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.
