Adopting digital services in customer-oriented retail banking – A service-dominant logic perspective

The goal of this thesis is to improve the current understanding of the ways banking service providers can create value to customers through digital services. In particular, the study explores the ways a retail baking service provider could adopt digital services to enhance its service offering for improved customer experience. This thesis consists of a review of the previous research on the emerging trends in retail banking to identify factors that affect the adoption of digitally enhanced services in the banking industry. In addition, the study builds on the research of the service-dominant (S-D) logic perspective to establish a framework to analyze digitalization in the retail banking environment. The empirical research is based on qualitative research methodology to validate earlier findings and to collect more in-depth insights of the phenomenon. The study adds to the current understanding of the changes in retail banking customer behaviors and customer expectations concerning the digitally enhanced service experience. The present thesis suggests that in order to increase customer-perceived value in retail banking through adopting digital services, the retail banking service providers need to integrate resources inside the service ecosystem with a customer-oriented mindset. Such a resource integration approach enables the production of unique value proposition, and allows the service providers to co-create value with their customers. In addition, it allows the service providers to differentiate themselves in the marketplace. The work contributes to the understanding of the S-D logic in the retail banking business by examining the applicability of the S-D logic in the empirical case. The results also include a great amount of valuable and practical suggestions for retail banking service providers to consider when they seek for ways to renew their service logic to be able to succeed in digital transformation. Also, a number of external and internal challenges in the adoption of digital services in retail banking were identified and discussed