Banking Competition, Switching Costs and Customer Vulnerability: The Case of South Italy

The aim of this paper is to analyze the impact of the emotional factors on the current account holders' decision to switch from their own principal bank. For this purpose, some survey data is used which highlight the bank-customer relationship. The data are collected through a questionnaire based on the bank-customer relationship. It is composed of two parts - the first one consists of a psychometric test aiming at investigating the individuals' behavioral attitude; the second one includes some questions on the economic determinants of the bank choice. Cross-tabulations and multiple regression analysis are performed in order to find a relation between the psychology of each interviewee and the acquired economic information on the duration of the deposit. From an analysis of the results, we find that, in accordance with the individual psychology, the decisive factors in the choice of bank are confidence in the intermediaries and bank location. Another interesting result is that the customers who declare themselves unsatisfied with their own bank, don't search for better banking services. This is evident when customers have a pessimistic attitude. The above results imply that as consumers are pessimistic and anxious about the relevant switching costs, the banking strategy to set prices lower or higher than the competitors is not effective in inducing customers to change the bank.