Bank Selection Criteria and Performance of Public and Private Banks of Sri Lanka: A Comparative Study

M. S. Nilam

doi:10.46291/cenraps.v2i2.27

Authors

M. S. Nilam Faculty of Graduate Studies, University of Sri Jayewardenepura, Sri Lanka. E mail: rishanyashiraz@gmail.com

DOI:

https://doi.org/10.46291/cenraps.v2i2.27

Keywords:

Bank selection, Bank performance, Influencing factors, Sri Lanka

Abstract

Financial deregulation and technological advancement have led the sri lankan banking industry to highly competitive environment. In sri lanka, the competition is not only among the local banks, but also from foreign banks. To stay competitive and strong, a bank’s customer retention is crucial. In this context banking institutions would like to know how the customers select their bank and how they perceive the performance of banks in such competitive environment. The researcher selected sample of 468 banking customers from public and private banks of sri lanka. Responses were analyzed and presented through descriptive, correlation and regression analysis. The findings showed that the security and service quality were the two most crucial factors when selecting a bank in sri lanka. Significant gender and education level factors in bank selection were observed. Study concludes that sri lankan private banks perform better on those factors than the public banks in sri lanka.

References

Almossawi, M., (2001). Bank selection criteria employed by college students in Bahrain: An empirical analysis, International Journal of Bank Marketing, Vol. 19, pp. 115-125.

https://doi.org/10.1108/02652320110388540

Aregbeyen, O., (2011). The Determinants of bank selection choices by customers: Recent and extensive evidence from Nigeria. International Journal of Business and Social Science 2(22), Bank Syst., Vol 2 Issue 4, pp 93-100.

Awan, H. M., and Bukhari, K. S., (2011). Customer's criteria for selecting an Islamic bank: evidence from Pakistan, Journal of Islamic Marketing, Vol. 2 Issue: 1, pp.14 - 27.

https://doi.org/10.1108/17590831111115213

Bandaranayake S. U. K., and Jayasinghe P., (2013). Factors influencing the efficiency of commercial banks in Sri Lanka. Sri Lankan Journal of Management, Vol. 12, pp 1-14

Blankson, C., Omar, O. E., and Cheng, J. M., (2009). Retail Bank Selection in Developed and Developing Countries: A Cross-National Study of Students' Bank Selection Criteria, Wiley Periodicals, Inc. D0I: 1002tie 20257

https://doi.org/10.1002/tie.20257

Boyd, W.L., Leonard, M. and White, C. (1994). Customer preferences for financial services: an analysis, International Journal of Bank Marketing, Vol. 12 No. 1, pp. 9-15.

https://doi.org/10.1108/02652329410049562

Central Bank of Sri Lanka Annual Reports, year 2017 and 2018, Publications [online], Economic and Financial Reports, Available at <http://www.cbsl.gov.lk/htm/english/10_pub/p_1.html> [Accessed 1 Aug. 2019]

Daily News, Role of Sri Lankan Small and medium enterprises in http://dailynews.lk/2016/11/30/business/100590 30 November 2016, [Accessed 23 Dec. 2016].

Gerrard, P. and Cunningham, J. B. (2001). Singapore Undergraduates: How They Choose Which Bank to Patronize, International Journal of Bank Marketing, Vol 19 Issue 3, 104-114.

https://doi.org/10.1108/02652320110388531

Gravetter, F., and Wallnau, L., (2014). Essentials of statistics for the behavioral sciences (8th ed.). Belmont, CA: Wadsworth.

Hedayatnia, A., Eshghi, K. and Avenue, G., (2011). Bank Selection Criteria in the Iranian Retail Banking Industry, International Journal of Business and Management, Vol 6 Issue. 12, pg. 222-231.

https://doi.org/10.5539/ijbm.v6n12p222

Hinson, R. E., Osarenkhoe, A., and Okoe, A. F., (2013). Determinants of Bank Selection: A Study of Undergraduate Students in the University of Ghana, Journal of Service Science and Management, Vol 6, pg. 197-205.

https://doi.org/10.4236/jssm.2013.63021

Katircioglu, S.T., Tumer, and M., Kılınc, C., (2011). Bank selection criteria in the banking industry: An empirical investigation from customers in Romanian cities, African Journal of Business Management Vol. 5 Issue 14, pp. 5551-5558, 18 July 2011

Kaufman, G.G. (1967). A Survey of Business Firms and Households View of a commercial Bank, Report to the Federal Reserve Bank of Chicago, Appleton, University of Wisconsin, Madison, WI.

