Remote channels as an opportunity in redesigning Portuguese banks’ business model – an empirical study in Lisbon metropolitan area

Abstract

Facing an unfavorable economic environment since 2007 the Portuguese banking sector has been unable to generate profitability levels capable of ensuring the industry's attractiveness to investors. The solvency adequacy measures required by regulatory authorities forced the paradigm change in the banking business model. The widespread diffusion of technological innovation in Portuguese society enhances the use of remote banking access channels such as internet banking service (IB) and the ATM, while the traditional branch channel usage is decreasing. A study conducted in the Lisbon area, with 191 responses obtained, revealed that the channels with greater usage intensity are the ATM and IB. It further revealed that there are behavior dimensions on the IB use with direct effect on customer retention. Satisfaction with IB service, perceived switching costs and favorable price perception affect customer retention in their IB service. The findings of this research also confirm that satisfaction with IB service and perceived service price have a direct effect on repurchase intention.