Relationship between service quality and customer satisfaction: a study of Malaysian banking industry

Abstract

Service quality and customer satisfaction are some of the most important factors of business competition for banking industry. With the increasingly intense competition for customers in today's banking industry, these factors are high management priorities. Using data collected from 200 bank customers in two major cities in Klang Valley, Malaysia, we investigate whether the five dimensions of SERVQUAL have an impact on customer satisfaction in Malaysian banking industry. We found out that the expectations of Malaysian banking customers are higher than perceptions in terms of service quality and tangible dimension has the largest influence on customer satisfaction. The findings provide several implications for bank management to improve upon their customer service quality in order to benefit from customer satisfaction which will lead to greater competitive advantage and profitability to the institutions concerned.