Developing a Model to Measure the Impact of Digital Banking Adoption on Customer Retention in Zimbabwe’s Commercial Banks

Abstract

The growing significance of digital adoption of banking as a determinant of competitive advantage has become a major focus of interest for research studies and bank management practice globally. This study sought to develop a contextual model that assesses the impact of digital banking adoption on customer retention by Zimbabwean commercial banks. The research was conducted under three main objectives, namely to investigate the relationship between digital banking service adoption and customer retention levels, to assess the mediating effect of customer satisfaction on such a relationship, and to construct a predictive model that can be utilized by banks to improve retention tactics. With a panel study design between 2014 and 2024, the study employed mixed-methods research that entailed quantitative regression analysis together with qualitative thematic analysis of customer feedback, bank strategy reports, and regulatory reports. It found that customer retention was significantly affected by digital banking adoption with customer satisfaction dimensions such as ease of use, speed of transaction, and perceived security moderating these effects. Furthermore, studies showed that despite the majority of Zimbabwean commercial banks embracing core digital platforms such as online portals and mobile apps, variability in digital service quality and infrastructural reliability undermined retention efforts. Environmental factors such as institutional trust, financial literacy levels, and internet penetration were also cited as important moderating variables affecting the success of digital banking efforts. Based on these findings, the study designed a realistic model for commercial banks to anticipate and optimize customer retention performance using systematic digital engagement, quality control processes, and tailored communication practices. The study gave realistic recommendations to policymakers and practitioners, particularly on improving digital infrastructure, promoting customer-oriented design inclusion in digital platforms. The developed model adds empirical weight to the growing scholarship on digital banking transformation in sub-Saharan Africa and provides actionable strategies for enhancing customer loyalty in Zimbabwe’s competitive banking environment.