Editorial

Citation

Eriksson, K. and Estelami, H. (2013), "Editorial", International Journal of Bank Marketing, Vol. 31 No. 2. https://doi.org/10.1108/ijbm.2013.03231baa.001

Editorial

Editorial

Article Type: Editorial From: International Journal of Bank Marketing, Volume 31, Issue 2.

The four papers included in this issue of the International Journal of Bank Marketing (IJBM) highlight some of the most significant characteristics of financial services markets today. The first relates to the increasingly global nature of financial services issues. This global emphasis is a defining characteristic of the challenges facing bank marketers today. The forces of change in financial services often do not restrict themselves to national or cultural boundaries. For example, financial stresses in credit markets experienced in one part of the world invariably and predictably have found their way to other parts of the world. Furthermore, the predictable ways in which the human brain is limited in evaluating financial services offers has made concerns regarding the public's trust of banks and other financial services providers an issue of shared focus for regulators and researchers worldwide. As a result the commonality of topics of concern can be evident as one examines research studies from different parts of the world. The papers in this issue of IJBM span the globe by including studies from Pakistan, Australia, Thailand, and Malaysia, and at the same time relate to some of the most central questions emerging in bank marketing.

Amin, Isa, and Fontaine examine the Malaysian banking market. They specifically study the diverse population of Malaysia which consists of both Muslim and non-Muslim banking customers, and question how these customers may react to different attributes of banking services provided by Islamic banks. Their study reveals that the image associated with an Islamic bank is driven by customer satisfaction and can serve as a driver of customer trust and loyalty for both Muslims and non-Muslims. However, their study identifies specific contrasts that exist between Muslim and non-Muslim customers in terms of the dynamics by which these constructs interact. Through their study Amin, Isa, and Fontaine demonstrate the significance of segment-based marketing in a cross-cultural context and remind us of the need to recognize the unique aspect of market segments which may drive variations in customer perception formation.

One of the other related issues of central concern to financial services marketers around the world is that of trust. The lack of public trust in financial institutions has grown significantly over the past few years, much of which has been triggered by the hardships and economic stresses caused by the global financial meltdown. Yet, trust is one of the most fundamental requirements in business transactions, especially within the context of financial services where information asymmetry exists. The asymmetry results from the superior depth of information possessed by financial institutions which cannot be matched by the average consumer. For example, financial advisors possess a greater degree of information on financial solutions than do consumers, and at the same time they may know more about their clients than the clients know about themselves. As a result, one often has to assume that the financial institution will serve the best interests of its customers, and to make such an assumption the concept of trust becomes central to the conversation.

Akhlaq and Ahmed focus on the issue of trust, specifically in the context of banking services in Pakistan. They deploy a structural equations modeling approach to determine what motivates individual consumers to trust the use of internet banking technologies. In doing so, they distinguish between intrinsic and extrinsic motivations and demonstrate that intrinsic motivations are more influential in developing a sense of trust in accepting online banking solutions. Akhlaq and Ahmed's work further strengthens the view that trust is a global construct that banking institutions need to embrace, and the dynamics by which it affects customers can be considered as universally present.

While trust may be considered an issue in bilateral relationships, it becomes a more universal issue in the context of a financial institutions’ views on corporate social responsibility (CSR). CSR is concerned with the greater role that financial organizations have in serving their social mandates. It extends the public's expectations of a financial services provider beyond the minimum requirements mandated by law, and requires organizations to take additional steps to ensure that their actions are indeed in the best interests of the public. These mandates may for example persuade financial services organizations to initiate campaigns to combat consumer financial illiteracy, protect the environment, or expand access to specific financial solutions for the poor.

Chomvilailuk and Butcher examine the issue of customer knowledge of a bank's CSR initiatives and question how it influences customer perceptions. In doing so, they conduct a cross-cultural study by contrasting the associated dynamics between Thailand and Australia. Using surveys of bank customers in the two countries, they demonstrate that customer perceptions of existing CSR initiatives affects the liking of the bank. They also demonstrate that the dynamics of their model may vary depending on the community orientation of the host country. Their work highlights the degree to which the cultural context can influence the mechanisms by which CSR initiatives affect target populations. As a result it is critical that CSR strategies be customized to the individual characteristics of the target population, accounting for cultural and national differences that may exist.

While CSR activities provide the possibility of developing a deeper sense of trust between the public and financial services providers, their actual impact and resulting financial benefits are of constant concern to bank marketing strategists. The emerging questions therefore relate to how much service improvement initiatives matter from a profitability perspective, and whether they are effective in convincing existing and potential customers of the merits of a financial services provider. Jahanzeb, Fatima, and Butt focus on this issue, specifically in the context of the banking market of Pakistan. They formally test the impact of service quality on brand equity, perceived value and company credibility. Their results indicate that perceived value and credibility mediate the relationship that exists between service quality perceptions and brand equity. Their results shed light on how marketing investments such as service quality improvements can eventually translate into deeper meaningful constructs such as brand equity and credibility, with potentially long-term benefits for the bank.

One may argue that from a financial cost-benefit perspective traditional marketing actions focussed brand building can be more easily quantified in terms of their marketing impact, compared to CSR and trust-building initiatives. However, this perspective can only be validated through empirical examination. Some of the papers in this issue achieve this objective. Other papers in this issue further highlight the global power of financial markets, and the universal constructs that affect bank customers around the world. The converging view among all the papers included in this issue is that mandates that encourage financial services firms to behave in more responsible ways have a positive impact on customers, which can reverse much of the distrust toward financial services providers that has accumulated over the years. It is therefore hoped that the papers included in this issue of IJBM help advance the conversation and provide financial services marketers with an appreciation of the impact of marketing actions aimed at enhancing trust and boosting CSR.

In both the USA and the EU, governments are now implementing new financial services firm regulations, based on the contention that a trustworthy financial system promotes growth. The papers in this volume reaffirms that trust and responsibility are important factors that financial service firm customers take into account when interacting with their customers.

Kent Eriksson and Hooman Estelami