The financial industry is one of the key players in the Sri Lankan economy, which provides a high income to the country. However, at the moment, the growth of the entire industry has stagnated due to some recent incidents such as the COVID-19 pandemic, the Easter Attack-2019 as well as the imposed Loan to Value (LTV) ratio restrictions; imposed taxes; time- to- time restrictions on importing vehicles; increased vehicle prices; increased leasing lending rates; decrease in fixed deposits (FD) and savings rates; increase in mortgage registration charges; and a reduction in the world’s economic activities. Since the market is not growing, it is very important to retain the existing client base with the company to create more business opportunities in the future (cross-selling and re-purchasing). This research was conducted to investigate the factors affecting customer retention in the finance industry, with special reference to one of the top finance companies in Sri Lanka. The survey strategy that was used to collect data from the sample of 360 was comprised of a well-developed numerically rated questionnaire while SPSS 20 was used to analyse the collected data. Many secondary data sources of ABC Finance PLC were gathered to identify the problem and conduct the research accurately. Therefore, the main objective of this research is to investigate the factors affecting customer retention. In order to create a suitable model for the research, the researchers performed a thorough literature review and discovered several variables relating to the problem. Finally, the researchers selected brand image, trust, switching barriers, service quality and price perception as the five independent variables and customer retention as the dependent variable, while the conceptual model was constructed based on these. Since it was created based on the literature review, this study was conducted as deductive research. Descriptive analysis, reliability analysis, correlation and coefficient analysis as well as regression analysis were done together with other necessary analysis to test the formulated conceptual model. Findings of the research proved that a positive relationship was shown by brand image, service quality, and trust and switching barriers towards the customer retention while the price perception was excluded from the model. Finally, researchers have submitted some recommendations in relation to the research problem and proposed a new conceptual model. Further, some distinct activities have been suggested by the researchers for the ABC Finance PLC in order to rectify this issue appropriately.
Keywords: Customer Retention, Brand Image, Trust, Switching Barriers, Service Quality