Service Quality In Retail Banking Research Articles

Retail Banking Service Quality and Customer Loyalty: The Role of Trust and Commitment as Mediators

This research examines how service quality, trust, commitment, and loyalty are related in retail banking. The study proposes a model that includes trust and commitment as mediating factors between service quality, and bank loyalty. The researchers collected data from 271 participants and used a descriptive design and quantitative approach to analyse the data. The study utilized the PROCESS macro-Version 3.5 to conduct the mediation analysis. The results indicate that service quality in retail banking has a positive impact on customer trust and commitment, which, in turn, predict customer loyalty. The mediation analysis reveals that trust and commitment play a significant role in mediating the relationship between service quality and customer loyalty. Since the direct effect of service quality on loyalty remained significant after the intervention/mediation of trust and commitment in the model, the mediation is interpreted as partial mediation. Findings of the study do provide a marketing guide to banking professionals who design and implement banking solutions in the retail banking environment.

Service Quality in Retail Banking: Conceptualizing and Testing a Hierarchical Model

Service Quality in Retail Banking: Conceptualizing and Testing a Hierarchical Model

Elucidating perceived overall service quality in retail banking

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.

Service quality and customers’ behavioural intentions

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.

Service quality and word of mouth: a study of the banking sector

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.

Service quality and customers’ purchase intentions: an empirical study of the Indian banking sector

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.

Customer Perception on Service Quality in Retail Banking in Developing Countries - A Case Study

The purpose of this paper is to evaluate the service quality in retail banking in the developing countries in general, and Bangladesh in particular. This is an analytical study based mainly on the primary data collected through scientifically developed questionnaire. The questionnaire has been personally administered on a sample size of 250, chosen from four banks in Bangladesh located in the northern district of Kushtia. The result indicates that customers' perception has reached on highest in the Prompt and accuracy in transactions of the bank and lowest in the service of modern equipment and décor. Due to the increasing competition in retail banking, customer service is an important part and bank must give their due attention to the customers' perception about service quality.

Key determinants of service quality in retail banking

Purpose – The purpose of this study is to build a retail‐banking specific quality scale and, through its examination and comparison with the SERVQUAL and BSQ metrics that are currently used in banking, to deepen understanding of quality determinants in the industry. Furthermore, the study is set to provide additional input to the debate over generic against setting/industry/time‐specific quality metrics.Design/methodology/approach – The study is implemented through a two‐stage process of literature review and empirical survey. Evidence drawn from Greek retail banking, through a specially designed research tool, is analyzed through reliability, factorial and regression analysis to determine the scale's item and factorial structure and assess its reliability and validity.Findings – The BANQUAL‐R metric is introduced, with key elements assurance/empathy, effectiveness, reliability and confidence, a combination of SERVQUAL and BSQ dimensions. Findings back the setting‐specific approach of service quality and ...

Customer perception on service quality in retail banking in Middle East: the case of Qatar

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 impact of internal marketing on the perception of service quality in retail banking: A Ghanaian case

Although there is a large volume of literature on internal marketing, there is limited empirical evidence on its impact on the perception of service quality in developing nations. A literature review of internal marketing and service quality has been completed. A survey of 32 top managers, 100 employees and 200 external customers of a major bank in Ghana was undertaken to assess the impact of internal marketing on the perception of service quality. The results suggest that internal marketing can have an influence on service quality. Implications of the study are highlighted, limitations noted and directions for future research are outlined.

Bank service quality: empirical evidence from Greek and Bulgarian retail customers

PurposeDespite the rapid growth and internationalisation of the services sector, particularly financial services, managers today realize that to successfully leverage service quality as a global competitive tool, they first need to correctly identify the antecedents of what the international consumer perceives as service quality. This paper aims to assess and compare the level of bank service quality provided in Greece and Bulgaria and to identify the dimensions of quality service in the two countries.Design/methodology/approachIn 2000 Bahia and Nantel proposed a specific scale, the BSQ, (Bank Service Quality) for measuring perceived service quality in retail banking consisting of six dimensions: effectiveness and assurance; access; price; tangibles; service portfolio; and reliability. This tool was used for the collection of data related to the banking services provided in the two countries (Greece and Bulgaria). Statistical methods, such as the t‐test, chi‐square, Cronbach's‐alpha and factor analysis, were then employed to answer the research questions.FindingsThe results suggest that the Greek customers' perception was that they received higher quality services compared to the perception of the Bulgarian clients. Differences between the countries were also reported regarding the dimensionality of quality service.Practical implicationsThe results have significant implications for banks in developing operational, marketing and human resource strategies in the two countries.Originality/valueGreece and Bulgaria – two countries with different economic, political and socio‐cultural backgrounds – give the opportunity for cross‐country research in the area of service quality, an area where research is not very mature.

