The Impact of Mobile Channel Adoption on Customer Omni-Channel Banking Behavior

41 Pages Posted: 7 Feb 2017 Last revised: 22 Mar 2017

See all articles by Jun Liu

Jun Liu

Agency for Science, Technology and Research; Singapore Management University

Vibhanshu Abhishek

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Beibei Li

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: January 10, 2017

Abstract

As smartphones and tablets have been widely adopted and mobile banking apps have come into ubiquitous use, mobile devices have increasingly become new tools that customers use for banking, payments, budgeting, and shopping. This paper examines the impact of the mobile channel on customer service demand across banking digital channels, and investigates how the use of the mobile channel influences customer financial decision-making. Our analysis is validated based on a novel large-scale dataset that contains 43 million individual transactions from 190,000 customers during April to June 2013 from a financial institution in the United States.

Our findings suggest that:

(1) the use of the mobile channel increases customer demand for digital services;

(2) lower ATM density and higher branch channel density in the customers’ vicinity is associated with higher digital service demand;

(3) the mobile phone channel serves as a complement to the PC channel, the tablet channel substitutes for the PC channel, and the mobile phone channel and the tablet channel complement one another;

(4) customers acquire more information for financial decision-making following the use of the mobile channel, and mobile phone and tablet users are less likely to incur overdraft and credit card penalty fees.

Net benefit of the mobile channel to the bank is $0.07 USD per month per (average) customer. This study has implications for banks’ managers related to the design and management of service delivery channels, and for financial regulators related to the inclusiveness of financial system.

Keywords: channel complementarity and substitution, customer behavior, digital banking, econometric analysis, mobile channel, omni-channel banking services, retail banking, big data

Suggested Citation

Liu, Jun and Abhishek, Vibhanshu and Li, Beibei, The Impact of Mobile Channel Adoption on Customer Omni-Channel Banking Behavior (January 10, 2017). Available at SSRN: https://ssrn.com/abstract=2912691 or http://dx.doi.org/10.2139/ssrn.2912691

Jun Liu (Contact Author)

Agency for Science, Technology and Research ( email )

1 Fusionopolis Way
#16-16 Connexis
Singapore, 138632
Singapore

Singapore Management University ( email )

School of Information Systems
80 Stamford Road
Singapore, 178902
Singapore

Vibhanshu Abhishek

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

Beibei Li

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

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