Evaluating The Effectiveness Of Third-Party Product Sales Through Banking Distribution Channels: An Empirical Study Of Retail Consumer Behaviour In NCR

Abstract

This study empirically evaluates the effectiveness of third-party product sales (e.g., insurance, mutual funds, credit cards) through banking distribution channels in Delhi NCR, with a focus on retail consumer behavior. While banks increasingly rely on cross-selling third-party financial products to boost non-interest income, significant gaps persist in understanding consumer adoption drivers and barriers in urban Indian markets. The research employs a quantitative methodology based on Structural Equation Modeling (SEM), analyzing survey responses from 252 retail banking customers across Delhi NCR. Grounded in the Theory of Planned Behavior (Ajzen, 1991) and Trust-Commitment Theory (Morgan & Hunt, 1994), the study examines how perceived value, trust, convenience, and social influence shape purchase intentions. Key findings reveal: Perceived Usefulness (PU) is the strongest predictor of adoption (β = 0.42, p < 0.01), confirming consumers prioritize functional benefits over ease of use (PEOU: β = 0.28). Trust in banks mediates 32% of purchase decisions, with relationship managers’ credibility being pivotal. Digital channels drive 68% of sales among younger demographics, though in-branch interactions remain critical for older customers. Mis-selling concerns (reported by 22% of respondents) and product complexity are key adoption barriers.

This study contributes to literature by integrating trust metrics into TPB frameworks and providing Delhi NCR-specific insights for financial service design. Limitations include geographic focus on urban consumers, warranting future research in rural markets.