Purpose Banks in India are underperforming on customer-centric measures. The existing mechanisms used by Indian banks for evaluating their customer interface are efficiency measures which are limited in deciphering bank’s success in fulfilling customer needs. The purpose of this paper is to build a case for banks to evaluate their processes on the dimension of customer experience (CE). Design/methodology/approach The study performs in-depth review of literature to identify the factors of CE and uses confirmatory factor analysis to confirm these factors in Indian retail banking context. Post factor confirmation, it uses discriminant analysis to test the predictive strength of the CE factors for discretionary behaviors of customers. Findings CE factors are categorized as functional clues (convenience and credibility), humanic clues (employee competence and compassion) and mechanic clues (service context). The study finds that the functional clues are the most significant predictors of customers’ discretionary behaviors followed by humanic clues while the mechanic clues are only hygiene factors for customer behaviors. Practical implications The study highlights CE factors which could be developed into potential competitive advantages for banks. Banks can prioritize their investments in these factors for improved economic performance. Originality/value There is no clear definition of CE in the extant literature particularly, in the context of retail banking. A factor-level study of CE for discretionary behaviors of bank customers is an attempt to provide specific inputs to those banks which are looking forward to use CE as a means to win and retain customers in markets characterized by intense competition.
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