THE ANALYSIS OF FACTORS DETERMINING CUSTOMERS’ CHOICE OF COMMERCIAL BANK A CASE IN HE NAN PROVINCE, CHINA

Abstract

The banks in China used to provide only saving and lending services, at the same time, there were no ATMs, limited number of branches, with unfriendly bank personnel, and long process time. But in the past two decades, the banking industry has changed a lot, partly because the number of banks is growing rapidly, the competition is getting intense, by this reason banks has to improve themselves in order to attract and withhold customers, on the other hand, foreign banks are allowed to operate in China, which bring in new services and better bank management in the financial market in China. Because of intense competition in the bank industry, banks have identify the factors that affect customer bank selection decision making, so that they can find strategies for improving their competitiveness. How do customers select banks? Researches find out that among others, service provision, secure feeling, financial benefits, branch location, ATM services and some other factors are important factors that affect bank selection decision. The researcher conducted surveys on 90 bank customers in Henan Province in China, to find out the factors influencing their selection of banks, and the results shows that financial benefits, including service charge and interest rates, has the most significant influence on customers’ bank selection decisions, while other factors, such as service provision, secure feeling are also important factors.