Identification and Prioritizing Factors Influencing Bank Selection: A Case Study of Retail Banking in Tehran

In this paper, we aim at identifying and prioritizing the factors and sub-factors that influence bank selection in retail banking of Iran. To do this, a questionnaire of 33 questions is designed based on literature review and is given to customers where 400-filled questionnaires are gathered. Data is analyzed by use of exploratory factor analysis in order to identify factors and sub-factors through the questionnaire, use of confirmatory factor analysis in order to prioritize identified factors, and use of Friedman test in order to prioritize identified sub-factors. We identified three factors; welfare, economical, and social. In addition, numbers of sub-factors are identified; 10 sub-factors for welfare factor, 8 subfactors for economical factor, and 8 sub-factors for social factor. The most important subfactors for welfare, economical, and social factor are Bank branches locations, deposit interest rate, and bank goodwill respectively.