The Role of Digital Innovation, Customer Analytics, and Financial Literacy in Enhancing Customer Lifetime Value in E-Banking

Abstract

This research aims to explore how these three factors influence CLV in the context of e-banking. A structured survey was conducted among 300 e-banking customers, and data were collected using a comprehensive questionnaire. The independent variables include digital innovation, customer analytics, and financial literacy, while the dependent variable is customer lifetime value. The study adopts a quantitative research design, and data analysis was performed using SPSS and PLS-SEM. The findings reveal that digital innovation significantly contributes to enhancing CLV by improving user convenience and service efficiency. Customer analytics, including predictive modeling and personalized service recommendations, was found to have a substantial impact on CLV by enabling banks to understand and address customer needs effectively. Additionally, financial literacy emerged as a crucial factor, with customers who possess higher financial knowledge engaging more with e-banking services and demonstrating greater loyalty. The study concludes that e-banking institutions should invest in digital technologies, leverage customer analytics, and promote financial literacy to maximize CLV. These strategies can help banks foster long-term relationships with customers, increase profitability, and stay competitive in a rapidly evolving market.