Digital innovation and de‐branching in the banking industry: Customer perception and satisfaction
| Published date | 01 March 2024 |
| Author | Santiago Carbó‐Valverde,Pedro J. Cuadros‐Solas,Francisco Rodríguez‐Fernández,José Juan Sánchez‐Béjar |
| Date | 01 March 2024 |
| DOI | http://doi.org/10.1111/1758-5899.13313 |
8
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Global Policy. 2024;15(Suppl. 1):8–20.wileyonlinelibrary.com/journal/gpol
1 | INTRODUCTION
While the digitalisation process started some years ago,
the COVID-19 pandemic has accelerated the digital tran-
sition in societies worldwide. Like other industries, this
wave of digital transformation has significant implica-
tions for the banking industry (Beck etal.,2022; Carletti
etal.,2021; Vives,2019). Policymakers have emphasised
that this digital transformation is currently one of the major
challenges for the banking industry.1 To remain competi-
tive and meet evolving customer demands, banks must
undergo digital transformation, adopting new technolo-
gies such as artificial intelligence, cloud computing,
big data and blockchain (Asadi et al.,2 017; Lewellen &
Williams,2021; Thakor,2020). However, the intensity of
this transformation has varied (Carbó-Valverde, Cuadros-
Solas, Gonnella, & Rodríguez-Fernández, 2023).
Moreover, this digital shift has occurred simultaneously
with a de-branching process, where financial institutions
reduce or close physical branch locations, in many ju-
risdictions (Boot et al., 2021; Kwan et al., 20 21). The
de-branching process has led banks to shift to online ser-
vices and reduce their reliance on physical branches.
To better understand the implications of this dig-
ital transition, particularly the reduction in branch net-
works, for the banking industry, it is worth examining
it from the perspective of bank customers. The digital
transformation of banks is likely to have an impact on
customers (Dehnert & Schumann, 2022; Pousttchi &
Dehnert, 2018 ), and research has shown that custom-
ers' satisfaction is linked to how they perceive a firm's
adoption of technological innovations (Amin, 201 6).
Furthermore, the quality of online services is a good
predictor of overall customer satisfaction with banking
performance (Herington & Weaven,2009). Despite this,
there is limited research on the extent to which the digital
transformation of banks is effectively perceived by their
customers and its impact on customer satisfaction. This
RESEARCH ARTICLE
Digital innovation and de-branching in the banking
industry: Customer perception and satisfaction
SantiagoCarbó-Valverde1,2 | Pedro J.Cuadros-Solas2,3 |
FranciscoRodríguez-Fernández2,4 | José JuanSánchez-Béjar4
Received: 31 Octo ber 2023
|
Accepted: 7 Novem ber 2023
DO I: 10 .1111/17 58- 589 9.13 313
© 2024 Durham Univer sity and John Wiley & Son s Ltd.
1Department of Ec onomics, Universit y of
Valencia, Valencia, Spain
2Funcas Foundation, Madrid, Spain
3Department o f Economics, CUNEF
Universidad, Madrid, Spain
4Department o f Economic Theory and
History, Univers ity of Granada, Granad a,
Spain
Correspondence
Pedro J. Cuadros- Solas, Department of
Economics, CU NEF Universidad,
C/Pirineos, 55, 28040 Madrid, Spain.
Email: pedro.cuadros@cunef.edu
Funding information
Fundación de la s Cajas de Ahorros;
Junta de Andalu cía, Grant/Award
Number: P18-RT-3571; Minister io de
Ciencia e Innovac ión, Grant/Award
Number: PID2020-118883GB-I00,
PID2021-128994NA-I00 and TED2021-
1328 96A-10 0
Abstract
In the ever-changing landscape of the banking industr y, digital transformation
has become a major challenge. Banks are transitioning towards digitalisation
by utilising information and digital technologies while reducing their branch net-
works. This paper investigates the relationship between technological innovation
and banking customers' perception and s atisfaction. By analysing a comprehen-
sive consumer finance survey, we assess how the digital transformation of banks
is perceived by customers and its impact on their satisfaction. Our results dem-
onstrate that customer perceptions of a bank's digital innovativeness are posi-
tively associated with effective digital tr ansformation. Customers tend to be more
satisfied with banks that have a higher degree of digitalisation. Furthermore,
our findings reveal that customers view banks as more innovative when the re-
duction in bank branches since the pandemic has been more intense. These
insights shed light on the technological transformation of banks and its influence
on their customers, providing valuable information for banks seeking to navigate
the digital landscape and improve customer satisfaction.
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