Factors Influencing Customer Loyalty of Banking Industry: Empirical Evidence from Pakistan

Abstract

This research attempts to examine that how service quality, trust and reputation effects customer loyalty in Pakistan Banking Industry. Despite the fact that world was facing a global financial crisis especially due to failure of the biggest banking channels of the world at that time. This high growth in banking sector of Pakistan can’t be achieved without the customer’s loyalty existing banking structure. Anchored in the theoretical model, a comprehensive set of hypotheses were devised and methodology for testing them was outlined. A total of 645 bank customers’ responses were collected an empirical research. The finding of this paper indicate that service quality, trust and reputation are positively influences customer’s loyalty. Also there is strong, positive and significant correlation among all three factors of customer’s loyalty. There are mixed trend observed as far as bank type is concerned, greater part of the respondents showed their trust toward private banks, also they believed among all three types of banks, private banks have good reputation in Pakistan existing banking sector. On the other hand, a high percentage of respondents believed that service quality of foreign bank is much better than public and private banks. All the results of this research are in line with our expectations and accepted hypotheses.