International Journal of Business and Management; Vol. 14, No. 11; 2019 ISSN 1833-3850 E-ISSN 1833-8119 Published by Canadian Center of Science and Education 263 Measuring Consumer Behavior in Banking: Scale Development and Validation Zaid Ahmad Ansari 1 1 College of Business and Economics, Qassim University, Buraydah, Qassim, Saudi Arabia Correspondence: Dr. Zaid Ahmad Ansari, College of Business and Economics, Buraydah, Qassim, Saudi Arabia. E-mail: drzaidansari@gmail.com Received: August 2, 2019 Accepted: September 11, 2019 Online Published: October 28, 2019 doi:10.5539/ijbm.v14n11p263 URL: https://doi.org/10.5539/ijbm.v14n11p263 Abstract The purpose of this paper is to construct a valid and reliable scale measuring consumer behavior with respect to banking industry. The study has highlighted that consumer behavior in banking industry can be measured by four factors banking services, consumer trust, employee behavior and the online services. These four factors have been measured using 26 items. The scale developed has shown high reliability, discriminant validity and has remained consistent across different samples. The findings have revealed that banking services is the most important determinant of consumer behavior followed by consumer trust, employee behavior and online services. Keywords: banking, consumer behavior, consumer trust, employee behavior 1. Introduction With the moderate recovery in the oil production levels and with the increase in the public spending World Bank estimates that Saudi Arabian economy is expected to expand in 2018 with a 1.8% increase in GDP. The year 2017 was a year of recovery and consolidation for banking sector in Saudi Arabia. The surge in interbank offered rate in 2017 had an overall positive influence on the profitability and an overall positive impact on the margins which was reflected in the ROEs and ROAs in 2017 (KPMG, 2017). In order to keep up the growth trajectory for the 2030 vision the financial sector of Saudi Arabia is committed to increasing the total size of financial assets to GDP ratio to reach 201% by 2020 from 192% registered in 2016. Banking sector organizations in Saudi Arabia need to become heavily focused on the customer because of the recent regulations aimed at enhancing transparency, demographic changes and the rise of fintech. At the same time, it’s very important that banks respond to these changes in a strategic manner. This all has made consumer retention very difficult and the ability to cross sell products to existing customers critically important in determining profitability. The only way to respond to these changes is to better understand the customer in an attempt to not only anticipate, but also to determine consumer behavior (Beckett et al., 2000). However, there is a dearth of studies which have studies the various factors which determine consumer behavior in the context of a developing country like Saudi Arabia. Researchers in this study have focused on Saudi Arabia which has a diverse immigrant population, sharia based legal and political system which makes this study an exclusive case point. There have been very few studies which have studies the acceptance of online banking like Al-Somali et al., (2009) but there are hardly any studies which have studies the overall consumer behavior in banking sector. Therefore, the purpose of this paper is to develop a reliable and valid scale to measure consumer behavior in banking sector. Second, to study the relative importance of those factors. 2. Background and Review of Literatures Consumer behavior is an activity of decision making, where an individual is engaged in evaluating, using, and disposal of goods and services. Advent of technology and increased use of internet forced the business into digital age affecting every aspect of routine life from acquisition of knowledge to analysis of products and services (Kim & Lennon, 2008). Banking sector is no exception here. Traditional banking services commonly provided in developed countries are still at budding stage in the markets of Middle East, which creates chaos among consumers, regarding quality of services. In this situation customers usually search for better alternatives (Kassim, & Souiden, 2007). It is a well-known fact that consumer is the “boss” indicating that company cannot