The Impact of Web-Based Service on Switching Cost: Evidence from Thai Internet Banking

Abstract

This study explored corporate customers' perceptions toward the benefits and barriers of web-based service in the context of Thai Internet banking, and examined the impact of the benefits and barriers on the overall customer relationship to the bank and switching cost. The survey results from corporate customers show that web benefits do enhance relationships, whereas barriers have no significant impact. Information accessibility, information quality, and transactional benefits can enhance the overall customer relationship. However, while web benefits do enhance the strength of customer relationship, the impact is not big enough to replace the interpersonal relationship of face-to-face service. The results also show that the web benefits of information accessibility and information quality lower switching costs. This is quite different from some prior studies which maintain that the value of information technology creates higher switching cost, but it is consistent with some work arguing that commoditization of information on the Internet would lower switching cost. Moreover, web benefits do have some indirect impact on creating switching costs, through their ability to enhance customer relationships, which increase switching costs. Hence, Thai Internet banking service providers need to integrate web-based service in bank business strategy as a way to supplement and enhance the relationships.

Keywords: Web benefits, web barriers, customer relationships, switching cost, internet banking, Thailand