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TopIntroduction
Banks are the crucial leading entities of the monetary system. They have a pivotal responsibility in the growth of a sound economy. They represent a crucial segment in a nation’s economic escalation and social safety to the common public in a broad way (Datta and Gupta, 2009). With the onset of continuous economic reforms in India, banking industry as a function, has achieved full circle. The leading attraction and survival tactic for today’s banks is margin and profit, with apparent hints from the government either to ‘perform or perish’. With the recent change in the operational orientations of banks with the intention of increasing their profit, the complete purpose of banking industry has been restructured. The banking industry in most of the emerging economies, especially in India, is journeying through difficult yet exciting times. Several studies in the banking industry are hinting at the following key challenges in the banking industry:
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Changing customers’ expectations and needs
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Influence of technology
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Increasing competition among the MNCs in the financial sector and banks
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Accountability towards the customers, government and other stakeholders
The fact cannot be denied that customers are deliberated as the centre for survival of all types of business. In banking industry also, the value of the customer allied services is very important and most of the banking establishments are accrediting the importance of customer relationships founded on loyalty (Ariff et al., 2013; Mylonakis, 2009). Providing satisfaction to customers is probably an effectual strategy that banks do employ to achieve an advantage and try to subsist in today’s escalating banking competitive environment (Kumar and Gangal, 2011). According to Hoq and Amin (2010), ascertaining customer satisfaction is imperative as it results in low intent of switching banks. According to Gupta and Dev (2012), in the banking industry, the satisfaction of customers is very important because they are the satisfied customers only who are able to pull in a good number of new customers because of their roles as ambassadors in conveying a positive feedback about the banks they deal with. On the other hand, customers’ dissatisfaction is more costly to banks as it involves the cost in the form of advertising expenditure for bringing in new customers.
However, the life cycle of customers also plays an important role and it has been taken as an established notion in the area of social sciences. It rests on postulation that human life has to travel through several sequences of stages (Arndt, 1979). It also suggests that there exists a relationship between demographic, life stage, and perceptual features of individuals (Blackwell, 1942). In banking industry also, the life cycle of customers provides an important theoretical basis for analysing changes in consumers’ needs and their expectations. (Lawson, 1988, 1991). The paper is an endeavour to analyse the changing perceptions of bank customers towards Interest rates and other charges with the change in their age and income.
TopLiterature Review
The notion of life cycle was first projected in literature of sociology in family research field. (Lawson, 1988).The study done by Benjamin Seebohm Rowntree in the UK on the effect of state of affairs of urban life on standard of living and family structure laid the foundation for life cycle research (Elder, 1978). At the outset, life cycle related research had a sociological background primarily and the researchers focused on families and analysed the impact of different life stages on debt, consumption and income. In ensuing decades, the life cycle concept was initiated into accounts also for the growth in modern societies such as single parent families (Hill, 1986); the rising number of elderly (Krisjanous, 2001; Hamermesh, 1984), gender issues (Gentry et al., 2003) and lesbian families (Slater, 1996).