Validation of three-path mediation modelling of service quality and behavioural intention relationship in retail banking

PurposeThe purpose of this paper is to evaluate the service quality in retail banking in the Middle East in general, and Qatar in particular, based on different levels of customers' perception regarding service quality.Design/methodology/approachThis is an analytical study based mainly on the primary data collected through a scientifically developed questionnaire. The questionnaire have been personally administered on a sample size of 120, chosen on a convenient basis from four Qatari banks, i.e. Qatar National Bank, Doha Bank, Qatar International Islamic Bank, and Arab Bank. The questionnaire has been designed on the basis of the study of previous scholars such as Berry et al., Parasuraman et al., Zeithaml and Bitner, and Stafford.FindingsThe result indicates that customers' perception is highest in the tangibles area and lowest in the competence area.Practical implicationsIn order to achieving higher levels of quality service in retail banking, banks should deliver higher levels of service quality and in the present context customers' perceptions are highest in the level of infrastructure facilities of the bank, followed by timing of the bank, and return on deposit. Owing to the increasing competition in retail banking, customer service is an important part and bank managers should be rethinking how to improve customer satisfaction with respect to service quality.Originality/valueThis paper makes a useful contribution given that there are only a few studies dealing with the assessment of service quality in banking environments.

The goal of this study is to identify the interrelationships between service quality, customer satisfaction and customer loyalty in the retail banking sector in Hong Kong. The study also aims to find out the most important attributes of service quality in retail banks, which can be used to evaluate the characteristics of banking service quality as perceived by customers. A sample of 119 retail banking customers was drawn from the Hong Kong and Shanghai Banking Corporation (HSBC) in Hong Kong. The questionnaire developed for this study was based on a SERVQUAL model that identified the influence of five dimensions (i.e. tangibility, responsibility, reliability, assurance and empathy) in banking service environments on customer satisfaction. The results indicate that the five SERVQUAL dimensions have a positive influence on customer satisfaction. Tangibility, responsibility, reliability and assurance were more significant in contributing to customer satisfaction, while empathy was the least significant. This study suggests that SERVQUAL is a suitable instrument for measuring service quality in the retail banking sectors in Hong Kong. Hence, banking industry practitioners can consider this instrument as a tool to assess and help improve their service quality. Keywords: SERVQUAL, Service Quality, Customer Satisfaction, Customer Loyalty, Banking Industry, Hong Kong To cite this document: Mei Mei Lau, Ronnie Cheung, Aris Y. C. Lam, and Yuen Ting Chu, "Measuring Service Quality in the Banking Industry: A Hong Kong Based Study", Contemporary Management Research, Vol.9, No.3, pp.263-282, 2013. Permanent link to this document: http://dx.doi.org/10.7903/cmr.11060

Service quality is believed to be one of the main determinants of customer satisfaction and purchase intention. However, there are very few studies that have been conducted to identify the important dimensions of service quality specific to banking sector. The present study is aimed to assess and compare the perceived level of bank service quality and to investigate the dimensions of quality banking service in private and public sector bank using an instrument banking service quality scale (BSQ) specifically designed for measuring service quality in banks. The study is based on the responses collected from 240 customers banking with private and public sector retail banks in India. The results show that the customers of public sector and private sector banks differ in terms of their service quality perceptions. Private banks are perceived to be superior on the service quality dimensions: effectiveness, access and tangibles whereas, the public sector banks score better on the dimensions of price and reliability. The study concludes that the BSQ instrument appears to be a valid instrument to measure the service quality in Indian retail banks.

Purpose– The purpose of this paper is to explore the influence of the dimensions of service quality on customers’ word-of-mouth (WOM) in the context of the retail banking industry.Design/methodology/approach– A modified SERVQUAL instrument was used to capture customers’ perceptions of service quality followed by exploratory factor analysis to study the dimensionality of service quality in retail banking. Multiple regression was used to probe the influence of the dimensions of service quality on WOM.Findings– The study revealed four dimensions of service quality in retail banking, namely, attitude, competence, tangibles and convenience and showed that the service quality factor attitude is most important in influencing WOM.Research limitations/implications– Continued refinement of the scale for measuring service quality in retail banking, proposed in this study, is certainly possible based on further research and trends in retail banking. Further research may also incorporate multiple measures of the WOM construct.Practical implications– Retail bank managers must realise the importance of employees’ attitude towards customers, be sensitive to the intangible aspects of the service, particularly the customer-orientation of its frontline personnel and engender and continuously rejuvenate a customer-oriented culture. This is because, the provision of personalised, courteous service and helpful employees who understand the customers’ needs is the strongest driver for WOM.Originality/value– This study explores the relationship between service quality and WOM by linking both constructs at their dimensional level. This increases the diagnostics of explaining customers’ propensity for WOM.

