Dr. Arun Mittal Marketing 3.0.pdf

Global Business and Economics Review, Vol. 25, No. 1, 2021 51
Copyright © 2021 Inderscience Enterprises Ltd.
Modelling value based banking and customers’
banking choices in the era of Marketing 3.0:
an empirical study with logistic ordinal regression
approach
Garima Srivastav
Jaypee Business School,
Jaypee Institute of Information Technology (Deemed to be University),
A-10, Sector 62, Noida, UP-201309, India
Email: garima.srivastav@mail.jiit.ac.in
Arun Mittal*
Department of Management,
Birla Institute of Technology (Deemed University),
Mesra Ranchi (Off Campus Noida),
A-7, Sector – 1, Noida, Uttar Pradesh – 201301, India
Email: arunmittal@bitmesra.ac.in
*Corresponding author
Abstract: Marketers keep on evolving ways and means to attract as well as
retain the customers. During the last few decades, the marketing practices have
been changed rapidly. The consumers now wish to be associated with those
organisations and brands, which are ethical and follow high standards of
integrity. Such aspects have been incorporated in the concept of Marketing 3.0,
which is based on value-based matrix (VBM). The present study empirically
predicts the construct of VBM in the banking industry context. The sample size
of the study is 283. The logistics ordinal regression was applied with 27 items
to identify the predictive constructs of value-based banking. ‘Selection of bank
based on value system’ was the dependent variable and the independent
variables contained 25 statements covering value-based banking along with
2 covariates ‘age’ and ‘education’. It was found that ‘value-based banking’ and
‘education’ have significant impact on the dependent variable.
Keywords: Marketing 3.0; value-based matrix; VBM; value-based banking;
logistics ordinal regression; customers’ banking choices; empirical study.
Reference to this paper should be made as follows: Srivastav, G. and Mittal, A.
(2021) ‘Modelling value based banking and customers’ banking choices in the
era of Marketing 3.0: an empirical study with logistic ordinal regression
approach’, Global Business and Economics Review, Vol. 25, No. 1, pp.51–67.
Biographical notes: Garima Srivastav completed her executive certificate
program in Marketing Analytics and Customer Valuation from IIM
KASHIPUR. She is currently a co-investigator of a research project on
SNS consumption pattern during lockdown. She is a doctorate from Birla
Institute of Technology, Mesra Ranchi as a fulltime (teaching) Research
Fellow. She has completed a minor research project (funded) as a principal
investigator. She has reviewed and published ten research papers in
refereed/double blind peer reviewed journals including five publications in

52 G. Srivastav and A. Mittal
international SCOPUS/ABDC/SSCI indexed journals. She has 12 years of
experience in teaching and research. Her areas of interest are marketing
analytics, and social media analytics.
Arun Mittal is currently working as an Assistant Professor in Birla Institute of
Technology, Mesra Ranchi, Noida Campus. He holds a PhD in Marketing from
BIT, Mesra, Ranchi and Executive Certificate in Digital Marketing from
IIM-Kashipur. He has 13 years of experience in teaching and research in the
area of marketing. He has published around 20 research papers in journals
indexed in/ranked by SCOPUS, ABDC and SSCI. He has co-authored three
books in marketing and finance and supervised three PhD scholars in areas of
service quality in banking, pharmaceutical branding and consumer buying
behaviour for gold jewellery.
1 Background of the study
Marketing 1.0 and Marketing 2.0 were typically known for marketing to mind and
marketing to heart respectively. Marketing 3.0 creates a spirit of consumers for better
surroundings and support. It imbibes from the organisations contributing to the
environment as well as betterment of the society (Kotler et al., 2010). Marketing 1.0
focused on products and sales, Marketing 2.0 focused on what a customer wishes, while
Marketing 3.0 focuses on human spirit. The emergence of Marketing 3.0 has raised the
eyebrows of marketing practitioners towards the inclusion of human spirit in the
marketing, which was somewhat missing in the existing marketing practices (Kotler et
al., 2010). The perceptive of analysing the definition of marketing has altered, with the
intrusion of a new model of marketing, Marketing 3.0 (Kotler et al., 2010, 2011;
Leonidou et al., 2013). The initial marketing approach has become an obsolete
mechanism for the present day marketing activities. It revolved around the goods
produced by the company forgetting other aspects. The second generation of marketing
known as Marketing 2.0 (Kotler et al., 2010) was released during the excessively
enlightening era where information technology ruled the world. Customers nowadays
have the right to extract complete information about the product and have the freedom to
grab the best deal among available variants. The choice pattern of the customer varies
from one to other. Hence, there should be ample amount of variety for them to decide
upon. The evergreen decree that ‘positions the buyer is above all’, is followed by many
organisations. The Marketing 2.0 was an approach that centred on the ‘buyers’.
