Customer Switching Behavior in the Banking Sector of Islamabad

Abstract

Purpose-There is a strong competition between the retail banks of Pakistan. The banks have to come up with strong customer centric strategies in order to survive in the strong competitive environment. If a bank is able to sustain a customer for a longer time it can earn greater revenues and can save greater cost for the bank. In today’s environment consumers in Pakistan have greater choices between national and international banks. This study aims to investigate and analyze the factors that influence the switching behavior of customers in the banking sector of Islamabad. Design/Methodology/Approach- This study is exploratory in nature. Qualitative method of data analysis has been adopted in this study. To collect data six in-depth interviews were conducted from banking customers. All of the interviews were recorded using a digital recorder. These recording were later used to transcribe two of the most comprehensive interviews. These transcriptions were analyzed over and again for the formulation of themes. Findings- The findings of this study indicate the service quality, convenient location are the most important factors that influence the switching behavior of the customers. This study also reveals that younger people and people with high income are more likely to switch the bank. Practical Implication- This study provides useful knowledge about the banking customers of Islamabad. Utilizing this knowledge the bank management can come up with strategies to retain customers for longer time which will earn profits and cost saving for the bank. Keywords- Switching behavior, service quality, reputation, advertisement, switching cost, involuntary switching, price, convenient location, Qualitative method.