Auntie Anne

Topics: Financial services, Service, Investment management Pages: 36 (11500 words) Published: March 16, 2013
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The impact of financial services quality and fairness on customer satisfaction Houn-Gee Chen
Department of Business Administration, National Taiwan University, Taipei, Taiwan

The impact of fairness


Julie Yu-Chih Liu
Department of Information Management, Yuan Ze University, Chung-Li, Taiwan

Tsong Shin Sheu
Department of Industrial Eng. and Management, Nan Kai University of Technology, Tsao Tun, Taiwan, and

Ming-Hsien Yang
College of Management, Fu-Jen Catholic University, New Taipei, Taiwan Abstract
Purpose – Customer satisfaction in the banking industry has long been measured as a function of service quality by using a variation of the SERVQUAL instrument. The purpose of this paper is to build a broader understanding of the determinants of customer satisfaction throughout the financial services industry by incorporating the perceptions of fairness in service delivery (FAIRSERV) and outlining why and how FAIRSERV is important to customer satisfaction. Design/methodology/approach – The authors conduct a cross-sectional questionnaire survey, including samples of 420 customers from the financial services industry in Taiwan. PLS-Graph is used to evaluate the measures of reliability as well as validities, and to test the hypotheses. Findings – The results show that fair service not only has a significant impact on customer satisfaction, but also plays a role equivalent to service quality in determining customers’ trust and perceived value, which in turn lead to customer satisfaction. Research limitations/implications – The impact of FAIRSERV on customer satisfaction should be emphasized. Future studies examining the impact of service quality on customer satisfaction should incorporate the concept or instruments of fair service as a major contributor. Practical implications – The results imply that financial institutions must carefully implement policies and practices to ensure that perceptions of fairness are propagated throughout the organization. Originality/value – The paper proposes a complementary component to service quality in determining the perceived value and satisfaction. The paper emphasizes the significance of fairness on service, and provides additional insights into the impacts of FAIRSERV on customer satisfaction. Keywords Taiwan, Financial services, Service quality, Trust, SERVQUAL, Service fairness, Customer satisfaction, Perceived value Paper type Research paper

1. Introduction Service quality, customer value, and satisfaction are some of the most important factors of business competition for manufacturers and service providers alike (Zeithaml et al., 1996; Parasuraman et al., 1988; McDougall and Levesque, 2000). With the increasingly intense competition for customers in today’s service industry, these factors are high management priorities (Parasuraman, 1997; Wang et al., 2004;

Managing Service Quality Vol. 22 No. 4, 2012 pp. 399-421 r Emerald Group Publishing Limited 0960-4529 DOI 10.1108/09604521211253496

MSQ 22,4


Olorunniwo and Hsu, 2006). Researchers generally agree that service quality leads to higher levels of customer perceived value and customer satisfaction. Financial executives and banking strategies are becoming more focussed on service quality to increase customer satisfaction and business success in the financial services industry (Arasli et al., 2005; Al-Hawari et al., 2009). Until recently, no study has challenged the assumption that service quality dominates the determination of customer satisfaction in the provision of services. Carr (2007) argued that managers cannot simply create services, provide them at high-quality levels, and hope for the best; instead, he argued that service evaluations result from a comparison of services against the norms of fairness and the treatment of similar customers, a fairness of service consideration. The...
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