Bank switching behaviour of employed graduates in South Africa

Abstract

This study looked at factors that determine bank switching behaviour among employed graduates, and their propensity to tell the bank and/or other people about the switching incident. Data was collected using a structured questionnaire sent via email using convenience sampling. 93 responses were analysed and presented using descriptive statistics and the Distribution Fitting Algorithm was used for inferential statistics. The study found bank switching behaviour to be determined by 10 different factors. Of the 10 factors, the major bank switching factors among employed graduates were found to be pricing, denied services, and attraction by competitors. The study also found that 6 out of every 10 employed graduates who make a switching decision tell other people about the switching incident. This potentially extends the impact of switching beyond the relationship between the bank and the customer who has already made a switching decision. Results also show that 3 out of 10 employed graduates who make a bank switching decision tell their bank about the switching incident. Being able to obtain as much information as possible from customers who switch does not only provide an opportunity to re-establish the relationship with the customer who switched, but may also provide information necessary to retain customers who have not yet switched. The results of the study point to a need for banks in South Africa to review service value propositions, acquisition and retention strategies; and customer contact and support strategy; among others