Customer expectations of CSR, perceived service quality and brand effect in Thai retail banking

Purpose This paper aims to explore how social responsibility initiatives can influence perceived service quality and brand effect from the perspective of retail banking customers in Bangkok, Thailand. The paper also aims to examine the impact of trust as a mediating variable between perceived service quality and brand effect. Design/methodology/approach The study is quantitative in nature, using the responses of 275 bank customers to a closed‐end questionnaire administered on a face‐to‐face basis by trained fieldworkers. The data analysis is performed by partial least squares (PLS), a second generation statistical SEM variance‐based modeling technique. Findings The results of the study demonstrate how corporate social responsibility (CSR) initiatives influence service quality perceptions and also examine CSR's impact on trust and affective attitudes of customers towards their banks. The study's hypothesized relationships were principally supported, i.e. perceived service quality is positively associated with brand effect mediated by trust. CSR initiatives play an important role in perceived service quality, which in turn, influences trust and brand effect. Finally, CSR is shown to be directly related to brand effect. Research limitations/implications While the results are clear and have strong salience to the retail banking industry in Thailand, applications of the findings beyond Thailand should take into account other factors such as the nature of retail banking industry, the perception, behavior and demographics of retail banking customers as well as the strategic focus of retail banking toward CSR. Practical implications The study provides a set of findings relating to CSR initiatives that could be readily incorporated into a bank's corporate plan. Originality/value To the authors' knowledge, their study proposes an exhaustive review of CSR activities a company could use to best match its stakeholders' interests. Also the paper demonstrates the contribution of advanced modeling methodology to understanding key relationships in the financial services sector.