Bank service quality: evidence from five Balkan countries

PurposeDespite the rapid growth and internationalisation of services and financial services in particular, managers realise that to successfully leverage service quality as a global competitive tool, they first need to correctly identify the antecedents of what the international consumer perceives as service quality. This paper aims to examine the differences: in perceptions of service quality; and in the ranking of quality dimension between the bank customers of five Balkan countries: Greece, Bulgaria, Albania, FYROM and Serbia.Design/methodology/approachBahia and Nantel proposed a specific scale for measuring perceived service quality in retail banking consisting of six dimensions of service quality: effectiveness and assurance; access; price; tangibles; service portfolio; and reliability. This instrument was used for collecting data in the context of banking services from the five Balkan countries. T‐test and factor analysis were employed to answer the research questions.FindingsThe results suggest that Greek customers perceived receiving the highest level of service quality. Differences and similarities between the countries were also reported related to the degree of importance attached to the BSQ dimensions of service quality.Practical implicationsThe results have significant implications for banks in developing operational, marketing and human resource strategies in the Balkan context.Originality/valueThe international bank managers need to understand the value of environmental differences between countries in terms of economic development, political situation, socio‐cultural system and the level of sector maturity. Accordingly they can emphasise the various dimensions of service quality differently and in addition focus on commonalities to introduce quality initiatives in the Balkans.

Identifying the critical determinants of service quality in retail banking: importance and effect

Provides managers with an empirically derived framework to help them assess the likely impact of any service quality initiative. Categorizes quality factors in terms of their relative importance and their effect on satisfaction and dissatisfaction. States that the study is based on an analysis of over 200 customer anecdotes of incidents in the UK banking industry and 100 interviews. Research suggests that certain actions, such as increasing the speed of processing information and customers, are likely to have an important affect in terms of delighting customers, however other activities, such as improving the reliability of equipment, will lessen dissatisfaction rather than delight customers. Suggests that it is more important to ensure that the dissatisfiers are dealt with before the satisfiers. Also suggests that there are two areas where banks could achieve a distinct advantage, genuine commitment and attentiveness by front‐line staff. States that some other areas are not worth much attention and any time and money put into these areas might be better redirected elsewhere.

Service quality in retail banking: the experience of two British clearing banks

Presents an empirical study of major quality improvement initiatives recently undertaken by two British banks. Provides a useful comparison of the two different approaches, and contributes new evidence on the current debate concerning the validity of the SERVQUAL model. First outlines the implementation of the SERVQUAL model, the bank’s subsequent quality improvement programme, and evidence of an improvement in customer satisfaction. Second, included for comparative purposes, describes the adoption and implementation of the Crosby total quality training programme. In both cases relevant evidence was gathered on staff attitudes. Given the long‐term nature of these comprehensive quality programmes, any evaluation must necessarily be tentative, but both banks are able to report an improvement in service quality, and fresh evidence is provided in support of the SERVQUAL model.

Relationship Marketing: the Importance of Customer-Perceived Service Quality in Retail Banking

During the last couple of years relationship marketing has been introduced within services marketing since more efficient, profitable and long-term marketing can be achieved by focusing on present customers instead of concentrating on attracting new ones. Retail banks have in this respect had a unique position as they have a well-developed system of local offices that enable them to be close to and to establish relationships to their customers. A prerequisite for a bank that wants to establish long-term customer relationships is satisfied customers who want to remain customers. In other words, the service quality as perceived by the customers must at least meet their expectations. Otherwise there is a possibility that a dissatisfied customer starts searching for another bank offering similar services, resulting in a break in the relationship with the bank, with which he was dissatisfied.