Exploring the antecedents of retail banks’ reputation in low-bankarization markets: Brand equity, value co-creation, and brand experience

Abstract

Purpose: The present study aims to propose and validate a model to measure certain variables that may contribute to increasing the bankarization rate (uptake of retail banking services) among developing-economy populations characterized by poor financial literacy and low income levels. Design/methodology/approach: A quantitative empirical study is carried out in the retail banking sector of a country with low bankarization rates. Using a self-administered questionnaire distributed online, structural equation modeling is applied to analyze the relationships between value co-creation, brand experience, brand equity, and reputation. Findings: The results show that brand equity is an antecedent of reputation, that value co-creation and brand experience positively influence brand equity, and that value co-creation positively influences brand experience. Originality: The findings of this study provide an original perspective that offers a deeper understanding of the mechanisms that enable banks operating in low-bankarization markets to enhance their reputation through strategies based on customer–company interaction and branding (with the variables of brand equity, brand experience, and value co-creation). Social implications: The bankarization rate of a developing country is generally taken as an indicator of the socioeconomic wellbeing of its population. Where there is a low bankarization rate, this renders it more difficult for financial institutions to build their reputation to attract new customers and retain existing ones. Strategies are therefore proposed to improve the reputation of financial institutions in such settings and, thus, contribute to increasing the bankarization rate.