Explaining customers’ financial service choice with loyalty and cross-buying behaviour

Purpose This paper aims to examine the impact of the customer’s previous transaction behaviour (represented by loyalty and general cross-buying) on his/her choice of specific services offered by the same financial services provider. Design/methodology/approach This study uses a set of logistic regression models by incorporating panel data from a large bank. The database consists of 2,187 randomly selected customers, and it includes features related to individual loyalty and cross-buying behaviours, as well as demographic indicators, i.e. individual measures related to each customer and each service. Findings From the results obtained, a large variation in customer choice behaviour with regard to the studied banking services was observed. These results reveal which customer transactional behaviours drive cross-category financial services purchases. Originality/value In academic literature, little progress has been made in the study of individual and behavioural factors that affect customer choices by service category, especially within the banking sector. By understanding customer choices, the company will be able to meet customer needs in a more appropriate way, thereby increasing its competitiveness. Hence, the results from this study have both managerial and research implications, improving the strategy formulation of financial services companies.