The influence of digital customer experience on loyalty to traditional banks in South Africa

Abstract

This study investigates the factors that influence customer loyalty in the South African digital banking landscape. Digital banking has revolutionised financial management, offering convenient 24/7 access to services. However, adoption rates in developing countries such as South Africa are significantly lower than in developed nations. Given the escalating competition from new digital banks in South Africa, a crucial research problem is to pinpoint how traditional banks can leverage specific digital banking experience elements to cultivate and sustain customer loyalty. This research aims to understand the drivers of customer loyalty within this context. Drawing upon the "experience economy" framework, the study explores how various stimuli constructs, such as perceived ease of use, perceived usefulness, trust, convenience, customer support, app/web attributes, and social influence, influence digital customer experience and, ultimately, customer loyalty. A quantitative approach was used to collect data through a structured questionnaire from a sample of South African digital banking customers. The data were analysed using statistical methods such as regression analysis to determine the relationships between the variables and identify significant predictors of customer loyalty. The results revealed that perceived usefulness, convenience, app/web attributes, and social influence had a significant influence on digital customer experience, while perceived ease of use, trust, and customer support did not exhibit a significant influence. These findings suggest that digital customer experience is primarily shaped by factors such as perceived usefulness, convenience, app/web design, and social influence. While perceived ease of use, trust, and customer support are important, their direct influence on the immediate digital experience appears of less consequence in this context. The study recommends that South African banks should focus on enhancing the practical benefits of their digital platforms, ensuring convenience and user-friendliness, and fostering positive social influence to improve overall customer satisfaction and loyalty.