New Insights into e-Loyalty of Internet Banking Users in an Emerging Market Context: A Multilevel Analysis

Although internet banking is considered a mature technology, digital failures and breakdowns have resulted in widespread customer dissatisfaction. However, recent examples in developed countries show that customer dissatisfaction with internet banking platforms does not necessarily erode customer loyalty. While this could be due to the strong assurance provided by institutional structures that govern the internet usage, it is not known if similar results can be found in emerging markets where internet banking technology has still not reached its saturation stage and coexists with traditional brick and mortar banking services. Thus, this study aims to develop a better understanding of the e-satisfaction-e-loyalty link in the Indian internet banking context. The moderating effects of structural assurance at the individual level and market share at the firm level are analysed on the e-satisfaction – e-loyalty link applying a multilevel modeling framework. Data collected from customers along with archival data across 21 banks in India demonstrate that structural assurance significantly moderates the e-satisfaction-e-loyalty link at the consumer level and market share regulates the link at the bank level. Also, market share is found to moderate the relationships among e-satisfaction, structural assurance, and e-loyalty. Three-way interaction results suggest that the interaction effect between e-satisfaction and structural assurance is less pronounced when market share is high rather than low. This study advances our understanding of the conditional effects of e-satisfaction on e-loyalty and elucidates how different share banks may optimize customer loyalty in an emerging market context.