Exploring the Relationship between Customer Experience and Bank Profitability
|Author:||Bc. Tereza Veselá|
|Year:||2022 - summer|
|Leaders:|| prof. PhDr. Petr Teplý Ph.D.
|Work type:|| Bachelors
|Awards and prizes:|
|Abstract:||The thesis empirically examines the relationship between customer experience and bank
profitability in Central Europe. It combines customer experience and financial data on 50 banks
in the Czech Republic, Austria, Germany, Slovakia, and Poland for the 2017-2020 time period.
Panel data estimation methods (first differencing, fixed effects, and random effects) combined
with pooled OLS estimation and other robustness checks were employed. Followingly, it was
possible to identify a positive significant effect of customer experience in the form of the Six
Pillars metrics on net interest margin. This finding is in contradiction with the ones of rather
scarce literature on this topic, and thus offers a new understanding of the relationship. No
evidence was found for associations between customer experience and return on equity or return
on assets, a result supported by some researchers but negated by others. The conclusions of this
study may be of interest to bank managers by guiding customer experience related investment
optimalisation or prospective investors who consider using customer experience to evaluate a
firm’s profitability potential.