Developing a Customer Behavior Model in the Iraqi Banking Industry with an Emphasis on Digital Transformation
Keywords:
Digital transformation, digital service quality, customer experience, customer satisfaction, customer loyaltyAbstract
The present study aimed to examine the impact of digital transformation on digital service quality, customer experience, customer satisfaction, and customer loyalty in Iraqi banks and to develop a model explaining the relationships among these constructs. This applied study employed a descriptive-survey design. The statistical population consisted of customers of Iraqi banks who used digital banking services, from whom 200 respondents were selected through convenience sampling. Data were collected using a standardized questionnaire based on a five-point Likert scale measuring digital transformation, digital service quality, customer experience, customer satisfaction, and customer loyalty. Reliability and validity were confirmed through Cronbach’s alpha, composite reliability, and average variance extracted indices. Structural equation modeling (SEM) using SmartPLS software was employed to test the research hypotheses and evaluate the measurement and structural models. The results indicated that digital transformation had a positive and significant effect on digital service quality (β=0.401, t=7.218, p<0.001) and customer experience (β=0.365, t=5.718, p<0.001). Digital transformation also exerted a direct positive effect on customer satisfaction (β=0.358, t=6.684, p<0.001). Furthermore, digital service quality (β=0.253, t=4.944, p<0.001) and customer experience (β=0.411, t=8.826, p<0.001) significantly enhanced customer satisfaction. Customer satisfaction demonstrated the strongest influence on customer loyalty (β=0.547, t=12.535, p<0.001). In addition, all endogenous constructs showed Q² values above 0.35, indicating strong predictive relevance of the proposed model. The findings suggest that digital transformation enhances customer loyalty indirectly through improving digital service quality, customer experience, and customer satisfaction. Consequently, investments in digital infrastructure, transaction security, online service development, and user-centered service design can substantially strengthen customer satisfaction and loyalty while improving the overall competitiveness and performance of Iraqi banks.
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Copyright (c) 1405 Ibrahim Mohammed Mahmood (Author); Naser Seifolahi; Ghasem Zarei, Mohammad Bashokouh (Author)
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