ISSN (Online) 2581-9429

IJARSCT
International Journal of Advanced Research in Science, Communication and Technology (IJARSCT)

Volume 3, Issue 3, January 2023

Impact Factor: 7.301

Service Quality and Customer Satisfaction in

Banking Sector: A Review
Jyoti Anandrao Chougale and Dr. M. M. Ali
Department of Commerce, Shivaji University, Kolhapur
[email protected]

Abstract: The aim of this review paper is to know more about the service quality of Banking Sector
available in Konkan Region through literature survey. In the 21st century, service quality and customer
satisfaction are directly proportional to each other for achieving success in any industry and the same is
applied to the banking sector in India. Customers play an important role in Banking Industry in India.
Therefore Banks in India are responsible to fulfill needs of customers to retain survival and success in
today’s modern era. Success of any organization depends upon their services quality and customer
relationship with an organization. Retention of customer and business is totally depends upon services
provided by banks to solve the complaints of customers instantly. This review paper summarizes the
relationship between services quality, customer satisfaction and success of organization through literature
survey in Banking Sector.

Keywords: Banking Sector, Service Quality, Customer Relation, etc.

I. INTRODUCTION
In traditional days, customer satisfaction depends on specific factors such as product price, quantity & reasonable
quality. But in today modern era customer satisfaction depends on several factors like tangibility, reliability, empathy,
assurance & policy. Therefore every service sector prefer on service quality dimensions. Hence success or failure of
any organization is depends on service quality provided by any organization to its customers. In the recent times, many
organizations are struggling to provide services to their customers which leads them into financial crisis. Banking
Sector is totally depends upon relationship of banks with their customers. A customer plays a pivotal role in growth of
banking sector in India. Therefore Banks needs to improve their customer relations by providing a good service quality.

1.1 Objective of the Study

 To analyze review of service quality and customer satisfaction of banking sector.
 To find out gap between service quality and customer satisfaction in banking sector.

1.2 Methodology of the Study

 Researcher collects various information with the help of secondary data such as internet, internet browser,
Ph.D. Thesis, Books, Journals, News Papers, etc.

II. REVIEW ANALYSIS

The researcher collects various review in Ph. D. thesis, Research Journal, related books and articles.
Sayed Ali Raza (2013) investigated about the effects of service quality dimensions on customer satisfaction in Pakistan
by using SERVQUAL model. He collected the data from 400 respondents consists of 30 items questionnaire on Internet
Banking of different banks situated in Karachi City of Pakistan. His conclusion totally depends on dimensions based on
questionnaire. His study significantly indicated that regression analysis results a positive relationship between
assurance, tangibility, reliability and responsiveness with customer satisfaction. But conversely, empathy shows a
positive but insignificant effect on the customer satisfaction. (1)
S. M. Feroj Mahmood & Mohammad Wasiu Osman studied about customer perception of service quality of Islamic
Bank in Bangladesh. Researchers noticed that after Indonesia & Pakistan, Bangladesh to be the third large muslim
populated in country. Researched was based on Empirical Analysis of Shahjalal Bank Limited in Bangaldesh. Authors
Copyright to IJARSCT DOI: 10.48175//IJARSCT-8106 31
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 ISSN (Online) 2581-9429
IJARSCT
International Journal of Advanced Research in Science, Communication and Technology (IJARSCT)

