Determining the role of corporate reputation in customer loyalty within the South African banking sector

Abstract

The study investigates the correlations between the customer's loyalty, trust and satisfaction regarding the organisation's reputation within the banking sector in South Africa. High service levels are expected in this highly competitive and price-sensitive market. A bank's competitiveness can be impacted significantly by factors including service quality, price competitiveness, and product diversity. As a result, a study with the primary objective is to determine if there are correlations between the customer's loyalty, trust and satisfaction regarding the organisation's reputation. The literature study was compiled, and intensive research was provided about service quality, customer satisfaction, customer trust, brand image, reputation, customer loyalty, and word of mouth. After all, these concepts were properly highlighted and explained so that conclusions could be made. A case study was used to illustrate the digital currency sector and blockchain technology that may offer numerous solutions in the future within the banking and financial system as a whole. Customer satisfaction data were gathered from customers across South Africa using a 5- point Likert scale on an electronic platform (Google Forms). More than 1000 questionnaires were distributed to people, and 150 were filled out and returned (representing a 15% response rate). The data were examined, and the Cronbach alpha coefficient was more than 0.775, indicating reliability. Four underlying factors were identified after additional analysis utilising exploratory factor analysis, namely the importance of customer service and satisfaction concerning customer loyalty (Factor 1), the impact of negative publicity on the reputation (Factor 2), the importance of regulatory compliance in trust (Factor 3), and importance of trust and reputation (Factor 4) can confidently be retained in this study. These factors explained a favourable cumulative variance of 55.34%. The model was confirmed using confirmatory factor analysis and possesses satisfactory fit indices.