The Impact of Customer Satisfaction on Customer Loyalty and Intentions to Switch in the Banking Sector in Malaysia

In today’s volatile dynamic environment, top performing financial institutions are looking into the demands of their customers avidly in order to survive and compete successfully. Researchers all over the world have relentlessly emphasized on the utmost importance of customer satisfaction, customer loyalty and retention as part of survival in the financial world. This study attempts to find out the impact of customer satisfaction on customer loyalty and their intentions to switch banks. Data were collected over a period of two weeks using survey questionnaire from 165 walk-in customers who had accounts with the banks serving in Ipoh, Perak, Malaysia. The data collected were then analyzed using SPSS. Pearson correlation and multiple regression analysis were used to examine the correlation between independent variables and dependent variable. The results of the study indicated that there is a positive correlation between customer satisfaction and customer loyalty but showed negative correlation with customer intentions to switch. Conclusions and implications of the study are also discussed based on the analysis.