All for one or one for all? effects of mobile banking app integration on customer churn, multi-homing and engagement

Abstract

Five major Korean commercial banks have been operating multiple mobile banking applications separated by functions to keep their sizes relatively smaller and manageable. Among those banks, however, ShinHan has made attempts to integrate mobile banking applications. The ultimate goal of the integration is to improve user experience (UX), which may help attract more customers and/or widen user base. This thesis aims to analyze customer churn rate, multi-homing propensity and time cost post mobile banking application integration by using ShinHan Bank’s App usage data as a proxy. Firstly, I have observed that customer churn rate was reduced after the integration. Secondly, multi-homing, which gives us hints on customer loyalty in short term, has stayed relatively constant. In other words, there was no significant evidence of “across the bank effect”. Lastly, time cost analysis indicated that customers tend to spend more time using ShinHan bank’s mobile banking application post integration. I interpret this phenomenon with higher degree of customer engagement. These findings have interesting implications for application developers and marketers in the banking industry who consider mobile banking application integration. This study suggests that streamlining application functions, improving user experience by integrating mobile banking applications are crucial to attract loyal customers.