Popularly, the customer satisfaction is considered as an outcome of a purchase decision
where the customers’ expectations are met with the actual performance (Paul et al.,
2016). Lately, there happened a growth in the wave of Marketing 3.0 (Kotler et al., 2010)
where businesses focused and started highlighting values. This latest version of
marketing has inverted the insight of marketers. People are just not the buyers of a
product. They also consider emotional, logical, spiritual and living entity while making
their purchase decision.

Modelling value based banking and customers’ banking choices in the era 53
2 Originating the Marketing 3.0 in organisations
It is now imperative for the modern organisation to imbibe values in their respective
business operations, controlling a values-based culture and transferring these values to
the patrons through improved service. Corruption free cultural and administration of an
organisation is the very foundation of value-based business. The organisations must build
a strong corruption free internal culture by maintaining a higher level of social class,
which can significantly reduce the corrupt culture and administrative corruption (Jundi
et al., 2019). All around the world, the organisations follow the corporate governance
norms irrespective of the company size, number of employees, sector and ownership type
(Nassar and Jreisat, 2020).
The approach is all pervasive and is universally adopted by every business
organisation. Most sectors of operation consider business-value to be of utmost priority
(Enquist et al., 2007). The only way that businesses can enhance their services is through
fulfilling the values that are demanded by the society. Therefore, a thorough analysis of
expectations of the consumer as well as offerings made by the organisation is needed to
bridge the gap in the marketer and the seller’s outlook (Alejandro et al., 2011). An
optimistic business ambience needs to uphold people’s reliability and conduct business
operations as anticipated by them. For example, preserving product quality throughout
the supply chain requires focus and arrangement, which is influenced by the fundamental
standards as well as values of an organisation. The presence of conviction in business
transactions is a significant aspect in every organisation. In a reputed textile sector
situated in Tamil Nadu (a state in India), financial affairs were done based on trust and
benevolence. Debts were given on the recommendations by family, friends and
acquaintances. It was witnessed that two-thirds of the predictable fiscal necessities of this
city (Karur) were done through local financing method in spite of sufficient banking
amenities. The relevance of trust and goodwill was more than the institutional assistance
in case of financial proceedings. The particular mechanism facilitates companies to
develop trust among its related elements and any contravention of loyalty can be harmful
for the company’s goodwill. This in turn would create obstacles in the smooth operation
of business. Lastly, value-based selling is not only the sole function of the sales
department. There is a dire need to communicate throughout functional precincts in
recognising prospect for mutual contribution to this aspect (Anderson et al., 2007). The
importance of value selling as well as its steps are deciphered beyond operational
limitations and to connect several areas (e.g., marketing and sales) that can be utilised in
building a strong and entrusted system (Homburg and Jensen, 2007).The function of
values in companies prolongs to enlarge in a growing pace (Agle and Caldwell, 1999).
3 Acceptability and appreciation of value-based business
Conviction is a predecessor to assurance (Abosag and Lee, 2013). Business forces always
value highly assured relationships. Companies, irrespective of their size have started to
clinch on to pop-up retail as a modern marketing instrument to offer an empirical setting
needed by consumers, work on their brand image and magnetise concentration on freshly
build customers. The marketing environment today is highly pragmatic. It stresses on
endorsing a brand or product line, obtainable for a limited amount of time. It is usually in
lesser locations that assist in more physical indulgence of brand representatives and

customers. This is the top most factor of appreciation as there is transparency and truth
involved (Gordon, 2004). Frost et al. (2010) stated that different people believe in
different mode of trade and build a comfortable aura around it. With effective consumer-
oriented techniques used in different shopping applications, online businesses have also
started gaining prominence and confidence among customers. Carroll (1979) mentioned
that the multidimensional build of ‘corporate social performance’ (CSP) consists of the
constituent of corporate social responsibility (CSR) that attracts consumers unknowingly.
