The Role of E-Banking on the Switching Behaviour of Retail Clients of Commercial Banks in Polokwane, South Africa

  • Reginald Masocha School of Economics and Management, University of Limpopo
  • Tafadzwa Matiza School of Economics and Management, University of Limpopo
Keywords: E-banking, Customer Switching behaviour, Switching Barriers, South Africa’s banking industry

Abstract

This study focused on investigating the role of E-banking on the switching behaviour of retail bank clients in Polokwane, South Africa. Recently, studies have shown that people are switching banks more often than in the past. Circumstances that are beyond control cause people to switch. This has become a challenge in the banking industry as many banks lose their clients. However, newly developed technologies have brought many changes in the operation of banks. The new E-banking services have enabled bank clients to have access to their bank account for 24 hours without visiting the physical branch. A sample of 98 respondents was surveyed in Polokwane, South Africa using the convenience sampling technique. The cronbach alpha test was used to ascertain reliability of the findings. The findings reveal that demographic characteristics have much impact on the switching behaviour of commercial bank clients and acceptance of e-banking services. Switching factors such as bank charges, low interest rates on savings, promotion activities, location and switching costs were the major reasons for bank customers to switch banks.

Downloads

Download data is not yet available.

References

Addae-Korankye, A. (2014). The impact of e-banking on customer service and profitability of banks in Ghana. Global Journal of Commerce & Management Perspective, 3(1), 61-65.
Blumberg, B., Cooper, D. R. & Schindler, P. S. (2008). Business research methods. London: McGraw-Hill Higher Education.
Chavan, J. (2013). Internet banking benefits and challenges in an emerging economy. International Journal of Research in Business Management, 1(1), 19-26.
Chibueze, A. Z., Maxwell, O. O. & Osondu, N. M. (2013). Electronic banking and bank performance in Nigeria. West African Journal of Industrial & Academic Research, 6(1), 171-187.
Chigamba, C. & Fatoki, O. (2011). Factors influencing the choice of commercial banks by university students in South Africa. International Journal of Business and Management, 6(6), 66-76.
Clemes, M. D., Gan, C. & Zheng, L. Y. (2007). Customer switching behaviour in the New Zealand banking industry. Banks & Bank Systems, 2(4), 50-65.
Colgate, M. & Hedge, R. (2001). An Investigation into the Switching Process in Retail Banking Services. The International Journal of Bank Marketing, 19(4), 201-212.
Cooper, D. & Greenaway, M. (2015). Non-probability survey sampling in official statistics. Available: http://www.ons.gov.uk/ons/guide-method/method-quality/specific/gss-methodology-series/ons-working-paper-series/mwp3-non-probability-survey-sampling-in-official-statistics.pdf. (Accessed: 1 September 2016).
Dawes, J. (2004). Price Changes and Defection Level in a Subscription-Type Market: Can an Estimation Model Really Predict Defection Level? The Journal of Service Marketing, 18(1), 317-325.
Gouws, N. (2012). Identifying factors that influence customer retention in a South African retail bank. Master of Business Administration, North West University, Potchefstroom.
Keaveney, S. M. (1995). Customer switching behavior in service industries: An exploratory study. Journal of Marketing, 59 (2), 71-83.
Khan, N. U. R., Ghouri, A. M., Siddqui, U. A. & Alam, I. (2010). Determinants analysis of customer switching behaviour in private banking sector of Pakistan. Interdisciplinary Journal of Contemporary Research in Business, 2(7), 96-110.
Kura, K. M., Mat, N. K. N., Gorondutse, A. H., Magaji, A. M. & Yusuf, A. (2012). Modelling the antecedents of customer switching behaviour in Nigerian banking industry. American Journal of Economics, 6, 29-36.
Manrai, L. A. & Manrai, A. K. (2007). A field study of customers’ switching behaviour for bank services. Journal of Retailing and Customer Services, 14, 208-215.
Masocha, R., Chiliya, N. & Zindiye, S. (2011). E-banking adoption by consumers in the rural milieus of South Africa: A case of Alice, Eastern Cape, South Africa. African Journal of Business Management, 5(5), 1857-1863.
Mathers, N., Fox, N. & Hunn, A. (2009). Surveys and questionnaires. National Institute for Health Research (RDS). Available: http://www.rds-yh.nihr.ac.uk/wp- content/uploads/2013/05/12_Surveys_and_Questionnaires_Revision_2009.pdf. (Accessed: 15 May 2015).
Mugera, W. (2013). Non-probability sampling techniques. Research Methods. Available: https://learning.uonbi.ac.ke/courses/LDP603/work/assig_2/Nonprobability_sampling_ techniques_assignment_1.pdf. (Accessed 9 April 2015).
Onditi, A. A. (2013). Relationship between customer personality, service features and customer loyalty in the banking sector: A survey of banks in Homabay County, Kenya.
Pirzada, S. S., Nawaz, M., Javed, M. U. & Asab, M. Z. (2014). Which factors influence the customer switching behaviour? (Evidence from the customers of banking sector of Pakistan). European Journal of Business & Management, 6(11), 134-142.
PricewaterhouseCoopers. (2013). Shaping the bank of the future. South Africa banking survey 2013. Available: www.pwc.co.za/en/assets/south-african-banking-survey-2013.pdf. (Accessed: 19 November 2015).
Redelinghuis, A. & Rensleigh, C. (2010). Customer perceptions on internet banking information protection. South African Journal of Information Management, 12(1), 1-6.
Subramaniam, R. & Ramachandram, J. (2012). Customers’ switching behaviour in banking industry – Empirical evidence from Malaysia. International Journal of Business, Economics & Law, 1, 156-162.
Wu, J. (2005). Factors that influence the adoption of internet banking by South Africans in the Ethekweni Metropolitan region. Master of Technology in Marketing. Durban University of Technology, Durban.
Zhang, D., Clemes, M. D. & Gan, C. (2010). Customer Switching Behavior in the Chinese Retail Banking Industry. International Journal of Bank Marketing, 28(7), 519-546.
Published
2017-07-20
How to Cite
Masocha, R., & Matiza, T. (2017). The Role of E-Banking on the Switching Behaviour of Retail Clients of Commercial Banks in Polokwane, South Africa. Journal of Economics and Behavioral Studies, 9(3(J), 192-201. https://doi.org/10.22610/jebs.v9i3(J).1758
Section
Research Paper