Determinants of bank selection choices : factors influencing the preference of a bank from a student’s perspective

Abstract

Evaluating customers’ bank selection criteria is felt to be beneficial to banks in classifying the suitable marketing strategies required to entice new customers and retain existing ones (Kaynak and Kucukemiroglu, 1992). Indeed, increased competition in the banking industry (Grady and Spencer, 1990) has made it progressively imperative for banks to classify bank selection criteria.

This empirical study investigates the bank selection criteria among University of Malta students with the aim of answering the question, ‘What are the factors influencing the preference of a bank from a University of Malta student’s perspective?’. Specifically, we study the criteria which have become important in determining the selection of a bank to investigate whether certain aspects are more important than others in this selection. A quantitative methodology is employed by means of questionnaire responses submitted by three hundred and forty-seven students.

The findings of the study reveal that a ‘secure feeling’ is the most important criterion, comprising of the financial stability of the bank, confidentiality and reliability. Other important factors include ‘service standard’ (professionalism, responsiveness and approachability of personnel) and ‘services provision’ (appropriate range of services,

internet and telephone banking and mobile-phone app). Although other factors received a lower rating, it does not, in any way, imply that the latter are unimportant.

In conclusion, the key aspects that student bank customers in Malta deem important in their bank selection have been, to a large extent, established in the course of this study. It is thus suggested that banks should take these aspects as a guide in outlining their future strategies in order to have an edge over competitors and ultimately benefit from a competitive advantage.