Impact of the internet on customer loyalty in Swedish banks

University essay from Luleå/Business Administration and Social Sciences

Abstract: The banking services have been dynamic during the last decade due to the
advent of the Internet in banking sector. One of the most vital challenges
of the Internet as a service delivery channel is providing and maintaining
service quality. Service quality is an input of customer trust which becomes
satisfaction and lead to loyalty as an output. Customer loyalty is a concern
of any organizations as well as banking sectors. The purpose of this
research was to gain better understanding of the impact of the Internet on
customer loyalty in Swedish banks. Four research questions have been
formulated to achieve the purpose. Based on detailed literature review, a
frame of reference was developed which helped to answer research questions
and guide to data collection. A qualitative research approach was used to
get better understanding of this issue. Empirical data were collected
through semi-structured in depth interview with two bank managers with the
research questions and the frame of reference. Finally, in the last chapter
findings and conclusions were drawn by answering research questions. In the
research it was found that all the banks interviewed seem to have the same
description, motivation and an underlining objective of customer loyalty and
the Internet has affected from two different directions which are made up of
both positive and negatives sides on customer loyalty creation by theses
banks. The Internet has become more powerful media of providing bank
services. Banks use the Internet as a new distribution channel for their
products and services. The Internet facilitates home banking services which
is becoming more popular in recent time. Another most important finding of
this study, from both banks, is service quality which form an integral part
of loyalty creation.