Emerald | International Journal of Bank Marketing

Share of wallet in Retail Banking: A comparison of Caucasians in Canada and Australia vis-à-vis Chinese in China and Overseas Chinese

Chris Baumann, Hamin Hamin, Rosalie L. Tung — 2012-02-24 00:00:00.0

Abstract

Purpose - This study investigates investing and borrowing behavior in retail banking between ethnic groups, specifically the Caucasians vis-à-vis the Chinese.Design/methodology/approach - A total sample of 645 Caucasians and Chinese in Australia, Canada and China were tested for their level of business assigned to their main banks, defined as share of wallet (SOW) in this study. The study applied multivariate analyses.Findings - No significant differences were found between the ethnic Chinese in Australia and Canada in comparison to their counterparts in Mainland China, or compared with the Caucasians in Australia and Canada. This finding of convergence suggests that ethnic Chinese have adapted to the local banking behavior. The ethnic Chinese in Australia and Canada assigned 81-88% of their assets to their main banks, in comparison to only 72% for their counterparts in China and 73% for the Caucasians. As such, the ethnic Chinese in Australia and Canada have developed their own unique behavior, resulting in crossvergence: an over-adaptation to local behavior in managing their assets, and a mid-way approach between the Chinese in China and the local Caucasians when it comes to borrowing money.Research limitations/implications - For bank marketing managers, this form of cross-vergence constitutes a challenge as it suggests that gaining the trust of Chinese customers is complex since the SOW is lowest in the booming emerging market (i.e., China) whereas ethnic Chinese consumers in Western markets have formed their own unique pattern of allocating business to their banks. "Ethnic Banking" is suggested to offer tailored services to ethnic groups in order to satisfy their specific money management.Originality/value - This study establishes that Chinese consumers in Western markets are a distinct consumer group. Products and services need to be especially customized to suit their wants and needs.

PUBLIC ATTITUDES TOWARDS THE UK BANKING INDUSTRY FOLLOWING THE GLOBAL FINANCIAL CRISIS

Roger Bennett, Rita Kottasz — 2012-02-24 00:00:00.0

Abstract

Purpose - The purpose of the paper is to establish the antecedents of changes in public attitudes towards the UK banking industry following the global financial crisis. Design/methodology/approach - A questionnaire was administered to 1066 people querying their attributions of blame for the crisis, attitudes towards the banking industry, levels of anger, knowledge of the crisis, degrees of moralistic trust, political orientations, prior perceptions of the banking industry’s reputation, and whether they had personally suffered badly as a result of events. A structural equation model covering these matters was developed and estimated.Findings - A substantial deterioration in the favourability of public attitudes towards the banking industry seems to have occurred following the crisis. However, certain groups of respondents were much less critical of the industry’s role in the crisis than were others. Research limitations/implications - The banking industry of just a single country was considered. Participants only commented on their attitudes towards the banking sector and not their actual banking behaviour. Practical implications - Collectively the banking industry needs to advertise the fact that failures on the part of public regulators played a critical role in the advent of the crisis. The industry should take joint action to influence the mass media’s interpretations of the banking sector’s current activities. Originality/value - This was the first study to explore how members of the public interpret the post-crisis identity and behaviour of the banking industry as a whole, rather than individual companies within it. The results contribute to knowledge concerning the determinants of attitude change vis-à-vis the banking sector and how customers might be segmented in terms of their perceptions.

Customer Intention to Adopt a Fee-Based Advisory Model: An Empirical Study in Retail Banking

Arvid O. I. Hoffmann, Heiner Franken, Thijs L. J. Broekhuizen — 2012-02-24 00:00:00.0

Abstract

Purpose - The paper identifies which factors determine (German) retail banking customers’ intention to adopt a new remuneration system for financial advice. The new system is a pay-per-use advisory model that supersedes existing commission-based advisory approaches. Design/methodology/approach - The paper develops and tests a comprehensive conceptual framework which includes perceived innovation characteristics, relationship quality, and socio-demographic and psychographic variables to explain adoption intentions of the new remuneration system. Data comes from a survey among clients of a large German retail bank.Findings - Perceived innovation characteristics (i.e., relative advantage) largely determine the intention to adopt the fee-based advisory model. Consumer and relationship quality variables do not directly impact adoption intentions, but have an indirect effect through influencing perceived innovation characteristics and moderating their relative importance. Relationship quality indicators, such as satisfaction with the current service and trust in the bank or its employees, do not impact customers’ intentions to switch to the new remuneration system.Research limitations/implications - The paper describes a (case) study using data from a large German retail bank. Future research may investigate the findings’ (international) generalizability using different datasets and also assess additional drivers of customers’ intentions to adopt a fee-based advisory model.Practical implications - The results suggest that banks should always explain the relative advantage of financial service innovations to their clients, as existing satisfaction and trust levels are not sufficient to ensure adoption.Originality/value - This is the first paper examining the adoption of a new remuneration system for financial advice in the retail banking industry. By assessing a variety of variables we increase our understanding of why customers adopt or reject such complex and difficult to evaluate service innovations.