Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/143718
Title: Impact of customers' digital banking adoption on hidden defection : a combined analytical–empirical approach
Authors: Son, Yoonseock
Kwon, Eric Hyeokkoo
Tayi, Giri K.
Oh, Wonseok
Keywords: Business::Finance
Issue Date: 2019
Source: Son, Y., Kwon, E. H., Tayi, G. K., & Oh, W. (2019). Impact of customers’ digital banking adoption on hidden defection: A combined analytical–empirical approach. Journal of Operations Management, 66(4), 418–440. doi:10.1002/joom.1066
Journal: Journal of Operations Management
Abstract: The implementation of digital channels as avenues for economic transactions (e.g., online and mobile banking/FinTech) has shifted the paradigm of customer–bank interactions, providing unprecedented opportunities for both parties. The prevailing belief is that digital banking has several advantages, such as lower costs and higher information transferability for customers. These benefits can also promote competition between banks given customers' predilection for “multi‐homing,” or engagement with multiple banks. This study investigated the impact of customers' digital banking adoption on hidden defection, in which customers purchase financial products from competing banks instead of their primary banks. To this end, we developed an analytical model to provide insights into the effects of digital banking adoption while taking customers' multi‐homing behaviors into consideration. We then conducted a series of empirical analyses using comprehensive individual‐level transaction data to provide evidence of hidden defection. Our findings indicate that customers with higher loyalty exhibit greater hidden defection after digital banking adoption. Customers who engage primarily with personal‐service channels (e.g., branches) show stronger hidden defection than do self‐service channel (e.g., ATMs) users, and this effect is more prevalent among loyal customers. Our results provide valuable implications for omni‐channel services in a market characterized by multi‐homing behavior of customers.
URI: https://hdl.handle.net/10356/143718
ISSN: 0272-6963
DOI: 10.1002/joom.1066
Rights: This is the accepted version of the following article: Son, Y., Kwon, E. H., Tayi, G. K., & Oh, W. (2019). Impact of customers’ digital banking adoption on hidden defection: A combined analytical–empirical approach. Journal of Operations Management, 66(4), 418–440., which has been published in final form at doi:10.1002/joom.1066. This article may be used for non-commercial purposes in accordance with the Wiley Self-Archiving Policy [https://authorservices.wiley.com/authorresources/Journal-Authors/licensing/self-archiving.html].
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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