The Nexus Between Sustainable Banking, Customer Trust, and Bank Loyalty in the Bangladeshi Banking Industry: A Structural Equation Modelling Approach

Authors

• Rashed Mahmud Shakil, Uttara University, BangladeshFollow
• Md. Ashfikul Islam, Uttara University, BangladeshFollow
• Md Raihatul Islam Hridoy, Uttara University, BangladeshFollow

Author ORCID Identifier

ORCID identifier- 0000-0002-9933-2085

Abstract

The increasing customer demand for environmentally-friendly practices makes adoption of sustainable banking (SB) strategies a great opportunity for banks wanting to ensure greater loyalty among their customers. However, the impact of SB on bank loyalty (BL) of customers in the Bangladeshi banking sector is limited in the scholarly literature. Thus, the present research investigates the association between SB and BL and the intervening influence of customer trust (CT) in this association. The proposed research model was developed based on the Social Exchange Theory. The research utilized a purposive sampling technique and employed data obtained through 230 questionnaires distributed amongst customers of the banking sector. Using structural equation modelling through SmartPLS 4.0, the findings showed that SB has a positive and direct influence on CT and BL, and that CT positively influences BL. In addition, CT acted as a mediator between SB and BL. From a practical perspective, banks in Bangladesh must incorporate sustainability initiatives to reinforce CT, ultimately leading to increased BL in the long term. Furthermore, SB approach can be transformed into a strategic opportunity for policymakers and banking executives to get customers more involved and sustain the competitive benefits in the industry.

Keywords

Sustainable Banking; Customer Trust; Bank Loyalty; Structural Equation Modelling; PLS-SEM; Bangladesh.

Disclosure of AI Use

1

Clarification of Disclosure of AI Use

We have used Artificial Intelligence only for getting the theoretical knowledge regarding the relationship between Sustainable Banking, Customer Trust, and Bank Loyalty.

DOI

10.54784/1990-6587.1803

Journal of Economic Literature Subject Codes

G21, M00, M140, N250.

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Recommended Citation

Shakil, R. M., Islam, M., & Hridoy, M. I. (2026). The Nexus Between Sustainable Banking, Customer Trust, and Bank Loyalty in the Bangladeshi Banking Industry: A Structural Equation Modelling Approach. Business Review, 21(1). Retrieved from 10.54784/1990-6587.1803