Factors Affecting Customers Bank Selection Decision The Case Of Commercial Banks In Mugher Town’’

Abstract

The purpose of the study was to investigate factors affecting customers' bank selection decisions in commercial bank of Mugher town, by employing eight key independent variables and one dependent variable. Namely: Bank Selection Decision, personnel factors, Bank Image and Reputation, Convenience Factors, Financial Factors, Service Quality Factors, Technology Factors, promotion factors, influence family and friends. Previous studies have explored bank selection criteria, but they did not fully address the role of technology or the relationships between variables. By using a conceptual framework based on these clusters, the research seeks to identify the dominant factors affecting bank choice and test their significance within the commercial bank in Mugher town. The statistical adequacy of the model was 82.8% while 17.2 % error term and the adjusted R-squared of 82.3% indicate that the model explains approximately 82.8% of the variability in the bank selection decision, making it a strong model. Of eight independents variables employed in the study: personnel factors, Bank Image and Reputation, Financial Factors , Technology Factors, promotion factors, influence family and friends were statistically significant positive effect on customers bank selection decision while Convenience Factors and Service Quality Factors related factors were statistically insignificant effect on customers bank selection decision. Therefore commercial banks in Mugher town, to enhance their competitiveness and better meet the needs of customers. First, banks should place a strong emphasis on improving their image and reputation, as these factors significantly influence customers' decisions. The findings would provide valuable insights for the Ethiopian banking industry to improve their customer engagement and service offerings.