The notion is made up of four ingredients, namely; monetary liability to investors as well
as customers, lawful accountability to the administration, moral dependability and
optional duty to the community. The approval with progressive development is
omnipotent to compare between the primary and secondary stages or expositional
contentment because it might get over time with the post-progressive performance of the
organisation. It is important to scrutinise customer’s discernment towards unprincipled
business activities and their frequent rejoinders from time to time. Leonidou et al. (2013)
carried out a longitudinal study with a panel of consumers who would be traced for their
moral attitudes and behaviour towards an organisation at frequent intervals. The
following activity would aid in formative alterations in the creation of consumer
awareness of business immorality, particularly by considering situations taking place in
the macrocosm and microcosm of the consumers. Societal values are significant in ethics,
as individualism firmly manipulates customer approach and decision making (Oyserman
et al., 2002).
4 Literature review
4.1 Value-based matrix
Marketing 3.0 is based on the value-based matrix (VBM) model which entails the
components of human spirit (compassion, sustainability and making a difference)
connected to the mission, vision and values of an organisation.
Kotler et al. (2010) have very critically explained the value driven matrix. The VBM
is a matrix in which on the X-axis there are three attributes namely mind, heart and spirit
of an individual (recent and upcoming purchasers). On the Y-axis, there are mission,
vision and values of the company. Corporations, while delivering satisfaction to the
customer brand should be focusing on realising aspiration and practicing compassion at
the highest level somewhere. The company’s vision should not only be restricted to
earning profit but also to create returns generating capacity and provide sustainability to
the customers at the highest level. Company must also evolve itself from better brand to a
brand, which can be differentiated from others and further evolving to such a brand. This
will certainly make difference to its current and future employee.
Value-based practices have been earlier conceptualised as a combination of the three
types of capitals – social, environmental and economic (Hawken et al., 2017), which are
also known as – triple bottom line (TBL). Gradually the sustainable development has
been embedded in every sphere of economic and other activities to ensure overall growth
of humankind which is perpetual as well as long lasting (Roberts and Cohen, 2002).
Slowly and steadily, value-based marketing has attained high importance. The
organisations may compromise with the short-term profits for long-term sustainability
(Doorasamy and Baldavaloo, 2016).

4.2 Value-based financial services
Lewis (1987) states the fundamental nature of every financial service that the final giver
and receiver entrust on the economic resolution designed by an external party involved in
the financial services. With the lack of conviction, the allocation cannot extend ahead.
Acquiring a unit trust, insurance cover and pension fund or asset management policy
involves substantial reliance in the stewardship of the financial organisations. It is
impossible for the clients to monitor the activities performed by the institutions and the
possibilities under which it works. Superiority of services is difficult to validate, values
are complex to implement and the services delivered are often irretrievable. In the
above-mentioned situations, goodwill is an indispensable asset that can decrease the
ethical vulnerabilities. Fleck and von Lüde (2015) define that personal trust is an
individual aspects based on status and experiences gained through frequent
communications. The credibility is a constructive framework to inspect the expense angle
of the consumer assumed value and its pertinent alteration over an expense of service
prerequisite; as clients renew their insight while gaining experience. Credibility related
services are characteristically multifarious, intellectual and enduring in nature (Dagger
and Sweeney, 2007). The financial services are a kind of credence service where quality
cannot be analysed even after utilisation (Bell and Eisingerich, 2007). There is a
co-survival of values that oppose each other. The pervasiveness of diverse enriching
values conveys the co-existence of challenging values in spite of its movement, while the
fundamental values of the society remain constant (Lin, 2001). This has caused an ethical
transformation in the last few years (Han and Shavitt, 1994).
4.3 Value-based banking
Over a period, the customers’ preferences have also changed for the organisations they
deal with. Core values mentioned in the vision and mission of the organisations integrate
its intellectual capital communicating the business spirit of the organisation to its
stakeholders. Banking is one of those industries that have transformed largely in the last
few decades specially the way they operate their business. Banking sector has always
been in the forefront to take up sustainable means of operations to ensure and implement
the value-based practices. Bankers understand that the same will affect their long-term
profitability and sustainability. The need for inheritance of value-based relationships
among bank employees is the very foundation of value-based banking operations and
their sustainability. The concern for people and platen is being established as a culture in
the organisations around the world (Wilson and Post, 2011).
