Key Aspects of Consumer Decision Making in Selecting Financial Services on the Market of Bosnia and Herzegovina

Abstract

The paper analyzes the key aspects of consumers’ decision making while selecting financial services with the focus on respecting the duties of financial institutions to provide their consumers with the timely and comprehensive information on the content and effects of financial services by means of a standard information form. The aim of the research presented in the paper are: a) to identify the criteria guiding the consumers when selecting financial services, b) to ascertain the availability of the standard information form that financial institutions need to provide for their consumers of financial services, c) to establish the structure of the respondents in terms of their understanding of the content of the agreement on the usage of financial services, d) to define the correlation between the availability of the standard information form and the participants’ satisfaction with their decisions on using financial services. The research results indicate that the data on the amount of effective and nominal interest rate and the amount of monthly instalment are the key criteria that guide the participants when they decide to use financial services. In addition, the results show that financial institutions do not fulfill the duty to correctly and appropriately inform prospective consumers prior to signing the agreement and point to the low level of consumer financial literacy when it comes to understanding the content of the agreement on using financial services. The results of discriminant analysis confirm how important the need is for financial institutions to provide their consumers with comprehensive information in the process of negotiating and signing the agreement on using financial services. As the result of discriminatory analysis for the year 2020, 48.02% of the variations (changes) in consumer satisfaction by their decisions on selecting financial services is explained by the availability of standard information that financial institutions should provide in the process of negotiating and signing the agreement on using financial services.