Do Perceived Ethics and Transparency Influence Customer Loyalty in Banking Sector? An Evidence from India

Abstract

The significance of business ethics has tremendously increased in recent years with the phenomenal rise in the volume and power of corporate brands. The domain of business ethics has been deeply investigated in the recent past given the rapidly emerging business forms, platforms and the market dynamics. The present study investigates the association between perceived ethics and transparency, and customer loyalty in banking sector. Primary data were collected from 422 customers of various banks in select locations of Bangalore city who are majors and have at least savings account in any of the banks. Based on review of literature, Ethics and Transparency construct was found to be one of the pertinent constructs in the context of customer loyalty in the banking sector. A total of 8 items were studied under the explanatory variable- perceived ethics and transparency to assess its influence on outcome variable- customer loyalty. Regression output shows the significant influence of predictors on customer loyalty with an adjusted R2 value of .532. It is statistically significant at 95%.