The notion of customer orientation is now importantly considered in the context of banking industries. Despite customer-oriented organizational cultures, there are few studies addressing the relationship between customer orientation and its outcomes. In particular, this study aims at testing the effect of customer orientation as a key marketing effort designed by a bank. This is because interest rate sensitivity is critical for evaluating banking services after raising the base rate. In so doing, first, this study investigates the relationships among customer orientation, interest rate sensitivity, and customer loyalty. Second, this paper examines how the moderating effects of both deposit interest and loan interest rates influence the linkages of customer orientation-interest rate sensitivity and customer orientation-customer loyalty. To test the proposed model, research data are collected from 304 subjects who use banking services(e.g., Shin-Han, Kookmin, the First Bank, Hana, and Woori banks). Each construct was measured by published items and the psychometric properties of the three constructs, excluding two constructs of the moderators, were evaluated by employing the method of confirmatory factor analysis via the use of AMOS. The model fit was also evaluated using the CFI, TLI, and RMSEA fit indices that are recommended based on their relative stability and insensitivity to sample size. The findings show that the relationship between customer orientation and customer loyalty is significant, whereas the relationships between customer orientation and interest rate sensitivity and between interest rate sensitivity and customer loyalty are not supported. Although customer orientation is highly evaluated, customers` interest rate sensitivity that results in the comparison of interest rates plays an important role in reducing the effect of customer orientation. As a consequence, interest rate sensitivity does not influence customer loyalty. First of all, one of interesting results in this study is that the moderating effect of loan interest rate is quite different from deposit interest rate. In the case of deposit interest rate, the linkages both customer orientation-interest rate sensitivity and customer orientation-customer loyalty are insignificant. In the case of loan interest rate, however, the two proposed linkages are supported. As our proposed relationships are still in its infancy in the context of banking industry, our study contributes to enhance scholars` knowledge of bank services and provides insights for practitioners when their marketing strategies, particularly both deposit and interest rates, have to be established. Finally, this research also illuminates the need for further research that considers the influence of customer orientation on consumer`s decision-making and bank profits. More specifically, the results are encouraging and will lead us to further investigate this key outcome of the banking deposit/interest rates.

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