Choice criteria in retail banking: an analysis of trends

Abstract

This paper presents an analysis of trends in the relative importance of choice criteria in respect of selecting a retail bank. In particular, it isolates those criteria which have become significantly more important in motivating choice over time and those which have become significantly less important. A quantitative methodology, using responses given by 7,033 consumers, is employed in the analysis. Findings show that the influence of recommendations has increased significantly and is now the most important choice criterion. Other factors which have also increased in importance are the offering of incentives, having a wide product range and economic factors, such as interest rate paid and fees and charges levied. Locational factors, such as choosing a bank close to home or work place, have decreased significantly in importance in motivating choice. Certain criteria have remained broadly constant through time, amongst them, and perhaps surprisingly, are choosing on the basis of a bank's image and reputation and expectations about level of service.