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Factors Influencing Customer Loyalty in Banks: The Mediating Effect of Customer Trust

Author

Listed:
  • Zargham Ullah Khan

    (Hailey College of Banking & Finance, University of the Punjab, Lahore, Pakistan)

  • Muhammad Ramzan

    (Assistant Professor, Hailey College of Commerce, University of the Punjab, Lahore, Pakistan)

  • Muhammad Bilal Ahmad

    (Hailey College of Banking & Finance, University of the Punjab, Lahore, Pakistan)

  • Muhammad Mujahid

    (Hailey College of Banking & Finance, University of the Punjab, Lahore, Pakistan)

Abstract

This study adds to the body of existing knowledge by examining the relationship between service quality (SQ) customer satisfaction (CS) brand reputation (BR) corporate social responsibility (CSR) and the mediating effect of customer trust (CT). This study's primary goal is to identify the individual and intuitive effects of service quality customer satisfaction brand reputation and corporate social responsibility (CSR) on customer loyalty (CL). Additionally the research investigates the significance of consumer trust as a mediator. The research collected responses from a diverse sample of 300 banking customers. A structured questionnaire was employed as the primary instrument for data collection. The questionnaire was made available to the bank customers in Lahore through online channels. The Statistical Package for the Social Sciences (SPSS) Smart Partial Least Squares (PLS) and MS Excel was used for data analysis. A robust analysis was also performed by using MS Excel. The results show that CSR did not considerably meaningfully affect CL even while SQ CS and BR had strong positive impacts on customer loyalty. This result calls for further research into the particular facets of CSR that might affect CL in the banking industry. The findings of the research may be specific to the context of the banking industry in Lahore and might not be directly generalizable to other regions or industries. The outcomes of this research offer practical implications for banking institutions seeking to enhance customer loyalty. Understanding the drivers of loyalty can guide strategic decisions related to SQ CS and BR.

Suggested Citation

  • Zargham Ullah Khan & Muhammad Ramzan & Muhammad Bilal Ahmad & Muhammad Mujahid, 2023. "Factors Influencing Customer Loyalty in Banks: The Mediating Effect of Customer Trust," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(4), pages 655-664.
    • Handle: RePEc:rfh:bbejor:v:12:y:2023:i:4:p:655-664
    DOI: https://doi.org/10.61506/01.00218
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    References listed on IDEAS

    as
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    4. Ruiz, Belén & García, Juan A., 2021. "Analyzing the relationship between CSR and reputation in the banking sector," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
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    6. Ali Raza & Raouf Ahmad Rather & Muhammad Khalid Iqbal & Umair Saeed Bhutta, 2020. "An assessment of corporate social responsibility on customer company identification and loyalty in banking industry: a PLS-SEM analysis," Management Research Review, Emerald Group Publishing Limited, vol. 43(11), pages 1337-1370, April.
    7. Darmawan, Didit, 2018. "The Effect of Service Quality, Customer Satisfaction and Corporate Image on Customer Loyalty in the banking sector in Indonesia," OSF Preprints uxsfr, Center for Open Science.
    8. Izaskun Agirre Aramburu & Irune Gómez Pescador, 2019. "The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of Reputation in Cooperative Banks Versus Commercial Banks in the Basque Country," Journal of Business Ethics, Springer, vol. 154(3), pages 701-719, February.
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