Introduction
The authors discovered that service quality dimensions such as efficiency, dependability, security, privacy, responsiveness, communication, availability, and access to E-banking services have a positive impact on customer satisfaction, which in turn influences purchase intentions and long-term relationships with the bank. Jun 24, 2020
How important is customer satisfaction in the banking industry? Extremely. With so little else to compete on, providing a great customer experience is the best way to distinguish your bank. In this article, we'll look at why banks should care about customer satisfaction and how it relates to better financial results.
Banks' most significant competitive advantage
The banking industry has become commoditized. With everyone offering nearly the same products and services and little room to compete on price, the experience customers have with their banks is what differentiates one bank from another. There are two areas where banks can truly differentiate themselves by providing an exceptional customer experience.
Interpersonal Assistance
According to our observations, the relationship between a bank and its customers has the greatest impact on customer satisfaction. People want to be treated as if they are important. They want to build a relationship with their bank, and they want their bank to go out of their way to get to know them rather than just pushing a product.
Omni-Channel Experience that is Consistent
Customers can interact with a bank in a variety of ways today, including online and mobile banking, at an ATM, and over the phone. One of the most significant findings has been that customers value consistency across channels. These things matter, whether it's transferring information quickly between channels or ensuring deposit times are consistent no matter how a deposit is made. Banks must meet their customers' expectations across all channels to provide a great customer experience
Customers who solve problems are reasonable. They are aware that the possibility of a problem or mishap exists. They do, however, believe that their bank will correct the situation. This entails resolving the issue quickly and effectively.
Bank Mistakes That Reduce Customer Satisfaction
We've seen some common mistakes that can have a negative impact in our extensive experience measuring customer satisfaction for banks.
Satisfaction of Customers
A customer is someone who buys goods and services, according to the dictionary. Thus, customer services involve three parties: the seller, the buyer, and the goods/services. Customer service is thus the encapsulation of all of these entities for mutual benefit in order to increase the value of all participants in the buying and selling process.
A person or entity that maintains an account and/or has a business relationship with a bank; one on whose behalf the account is maintained (i.e. the beneficial owner); beneficiaries of transactions conducted by professional intermediaries, such as stock brokers, Chartered Accountants, solicitors, and so on; and any person or entity involved in a financial transaction that can pose significant reputational or other risk to the bank, such as the issuance of a high-value depository receipt.
According to the Talwar Committee (1977), the primary purpose of banking is "to create and deliver customer-needed services in a customer-satisfying manner." This implies that two elements are required for banking services: creating and delivering services.
While creation denotes the introduction of new technology into services, carrying out these services effectively denotes service delivery. These two factors have a large impact on customer satisfaction.
According to Kotler and Keller (2009), "customer satisfaction is a person's feeling of pleasure or disappointment as a result of comparing a product's perceived performance in relation to his or her expectation." Rao (2008) develops the basic formula for customer satisfaction, Customer satisfaction = Customer perception of service received - Customer expectation
Service Quality and its Various Models
A service is an act or performance performed by one party for the benefit of another. They are economic activities that generate value and provide benefits to customers at specific times and locations, resulting in the desired change. Service can be defined as a transaction in which no physical goods are exchanged. Service quality is a type of attitude that is related to but not the same as satisfaction and results from a comparison of expectation to performance.
Service quality can be calculated as follows: Service quality=Perception - Expectation
As a result, if the customer receives the same services as expected, the difference will be zero, and we can conclude that service quality is very good. When a customer does not receive the expected services, the service quality is poor. Customer perception is influenced by a variety of factors such as age, gender, occupation, technological changes, and so on, all of which influence service quality.
Models of Service Quality
Several service quality models have been developed by researchers worldwide, including the Gronroos model, the GAP Model, the Attribute Service Quality Model (Haywood-Farmer, 1988), the Alignment Model (Berkley and Gupta 1994), the SERVPERF Model, and the SERVQUAL Model. Among these, the SERVQUAL model is a well-known model that has been used globally to assess the quality of various services.
Assurance: Employees' knowledge and courtesy, as well as their ability to convey trust and confidence.
Tangibles: The physical appearance of facilities, equipment, personnel, and communication materials.
Empathy: Providing customers with caring, personalized attention.
Responsiveness: The willingness to assist customers and provide timely service.
Customer Satisfaction and Service Quality Relationship
Customer satisfaction and the quality of service are inextricably linked. Customer satisfaction increases as service quality improves. Many agree that there are no recognized standard scales to measure the perceived quality of a bank service in the banking industry. As a result, gaining a competitive advantage through high-quality service is becoming an increasingly important survival weapon. Service quality occurs as a process in time and leads to overall customer satisfaction.
Conclusion
The study discovered that in today's competitive environment, service quality is critical to the long-term viability of banks. As a result, in order to cope with the changing market conditions, banks must retain old customers while also attracting new customers by providing higher-quality services. According to the findings of the study, there is a strong relationship between customer satisfaction and service quality. Banks must improve their service quality to meet customer expectations in order to ensure customer satisfaction.
The following are the specific conclusions regarding the five service quality parameters:
I In SBI Bank, the appearance of physical facilities, equipment, personnel, and communication materials in relation to "Tangibility" is not as strong.