Like other service institutes, developing and managing quality service is a challenging issue in retail banks. Recent studies established that retail banks' customer satisfaction can be managed with a total quality management approach. It is accepted by prior literature that service quality (SQ) is a multilevel and multidimensional construct; however, the SQ dimensions of retail banking are still considered one-dimensional. The purpose of this study is to develop theoretical conceptualisations and validate an SQ model for retail banks. A positivist epistemology using a mixed method research approach has been adopted for this study. A research model has been developed from the literature which was contextualised by a cross-country qualitative field study. The model is validated with partial least square-based structural equation modelling. The results of this study summarise that retail banks' SQ is a third-order reflective model where SQ can be explained by station, interaction, and outcome quality. Furthermore, these three dimensions reflect nine sub-dimensions in total. This paper focused on managing total quality issues of a retail bank through service quality tools. With the objective of acquiring total quality, bank managers and other management personnel may develop strategies and policies using the findings of this study.

Purpose– The purpose of this paper is to explore how the different dimensions of service quality influence customers’ behavioural intentions in the private and public sector banks, that is, in class and mass banking, respectively, and the implications for the service provider, consumer, society and consumer policy.Design/methodology/approach– A contextually modified SERVQUAL instrument was used to capture customers’ perceptions of service quality followed by exploratory factor analysis to study the dimensionality of service quality in retail banking. Multiple regression was used to probe the influence of the dimensions of service quality on customers’ behavioural intentions.Findings– The study revealed four dimensions of service quality in retail banking, namely, customer-orientedness, reliability, tangibles and convenience and showed that the service quality factor customer-orientedness comprising of the responsiveness and attitude of employees is most important in influencing customers’ behavioural intentions in the case of private sector banks and reliability of the service is most influential in the case of public sector banks.Research limitations/implications– Future research can focus on “service excellence” being extended beyond assessment of the quality of services, towards evaluation of the quality of life outcomes, to which public organizations contribute, appraisal of the quality of public governance processes and quality of performance in meeting social objectives.Practical implications– Retail bank managers must realize the importance of employees providing competent, reliable service in the case of public sector banks and their responsiveness and behaviour towards customers in the case of private sector banks, as the keys to foster a culture of service excellence.Social implications– High-quality financial consumer policy must not only be able to increase customer satisfaction with financial services but also build security and trust in public administration through transparent processes and accountability. In this context, with public agencies being regarded as service providers and citizens as customers, the concept of quality must also visualize public agencies as catalysts of a responsible and active civic society.Originality/value– This study explores the relationship between service quality and customers’ behavioural intentions in the private and public sector banks by linking both constructs at their dimensional level. It highlights major implications for the service provider, society, consumer and public policy based on the different needs, characteristics and requirements of customers of class and mass banking, that is, private and public sector banks.

PurposeThe purpose of this paper is to perform a meta-bibliometric analysis of the banking service quality and to provide various research streams. Another goal is to provide future research questions to explore these areas in more detail.Design/methodology/approachThe authors used three major academic databases (Scopus, ProQuest and EBSCO) from 1980–2021 and found 226 papers, where they performed the meta-bibliometric analysis by performing co-citation analysis, co-authorship analysis, cartographic analysis and content analysis.FindingsThe SERVQUAL model is the most used conceptual framework and model to study banking service quality. Structural equation modeling (SEM), followed by partial least squares SEM, is a majorly used method. There are three research streams in the literature: retail banking service quality, internet banking service quality and mobile banking service quality. Retail banking is the most studied stream, whereas mobile banking is the least studied stream. The study on banking service quality was initially conducted in developed markets, and later in emerging markets. All three streams have scope for further exploration, and hence, 44 future research questions have also been proposed.Research limitations/implicationsThis study has implications for bank managers, academicians and future researchers.Originality/valueThis study is unique in that it examines the meta-bibliometric dimensions of banking service quality and provides directions for future research for academicians and researchers.

Adopting an internal marketing approach, this paper attempts to provide a deeper understanding of the organisational commitment — service quality relationship in the service context. This is done by empirically testing the relationships that the three components of organisational commitment (affective, continuance and normative) have with the service quality of customer-contact employees. The hypotheses were framed by critically reviewing the extant literature in the areas of services marketing and human resource management. A large sample comparative study was conducted on employees in call centres and branches of a major retail bank in UK. We explore the important question of how the three components of organisational commitment influence the employee-perceived service quality differently in call centres and in branches. The findings indicate that in branches, both affective commitment and continuance commitment have significant positive impact on service quality while in call centres, only affective commitment is found to affect service quality significantly. Having established the commitment — service quality relationship, the implications for designing internal marketing strategies are further discussed.