Volume 3, Issue 3, January 2023

Impact Factor: 7.301
mentioned that for fulfillment of higher demand of products and services of Islamic Banking requires not only superior
quality but also prompt response to the customer. This study was based on various of factors like age, occupation,
assumptions, assurance dimensions, responsiveness dimensions, reliability & tangibility dimensions. This study
concluded with a result that many of respondents were well aware of service quality of said bank. But did not show any
effect on client retention. However, in some cases it affects clients to choose different schemes of banking services. (2)
Prof. Ranjith P V (2019) highlighted the importance of service quality in Banking Sector in India. He studied service
quality using SERVQUAL and BSQ questionnaire model to understand the important parameters for service quality in
banks and to classify the respondents based on perception. This research article aim to study to reduce number of
statements for service quality and to formulate a questionnaire for studying service quality from customer point of view.
(3)
Shruti Agrawal, Manish Mittal & Ratish Gupta studied about service quality in Public and Private Sector Banks of
India. In this research article, authors mentioned role of banking sector in Indian Economy. To maintain market share it
is necessary for banking institutions to acquire large customer base. Now a day’s customers are well aware of various
financial institutions and schemes also they are having more choices of institutions. Hence researchers identified that
service gap is lower in private sector banks than public sector banks. (4)
Ravi K. Dhar & Silky Vigg Kushwah (2009) investigated regarding comparative study of service quality expectactions
& perceptions of Public and Private Sector Banks in India. However researchers resulted that public sector banks
should continually assess and reassess how customers perceive their services and to implement appropriate corrective
action for retaining the existing customers and getting new customers. (5)
Madhukar G. Angur, Rajan Natarajan & John S Jahera conducted a study on an assessment in a developing economy
regarding service quality in the banking industry. Authors examined the applicability of alternative measures of service
quality in the developing economy of India using SERVQUAL & SERVPERF Model. In this connection, they found
that SERVQUAL and SERVPERF have identical convergent validity, SERVPERF appears to have higher discriminate
validity than SERVQUAL. (6)
Jyoti & Subodh Kesharwani (2020) reviewed about the E-Service Quality in Banking Industry. Considering the new
edge technologies such as artificial intelligence, machine learning, data analytics, deep learning, etc. banking
institutions are setting the new consumer expectations. After reviewing the said technology in banking sectors authors
came to conclusion that E-Service quality to impact the customers satisfaction in banking sector are found to be
reliability, efficiency, responsiveness, ease of use, security, website aesthetic, credibility and personalization. (7)
Bindu K Nambiar, Hareesh N Ramanathan, Sudhir Rana & Others (2019) investigated about the perceived service
quality and customer satisfaction: A Missing Link in Indian Banking Sector. This research article revealed that banks
needs to improve knowledge of customers regarding banking sector to streamline service quality and customer
satisfaction. However customer knowledge strengthened the relationship between empathy and responsiveness
dimensions of service quality had with customer value evaluation and moderated the relationship that reliability and
tangibility dimensions had with customer value evaluation. (8)
Jasveen Kaur & Baljit Kaur examined regarding determination of Internet Banking Service Quality and Customer
Satisfaction in India. Authors indentified that the regression measures indicated that responsiveness, security/ privacy
and site aesthetic are influential factors whereas reliability and efficiency have insignificant impact on satisfaction of
the online customers. (9)
Dr. M Geeta & Dr. C. Naga (2021) Sivan and investigated regarding empirical study of Service Quality in Indian
Banks. The study examined that service quality in Banking Sector was measured on SERVQUAL Model & Marketing
Mix Scale. The researchers revealed that there is a great need of improvement of services to be rendered by Indian
Banks to sustain in Indian Market. (10)
Choudhary M. (2017), the title of Book is “An Introduction to Banking”. Authors covered various aspect of Banking in
two parts such as Bank Business and Markets & Asset Liability and liquidity risk. First section covered basic aspect of
banking such as interest rates markets, customer service & credit assessment. General Balance Sheet, Asset Liability
Management covered under other section of book. However intention of Author was to provide information of value to
the practitioner in banking & these topics deserved to be understood & appreciated by everyone involved in Banking
Sector. (11)

Copyright to IJARSCT DOI: 10.48175//IJARSCT-8106 32

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 ISSN (Online) 2581-9429
IJARSCT
International Journal of Advanced Research in Science, Communication and Technology (IJARSCT)

Volume 3, Issue 3, January 2023

Impact Factor: 7.301
Schneider B & White S. S. (2004) stated in their book that service quality and customer satisfaction are closely related
to each other. This book discussed regarding various dimension of service quality & models of service quality i.e.
SERVIQUAL, GAP Model, etc. According to authors service marketing concepts & strategies had been developed in
response to the tremendous growth of service industries resulting in their significant increase in the US & world
economics. (Zeithhmal & Bitner 2000) (12)
Pawar S.S. (2017), title of thesis is “Service Quality of Housing Finance An Empirical Study of Banks in Satara
District” the objective of this study is to identify, measure and determinants of service quality of housing finance and to
identify the service quality gap of housing finance service providers. This study has been taken into consideration
housing finance provided by Private, Public and Co-operative banks in Satara district. This study concludes that the
different factors affecting the quality of housing finance and there is no significant gap between service quality
dimensions. Therefore, the private, public and co-operative banks are better service provider in all the respects like,
tangibility, reliability, assurance, responsiveness and empathy. As the result, the customers are satisfied with the service
offered by private, public and cooperative banks. (13)
Baghla Adita ( 2017) stated in his PhD thesis banking deals with lending money to the customers which include a
ample variety of loans, credit cards, mortgage loans, withdrawal facility any many more. Retail banking executes
transaction directly with consumers as compare to corporations or other entities. Newline Retail banking is the fastest
growing sector because of the banking industry with the key success by attending directly the needs of the end
customers. Retail banking sector is facing a lot of competition ever since financial sector reforms were started in the
country. Therefore there is a need of constant innovation in retail banking. This requires micro planning, product
development and differentiation, technological up gradation appropriate marketing strategy, product pricing,
customization, online services and effective risk management techniques. Today retail banking sector is marked by high
customer expectations and technology innovations. Therefore, it needs to concentrate on increase service quality and
buildup customer relationship for more customer delight. (14)

III. FINDINGS
 The Service Quality and Customer Satisfaction are directly related to each other.
 Most of the researchers preferred SERVIQUAL Model to identify service quality in Banking Sector.
 Most of researchers studied service quality and customer satisfaction in mini metro cities bank branches.
 Economic growth of banking sector is totally depends on customer satisfaction.

