Bank Selection Decision : Factors Influencing the Selection of Banks and Banking Services

Two hundred fifty questionnaires were distributed to customers of several banks in three major towns in Kedah: Jitra, Alor Setar and Sungai Petani. Maybank, Bank Bumiputra (M) Bhd, Sime Bank, Public Bank, Ban Hin Lee Bank, DCB Bank and EON Bank were selected. Questionnaires were developed to examine factors that influence customers in selecting a particular bank. This thesis was also designed to examine: the relationship between bank selection decision and customers personal characteristics; customers rating on the current performances of the selected banks; customers’ bank selection criteria; and comparison of banks’ performance and bank selection decision. One hundred seventy eight questionnaires were analysed using Mean and Pearson Correlation to determine the significant relationships as well as distinstions among the 6 hypotheses at 5% level of significance. The findings revealed that there are positive significant relationships between bank selection decision and personal characteristics, service quality, bank image/reputation, products and convenience location. The results also suggest that customers rated bank image/reputation better than service quality for bank performance. However, they prefer to deal with banks that can provide quality services such as fast and efficient service, staff work accuracy, friendliness of bank personnel and warm reception. In general, customers prefer quality services than the other factors mentioned. They rank fast and efficient services and bank image/reputation as their first and second preferences, respectively. Therefore, banks should emphasise on providing training to all staff, especially front-end, to ensure quality services that would project good image and attract new businesses. Convenience location and the availability of parking space nearby were found to be significant in bank selection decision. Thus, opening of more service centres at strategic location would be to customers convenience. Confidence in bank manager, external appearances of bank, mass media advertising and recommendation from friends and relatives were found to be less significant factors in bank selection decision