Abstract:
Reforms in the Ghanaian banking sector between 2016 and 2019 which were aimed at
creating a resilient and safe banking sector has resulted in regulatory induced mergers,
acquisitions and consolidation of insolvent and capitally inadequate retail banks. This has
contributed to a heightened state of uncertainty to customers of these retail banks which can
potentially contribute to their switching intentions. Even though on switching behaviour in
general exists, however, there is paucity of research on post retail banks acquisition, merger
or consolidation customer switching intentions particularly from an emerging economy. The
purpose of this study therefore, is to examine the factors that affect customers’ switching
intentions among banks in the context of post retail bank mergers, acquisitions and
consolidations and to examine the impact of the availability of suitable substitutes on this
relationship. Demographic variables were used as control variables on this relationship.
Using a quantitative approach with a positivist research paradigm, questionnaires were
employed to collect data from 450 customers of nine acquired, consolidated and merged
banks. Measurement items of the questionnaire were derived from a collection of existing
scales in the literature. 392 usable questionnaires were recovered. The data was analysed
with Partial least square structural equation modelling (PLS-SEM) where the measurement
and structural models were tested. The predictors of customer switching intentions were
contextually considered and operationalized to consist of unfavourable pricing, ineffective
communication, bank reputation, inconvenience and poor service quality. Unfavorable
pricing, ineffective communication and reputation influenced customer switching
intentions. However, inconvenience and service quality did not influence customers’
intentions to switch. Again, the availability of suitable substitutes moderated only one
baseline relationship, thus unfavourable pricing and switching intentions. In this context,
demographic variables did not influence switching intentions. This study fills the gap
identified in literature and provides practitioners and scholars with insights on post retail
bank acquisition, mergers or consolidation and customer switching intentions. Practitioners
could take cognizance of these findings and strategize to retain customers in such situations.
Future studies might extend the operationalization of the service quality dimension to
include other relevant dimensions such as responsiveness and tangibles. Future research can
also include the perspectives of employees of the retail banks to examine in totality of
customer switching behaviour from both perspectives.
