Consumers’ switching motivations and intention in the case of bank mergers: a cross-cultural study

The purpose of this paper is to analyze consumer switching behavior, which in the retail banking sector is of outmost importance, particularly during financial crises and in their ensuing consolidation pressures. Moreover, research indicates that cultural values play a critical role in determining a customer’s likelihood to switch the service provider. The theory of planned behavior offers a comprehensive theoretical framework for an understanding of this behavior. Its application implies that switching is influenced not only by one’s attitudes toward changing banking service providers, but also by the merger situation at hand, the influence of significant others, and whether the switching decision is under one’s behavioral control.

This paper scrutinizes the merger between Lloyds TSB and Halifax Bank of Scotland in the Spanish market, with a focus on the differences between British and Spanish consumers. In all, 30 face-to-face exploratory interviews were conducted with a sample of customers from both nationalities selected through a purposive sampling technique.

The results indicate that the switching behavior within the banking sector is largely determined by one’s cultural background. While individualistic consumers are more prone to switch banks, collectivist consumers are highly risk averse and are unwilling to lose the established relations with a bank’s personnel. These particular characteristics make them unlikely to switch banks irrespective of a merger and its related consequences.

This paper examines the impact of cross-cultural differences on consumer switching motivations and intentions in the particular case of a real-life banks’ merger.