Study On Factors Influencing Individual Customer Loyalty To Commercial Banks Based On PLS-SEM

With the opening up of China’s financial market, more and more foreign banks are pouring into China. Meanwhile, other non-bank financial institutions are developing their banking products, making the competition in banking industry increasingly fierce. As a result, all commercial banks choose to set up a customer-centered business strategy. Customers become the most vital commericial resource of commercial banks. The role of individual customers is important in the competition among commercial banks owing to their characteristics of large base number, low risk and stable operation income. Furthermore, the group of loyal individual customers are important potential market of commercial banks in the new economic condition. Therefore, how to improve service quality, enhance customers’satisfaction and keep individual customers has become an urgent problem that commercial banks need to deal with.The research object of this paper is individual customers of China’s commercial banks.A theoretical model analyzing the major driving factors of customer loyalty, which are customer satisfaction, relationship trust, service quality, switching cost and bank image, is built on the basis of previous studies and latest research findings about customer loyalty. Model analysis method based on PLS structural equation is adopted in view of the problem that the data distribution and latent variable influence confronted by the relation model of customer loyalty and its influencing factors. An empirical study is conducted in Chengdu district in order to testify the theoretical model. Individual customers of Chengdu’s commercial banks are chosen as the respondents and questionnaire survey is adopted to collect data, which is then analyzed by SPSS17.0and SmartPLS2.0.The major conclusions of this paper are as follows:First of all, customer loyalty is influenced by various factors, among which switching cost is the most obvious one by exerting obvious direct positive influence.Meanwhile, switching cost has a little influence on customer satisfaction. Customer satisfaction and relation trust exert similar influence on customer loyalty. Customer satisfaction not only directly influences customer loyalty, but also acts as an intermediate variable of service qualtiy and bank image.Bank image has an obvious positive influence on customer loyalty both directly and indirectly. Service qualtiy has a non-significant direct influence on customer loyalty. It drives customer loyalty indirectly via customer satisfaction.