Khaled, A., Filzah, M., D., Othman S. N., and Munadil, K. F., (2013). Factors Affecting Intentions to Use Banking Services in Yemen, Journal of Internet Banking and Commerce, Vol. 18, Issue 3

Ladhari, R., Souiden, N., & Ladhari, I., (2011b). Determinants of loyalty and recommendation: The role of perceived service quality, emotional satisfaction and image. Journal of Financial Services Marketing, Vol 16 Issue 2, pg. 111-124.

https://doi.org/10.1057/fsm.2011.10

Maiyaki., A. A., (2011). Determinants of customer behavioral intention in Nigerian retail banks, Interdisciplinary Journal of Research in Business, Vol 1, Issue 10, pp. 42-48

McCole, P., Elaine, R., and Williams, J., (2010). Trust considerations on attitudes towards online purchasing: The moderating effect of privacy and security concerns, Journal of Business Research, Vol 63, Issues 9 and 10, Pg. 1018-1024

https://doi.org/10.1016/j.jbusres.2009.02.025

Mokhlis, S., Mat, N. H. N., and Salleh, H. S. (2010). Ethnicity and Choice Criteria in Retail Banking: A Malaysian Perspective, Inter. J. Bus. Management Vol 5 Issue 6, pg. 98-105.

https://doi.org/10.5539/ijbm.v5n6p98

Mokhlis, S. (2009). Determinants of Choice Criteria in Malaysia's Retail Banking: An Analysis of Gender-Based Choice Decisions, European Journal of Economics, ISSN 1450-2887, Vol 5, Issue 16.

Mokhlis, S., Salleh, H. S., and Mat, N. H. N. (2009). Commercial Bank Selection: Comparison between Single and Multiple Bank Users in Malaysia, International Journal of Economics and Finance, Vol. 1, Issue 2.

https://doi.org/10.5539/ijef.v1n2p263

Munro., C. A., McCaul, M. E., Wong, D. F., Oswaldm, L. M., Zhou, Y., Brasic, J., Kuwabara, H., Kumar, A., Alexander, M., Ye, W., and Wand, G., (2006). Sex differences in striatal dopamine release in healthy adults, Biol Psychiatry, Vol 59 pg. 966-974.

https://doi.org/10.1016/j.biopsych.2006.01.008

Omo, A. (2011). the determinants of bank selection choices by customers: Recent and extensive evidence from Nigeria, International journal of business and social science, Vol 2, Issue 22.

Rao, S., and Sharma, R. K., (2010). Bank Selection Criteria Employed by MBA Students in Delhi: An Empirical Analysis, Journal of business studies Quarterly, Vol 1 Issue 2, pg. 56-69.

https://doi.org/10.2139/ssrn.1597902

Rashid, M., and Hassan. M. K., (2009). Customer Demographics Affecting Bank Selection Criteria, Preference, and Market Segmentation: Study on Domestic Islamic Banks in Bangladesh, International Journal of Business and Management Vol. 4, Issue 6

https://doi.org/10.5539/ijbm.v4n6p131

Ravichandran, K., Bhargavi, K., and Arun Kumar, S., (2010). Influence of Service Quality on Banking Customers' Behavioral Intentions, International Journal of Economics and Finance, Vol. 2, Issue 4

https://doi.org/10.5539/ijef.v2n4p18

Saleh, M. S., Rosman, M. R. M., and Nani, N. K., (2013). Bank Selection Criteria in a Customers' Perspective, Journal of Business and Management. Vol. 7, Issue 6, pp 15-20.

https://doi.org/10.9790/487X-0761520

Saunders, M., Lewis, P., and Thornhill, A., (2012). Research methods for business students (6th ed.). Harlow, England: Prentice-Hall.

Sayani, H. M., (2013), Determinants of bank election in the United Arab Emirates, International Journal of Bank Marketing, Vol 31 Issue 3, pg. 206 - 228.

https://doi.org/10.1108/02652321311315302

Sekaran, U., and Bougie, R., (2012). Research methods for business. 1st ed. New York: John Wiley and Sons, ISBN 978-81-265-3131-8

Tank, J., and Tyler, K., 2005. UK student banking revisited: influences and the decision-making process. Journal of Financial Services Marketing, Vol 10 Issue 2, pg.152-164.

https://doi.org/10.1057/palgrave.fsm.4770182

Trochim, W. M., and Donnelly, J. P., (2006). The research methods knowledge base (3rd ed.). Cincinnati.

Zabri, S. M., Ahmad, K., and Wah, W.Y. (2016). Descriptive study on demographic characteristics and bank selection criteria among undergraduate students in Malaysia. The 27th International Business Information Management Association Conference, Milan, Italy, ISBN: 978-0-9860419-6-9

Zikmund, W. G., Babin, B. J., Carr, J. C., and Griffin, M. (2013). Business research methods (9th ed.). South-Western: Cengage Learning

Zulfiqar, B, Arshad, H. M., and Fareed, H., (2014). Criteria of Selecting Bank in Pakistani Banking Sector: Study of Banking Customers in Sahiwal, Pakistan. International Journal of Managing Value and Supply Chains. Vol 5 Issue 4.

https://doi.org/10.5121/ijmvsc.2014.5402