4.3.1 How banking is different from other businesses?
Banks provide financial intermediation service to its clients – borrowers and lenders
(depositors). This process requires bankers to examine and manage the activities through
its personnel. Marketer-customer relationship in banking context is more crucial than in
any other business and that is why the marketing strategies in banking context
implemented differently (Gupta and Mittal, 2008). The information about the borrowers
is extracted at different levels of scrutiny and a long lasting relationship is instituted
between the customer and banker. The particular process can lower agency issues like

disagreement of interests and can also minimise the need for credit screening and reduce
supervision expenses (Perera et al., 2010).
The working model of banking institutions is not similar to other sectors. The risk
management and generation of values in banks are done in the most loyal manner. The
banks cannot entirely tarnish the understanding and capitalise on value. For example, by
creating multifaceted or elevated marginal monetary services for its customers as
inadequately screened transactions and consumer chains can result to an increase in the
information irregularity. It may also result in deficiency with clients along with an
accentuated menace in fiscal firm and mechanism. Therefore, initial priority of business
models followed by banks stresses more on risk management and value creation. Banks
have started gaining interests in producing professed value of consumers. They have also
witnessed increased level of displeasure by the clients. However, the preference of
consumers is not elucidated precisely. The need to prioritise value of consumers is an
essential concept for all banking institutions. Many banks have incurred on CRM and
data warehousing apparatus. However, many monetary units have a long way to go in
order to recognise the facts that are significant and can be effectually utilised for the
creation of value-based customers. An adaptable and affordable competitive benefit
happens when any business big or small, applies a value-creating policy that has not been
implemented by other businesses. For instance, a bank with excellent headship
capabilities in managing ethical convolution and building managerial veracity
competence improves its status with numerous stakeholders. It then looks forward to
competitive improvement, contrary to banking institutions having no leadership approach
and essence (Petrick and Quinn, 2000).
4.3.2 Banking and sustainability
There has been a paradigm shift in the ways of conducting economic activities
throughout the world. The business practices have been shifted from profitability to
sustainability. In the present context, the industry has accepted to maintain a balance
between profitability and sustainability (Ramnarain and Pillay, 2016). Since banking
sector is the backbone of an economy, this sector remains under a serious surveillance
and bounded with regulations so as to reduce the chances of financial irregularities. As
per KPMG report (Straw, 2013), the banking sector pressurises globally to operate more
sustainably as well as to be more transparent about its economic, social and
environmental impacts. Moreover, the banking sector should use its resources in such a
holistic way that in the long-term it can blend the corporate culture with operational
excellence and at the same time can bring a socially responsible focus on the customer
(Gelder, 2006).
Sustainable banking is concept that is more complex than green, energy efficient
ways; as it is based on the idea of bringing the spotlight on the customers and their
well-being. Customers make an organisation, hence needs of the customers are the most
prominent aspect of the service sector, especially the banks. A ‘seamless blend’ between
the corporatisation of the banking culture along with an attitude to make the customers
feel most comfortable can make the banking experience sustainable in the 21st century
(Gelder, 2006).

4.3.3 Tenets of sustainable banking
Banks need to synergise their resources in a manner which lead to sustainability as being
stated by Straw (2013) who speaks of six C’s of sustainable banking – clients, culture,
compliance, compensation, costs and capital. Clients these days are tech-savvy with
practical understanding in general. Their loyalty is ever decreasing when their demands
and wishes are not being fulfilled. Therefore, it was suggested that banks should focus
more on their clients in a culture where things are becoming more and more global day
by day. Sustaining the culture and complying with them are therefore key components of
sustainable banking. It is necessary that the banks should focus on decreasing
compensation to survive and make profit in the long-term. Similarly, cost-cutting
strategies should be undertaken reflecting the great managerial sustainable acumen.
Capital to increase equity levels should also be the focus to think in terms of potential
return in the long run and thus sustainability should be ‘at the heart of strategies’ of the
banking sector (Eccles and Serafeim, 2011). If a bank can take up the six C’s as stated by
Straw then it can look forward to a better future not only for itself, but also for its
customers as well as the planet.
