Moderating effects of customer profitability in the retail banking services sector

Unlike many Western countries where retail banking markets can be characterised by longterm customer relationships with their chosen banks, customers in Eastern Europe are ready to collaborate with several banks at the same time or switch to a different retail banking service provider more frequently. Thus, the retail banking market in Eastern Europe faces new challenges in terms of customer loyalty. In this study, we test the commitment – customer loyalty link in the retail banking market across three customer groups segmented on the basis of customer profitability in an Eastern European country. Our results suggest a positive effect of commitment on loyalty in all three different customer segments and we find that customer profitability moderates the commitment - loyalty relationship in the context of retail financial services.