SMALL BANK IN HONG KONG

Small Bank in Hong Kong

Abstract

The banking industry in Hong Kong plays a significant role in the international financial arena. Because of increasingly competitive pressure from domestic and overseas banks, Hong Kong banks must improve service quality and care about customer demand. They must tightly control cost and improve the quality and efficiency of operations in order to maintain profitability. This study surveys the entire population of licensed banks in Hong Kong on their quality management initiatives. It not only analyzes the current status of quality management initiatives in Hong Kong, but also compares the results with those from UK financial institutions in 1994.

Table of Content

ABSTRACTII

CHAPTER 01: INTRODUCTION1

Background of the Study1

Outline of the Study1

Rationale1

Purpose of the Research2

Hypotheses2

Significance of the Study2

Theoretical Framework3

Limitations and Suggestion for Future Research3

Assumptions & Limitation4

CHAPTER 02: LITERATURE REVIEW5

The Relationship Marketing Paradigm7

The Morgan and Hunt's commitment and trust relationship model8

The Hong Kong Banking Industry10

Corporate Banking Relationships13

Corporate Image And Financial Services Distribution16

Trust And Financial Services Distribution17

CHAPTER 03: METHODOLOGY21

Research Design21

Data Collection Method21

Data Analysis21

CHAPTER 04: DISCUSSION23

Relationship between Customer Trust and Customer Commitment23

Customer Trust24

Customer Commitment25

Idealized influence behavior and individualized considerate behavior of a Relationship manager26

The Effect of Customer Trust on Customer Commitment26

The Effect of Idealized Influence Behavior of Relationship manager on Customer Trust27

The Effect of Individualized Considerate Behavior of a Relationship manager on Customer Commitment27

The Joint Effect of Customer Trust and Individualized Considerate Behavior of a Relationship manager on Customer Commitment27

Managerial Implications28

CHAPTER 05: CONCLUSION AND RESULT30

REFERENCES32

APPENDIX37

Chapter 01: Introduction

Background of the Study

Hong Kong's banking sector has experienced several major changes since the Asian financial crisis in 1997. First of all, the intense competition among competitors in the industry had forced many banks to close their businesses. At the end of 1997, there were 188 licensed banks. While 172 licensed banks were still in business at the end of 1998, only 156 remained at the end of 1999. The density of financial institutions in Hong Kong is probably the highest in the world. At the end of 1999, there were 288 financial institutions. Hong Kong also has one of the largest representations of international banks in the world. Of the top 100 largest international banks, 76 have operations in Hong Kong. Whenever new products are launched, they are copied in the market. In addition, prices, customer convenience, service standard and reputation are all of concern to the banks.

Outline of the Study

The major change in the banking industry concerns customer expectations and needs for banking services. As customers become more educated, they demand new products, better delivery channels and more reliable and responsive services. Improvement in service standards in other industries also raises the expectations of banking customers. Banks need to deal with a generation of more demanding customers. To improve competitiveness, banks have to satisfy their customers by providing higher quality services.

Rationale

Another change in the banking industry concerns changes in culture and technology. Customers are more aware of their rights and are more willing to voice their opinions or complaints than before. With rapid development in mass media, any complaints or negative ...