IV. CONCLUSION
All banking sector offers similar services to the customers but they are different in terms of service quality. This paper
is analyzes the various literatures review regarding service quality and customer satisfaction in the banking sectors and
examine the relationship between customer satisfaction and service quality and their effect. The findings suggest that
improved service quality to maximize customer satisfaction or delight as well as prepare better technique for providing
better services to the customers and to develop new service quality instrument for accurate results for measuring service
quality. Most important thing is to concentrate on element of marketing mix. This paper also contributes in knowledge
and background for banks to apply these findings for better outline and focus on their position in the market to provide
maximum customer satisfaction.

REFERENCES
[1]. Syed Ali Raza (2013), “Internet Banking and Customer Satisfaction in Pakistan”, Qualitative Research in
Financial Markets, Vol. 7 No. 1, 2015, pp. 24-36.
[2]. S M Feroj Mahmood & Mohammad Wasiu Osman (2015), “Customers Perception of Service Quality of
Islamic Bank in Bangladesh: An Empirical Analysis of Shahjalal Islami Bank Limited”, Global Journal of
Management and Business Research: A Administration and Management, Vol. 15, Issue 12, Version 1.0,
ISSN: 0975-5853.
[3]. Prof. Ranjith P V (2019), “Service Quality in Banking”, Journal of Enineering Science, Vol. 10, Issue 12,
Dec/2019, ISSN: 0377-9254.
Copyright to IJARSCT DOI: 10.48175//IJARSCT-8106 33
www.ijarsct.co.in
 ISSN (Online) 2581-9429
IJARSCT
International Journal of Advanced Research in Science, Communication and Technology (IJARSCT)

Volume 3, Issue 3, January 2023

Impact Factor: 7.301
[4]. Shruti Agrawal, Manish Mittal & Ratish Gupta (2016), “International Journal on Customer Relations”, Vol.
4, Issue 1, pp. 34-43.
[5]. Ravi K. Dhar & Silky Vigg Kushwah (2009), “Service Quality Expectactions and Perceptions of Public and
Private Sector Banks in India: A Comparative Study”, IMJ (IIM INDORE), Vol. 1, Issue 3, pp. 34-49.
[6]. Madhukar G Angur, Rajan Nataraajan & John S Jahera (1999), “Service Quality in the Banking Industry: An
Assessment in a developing Economy”, International Journal of Bank Marketing, ISSN: 0265-2323, Vol. 17,
No. 3, pp. 116-125.
[7]. Jyoti & Subodh Kesharwani (2020), “E-Service Quality in Banking Industry – A Review”, Global Journal of
Enterprises Information System, Vol. 12, Issue 2, ISSN: 0975-153X, pp. 111-118.
[8]. Bindu K Nambiar, Hareesh N Ramanathan, Sudhir Rana & Others (2019), “Perceived Service Quality and
Customer Satisfaction: A Missing Link in Indian Banking Sector”, The Journal of Business Perspective, Vol.
23, Issue 1, pp. 45-55.
[9]. Jasveen Kaur & Baljit Kaur, “Determining Internet Banking Service Quality and Customer Satisfaction in
India”, ENVISION- Apeejay’s Commerce and Management Journal, pp. 21-29
[10]. Dr. M. Geeta & Dr. C. Naga Sivanand, “Service Quality in Indian Banks- An Empirical Study”, Natural
Volatiles & Essential Oils, Vol. 8 (4), pp. 6110-6135.
[11]. A Book By Choudhary M (2017), “An Introduction to Banking”
[12]. Schneider B & White S. S. (2004), “Service Quality: New Directions in theory & practice” published by sage
publications International & Professional Publisher, pp. 289.
[13]. Pawar S.S. (2017) “Service Quality of Housing Finance An Empirical Study of Banks in Satara District”
PhD. Thesis submitted in Shivaji university Kolhapur, Department off commerce and management
[14]. Baghla Adita ( 2017),”Service Quality in the Retail Banking Sector A Study of Selected Public and New
Indian Private Sector Banks in India An Empirical Study of Malwa Region,” PhD. Thesis submitted to Guru
Kashi University.

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