their customers.

Customer Loyalty towards Internet Banking in Nigeria

“…Thus, the study concluded that, increasing the trust the customers have toward their internet banking providers, providing satisfactory services, gaining their commitment and building a strong bank reputation enhances the loyalty of the customer towards their internet banking services providers within the Nigerian context. This conclusion is in accordance with previous findings [10,29,17,23,53,33,43,42]. In addition, the results reveal that the odd of a customer being loyal to his/her internet banking service providers is higher with the bank reputation as compared to customer satisfaction, trust, and commitment in the Nigerian context.…”

“…In addition, the results reveal that the odd of a customer being loyal to his/her internet banking service providers is higher with the bank reputation as compared to customer satisfaction, trust, and commitment in the Nigerian context. This conclusion is consistent findings of [53] who found reputation to be an essential factor for encouraging customer loyalty towards Internet banking in Malaysia.…”

The Effects of Service Quality, Customer Satisfaction, Trust, and Perceived Value Towards Customer Loyalty

“…According to Yee and Faziharudean (2010) perceived value or accepted value has contribution to customer loyalty. H4: there is a positive and significant relationship between perceived value and customer loyalty.…”

Investigating the Determinants of e-Banking Loyalty for Large Business Customers: Two Empirical Models

“…Lowering perceived risks associated with online transactions as well as maintaining transaction trust is vital keys to attracting and retaining customers [7]. The quality elements of the e-service are expected to affect e-trust directly [8], because they represent trust cues that convey the trustworthiness of the site and the system to customers [9].The authors in [10] found that trust, habit and reputation have a significant influence on customer loyalty towards individual Internet banking websites, and in an investigation by [11] service quality, e-satisfaction, and e-trust have a strong direct effect on e-loyalty. The authors in [12] also investigated trust and switching costs as a way to build e-loyalty in Internet markets.…”