4.3.4 Banks and triple bottom line
Banks play a crucial role in the higher capitalist system. There are multifarious banks
offering their services with the aim of making profit. They need to understand that in the
present time of a growing awareness of sustainable development, no institution,
especially banks, can think of doing business if it does not follow the principles of TBL –
profit, people and planet. It is not just the CSR which should make them take up some of
the environmental friendly steps. It is also their role to create sustainable world so that we
can survive for a longer period. TBL makes a rallying cry for businesses trying to address
sustainability (Oberio, 2014). If TBL is not being followed by any bank then it is leading
towards its own doom at its own cost.
All financial institutions contribute to the society by providing services. But, when
choices are available, to choose from institutions which have greater social awareness
and concern, one feels more connected to them. It is noted that the economic
development of any developing nation such as India is directly linked to the growth of
financial institutions (Tripathy and Pradhan, 2014). Financial institutions can only grow
when they gain the faith of their customers. To achieve this, banks necessarily need to
develop the model of their business according to the line of TBL so that they give more
significance to the people than profit. Planet is important but the planet without people is
of no use as far as the profit of the banks is concerned. Therefore, it is extremely
important that the banks look after the ‘people’ – their customers in such a fashion that
they feel that their needs are taken care of. It is only by looking after and by caring for the
people that the banks can take care of their profit as well as the planet.
4.3.5 Technology-enabled sustainability
Technology-enabled services, if intelligently used by bank and its systems, many key
issues related to sustainability can be easily solved. It cannot only make banking services
more effective but also more efficient (Walker, 2007). Economic use of resources can be
ensured when banking is done through technological devices using the information
technology (IT) and internet connectivity. Using technology can make it become

operationally more productive while leading to customers having a seamless experience
of the banking services. The internal processes of bank can also be streamlined using
technology, which can lead to more effective managerial control as well as
corporatisation of the banking culture (Case, 2012), Overall, use of technology enables
banks to not only go green, but also to adopt effective mechanism making the ways of the
banking sector more rationalised.
In a globalised world, where people are no more limited to the place of their birth and
when mass migration as well as faster communication is the means through which the
world is gradually becoming a smaller place; it is essential that banks do realise that they
need to get into an extremely potent role. This role is of being global in its services and at
the same time local in its outlook so as to deal with the stakeholders in a manner which
does not in any way hurt their sensibilities. What is required therefore is a value-based
approach – an approach where the customer or the stakeholder is given prime importance.
4.3.6 Green banking
The notion of green banking is a new concept, which is still in the process of its
evolution. The stakeholders as well as regulatory bodies are yet to formalise a concrete
concept of the same, though it is considered a significant element of the CSR (Sharmeen,
2018). It is still in its infancy, but still the awareness amongst the stakeholders is already
in a great acceleration. According to Nielsen’s (2011), global online environment and
sustainability survey, it is being found out that about 90% of Indians surveyed were much
concerned about air and water pollution and 80% were of the opinion that climate change
was an environmental issue, which needs to be taken seriously. In such circumstances, it
is necessary that the banks also respond to the ways as well as means of the people and
take up green banking as their motto so that they can make a positive impact in the
society. Green banking strategy and ideology has been adopted since 2012 with the
establishment of the sustainable banking network (SBN) by the International Finance
Corporation (IFC). However, out of 35 SBN member countries, 15 countries have
launched national policies, guidelines, principles or roadmaps focused on green banking
(IFC, 2012) and more needs to toe the line sooner so that the world can look forward to a
better, greener environment. Sahoo and Nayak (2007) presented green banking effort
with a new perspective by recommending that the banks should give priority in lending to
those organisations, which follow green banking practices. Value-based practices and
environmental friendly banking has been well highlighted in the extant literature. A
positive correlation has been found between environmental performance and financial
performance (Hamilton et al., 1993; Hart and Ahuja, 1996). The green-banking efforts
are considered as change in the strategic orientations of banks wherein the banks aligned
their goals sustainability of the environment in which they operate (Almandoz et al.,
2017). Le et al. (2019) found that there is a resistance to change and attitudinal
ambivalence in the consumers towards the green products. Hence, the marketers need to
form effective strategies to target green consumers.
