The Role Of The Availability Of Suitable Substitutes In Mergers, Acquisitions Consolidation And Customer Switching Intentions In The Ghanaian Banking Industry.

ABSTRACT Reforms in the Ghanaian banking sector between 2016 and 2019 which were aimed at creating a resilient and safe banking sector has resulted in regulatory induced mergers, acquisitions and consolidation of insolvent and capitally inadequate retail banks. This has contributed to a heightened state of uncertainty to customers of these retail banks which can potentially contribute to their switching intentions. Even though on switching behaviour in general exists, however, there is paucity of research on post retail banks acquisition, merger or consolidation customer switching intentions particularly from an emerging economy. The purpose of this study therefore, is to examine the factors that affect customers’ switching intentions among banks in the context of post retail bank mergers, acquisitions and consolidations and to examine the impact of the availability of suitable substitutes on this relationship. Demographic variables were used as control variables on this relationship. Using a quantitative approach with a positivist research paradigm, questionnaires were employed to collect data from 450 customers of nine acquired, consolidated and merged banks. Measurement items of the questionnaire were derived from a collection of existing scales in the literature. 392 usable questionnaires were recovered. The data was analysed with Partial least square structural equation modelling (PLS-SEM) where the measurement and structural models were tested. The predictors of customer switching intentions were contextually considered and operationalized to consist of unfavourable pricing, ineffective communication, bank reputation, inconvenience and poor service quality. Unfavorable pricing, ineffective communication and reputation influenced customer switching intentions. However, inconvenience and service quality did not influence customers’ intentions to switch. Again, the availability of suitable substitutes moderated only one baseline relationship, thus unfavourable pricing and switching intentions. In this context, demographic variables did not influence switching intentions. This study fills the gap identified in literature and provides practitioners and scholars with insights on post retail bank acquisition, mergers or consolidation and customer switching intentions. Practitioners could take cognizance of these findings and strategize to retain customers in such situations. Future studies might extend the operationalization of the service quality dimension to include other relevant dimensions such as responsiveness and tangibles. Future research can also include the perspectives of employees of the retail banks to examine in totality of customer switching behaviour from both perspectives.