Customer Retention in Digital Banking: The Role of Mobile App Experience and Personalization

The proliferation of mobile banking applications has transformed retail financial services, yet customer retention remains a persistent challenge as low switching barriers and intense competition erode loyalty. This study investigates the mechanisms through which mobile app experience quality and personalization influence customer retention in digital banking, with particular attention to the mediating role of satisfaction and the moderating role of perceived switching costs. Drawing on the DeLone and McLean Information Systems Success Model, Oliver's satisfaction-loyalty framework, and Burnham et al.'s switching cost typology, this research develops and tests an integrated structural model with five hypotheses. Data were collected through an online survey administered via the Prolific platform to 487 adults in the United States who use mobile banking at least weekly. The survey employed validated multi-item scales measuring mobile app experience quality, personalization, customer satisfaction, perceived switching costs, and retention intention. Partial least squares structural equation modeling (PLS-SEM) was conducted using SmartPLS 4 to evaluate both the measurement and structural models. Results indicate that mobile app experience quality exerts a strong positive effect on customer satisfaction (beta = 0.47, p < .001), which in turn significantly predicts retention intention (beta = 0.39, p < .001). Personalization positively influences both satisfaction (beta = 0.31, p < .001) and perceived switching costs (beta = 0.28, p < .001), while switching costs moderate the satisfaction-retention relationship (beta = 0.14, p = .003). The model explains 52% of variance in satisfaction and 41% of variance in retention intention. These findings advance theoretical understanding of digital banking loyalty formation and offer actionable guidance for financial institutions seeking to reduce churn through app design and personalization strategies.