Responding to Customer Demand: Investigating Customer Agility of Financial Institutions

In turbulent environments firms have to constantly adapt their business to the changing environment to achieve profitability. Identifying changing customer demand and responding to it through the introduction of new products and services is an important capability of a firm. In this regard, the concept of customer agility has been discussed in literature as the capability of a firm to sense and respond to customer-based opportunities. In this study, we investigate this ability of financial intuitions and its effect on the firms’ performance. Therefore, we analyze the reaction of financial institutions on different banking trends in four countries based on Google Trends and financial data. The results show that financial institutions that are able to sense changing customer demand and quickly provide new services to its customers gain higher profits. Hence, information about customer needs should be monitored continuously by firms to establish competitive advantage.