An assessment of customer retention with self-service technology: a comparative study between internet banking and mobile banking in Saudi Arabia

Self-service technology (SST) channels (i.e. Mobile banking; Internet banking) have been commonly adopted by banks in Saudi Arabia as a one of the main mechanisms to enhance the customer experience, satisfaction, and loyalty. By using such channels, customers will have an effective role in terms of value co-creation as they will undertake the financial service required individually and without any assistance from the banking staff at their own convenience in terms of time and place. Banks could also benefit from such novel channels by maintaining the quality of their services, increasing geographical coverage, and decreasing labour cost. However, such benefits could not be easily captured by banks with lower levels of customer retention with regard to SST channels as in the case of Saudi Arabia. Additionally, in the Saudi Arabia banking context, there is a lack of current understanding regarding the main factors predicting the customers’ adoption and usage of SST channels (e.g. Internet banking and mobile banking) due to the limited studies undertaken in Saudi Arabia. This is in addition to the fact that customer retention has never been studied in Saudi Arabia. Therefore, the fundamental aim of this thesis is to identify and empirically examine the key factors predicting retention of SST banking channels.
Through a critical review of the main body of SST literature and information systems theories, the conceptual model proposed was based on the technology acceptance model (TAM) and expectation confirmation theory (ECT). This was also extended by adding perceived risk and culture as external factors. The positivist quantitative research approach was adopted in the current study to test the conceptual model and research hypotheses. The empirical data was collected using a self-administered questionnaire from a convenience sample of Saudi bank customers (potential users and actual users of SST channels). The collected data was then tested using Structural Equation Modelling. The main statistical findings largely supported the significant impact of model factors for two SST channels: Internet banking and mobile banking (i.e. perceived ease of use, perceived usefulness, attitude, perceived risk, cultural factors, confirmation, and satisfaction).
This study makes an important contribution by applying TAM and ECT to examine new technology (SST) in a new context (Saudi Arabia) and by including perceived risk and culture alongside the TAM and ECT constructs and adding new relationships. Results of the current study will hopefully help banks in Saudi Arabia to design and deliver their SST channels in a more acceptable form.