The Effect of Bank Mergers on Customer Trust in Retail Banking: A Case Study of Ecobank, Cross River State
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Background of the Study
Bank mergers have become a common strategy in the financial sector to achieve economies of scale, enhance service delivery, and strengthen market presence. In Cross River State, Ecobank has undergone significant mergers as part of its growth strategy, aiming to consolidate resources and improve service quality (Eze, 2023). These mergers are intended to create a more robust financial institution capable of offering a wider array of services, which in turn is expected to boost customer trust. The integration of different banking systems and corporate cultures can, however, lead to operational disruptions and customer apprehension regarding service continuity (Okoro, 2024).
Customer trust is a vital asset in retail banking, influencing loyalty and long-term engagement. During merger processes, uncertainties about changes in service quality, account management, and customer support can erode confidence. Ecobank’s approach to managing these transitions—through clear communication, integration of service systems, and targeted customer retention programs—plays a crucial role in maintaining trust (Nwankwo, 2025). This study examines the impact of bank mergers on customer trust by exploring pre- and post-merger perceptions and identifying the factors that either enhance or diminish trust during the consolidation process.
Statement of the Problem
Despite the anticipated benefits of bank mergers, customer trust can be adversely affected if the integration process is not managed effectively. In the case of Ecobank, customers have expressed concerns over disruptions in service quality, inconsistent communication, and uncertainties about the future direction of the bank (Eze, 2023). The challenges of aligning different corporate cultures and operational practices during a merger can result in gaps in customer service and operational inefficiencies, which in turn reduce trust.
These issues are compounded by a lack of transparent communication from the bank, leaving customers uncertain about the impact of the merger on their accounts and service delivery. The erosion of trust during the merger process can have long-term repercussions, including reduced customer loyalty and negative word-of-mouth publicity. This study seeks to identify the specific factors contributing to a decline in customer trust during bank mergers and to assess whether the overall benefits of consolidation outweigh the risks to customer confidence.
Objectives of the Study
- To evaluate the impact of bank mergers on customer trust at Ecobank.
- To identify key factors influencing customer trust during the merger process.
- To propose strategies for maintaining or restoring customer trust post-merger.
Research Questions
- How do bank mergers affect customer trust in Ecobank?
- What factors contribute to changes in customer trust during mergers?
- What strategies can help sustain customer trust after a merger?
Research Hypotheses
- Bank mergers significantly impact customer trust in retail banking.
- Transparent communication during mergers is positively correlated with customer trust.
- Integrated service systems post-merger improve customer trust.
Scope and Limitations of the Study
This study focuses on the merger process at Ecobank in Cross River State and its effect on customer trust. Limitations include isolating merger effects from other market dynamics and potential response biases in customer surveys.
Definitions of Terms
- Bank Mergers: The consolidation of two or more banking institutions into a single entity.
- Customer Trust: The confidence customers have in a bank’s reliability and integrity.
- Retail Banking: Banking services provided to individual consumers.
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