Proceedings of The IRES International Conference, Kuala Lumpur, Malaysia, 31 st December 2016, ISBN: 978-93-86291-79-0 33 CRITEREAS EMPLOYED BY SRI LANKAN CUSTOMRES IN SELECTING FINACE FIRMS: AN EMPIRICAL STUDY H. M.C.G. BANDARA Department of Marketing Management, Sabaragamuwa University of Sri Lanka, Belihuloya, Sri Lanka A.A.M.D. Amarasinghe, Department of Accountancy and Finance, Sabaragamuwa University of Sri Lanka, Belihuloya, Sri Lanka Email: bandarac@mgt.sab.ac.lk, malithamarasingha@yahoo.com Abstract: The very dynamic nature of the service industry competition influences marketers to identify the customer base more effectively. Financial institutes in Sri Lanka should identify the needs of existing and potential customer base to reach the expectations profitably. In this process it is very much important to know what factors influence the customers in selecting the service provider in the finance industry. This study focuses on examine the factors influencing in selecting a finance firm as their service provider in Sri Lankan market. A total of 377 customers were selected using convenient sampling technique to find the influence on eight independent factors extracted from existing literature. Reliability analysis, factor analysis and multiple linier regression analysis were conducted in reaching the research objectives. Findings reveal that the principal factors influencing in selecting finance firms are reputation, easy banking process, bank appearance, convenience, bank staff, word of mouth advertising and quality of service. more interestingly cost of the service show insignificant for Si Lankan customers. Keywords; Customer Base, Finance Industry, Influencing Factors I. INTRODUCTION In industry wise the financial industry is playing a significantly important role in any economy of the globe. Further the dynamic nature of this industry is sky-scraping continuously since large number of service providers are operating with creating and delivering competitively greater value to its customers. The benchmark for the present dynamic nature of the Sri Lankan financial industry laid in the early 1990s, with the reforms aiming at strengthening institutional framework and decreasing government direct involvement in financial delivery (Central Bank Report, 1994). These reforms have led too important legislative and regulatory changes, better capacity for financial sector supervisions, improved system, process and performance and strengthening of Central Bank operations. However, the state continues to dominate the financial system with two large state-owned commercial banks. The state- owned banks account for nearly half of banking system assets and quarter of total financial sector assets. As per the details disclose by the Central Bank of Sri Lanka, there are 22 commercial banks, 09 licensed specialized banks and 48 numbers of Licensed Finance Companies registered in the country to provide financial services to the people in the country. Intense competition which generating through the competition make a significant challenge for the profitability of the financial firms of all size (Mokhlis, 2009) and it further signifies to be more focused on customer requirements. As per Kaynak and Kucukemiroglu, (1992) service providers should identify the factors which impacts upon customer choice and identifying the factors impacting the service provider selection would help marketers to make strategies in retaining existing customers while attracting new customers and potential customers (Kaynak, & Kucukemiroglu, 1992; Almossawi,2001). In this research the researcher focuses on investigating the factors influence on Sri Lankan customer’s decision of selecting a finance company for all kind of financial requirements. The idiom customer refers the individual who visits investment divisions of finance companies in Sri Lanka. Marketer may impressively be benefited through the outcome of this research in keeping existing customers profitably with the organization while attracting new and potential customer. II. LITERATURE REVIEW Research on the factors effecting in the selection of banks and financial institutions has been significantly increased and has made the significant contribution for richness of bank marketing literature ( e.g., Aregbeyen, 2011; Haque et al., 2009) The most important attribute in selecting an Islamic or a conventional bank for UAE customers being the religious preferences (Sayani and Miniaoui,2013) and for collage students bank’s reputation, parking, service providers friendliness, availability of automated teller machines (ATM) were influenced (Hinson et al., 2013; Mokhlis et al., 2008; Chigamba and Fatoki, 2011). Indeed technology that the bank use to provide a competitive service to customer for certain customer basses (Almossawi, 2001; Lenka et al. 2009). Convenience (Zulfiqar, Arshad & Fareed, 2014, Siddique, 2012, Lee and Marlowe 2003) and it is the principle factor (Sanyang, 2009) for customer selection.