Adopting an internal marketing approach, this paper attempts to provide a deeper understanding of the organisational commitment – service quality relationship in the service context. This is done by empirically testing the relationships that the three components of organisational commitment (affective, continuance and normative) have with the service quality of customer-contact employees. The hypotheses were framed by critically reviewing the extant literature in the areas of services marketing and human resource management. A large sample comparative study was conducted on employees in call centres and branches of a major retail bank in UK. We explore the important question of how the three components of organisational commitment influence the employee-perceived service quality differently in call centres and in branches. The findings indicate that in branches, both affective commitment and continuance commitment have significant positive impact on service quality while in call centres, only affective commitment is found to affect service quality significantly. Having established the commitment – service quality relationship, the implications for designing internal marketing strategies are further discussed.

Purpose – The purpose of this paper is to understand the dimensionality of customer-perceived service quality and investigate the influence of service quality on customers’ purchase intentions. Design/methodology/approach – A modified SERVQUAL instrument was used to capture customers’ perceptions of service quality followed by exploratory factor analysis to study the dimensionality of service quality in retail banking. Multiple regression was used to probe the influence of the dimensions of service quality on purchase intentions. Findings – The results of the study provide strong support for the predictive power of perceived service quality on customers’ purchase intentions and shows that reliability is most important for influencing customers’ purchase intentions, followed by employee behaviour, tangibles and convenience. Research limitations/implications – Refinement of the scale for measuring service quality in retail banking is possible based on future newer trends in retail banking. Multiple measures of the purchase intentions construct may also be considered in future research. Practical implications – Retail bank managers must realise the importance of reliability as the strongest driver for purchase intentions. Performing the service dependably and accurately is the heart of service marketing excellence. When a company performs a service carelessly, when it makes avoidable mistakes, it shakes customers’ confidence in its capabilities and undermines its chances of earning a reputation for service excellence. Originality/value – The study explores the relationship between service quality and purchase intentions by linking both constructs at their dimensional level. This increases the diagnostics of explaining customers’ purchase intentions.

PurposeThe purpose of this paper is to examine the dimensions of service quality (SERVQUAL) from the perspective of the customers and its relationships with perceived overall SERVQUAL in retail banking and also investigate the relationships between perceived overall SERVQUAL and customer trust, customer satisfaction, and bank reputation.Design/methodology/approachA survey questionnaire was constructed, and data were collected from 375 regular customers of local banks. The convenience sampling method was employed to collect data from existing customers of local banks operating in the Klang Valley area of Malaysia. Structural equation modelling was applied to analyse the data.FindingsThe results of the study indicate four key dimensions of SERVQUAL – tangibles, empathy, reliability and security, and internet banking – all of which are significantly and positively related to customers’ perceived overall SERVQUAL. Internet banking facilities are another significant determinant of the perceived overall SERVQUAL. The results are indicative of the strong and positive effect upon customer satisfaction, their trust in the bank, and, finally, a bank’s reputation.Research limitations/implicationsThis study has presented and tested empirical study of perceived overall SERVQUAL model in the banking industry, particularly in the Malaysian context. This research identified the dimensions of SERVQUAL (i.e. tangibles, empathy, reliability and security, and internet banking) that influence the overall perceived SERVQUAL, and how these overall perceptions will eventually influence customer trust, customer satisfaction, and bank reputation is valid and reliable in retail banking industry. This study, however, only focussed on the banking industry. Given the diversity of the service industry, these findings may have to be tested for the applicability to different service industries in future studies.Practical implicationsThis research is useful to bank managers as it helps them improve SERVQUAL to protect and expand their respective market share in a highly competitive industry. Banks could utilise the results of this study to improve their service tangibility, empathy, reliability, and security, which will affect both customer trust and satisfaction, and enhance a bank’s reputation.Social implicationsThe findings of specific dimensions of SERVQUAL will contribute to customer perception of banks’ image and reputation, and strengthen trust and satisfaction. Moreover, assisting customers towards the understanding of how they should received high quality of services with regard to quality should be perceived as emphatic, reliable, secured and tangibility of service.Originality/valueThe findings of this study highlight the specific dimensionalities of SERVQUAL in influencing the perceived overall SERVQUAL. This study will increase the understanding on the impact of perceived overall SERVQUAL on consumer trust, customer satisfaction, and a bank’s reputation. Specifically, it reports an empirical study of a model of perceived overall SERVQUAL that simultaneously considers the direct effects of perceived overall SERVQUAL on customer trust, customer satisfaction and bank reputation.

