Perceived overall service quality and customer satisfaction

Abstract

Purpose Foreign and local banks in Malaysia are competing in terms of skilled staff, innovative products and services, rendering quality services and customer satisfaction. The purpose of this paper is to examine the overall service quality and customer satisfaction of both foreign and local banks. Design/methodology/approach The data used to test the hypothesis were collected from 748 foreign and local bank customers in Malaysia. The research model was analysed using a structural equation modelling technique. Findings Results show that knowledge and staff competencies, as well as convenience of the bank is more significant for local bank customers while bank image and internet banking are important components for foreign bank customers. The results also reveal that foreign bank customers have higher satisfaction as compared to local bank customers. Research limitations/implications No analysis is undertaken of any difference in the service quality dimensions between banks of different size. Further research on banking services could usefully test services quality dimensions across banks of different sizes. Practical implications The findings serve as a valuable reference for local banks understand service quality challenges they may face from foreign banks in this competitive industry. Findings suggest that, to provide high-quality services, financial institutions need to heighten customer satisfaction differentiation strategies. Originality/value The outcomes of this study enhance the knowledge on the performance of both local and foreign banks in Malaysia as well as customer satisfaction, which are invaluable to all bank managers and industry players in improving their services.

Does quality stimulate customer satisfaction where perceived value mediates and the usage of social media moderates?

“…In this changing twenty-first-century business environment, the need for research on product quality, customer attitude, innovation has poised an inevitable strategy of a business organization to meet and satisfy the multiple role holding consumers ( Lau et al, 2019 ; Moghavvemi et al, 2018 ; Quang et al, 2018 ). Besides, customers’ interaction in technology and social media have made this challenge more challenging ( Hamzah and Shamsudin, 2020 ).…”

The Relationship between E-Service Quality and E-Customer Satisfaction: An Empirical Study in Egyptian Banks

“…The technological changes have led to great competitive challenges due to the globalization of banking activity, which requires banks to adapt to these challenges, to keep abreast of technological developments and develop the banking services provided to increase the competitiveness of banks. Moghavvemi et al (2018) believe that banking services are similar at the level of different banks and the quality of service can create a competitive advantage. This is in line with what Pasha et al (2018) said that the quality of service has a significant impact on customer satisfaction and loyalty to the bank.…”

Cross Country Analysis of Online Banking Service Quality in South Africa and Indonesia

“…Various scholars investigated the determination of service quality in the banking sector (Ayo, 2018;Moghavvemi and Lee, 2018;Al-jazzazi and Sultan, 2017;Rouf et al 2018;Shayestehfar and Yazdami, 2019;Yaseen and Qirem, 2018). According to Rouf et al (2018), the importance of service quality for the achievement of businesses has been substantiated in the literature through a plethora of studies.…”

“…These days, banks understand the importance of service quality, seeing that customer satisfaction, loyalty and a larger market share can be obtained through it. Moghavvemi and Lee (2018) argue that in the banking industry, it is difficult to achieve product differentiation therefore, banks use service quality to set them apart from one another. Ayo (2018) agrees with Moghavvemi and Lee (2018) and argues that superior service quality is an important facet of the banking industry, as it results in customer satisfaction and loyalty.…”

“…Moghavvemi and Lee (2018) argue that in the banking industry, it is difficult to achieve product differentiation therefore, banks use service quality to set them apart from one another. Ayo (2018) agrees with Moghavvemi and Lee (2018) and argues that superior service quality is an important facet of the banking industry, as it results in customer satisfaction and loyalty. Shayestehfar and Yazdami (2019) came to the conclusion that by providing high quality services to customers, the banks competitive advantage can increase.…”