Intellectual capital and new product sale performance of the financial services industry in Taiwan

This research considers the financial services industry in Taiwan and investigates the effect of intellectual capital – namely human capital, organization capital and information capital – on new product sale performance based on cross-functional integration and co-production. The results indicate that intellectual capital, cross-functional integration and co-production have a positive effect on new product sale performance. Also, the results confirm the positive mediate effect of cross-functional integration and co-production on intellectual capital and new product sale performance.     

Effects of financial education on sound personal finance in Korea: Conceptualization of mediation effects of financial literacy across income classes

This study analyzed the role of financial literacy as a mediator between financial education and sound personal finance to assess how financial education affects the soundness of personal finance. In particular, this study conducted three sets of mediation analyses using data from the 2014 Consumer Empowerment Index survey of the Korea Consumer Agency to verify whether the mediating relationship is valid across different income classes of the Korean population. The results suggest that financial literacy works as a mediator between financial education and sound personal finance in the high‐income class and the middle‐income classes. Therefore, policymakers should consider the limitations of financial education and financial literacy when addressing low‐income consumers.     

Using World Café and drama to explore older people's experience of financial products and services

This paper examines a novel strategy to get older people talking about their financial needs and equity release. A questionnaire was used to identify issues which were then written into a drama on equity release products and bank accounts. This dramatic representation of the issues preceded discussion among older people at a World Café event – a format that involves a series of circulating focus groups where concepts can be discussed in depth and recorded. The drama offered an initial stimulus of alternative and opposing opinions and facilitated conversation about financial products and services which are often considered uninteresting and private. The aim was to record ideas in the discussions that would benefit the production and design of innovative financial products that would meet the needs of people over 50 years. Further, as a technique, the combination of drama, used to stimulate discussion, and the World Café format, to obtain and record consumer opinions, arguably offers innovative options to researchers in other sectors of product or service consumption.     

Consumer complaints and redress: an important mechanism for protecting and empowering consumers1

This paper explores a consumer complaint programme as a tool for empowering consumers, using the consumer complaint programme of a United States federal agency as a case study. After describing the structure and role of the Federal Reserve System (the central bank of the United States) in handling complaints, the paper follows a complaint through the System, looks at trends in complaints and provides a profile of consumers who complain. The paper concludes with information on the economic impact of complaint resolution and consumer satisfaction with third‐party complaint investigation.     

Islamic financial services industry: Aspirations and achievements

Islamic Financial Services Industry (IFSI) crosses the age of 40 years, and sufficient empirical evidence exists to evaluate in light of the distinctive aspirations. This study fills the gap in the literature by evaluating the performance of IFSI in light of Islamic finance objectives—financial stability, equitable distribution of wealth and social responsibility; Shari’ah principles, and professional practices. Our investigation documents the achievements based on real accounting data from 23 countries, and the suitability of tools in practice to achieve the stated objectives by promotors of IFSI. Findings suggest that the objectives of IFSI have been achieved to an extent. However, visible contribution to the achievement of socio-economic justice is yet to emerge. Practical application of tools shows divergence (in spirit) from the original design, primarily to achieve integration and coherence with the prevailing conventional financial system. IFSI needs collaborative efforts to overcome the challenges at hand.     

Proposal and validation of a financial protection perception scale

This article proposes and validates a financial protection perception scale (FPPS) from the perspective of the financial services consumer. The scale was applied to a sample of 1137 individuals residing in Brazil and validated using exploratory and confirmatory factor analysis and standard multivariate validation methods. The FPPS, composed of 14 items, allows the development of an indicator that defines the level of protection perceived by the consumer of financial services, evaluated along the dimensions of transparency, suitability, security, and complaints. The tests and fit indices indicated the reliability and validity of the FPPS. With this scale, researchers, managers, and policymakers can assess the extent to which consumers feel protected when using financial services.     

Pricing and issuance dependencies in structured financial product portfolios

We exploit a unique sample of structured financial products (SFPs) to analyze pricing and issuance dependencies among different types of such market-linked investment vehicles. Our study provides evidence of cross-pricing between products with complementary payoff profiles. Such dependencies may be explained by issuers’ efforts to generate order flow for products that supplement their current SFP risk exposure. Additionally, we observe issuance patterns in line with the argument that issuers exploit the complementarity payout profiles when bringing SFPs to market. Our study emphasizes cross-pricing from a perspective not previously considered in the literature.     