India needs to take proactive steps in the banking sector to make the notion of green
banking a reality as soon as possible. If green banking is not taken up immediately by the
banks then it may lead to the banks losing customers as people are educated. The banks
need to live up to the sensibilities and concerns of the educated to be their choice of
financial dealings.

4.3.7 Customer relationship management
In banking sector, business depends on how the banks manage their relationship with the
customer. In other words, it can be said that customer relationship management is putting
the customer at the heart of the business (Singh and Rahul, 2010). It is because of this
that most financial organisations are spending six times more to acquire new customers
than to keep them. Acquiring new customers as well as to keep the needs and demands of
the existing customers is the core of the relationship management of the banking sector as
more satisfied customers will bring more new ones. In this effort to satisfy the needs of
the customers, the technology-based delivery system of the banking sector such as
internet-banking, tele-banking, mobile banking and automated teller machines (ATMs),
etc. have a great role to play. These are the modern amenities, which are both green as
well as cost cutting measures. The tremendous cost advantages of these technological
amenities (Shainesh and Choudhary, 2004) can make the situation a win-win for both the
banks as well as the customers. It is evident that customer Relationship Management is a
significant strategy to both acquire as well as retain the most valuable customer’s
relationship (Croteau and Li, 2003; Kracklauer et al., 2001; Verhoef and Donkers, 2001).
Marketing 3.0 can be analysed through different aspects. We have focused on the
basics of creating communities, personalisation, brand identity and co-creation with
consumers. What the consumer thinks, feels and needs are important in order to generate
products as well as services based on the knowledge gained. The customer is always
included in the productive process. This way not only is a customer secured, but a brand
ambassador is gained.
4.4 Novelty of the research
In view of the various literature surveyed and analysed above, It can be clearly seen that
there is no mention of Marketing 3.0, VBM and its implication in Banking sector, i.e., to
use a financial tool for greater good. This research suggest ways to modify the current
banking processes for the sustainability of the environment and social good of the
society. No research has clearly indicated the implications of VBM and banking system.
Hence this paves way for the current research very clearly. Further, the objective of the
research highlights the use of strong statistical tool like logistic ordinal regression which
is why this study is immensely accurate, pertinent and quintessential in today’s
perspective. Confluence of these two pertinent subject areas (VBM and banking sector)
makes this study distinctive and pioneer in this category.
5 Objectives of the study
 to predict the construct of value-based banking of Indian banks from VBM
 to develop the model based on the predictive results.

6 Methodology
The present study is exploratory cum descriptive in nature. In this paper, for the purpose
of measuring value-based banking, 27 items were formulated. Total of 500
branch-banking customers were contacted from different nationalised banks in India.
Approximately300 customers were contacted through broadcasted Google forms (150 by
each researcher). Researcher one targeted only professional, engineer, faculty members
of professional UG and PG colleges/universities), while researcher two broadcasted the
Google form amongst the Facebook friends. Remaining 200 customers were targeted
through survey monkey (100 by each researcher). The data was collected over a time
period of two years from 2018 to 2020.The first round of Google forms were circulated in
the month of April 2018, where 48 and 45 responses were received by researcher one and
two respectively. The second round of Google forms were circulated in the month of
December 2018, when 49 and 48 responses were collected again after one reminder in the
month of January 2019. The third round of Google forms were circulated again in the
month of April 2019 followed by reminder in the month of May 2019, where 17 and 19
responses were collected again by both the researcher. The fourth round of Data
collection was done through Survey Monkey wherein 33 and 23 responses were collected
respectively by both the researchers. The total response received was 283 out of 500
circulated questionnaires resulting into 57% response rate which falls within an
acceptable response rate for panel web-based surveys (Sax et al., 2003). Incomplete
questionnaire data, (n = 217) from the participant were removed from the study.
