Abstract
With the performance of service personnel often constituting a major element of a service per se, the customer orientation of service employees (COSE) is often regarded as a main determinant of service firm's success. The purpose of this study is Understands how customer orientation (CO) of service employees (SE) affects customer satisfaction (CS), customer commitment (CC), customer retention (CR) and increasing service quality (SQ) in Iranian Islamic banking sector. This is based on 300 responses collected from customers using Iranian Islamic bank service in three provinces (Khorasan-e Razavi, Khorasan-e Shomali & Khorasan-e Jonobi), in private and governmental sectors. The results show that customer orientation of service employees (COSE) has no impact in customer retention in Iranian Islamic banking. Therefore, other hypotheses accepted. There are important variables in the service sectors that affect customer quality perception. This paper draws on the conceptualization suggested by Henning-Thurau and Thurau and tests model of COSE dimensions (Technical and Social Skills, Motivation and Decision Making Authority) and customer–sided consequence in Islamic banking in Iran.
Highlights
The financial service industry is changing rapidly
The results show that customer orientation of service employees (COSE) has no impact in customer retention in Iranian Islamic banking
It is important to note that Islamic banking in Iran is the biggest of Islamic banking institutions in the world and it has the primary effect in the mind of customers
Summary
The financial service industry is changing rapidly. Technology, government regulation, and increase customer sophistication are forcing financial service institutions to re-evaluate the current business practices. Financial institution across the global are re-examining how they are meeting their customer's needs today and developing business plans needed to align them strategically to remain competitive and profitable in the future. The concept of Islamic banking is gaining momentum in today's market. It has been reported that the establishment of Islamic banks and financial institutions have resulted from new challenges posed by the wave of globalization which has swept all fields of life worldwide (Rahman and Shaikh, 2002). Islamic banks operate in more than 55 countries with estimated deposits of over $100 billion. There are more than 200 Islamic banking institutions in operation around the world and they are one of fastest growing financial service markets in the Islamic world (Venardos, 2005). When banks start to offer similar products and service, it is the employee CO that can influence the performance of the Islamic bank and determine its competitiveness
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