Sultanate of Oman is one of the prominent GCC Countries with a population of around 3 million. With assets worth over USD 15 billion, Bank Muscat (SAOG) is the leading financial services provider in Oman with a strong presence in Corporate Banking, Retail Banking, Investment Banking, Treasury, Private Banking and Asset Management. This paper looks into the “RELATIONSHIP MARKETING AND SERVICE QUALITY IN BANK MUSCAT OMAN (Sayaratti Loans)”. The quality of customer service is the key indicator of the performance of the different branches of the Bank. Banks in the current scenario is increasingly showing its interest in satisfying a customer wants. Given the profit figures on board as targets Banks need to also look into the special needs of the customer’s perspective, any lacuna in service quality to be looked into seriously. The car loans popularly known as Sayaratti loans are taken as the product for study. The findings of the study say that there is a significant relationship between the age and the overall customer satisfaction levels and there is no significant relationship between the age and the service quality by the bank.

This research is conducted to find out the relationship among service quality, customer satisfaction, and customer loyalty of Cambodian Commercial banks. This study used translated version of the SERVQUAL instrument questionnaire. The questionnaire included 22 items of service expectations, 22 items of service performance perceptions, two different single items of overall service quality and overall customer satisfaction, and 4 items of customer loyalty to explore the relationship among service quality, customer satisfaction and customer loyalty of Cambodian Commercial banks. Total sample sizes of 200 respondents were chosen, distributed and collected from Commercial banks’ customers in Phnom Penh Capital city. Of the 200 questionnaires distributed, 147 respondents were collected back from customers of 8 Commercial banks. After descriptive and factor analysis, multivariate regression analyses were performed to study the impact of banking service quality on both customer satisfaction and customer loyalty of Cambodian Commercial banking industry setting. Factor analysis was performed among five dimensions of the SERVQUAL instrument and resulted in three new dimensions naming Tangibles, Reliability and Human Skills dimensions. The results from findings revealed that the expectations of Cambodian Commercial banks were higher than their perceptions in terms of service quality. Their expectations were not met and that the largest gap was found in Human Skills dimension. The findings from regression suggested that banking service quality was significant influence on overall customer satisfaction and thus banking service quality will lead to customer satisfaction. In addition, the results from multiple regressions showed that the Reliability dimension had the largest influence on overall customer satisfaction. Regression analysis also posited that overall customer satisfaction was positively influent on customer loyalty. However, Banking Service Quality had the indirect and positive impact on customer loyalty and this result was proved by performing two different models of regression. First, regression was analyzed using customer loyalty as dependent variable and banking service quality as independent variable. Second, regression analysis was performed using customer loyalty as dependent variable, banking service quality as independent variable, and customer satisfaction as mediator independent variable. In this study, managerial implications were provided to Management of Cambodian Commercial banks with the tested model of service quality that measures banking service quality and its attributes which had influences on overall customer satisfaction and then led to customer loyalty. Also, limitations of the study were provided and the directions for future research were suggested for further study on this field of banking service quality, customer satisfaction and customer loyalty. Contributions of this study were provided to both academic research and managerial practitioners in this field.

Customer service is an aspect of great significance and importance in the banking industry. In this competitive era, it is imperative for banks to provide satisfaction to their customers and satisfaction can be derived through delivering high service quality. Service quality is the key factor that can differentiate banks on account of their products and services. Service quality has become a popular area of researches and there is a need to identify methodologies to measure service quality. Researchers identified various factors of service quality to measure. Reliability, responsiveness, assurance, empathy and tangibility were explored as the five factors for measuring service quality in traditional banking, while tangibility factor was not considered an important factor for internet banking. Five dimensions of service quality in internet banking were identified as reliability, attentiveness, access, easy to use and security.

In today’s competitive environment, consumers are increasingly aware of alternatives on offer in relation to services and provider organizations and also of rising standards of service. Consequently, expectations rise and consumers become more critical of the quality of service. So companies can never afford to be complacent. In addition, knowledge of the costs and benefits of retaining consumers relative to attracting new ones draws company’s foremost attention to looking after present customers, responding to their needs and problems, and developing long term relationships. In view of this widespread belief, an attempt has been made in the present paper to study service quality in commercial banks with a view to offer suggestions to make overall service quality in banks more effective and efficient. The results of the study lead us to the conclusion that service quality of foreign banks is comparatively much better than Indian banks and suggests heavy investment by Indian banks in tangibility dimension to improve the quality of service to the customers.