The Analysis of Customer Switching Behaviour to PT. Bank Rakyat Indonesia Tbk in Manado

Abstract

There is intense competition and increasing globalization in financial markets. Bank management must develop customer-oriented strategies in order to compete successfully in the competitive retail banking environment. The price war and intense competition in Manado banking industry have exposed banks to one of the major threat of switching. Consumers are now more price and service conscious in their financial services purchasing behavior. They are more prone to change their banking behavior as banking products and services are nearly identical in nature. The purpose of this paper is to provide an insight of the drivers that lead a customer switch from one service provider to PT. Bank Rakyat Indonesia at Manado. The research is using quantitative method. The data for this analysis was obtained using a purposive sample of 100 PT. Bank Rakyat Indonesia customers in Manado City. The decision to switch banks is hypothesised to be a function of Advertising and service quality. Results shows that advertising and service quality have their significant effect on customers’ switching behavior. The findings of present study can be used by PT. Bank Rakyat Indonesia for their product and service designing strategies, marketing strategies and customer services practices in order to reduce customer switching. It would help them in improving their service operations and also in increasing customer satisfaction and loyalty by understanding the banking behaviour of their customers. Furthermore, this research provides useful information for future researchers investigating customer switching behaviour in the retail banking industry.