Challenges in the Era of Globalization - iaabd

Proceedings of the 12th Annual Conference © 2011 IAABD
become more sophisticated in their demand for financial services (Lewis, 1991). How students choose
banks they patronize has been given considerable attention in scholarly literature (Hinson et al. 2009;
Blankson et al. 2007; Pass, 2006; Gerrard and Cunningahm, 2001; Ta and Har, 2000), Thwaites and Vere,
1995; Schram ,1991; Lewis, 1982; Gray, 1977). This has become necessary because students are seen as a
large segment that meets the requirements for a successful implementation of market segmentation
strategies. Lewis (1982), in his work entitled “Student accounts – a profitable segment notes how
profitable the student market segment has become. Banks which are planning to cultivate this vibrant
market segment must understand how individuals belonging to such a segment select their banks. We
choose the undergraduates students because of the reasons stipulated in Mokhlis (2009). In addition,
student population in Ghana has constantly been growing for the last decade. The current student
population of University of Ghana is 29,750 (www.ug.edu.gh). Students need bank accounts for receiving
payments of loans, remittances from parents and bursaries. Moreover, they need bank accounts after their
studies. Banks like HFC Bank, Ecobank, Intercontinental Bank Limited, Cal Bank, Barclays Bank,
Standard Chartered Bank and Ghana Commercial Bank have all opened branches and/or ATM facilities at
university campuses. Despite the growing importance of student bank market segment, literature on
which factors students consider in selecting a bank in West Africa in general and Ghana in particular is
very scanty (Owusu-Frimpong, 1999). As revealed by the literature, bulk of the studies on the criteria that
students use in selecting a bank has North America, Europe and Asia origins. Out of the few scholars
(Owusu-Frimpong (1999), Hinson et al. (2009) and Omar (2007), Blankson et al. (2007) appear to be the
only researched work on the factors that determined bank selection among undergraduates in Ghana.
Even in the case of (Blankson et al 2007), their work was cross-national.
This paper aims to investigate bank selection criteria among undergraduate students in the University of
Ghana. This study differs from previous studies because it will investigate how undergraduate students in
the University of Ghana select a bank. We will find out to what extent our findings are in agreement with
other studies.
Literature Review
Pioneer researchers on the selection criteria employed by students in selecting a bank (Gray, 1977; Lewis,
1982) establish that convenience and parental influence are the most important factors influencing
students’ bank selection (Mokhlis, 2009). This position was later corroborated by Schram (1991) in his
article about American college students. However, Zineldin´s (1996) study challenged previous findings
on the importance of a close bank or branch to a customer home or work. He attributes his position to the
emergence of today’s telecommunication, ATM, home banking, credit cards and mobile banking. An
important dimension was however given to the convenience variable by Lee and Marlowe (2003). They
argue that although convenience is one of the most important criteria for bank selection, definition of
convenience vary across consumers. This view is consistent with the findings of Blankson et al. (2007).
They note the overlap in competence and convenience. And that “convenience” is a latent factor
embedded with “competence”. Tan and Chua (1986), on the other hand, strongly support the third party
argument by Gray (1977) and Lewis (1982), disagree with convenient location criterion. The findings of
Ma et al. (1996) sharply contrast Tan and Chua (1986), Gray (1977) and Lewis (1982) in that their study
of Singaporean graduate students reveal that family and friends influence is not so important. Most of
these research findings, despite their inconsistencies or significant differences (Hun and Kar, 2000)
appear to overlap in one way or the other. For example, both Zineldin (1996) and Anderson et al. (1976)
strongly agree that banks reputation, credit availability and charges are sensitive for customers. However
peer recommendation was not so important in Zineldin (1996) whereas it emerge as a very important
factor in Anderson et al. (1976). Thwaites et al. (1997) study which focuses on factors that influence the
selection of banks in New Zealand shows that fast and efficient service, friendly and helpful staff and the
reputation of the bank are very important factors.
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