COMMUNICATION STRATEGIES AND CUSTOMER LOYALTY DURING BANKING M&A
DOI:
https://doi.org/10.29121/shodhkosh.v5.i1.2024.4129Keywords:
Banking Mergers & Acquisitions, Customer Loyalty, Strategic Communication, Digital Banking, Customer Retention, Trust-Building Strategies, Organizational Change ManagementAbstract [English]
Mergers and acquisitions (M&As) have become a defining feature of the banking sector, offering institutions opportunities for market expansion and financial growth. However, these transactions often pose significant challenges in customer retention, with studies indicating that banks can lose up to 30% of their customer base during the transition. This research examines the role of strategic communication in mitigating customer attrition and fostering trust during banking M&As.
Utilizing a mixed-methods approach, this study analyzes five major banking M&As between 2018 and 2023, focusing on how communication timing, channel selection, and message content influence customer loyalty. Quantitative data on customer retention rates and engagement metrics were supplemented with qualitative insights from structured interviews with banking executives and communication strategists. The findings reveal that early, transparent, and personalized communication significantly improves customer retention. Banks that implemented proactive, multi-channel communication strategies experienced a 25% higher customer retention rate than those employing traditional, reactive approaches.
The study highlights key success factors, including the effectiveness of digital channels such as mobile banking notifications and online portals, the impact of trust-building messages emphasizing service continuity, and the importance of segment-specific communication tailored to retail, business, and high-net-worth customers. Additionally, transparent disclosures regarding integration timelines and customer impact emerged as critical drivers of customer confidence.
This research contributes to both theoretical understanding and practical applications in banking communications, offering actionable insights for financial institutions navigating M&As. By integrating communication as a core component of M&A strategy, banks can enhance customer retention, protect revenue streams, and ensure long-term institutional stability. Future research could explore the long-term effects of communication strategies on customer behavior and the role of emerging digital communication technologies in post-merger integration.
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Copyright (c) 2024 Garima Singh Nahar, Hrishi Kumar Gond, Amarendra Pratap Singh, Dr. Vinay Kumar Yadav
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