Linking psychological needs, perceived financial well-being and loyalty: the role of commercial banks

Abstract

This research examines the role of commercial banks in influencing customers’ perceived financial well-being under the basic psychological need theory and the impact of customers’ perception of financial health on their bank loyalty. We firstly conducted in-depth interviews to explore bank-related factors that could help satisfy the needs for autonomy, relatedness, and competence that a bank customer may have in their financial life. A structural equation model linking personalization of service offerings, interpersonal adaptive behaviour, communication, service quality, customer satisfaction, perceived financial well-being and customer loyalty is tested using data collected from 391 Vietnamese individual bank customers. The results indicate that the personalization of service offerings, interpersonal adaptive behaviour, and service quality could help enhance financial well-being among bank customers. This could be explained by the impacts of these factors in either satisfying customers’ psychological needs or enhancing overall customer satisfaction with banking services. Further, we also find that financial well-being not only positively affects customer loyalty but also moderates the relationship between customer satisfaction and bank loyalty. This research provides crucial strategies for commercial banks to improve financial well-being among their customers and hence, further increase customer retention and lifetime value. Supplementary Information The online version contains supplementary material available at 10.1057/s41264-022-00170-z.

How am I doing financially compared to expectations? An experimental comparison of messaging strategies in investor newsletters

“…, 2006; Phan and Anh, 2019; Presser, 2001). Personalisation of financial service offerings has been found to have a positive effect on financial well-being (Hoang et al. , 2022).…”

“…The effectiveness of a newsletter can be amplified by including a personalised message that refers to the readers' self (Carvalho et al, 2006;Phan and Anh, 2019;Presser, 2001). Personalisation of financial service offerings has been found to have a positive effect on financial well-being (Hoang et al, 2022). That said, other research has not found a significant difference between personalised and generic messages (Maslowska et al, 2011a).…”