At first, I would like to thank God to give ability with knowledge and wisdom to undertake work like this research study. Secondly, my cordial love and honor to my module tutors and dissertation supervisors who have supported me with their suggestions, lecture sheets, notes, and guidelines. Thirdly, I would appreciate to writers and publishers of the related books, journals and websites on these research subject areas. Fourthly, I bless my parents who have supported me mentally with motivation, advice and suggestions, and financially to complete my study here in the UK. Finally, my friends and relatives who live or work with me would be appreciated for their support through giving me opportunities to work on my research work attentively.
Attracting and retaining customers through personal internet banking services have been key issues for the UK banking sector including Santander Bank. The aims of this study are to identify and assess the impact of internet banking on customer loyalty levels of Santander Bank to suggest Santander Bank improve its existing Internet Banking to improve customer loyalty.
The objectives of the study are a) to review the concept of Internet Banking, customer loyalty, and the impact of Internet Banking on customer loyalty; b) to explore the Internet Banking services used by Santander Bank in their business operation; c) to find out the weaknesses of Internet Banking services of Santander Bank in compare with widely used ones; and d) to suggest Santander Bank for improving its Internet Banking services so that it can attract more consumers and make them loyal.
As a methodology, the study applies pragmatism philosophy. the data collection methods are both quantitative and qualitative, where data is collected only from secondary sources including books, journals, websites, reports published, etc. Deductive research approaches are applied in this study. As data analysis techniques, a thematic technique for qualitative data and MS Excel Sheet for quantitative data.
The research findings disclose some limitations of Santander’ Personal Internet Banking which should be improved by Santander. Firstly, it should improve its digital communication channels to improve interaction with consumers. Secondly, it should take initiatives to make sure of the privacy of customer personal information and accounts details including balances. Finally, it should concentrate on customer feedback keeping in mind that negative comments may spread out instantly among a large volume of customers.
Chapter 1: Introduction
This chapter has introduced the undertaking research work. At first, the chapter has focused on the research background, where the researcher first discussed the importance of studying this particular research. Consequently, the researcher has first discussed the importance of internet banking services and customer loyalty from the banking business perspective. In addition, the researcher has discussed why internet banking is important from the customer’s point of view. Then, the researcher has discussed the research background which has led the researcher to conduct the research study in the context of Santander Bank. In the second part, the chapter has discussed the research problems and the possible way of sorting out the issues. In the third part, the researcher has discussed the research rationale. In the fourth part, the researcher has defined the research aims and objectives, and the research questions. Finally, the researcher has summarised the chapter.
1.1 Study Background
Nowadays people would like to have their desired products and services in a more convenient way having seat at home (Kim and Benbasat, 2013). Several types of research have disclosed that the use of the internet has been growing dramatically across the world being an integral part of people’s daily lives (Larzelere and Huston 2012). As a result, the use of the internet in the banking sector has been playing an important role to promote banking products and services (Molla and Licker, 2011). Many financial institutions are using e-banking facilities to emerge their business and to attract internet users (Rego, 2012).
In addition, internet banking is considered as the tool of increasing banks’ brand loyalty and customer loyalty (Acharya and Srinivasan, 2012). The recent researches have revealed that internet banking facilities are being used as the cost-effective manner and are giving improved customer retention level (Paine and Katie 2011). It is also using fewer resources to build up effective customer relationships and to retain them (Gefen, Karahanna and Straub, 2013). In a word, internet banking has created a positive impact on banks’ operations and profitability (Huber and Margit, 2014). It is also significant in increasing relationships between banks and customers (Gupton, 2012).
On the other hand, gaining customer loyalty has been a significant issue for the banks because the alternative choices and several opportunities provided by the different banks are giving hard time to retain the staffs for long time basis. According to Mullins (2010), improved customer loyalty can reduce the business operational costs and marketing costs by 15%. In addition, the power of words- of-mouth of the loyal customers can spread out very quickly among the huge volume of people which can support organizations to attract new unlimited consumers (Bratton and Gold, 2012). As a result, the banking sectors are thinking deeply about how they can attract more consumers and retain them through their internet banking services.
The rapid upgrade in technological development has been completely changing the ways of internet banking (Bressler et al., 2010). However, internet banking has been the most valuable approach of financial institutions including Lloyds Bank to contact consumers (Chaudhuri and Crosby, 2011). Internet banking in the UK launched during the 1980s with a limited number of customers (Dick and Basu 2014), which has increased by 52% to about 18 million in 2014 where 70% of the total internet banking customers use this service to contact their banks (Hughes 2014). This trend has more attracted banks than ever before, consequently, the banking competition has grown up in the last few years (Grewal, Monroe and Krishnan, 2013).
This competition possibly will increase in near future because of new development in internet banking technologies (Hafeez and Hasnu 2014). A survey conducted by KPMG discloses that 61% of consumers are happy with their respective banking activities, the 39% raise issues against the banking services provided by their banks, consequently look for alternative choices (McCauley 2013). The most important features that the customers look for from their banks are user-friendly and reliable banking services through the internet (Larzelere and Huston, 2012. As a result, it has been a significant issue for financial institutions to provide unique and reliable internet banking services to survive and gain competitive advantages.
Therefore, the researcher has conducted a study on the effectiveness of the Internet Banking services provided by a particular bank called Santander Bank, UK on the customer loyalty level. Santander Bank is one of the leading banks in the UK which provides a wide range of financial and banking services focusing on both individual and commercial customers. Its key activities are retail, commercial and corporate banking facilities, pension, general and life insurance, investment provision, etc. It serves diversified customers with its devoted workforces and technological resources (Santander Annual Report, 2014)……..