Banking Competition, Switching Cost and Customer Vulnerability: tha case of South Italy

The aim of this paper is to analyze the impact of the emotional factors on the decision taken by current account holders to switch from their own principal bank. For this purpose we use some survey data which enlighten the banking-customer relationship. The data are collected trough a questionnaire based on the bank-customer relationship. It is composed of two parts: the first one consists of a psychometric test aiming on investigating the individuals’ behavioural 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 appears more evident when customers have a pessimistic attitude. The above results imply that when consumers are characterized by relevant switching costs and are pessimistic, the banking strategy to set prices lower or higher than competitors is not effective in inducing customers to change bank.