The influence of internet banking and teller service quality on customer retention : a comparison study

While customers have historically used bank branches for transactions, internet banking has become an increasingly important technique to retain customers in today’s dynamic banking environment. This study empirically investigates the relative importance of bank tellers and internet banking services in influencing retail customer retention. The study is significant as it provides a practical insight into the differences between traditional and new internet banking service delivery channels for retaining customers in Australia. Therefore, bankers can identify the best strategies to maximise their competitive advantage. The results of this research show that delivering service through the traditional service channels (branches) has a stronger influence on increasing bank retention rates than internet banking. It is essential for bank mangers to have, as their first priority, the improvement of personal interactions with bank customers. Banks can then move forward to the quality issues of internet services.