Reservation wage levels in UK and German financial services sectors

Although expenditure on wages represents a major element of costs in financial services firms, there is a dearth of studies analysing wage levels in the sector. This paper examines reservation wage levels in the sector by utilising maximum likelihood selection and stochastic frontier methodologies in two leading European economies: UK and Germany. Our results show that wage achievement is higher in the UK than Germany. At first glance, this seems counter-intuitive, given that actual wage costs and the overall cost–income ratio is higher in Germany than the UK.     

The role of brand strength,type, image and product-category fit in retail brand collaborations

Retailer brand collaborations are an underexploited way for retailers to expand product lines and target new segments relatively quickly and cheaply, yet little work has explored the area and the influence of important factors in the image inheritance process remains unknown. Using data from two experiments involving 240 subjects, we examine the role of brand type, brand strength and the fit between parent and brand collaboration product categories to show that a new retail product's image inherits more characteristics from a symbolic parent brand (even when the brand is weak) and when there are higher degrees of parent retailer-image fit. However, fit between the new retail collaboration's product category and that of the parent brands is only important for functional brands. The results help retailers decide which partner to choose to maximize image inheritance.     

Co-production and customer loyalty in financial services

Recent developments in marketing thought and practice highlight the opportunities that co-production of services provide for creating customer value. The authors propose a model of co-production with which they investigate the links between co-production and customer loyalty and the factors likely to increase the level of co-production in a financial services context, with support from an investigation in the medical services context. Further, the authors consider the relationships of customer expertise, customer–advisor communication, customer affective commitment, and interactional justice with the level of co-production. On the basis of testing with a sample of 1,197 customers of a large multinational financial services organization and 100 patients of medical services, the model is partially supported. Therefore, the authors suggest that co-production may have an important role as a basis for competition in the financial services industry.     

Choosing and upgrading financial services dealers in the US and UK

This paper addresses a gap in the international literature aimed at understanding the impact of the marketing mix on choosing and upgrading business-to-business financial services dealers. This study involves two important financial services markets (foreign exchange and bonds) in two leading countries in financial services (the United States and the United Kingdom). It provides a comparative analysis of the effectiveness of marketing mix variables (“price”, “product”, and “promotion” in this case) in determining (a) choice of dealers and (b) how a utilized dealer may achieve the sought-after status of being among the top three dealers of a customer. The impact of the marketing mix variables on the choice of dealer is significantly greater in the US relative to the UK. However, a two-stage analysis shows no significant country differences in the impact of the marketing mix on how a dealer is upgraded to a top three status with a customer. Further, the effects of the individual marketing mix variables are more nearly equal in the determination of whether a utilized dealer is among the top three dealers relative to the choice stage. Finally, consistent with our hypothesis, the bond market is more price sensitive relative to foreign exchange and the foreign exchange market is more product sensitive than the bond market.     

Capturing the voice of older consumers in relation to financial products and services

The purpose of this pilot study was to focus on the suitability of selected financial products for older people. Bank accounts and equity release products were selected for this study by an expert advisory panel. New marketing initiatives are being used to promote bank accounts, including forms of insurance, for the ‘50+’ market. Also, older people are now expected to provide for their retirement and it is anticipated that equity release will be one product which may be used to fund and maintain consumer lifestyles. In the first phase of the study, a questionnaire was distributed to 152 people aged over 50 years in Scotland. Eighty‐three were completed, a response rate of 55%. The results informed the development of questions for the second phase which were discussed with 46 participants via the World Café in June 2008, enabling a deeper insight into their opinions. The research found that consumers had lost trust in financial product and service providers because of the perceived excessive profits of banks and lack of customer service. Further, many products and services were prohibited for or incurred extra costs to those aged over 60 or 65 years, leaving limited choices, and equity release products were seen as a last resort for those in financial difficulty. Although the profitability of banks has changed dramatically since the completion of data collection, the issues identified by older consumers in Scotland will be of international interest. The demographic changes resulting in an increasing proportion of elderly people in the population are reflected throughout the UK and many Organisation for Economic Co‐operation and Development countries. Similar financial products and services, which were the focus of this study, are promoted internationally, offering opportunities to replicate the research methods.     

The business-to-business relationship dimensions in financial services markets

This paper discusses the nature of financial business relationships by drawing on the IMP Group’s theory of industrial relationships. It discusses, among other aspects, the interaction process between banks and their corporate clients, the longevity of relationships, the interdependence between both sides, and the atmosphere of financial services relationships. The conclusions are thought to be interesting and useful for the managers of firms and financial services when setting relationship marketing policies and for academic research on business-to-business services relationships. The field research was done in Portugal and the case method was used.