VBM: Kotler et al. (2010) have very critically explained the value driven matrix. In
this matrix, on the X-axis there are three attributes – mind, heart and spirit of an
individual (recent and upcoming purchasers), while on the Y axis – mission, vision and
values of the company have been shown. While delivering satisfaction to the customer
brand, we should be focusing on realising aspiration and practicing compassion at the
highest level somewhere. The company’s vision should not only be restricted to earning
profit, but also the return earning ability and providing sustainability to the customers at
the highest level. The company must also evolve itself from better brand to a brand,
which can be differentiated from others and further evolving to such a brand, which
certainly will make difference to its current as well as future employees. Based on the
various parameters of the VBM, 27 items have been shortlisted related to the banking
services and customers’ experience. The logistics ordinal regression is applied on these
27 items to identify the predictive constructs of value-based banking. The dependent
variable (DV) here is ‘I prefer a bank whose value system is based on achieving the TBL
principles’ basic fundamentals of VBM of Banking 3.0. This is a DV in relation to two
types of independent variables (IV) – factors and covariates. Here, the first type of IV 1
called factors, includes 25 different variables of banking 3.0. From Table 1 we can
clearly see the 25 different kind of IV1. While IV2 also called as covariates comprises of
two variables ‘age’ and ‘education’.
7 Analysis and interpretation
From Table 1 (model fitting information), we can see a highly significant reduction in the
chi-square statistics = 0.000. This is less than the assumed level of significance
(p < 0.05). So, the model is clearly a significant.

Table 1 Model fitting information
Model –2 log likelihood Chi-square Df Sig.
Intercept only 442.181 – – –
Final 0.000 287.597 30 0.000
Link function: logit.
The Nagelkerke R2
indicates that the model can account for 79.2% of the variance in tier
of entry (Table 2).
Table 2 Pseudo R-square
Name of the test
SCox and snell 0.638
Nagelkerke 0.792
McFadden 0.621
Link function: logit.
What constitutes a ‘good’ R2
value depends upon the nature of the outcome and the
explanatory variables. Here, the pseudo R2
values (e.g., Nagelkerke = 79.2%) indicates
that IV1 and IV2 explains major proportion of the variation between various attributes of
VBM. The high R2
indicates that a model containing IV1 and IV2 is likely to be an
absolute predictor of the outcome for any items in VBM.
The parameter estimates table is the core of the output, telling us specifically about
the relationship between our explanatory variables and the outcome. This represents the
response variable in the ordered logistic regression. The threshold estimate for [I prefer a
bank whose value system is based on achieving the TBL principles = 3.00] is the cut-off
value between low and middle [I prefer a bank whose value system is based on achieving
the TBL principles and the threshold estimate for I prefer a bank whose value system is
based on achieving the TBL principles = 4.00] represents the cut-off value between
middle and high. A bank that considers to satisfy its customers with their mind (DV). For
[I prefer a bank whose value system is based on achieving the TBL principles = 3.00] this
is the estimated cut-point on the latent variable used to differentiate low DV from middle
and high DV, when values of the predictor variables are evaluated at zero. Subjects
having a value of 29.276 or less on the underlying latent variable that gave rise to our DV
variable would be classified as low DV. These are the ordered log-odds (logit) regression
coefficients. Standard interpretation of the ordered logit coefficient is that for a one-unit
increase in the predictor, the response variable level is expected to change by its
respective regression coefficient in the ordered log-odds scale, while the other variables
in the model are held constant. Interpretation of the ordered logit estimates is not
dependent on the ancillary parameters; the ancillary parameters are used to differentiate
the adjacent levels of the response variable. However, since the ordered logit model
estimates one equation over all levels of the outcome variable, a concern is whether our
one-equation model is valid or if a more flexible model is required. The odds ratios of the
predictors can be calculated by exponentiation the estimate as shown in Table 3.

