Kent Eriksson (Center for Banking and Finance, KTH - Royal Institute of Technology, Stockholm, Sweden)
Hooman Estelami (Graduate School of Business, Fordham University, New York, New York, USA)

International Journal of Bank Marketing

ISSN: 0265-2323

Article publication date: 2 February 2015



Eriksson, K. and Estelami, H. (2015), "Editorial", International Journal of Bank Marketing, Vol. 33 No. 1. https://doi.org/10.1108/IJBM-09-2014-0123



Emerald Group Publishing Limited


Article Type: Editorial From: International Journal of Bank Marketing, Volume 33, Issue 1.

In this opening issue of the International Journal of Bank Marketing (IJBM) for 2015, banking transactions are viewed both in the context of technological evolution and evolving management approaches to motivating and retaining employees. The impact of technology on financial services marketing in general, and bank marketing in particular is undeniable. Nevertheless, many customers prefer traditional brick-and-mortar and paper-based modes of interactions. The costs associated with old-fashioned modes of interactions can, however, become prohibitive and there is a growing need to understand how customer interactions can evolve into electronic modes of information exchange. Furthermore, management philosophies of how to mobilize, motivate and retain employees is of growing significance as employee loss and recurring training costs can be detrimental to profitability all banking institutions.

In the first paper of this issue of the IJBM, the persistence of traditional forms of consumer communications in banking is examined. Paper bills and statements have been at the core of record-keeping for financial transactions for both consumers and financial institutions. However, they are becoming less relevant in an ever-growing digital world, where mobile devices and online banking are beginning to dominate how financial transactions take place. An emerging question in this evolving paperless environment is with respect to the continuing role of paper bills and statements in customer engagements. As the customer environment takes on a more digital form, customers’ reliance on traditional modes of receiving their statements and bills is expected to decline. However, many consumers – even those engaged in online banking – continue to demand from with their financial services providers the availability of paper bills and statements. Despite this lingering interest by a subset of customers to receive paper bills, the costs to a financial services organization to produce and mail them is significant. In addition the environmental impact of the produced paper statements and the societal costs associated with the logistics of processing paper bills have gradually made them a less attractive option.

Any shift towards electronics means of transmitting bills and statements can translate into significant costs savings to financial institutions, customers, and arguably the society at large. To achieve this, one must understand why some online banking customers may continue to insist on receiving paper statements and bills. To address this question, in this study, Joanne McNeish has utilized a survey of online bill payers in Canada to determine what drives their intentions to continue to receive paper bills. She finds that due to the consumer vulnerabilities that exist in the online domain, some consumers continue to insist on paper bills and statements as a means for balancing the distrust that may exist in a purely online (paperless) world. For these consumers, the very existence of the paper statements enhances their feelings of trust and security in financial transactions. The need to receive paper bills and statements is increased when consumers perceive a higher degree of structural assurance in paper bills, but reduced when the consumer feels that other consumers do not see paper bills and statements as necessary, or if the consumer has an overall positive feeling that the financial services provider can be counted on if account/transaction problems occur. Utilizing regression analysis methods, McNeish finds that online customers’ intentions to continue to receive paper bills is influenced by trust-related factors. The study has highly practical recommendations for how financial institutions can lower their costs by communicating elements of their operations that increase customer trust and minimize distrust, as the industry moves to paperless forms of consumer communications.

The second paper in this issue of IJBM focuses on the measurement of bank customer satisfaction. Accurate measurement of customer satisfaction in the banking industry has always been a focus of interest to bank marketers. The desire to improve the quality of banking services and to enhance customer satisfaction has been instrumental to improvement initiatives for banks around the world aiming to enhance their market positions in a growing competitive global banking environment. To achieve this, many data-collection instruments have evolved over the years with different benefits and drawbacks. One of the merging instruments has been PAKSERV which is a multi-item scale modified for use specifically for bank customer service measurement in Pakistan. This is a modification of classical service quality measurement tools (e.g. SERVQUAL) which takes into account cultural variations, making it more relevant to customers in Pakistan. However, the use of this instrument, and its applicability to other contexts is an empirical question. The focus of the paper by Kashif, Wan Shukran, Rehman and Sarifuddin is to examine PARKSERV within the context of banking operations in Malaysia. This is an important undertaking not only due to cultural variations between Pakistan and Malaysia, but also due to the prevalence of Islamic banking in Malaysia. In this study, the authors utilize a survey-based approach to examine the effects of the measures obtained through PAKSERV on loyalty measures for banking customers in the Malaysian context. The results validate most of the dimensions of PAKSERV, and demonstrate its applicability in a collectivist cultural context. The authors provide managerial insights on how Islamic banks can systematically measure customer satisfaction using PAKSERV and how this can inform management efforts to improve customer satisfaction and loyalty.

