Effect of digitalization, personalization, and social engagement on customer satisfaction in neo-banks and traditional banks

Abstract

This article explores the impact of digitalization, service personalization, social media engagement, and customer experience on customer satisfaction in the banking sector, focusing on the differences between neo-banks and traditional banks. The study, qualitative in nature, was conducted through semi-structured interviews with 18 participants and utilized a thematic analysis approach to gather data on their experiences with digital and traditional banking services. The results show that the digitalization of banking services improves customer satisfaction by offering convenience and responsiveness, particularly through mobile apps and online tools. Service personalization is also a significant driver, with neo-banks outperforming traditional banks in terms of loyalty and satisfaction due to tailored offerings that meet customers' specific needs. Social media engagement further enhances satisfaction, especially among younger generations who favor the interactivity and responsiveness of neo-banks. Additionally, a positive customer experience that combines digital services with human interactions is crucial to maintaining a high-quality relationship. Finally, the comparison between neo-banks and traditional banks reveals that neo-banks, with their customer-centric and digital-first approach, provide better customer satisfaction. This study highlights the importance for traditional banks to strengthen their digital transformation and personalization efforts to remain competitive in the face of the rise of neo-banks.