Customer Loyalty and Electronic Banking: A Conceptual Framework

In this paper, we present a conceptual framework that helps to better understand and assess the impacts of information technology on customer loyalty in retail banking. To do so, we define the concept of customer loyalty and identify its antecedents. A conceptual framework describing the impacts of information technology on loyalty is developed based on the literature in marketing, social psychology, and communication. The framework suggests that electronic banking might have different effects on loyalty depending on the type of customer. Research in social psychology indicates that customers can be either communally-oriented or exchange-oriented. Loyalty is thus likely to be generated differently in each case: for communally-oriented customer loyalty is likely to be generated based on social and personal interactions, whereas for exchange-oriented customers, loyalty is enhanced by service efficiency and reliability. Because it reduces the amount of face-toface interactions customers have with bank personnel, electronic banking is likely to lead to lower levels of loyalty for communally-oriented customers and to higher levels of loyalty for exchange-oriented customers.