The next paper in this issue of IJBM further builds on the interaction between bank employees and customers. Given that customers are a party to banking transactions, it is expected that the manner in which they interact with the bank can influence their own perceptions of the quality of the bank’s services. The paper by Mohammad Ahmad Al-hawari explores this issue in detail. It focuses on the role that the customer’s personality may have in their bank service interactions, their perceptions of service quality and eventually their loyalty towards the bank. A structural equations modelling approach is applied to customer survey data from the United Arab Emirates. In total, five personality traits are identified: extroversion, conscientiousness, agreeableness, emotional stability and openness to experience. The results reveal that the impact of service quality on customer loyalty varies depending on a customer’s personality traits. The study reveals the importance to bank mangers of knowing their customer’s personality traits, in order to optimize the delivery of services and to enhance customer loyalty in an informed and optimal manner.

The next paper in this issue of IJBM is by Gagandeep Kaur and examines the impact of the work environment of universal banks in India. Given that banking transactions often require employee-customer interactions, the critical role of employees has been long recognized in the bank marketing literature. Having satisfied employees can, and often does, lead to customer satisfaction, with eventual gains for both customers and banks. In this study the author explores the topic in the quickly evolving and deregulating environment of the Indian banking market. The drivers of bank employee satisfaction are explored utilizing a survey. Factor analysis reveals that factors such as work allocation, supervision and cooperation from peers can significantly influence a bank employee’s level of job satisfaction. The findings are significant as they can help direct management actions that positively influence bank employee’s level of job satisfaction, with expected positive outcomes for customers.

The final paper in this issue of IJBM is related to the previous paper and focuses on the issue of retention of bank employees. Given the large expenses that banks have to undertake to train their employees, employee retention continues to be a concern for banks everywhere. Employees that stay with a bank for the long term not only tend to be better trained and equipped to handle customer transactions and inquiries, but they also tend to foster stronger customer relationships critical to a bank’s success. One of the means to motivate, mobilize and retain bank employees is the internal communications to employees of the bank’s values and benefits to customers. In this paper, Du Preez and Bendixen examine the influence of internal marketing of a bank to its employees on employee’s level of job satisfaction, employee commitment to the bank’s brand, as well as their intent to remain employees of the bank. To address this empirical question, a survey of bank employees – both frontline and management – was used in the context of a bank in South Africa. The results reveal that for service staff, job satisfaction, retention and brand commitment are all affected by internal branding efforts of the bank. Furthermore, internal brand communications are found be the strongest drivers of internal brand management. This study demonstrates how internal branding efforts of a bank can help improve the level of job satisfaction of its employees, with possible effects on employee retention and profitability.

The papers in this issue of IJBM have a highly applied perspective on how bank managers can optimize their marketing operations – both externally and internally. Understanding factors that can reduce online customers’ needs for paper bills and statements can result in significant reduction of bank operating costs, while at the same time facilitating more environmentally friendly banking operations. Methods that can be used for measurement of customer satisfaction can help bank managers pinpoint areas for internal improvement of operations and an also enhance customer loyalty. At the same time understanding the drivers of employee satisfaction and retention, as well as means by which such measures can be enhanced through internal employee communications regarding a bank’s identity can increase employee retention and productivity. It is therefore hoped that the papers presented in this issue of IJBM have advanced both academic and managerial insights on how bank marketing operations can be optimized to enhance customer experience and bank profitability at the same time.

Kent Eriksson and Hooman Estelami

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