Household characteristics and the change of financial risk tolerance during the financial crisis in the United States

This study examines how household financial risk tolerance is affected during the period of 2007 and 2009, which covered the eve and trough of the financial crisis in the United States and what types of households are associated with the change of risk tolerance. Risk tolerance is measured by two objective indicators, narrowly and broadly defined stock ownership, and a subjective indicator, risk taking attitude. Using panel data from 2007 to 2009 Survey of Consumer Finances, results show that during the financial crisis, the households in general are more risk averse, indicated by withdrawing from stock markets and holding a less risk taking attitude. In addition, Black and Hispanic households are more likely and households with higher education are less likely to withdraw from stock markets. Older households are less likely to change in risk tolerance during the financial crisis, as are richer households. The findings show panel data could generate novel results and contribute to the literature of financial risk tolerance.     

Corporate brand image in retail banking: development and validation of a scale

Recent changes in deregulation and technology have made banking one of the most competitive sectors in the global economy. Within this background, corporate image management has gained importance as a way of differentiating companies. This paper aims to develop a scale to analyse the corporate image in banking. Derived from a review of the literature, a scale with the most cited dimensions of analysis is developed. This scale is then tested by means of an empirical study of 450 individuals, where dimensionality, reliability and validity requirements are confirmed. Both theoretical and managerial implications are presented.     

Retailers and their relationships with their financial services suppliers: the case of debit card charges in the United Kingdom

The mid 1990s has seen a very rapid growth in both the holding and use of debit cards in the UK. There are now just over 27 million debit cards issued in the UK under the marques Switch and Visa Delta. Debit card transactions immediately debit the account of the card holder. These transactions are acquired by a financial institution (the acquirer), who reimburses the retailer of the purchase sum minus a negotiated fee, the merchant service charge (MSC). In the UK the MSC is a fixed fee per transaction as opposed to credit card transactions that are levied as a percentage of the transaction value. The level of the fixed fee payments vary enormously from just a few pence for large corporate clients to anything up to 80 p for some small independent retailers. The authors of this paper were commissioned to undertake a research programme into retailer attitudes to card payment systems. This paper will outline the main implication of the research in terms of marketing the acquiring service to retailers and consequent relationship between acquirer and retailer. Relationship marketing can be seen as a return to a more traditional method of bank management, in terms of close relationships between banks and businesses. With the development of specialist sections and departments such as card services there may have been a more transactional marketing approach by the banks. Merchant acquirers should focus more attention on retention rather than recruitment and treat each customer as an individual. Factors other than price and technology, for example quality and customer service, should be emphasized to protect themselves from competition and to encourage long term customer loyalty.     

Perceived value and customer loyalty in financial services

Taking into account how expensive it is to maintain customer loyalty programmes, it is necessary to know which aspects of the firm’s service are the ones that really deliver value to the customer. The aim of this paper is to study the relationships between perceived value, satisfaction and consumer loyalty in the financial services market, in order to know which factors are the most important for gaining the customers’ loyalty. A personal survey was made of 200 customers of financial entities, and structural equations models were used to test the relationships posited.     

The influence of gender and culture on Generation Y consumer decision making styles

Through the use of case studies of Cardiff (UK) and Charlotte (USA) this paper provides a comparative study of the retail structure of British and American cities. Three of the most striking contrasts can be seen in the intra-urban location of retail activity, the role of planned and unplanned shopping centres, and in the amount of retail space provision. Retailing in USA cities tends to be more decentralized, with a greater role for planned shopping centres and more retail space than in British cities. Reasons for this are explored.     

Involvement, satisfaction, and brand loyalty in a small business services setting

Considerable resources are expended annually on building business brands, yet the literature is virtually silent on brand loyalty in a business setting. This study examines the relationship between attitudinal loyalty and behavioral loyalty in a business services context, and attempts to identify two key antecedents of loyalty in this context. In particular, little is known about small businesses as customers, despite their significant contribution to the economies of developed nations. A longitudinal design is implemented, and data are captured on both attitudinal loyalty and subsequent loyalty behaviors (i.e., actual purchase behavior). The findings demonstrate the value of conceptualizing and measuring both attitudinal and behavioral components of brand loyalty. Specifically, the results indicate that attitudinal loyalty mediates the effects of the antecedents studied (category involvement and purchase satisfaction) on behavioral loyalty. Implications for marketing theory and practitioners are discussed, and possible directions for future research are sketched.