Predicting actual consumer behaviour in retail banking

A critical measure largely neglected in previous loyalty studies is the customer's 'share of wallet' (SOW). This study, based on 1,924 retail banking customers, suggests that about 25-65% of the variance in customer loyalty in terms of actual behaviour can be predicted, in particular by demographic factors such as age, income and a customer's residential location. In recognition of the fact that banks generate different profits from savings/investment products and loans, the study develops separate models predicting SOW in terms of deposits, debts/loans; and percentages of accounts, loans and credit cards nsed from a customer's main bank. While satisfaction and attitude are strong predictors of behavioural intentions, they were, together with service quality, found not to be significantly associated with SOW.