Table 3 Coefficients and significance
Sr.no. Attributes Estimate Wald (p) Sig VBM
1 [I prefer a bank whose value system is based on
achieving the triple bottom line principles = 3]
29.276 40.378 0.000 Spirit *
value
2 I prefer a bank whose value system is based on
achieving the triple bottom line principles = 4]
40.448 45.670 0.000 Spirit *
value
3 I prefer to avail the services of the bank that has
a high mission of contributing to the society
–2.715 7.219 0.007 Heart *
value
4 I prefer to avail the services of the bank whose
services reflect that it wants to make the world a
better place to live
3.293 16.349 0.000 Spirit *
mission
5 I prefer dealing with the bank that believes in
innovation and sustainable growth
1.314 7.299 0.007 Spirit *
vision
6 I prefer a bank that has a vision to be a leading
global enterprise contributing to the humanity
2.105 13.401 0.000 Heart *
value
7 A bank that considers to satisfy its customers
with their mind
–1.260 9.941 0.002 Mind *
value
8 I prefer bank that has adopted ecofriendly
processes in banking(for example – paper free
banking)
–1.531 7.357 0.007 Spirit *
value
9 I prefer the bank that reaches with services to
my mind and soul rather than simply satisfying
the Banking needs *
2.171 10.554 0.001 Spirit*
value
10 I feel contended to be a part of bank or services
which benefits even the smallest customer
–1.721 12.769 0.000 Heart *
vision
11 I would prefer a bank while banking with which
I feel internally empowered
2.100 23.725 0.000 Mind *
mission
12 Education 3.425 8.213 0.004 –
From Table 3, we can clearly see that ten items have come out to be the part of predictive
construct. Whereas the DV being I prefer a bank whose value system is based on
achieving the TBL principles while all the other nine items being IV1 and 1 being IV2.
From Table 3, we also see that out of the two covariates (IV2) ‘age’ and ‘education’, only
‘education’ tends to be a part of the predictive model. Here, ‘age’ is dropped (on account
of it being insignificant, i.e., p > 0.05) and education is the strong determinant while
defining the predictive model.
From Table 4 of ‘test of parallel lines’, we can see that the sig value = 1.000.
Table 4 Test of parallel lines
Model –2 log likelihood Chi-square Df Sig.
Null hypothesis 0.000 – – –
General 0.000 0.000 30 1.000
Here, SPSS tests the proportional odds assumption. This is commonly referred to as the
test of parallel lines because the null hypothesis states that the slope coefficients in the
model are the same across response categories (and lines of the same slope are parallel).
Since the ordered logit model estimates one equation over all levels of the response
variable (as compared to the multinomial logit model, which models an equation for

medium DV versus low DV and an equation for high DV versus low DV, assuming low
DV as referent level), the test for proportional odds helps to assess whether our
one-equation model is valid. If we were to reject the null hypothesis based on the
significance of the chi-square statistic, we would conclude that ordered logit coefficients
are not equal across the levels of the outcome. Here, we would fit a less restrictive model
(i.e., multinomial logit model). If we fail to reject the null hypothesis, we conclude that
the assumption holds. For our model, the proportional odds assumption appears to have
held because the significance of our chi-square statistic is 1.000 > 0.05.
8 Proposed predictive model
Figure 1 Value-based banking model (see online version for colours)
9 Conclusions
The industry as a whole has a long way to go before it truly earns back the trust of its
customers. A select few institutions from the India and abroad are dedicated to use
finance as a tool for social good, rather than solely as a means to make a profit. These
financial institutions assess investments, products, lending and other services for their
ability. This will foster positive as well as sustainable economic, social and
environmental development. These ‘values-based banks’ see sustainable development as
essential to their business and operating models. Values-based banking is a diverse
movement drawing in community banks, ethical, green and socially oriented banks
including cooperatives, credit unions, privately owned banks, B corporations as well as

public companies, which are purposively oriented towards the development of a
sustainable economy.
This paper identifies ten different attributes that need to be at the ‘TBL’ (mind, heart
and soul of the organisation) of a sustainable or values-based financial system, which can
be precisely read as sustainability, transparency, diversity/fairness and inclusion. For
consumers, it can sometimes be difficult to see the link between where the account is
opened and how the bank can affect broad, ambitious and positive social change. We
know that the foundation of banking is the deposit of the capital as loans to individuals,
businesses, non-profits and government enterprises. That means that larger the deposit
base is, the more customers a bank has and hence the more influence a bank can exercise
over companies as well as communities through loans, investments and direct
contributions. Despite the public image of banks as a whole, values-based banks more
often forego short-term opportunities for profit in favour of sustainable, forward-thinking
investments and services that actively improve the communities they serve. In this study,
we can clearly see the predictive model for value-based banking that includes all the
quadrants of VBM. The TBL principle can be assumed as the base of VBM, while all the
other ten items contribute in its framework. The predictive model represents all the ten
items through VBM while only ‘education’ is the additional item though not a part of
traditional VBM. Hence, with the help of suggested predictive model, banks must take
cognisance of all ten items and must include it in their banking practices to leave their
customer satisfied with their mind, heart and soul.
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