James F. Devlin

Why consumers are not using internet banking: a qualitative study

Purpose – This paper illustrates why consumers are resistant to using internet banking.Design/methodology/approach – A survey was used to acquire data from 127 consumers who were not internet bank users.Findings – Using a content analysis procedure, eight factors were identified which explain why consumers are not using internet banking. In order of frequency, the factors are: perceptions about risk; the need; lacking knowledge; inertia; inaccessibility; human touch; pricing and IT fatigue.Research limitations/implications – A list of those consumers who were not internet banking users could not be sourced, meaning that a random sample could not be carried out. The factors which emerged, however, appear to provide a comprehensive understanding of why certain consumers are not internet banking users. The factors provide a useful basis for researchers to conduct studies to better understand what influences a consumer decision not to use the internet as a means of sourcing banking services.Practical implicat...

Technology and innovation in retail banking distribution

The issue of distribution of retail financial services has received growing attention in the academic and professional literature and has been hailed as an increasingly important factor in determining whether or not a company competes effectively in its chosen markets. In an increasingly competitive and deregulated environment, superior distribution strategies concerned with how to communicate with, and deliver products to the consumer can provide institutions with significant competitive advantage in the marketplace. In effect distribution provides the basis for differentiation rather than the core service itself. Discusses developments in the distribution of retail banking services in the UK; more particularly, the emergence of home and telephone retail banking delivery systems will be highlighted, with the successful introduction of a telephone banking service by First Direct, a subsidiary of Midland Bank, being used as a case study to explore current developments.

Customer knowledge and choice criteria in retail banking

This paper presents an analysis of customer choice criteria in the retail banking market in the UK. Specifically, it investigated potential variations in the importance of various choice criteria,which were classified as either intrinsic or extrinsic in order to aid analysis with respect to customer financial knowledge. A database of 6700 respondents collected by a commercial organization was used in the analysis. The results suggest that all customers rely primarily upon extrinsic choice criteria when choosing a retail banking service. In addition, low financial knowledge is associated with a propensity to choose a bank purely on location or by recommendation and, whilst such factors are also important to higher financial knowledge groups, higher knowledge groups are more likely to take account of intrinsic attributes such as service features, rate of return and low fees in their choice.

Understanding competitive advantage in retail financial services

The process of establishing a competitive advantage is at the heart of competitive marketing strategy. However, a competitive advantage cannot be established without a clear idea of what constitutes the relevant competitive arena. Theoretically, there are strong arguments for seeing both these processes as market‐driven, but in practice their implementation may present particular problems for financial services providers. The degree of complexity and intangibility which characterizes most financial services is generally thought to complicate the identification of a clear source of competitive advantage; it is also argued that these characteristics might affect the extent to which an organization may identify the appropriate competitive arena. Provides preliminary interview‐based evidence on the extent to which the market‐driven concepts of competitive advantage and competitive arena have been adopted in financial services and evaluates the extent to which they can be adopted, given the distinctive characteristics of many of the services concerned. Contends that the findings confirm the difficulties associated with the development of a clear competitive advantage and the relative unimportance of price; they also highlight the practical difficulties associated with defining the competitive arena as market‐driven. While these difficulties are common across the financial service providers interviewed, concludes that there is some evidence to suggest that market‐driven competitive arenas and sources of competitive advantage are more easily identifiable for specialist or niche players.

An analysis of choice criteria in the home loans market

This paper presents an analysis of customer choice criteria in the home loans market in the UK. In particular, the study investigates the relative importance of choice criteria according to consumers and also analyses differences in the importance of choice criteria with respect to a number of demographic and related factors. A quantitative study drawing data from 4,200 participants is employed. The study shows that choosing a home loan institution on the basis of professional advice is the most frequently cited choice criterion, closely followed by interest rates. Differences in the importance of choice criteria with respect to gender, class, household income, educational attainment, ethnicity and financial maturity are apparent.

Adding value to service offerings: the case of UK retail financial services

This study explores practitioner views regarding which elements of the service offering to emphasise when formulating strategies to add value and, hence, gain competitive advantage in services markets. In particular, the case of retail financial services is emloyed to investigate hypotheses regarding variations in importance of elements of the service offer in adding value due to increased complexity and intangibility of some offerings and the resultant implications for consumer evaluation. Evidence suggests that these issues may be particularly relevant in the context of services and that consequently many of the common prescriptions regarding strategy formulation may be rather more difficult for services organisations to implement. It is found that factors such as image and reputation of the organisation, as well as functional service quality, are perceived to be particularly important in adding value to more complex financial services offerings. More surprisingly, the features and quality of the core service provided are also perceived to be more important in adding value to complex services. In addition, factors such as price, location and recovery are perceived to be significantly more important in adding value to more simple, rather than complex, offerings. Finally, conclusions are presented.

Consumer evaluation and competitive advantage in retail financial services ‐ A research agenda

The primary objective of this paper is to formulate a research agenda in the area of consumer evaluation and competitive advantage in retail financial services markets. In order to achieve this objective, a brief exposition of the market‐led view of competitive advantage is provided, which emphasises the importance of the provision of “customer value” in the relevant market. The process of consumer evaluation of financial services offerings is then reviewed and potential problems in consumer understanding of some types of financial services offerings are highlighted. The implications of such problems for the formulation of value adding strategies are explored with reference to the conceptualisation of the financial service offering and in particular which elements of the offering may be particularly important in adding value in the eyes of consumers. Finally, propositions for research are developed and explored, with the aim of informing both academics and practitioners.

Organizational positioning in retail financial services

The establishment of an effective competitive position is a key stage in any marketing strategy. Typically, positioning is examined in relation to products and their features, but, in financial services, the nature of the products are such that organizational positioning is of much greater importance than product positioning. Current positioning strategies in the retailing of financial services are examined from the customer perspective and the results suggest that despite the disappearance of the traditional distinctions between banks and building societies, consumers still tend to see the two institutional types as occupying distinct competitive positions.

An analysis of main and subsidiary credit card holding and spending

Purpose – This study seeks to examine why most multiple credit cardholders have a “main” card (i.e. a card used more often than others) and “subsidiary” cards (i.e. cards used less often or only in an emergency) and the spending patterns associated with main and subsidiary cards.Design/methodology/approach – The study is qualitative in nature, using a survey which contained open‐ended questions to acquire data. Responses were subject to content analysis to categorise the reasons given for having a main and subsidiary card.Findings – Results show that some 85 per cent of the 141 respondents indicated that they had a main card and the most frequently quoted reason for having such a card was the superior discounts and promotions which were offered by the card issuer. Not surprisingly, main cards were used for the broadest range of transactions, while subsidiary cards were used for a more restricted range of transactions, a majority saying that their subsidiary cards were held for “stand‐by purposes”.Research...

Trustworthiness and trust: influences and implications

Abstract This paper frames trustworthiness as the key upstream construct of trust and recognises that trust operates at two levels in services relationships, with a number of key drivers that are mediated by trustworthiness. Our findings are supported by survey data from customers of UK financial services, with the data points captured over a number of years which allow for fluctuations in trust level. Empirically we find that trustworthiness impacts both the cognitive and affecting dimensions of trust, with the impact being greatest on cognitive trust. As a result of our findings it is possible for practitioner to implement policies to not only build trust but also deal with issues where there is a need to rebuild it, as in the case of our research setting.