Banks' data privacy practices and customer relationship

This study applies gossip theory to explore how and under what conditions a bank’s data privacy practices (gossip remedies) can enhance its relationships with customers (gossip targets). Results of a quantitative survey reveal that this enhancement is mediated by customers’ reduced privacy concerns and increased trust in the bank. Furthermore, customers’ perceived self-serving motives of the bank (negative gossip valence) moderate the effects of privacy practices on both privacy concern and trust, while customers’ privacy protection behaviours (gossip targets’ own behavioural response to the gossip) moderate the effect of privacy concern and the effect of trust on customer relationship. These findings contribute to the literature on customer data privacy by applying gossip theory as a new perspective to explore the complex impacts of firms’ data privacy practices. The findings provide practical insights for bank managers to effectively address customer data privacy.