Consumer Perception of Public & Private Sector Banks: a Service Quality Approach

Topics: Bank, Retail banking, Commercial bank Pages: 19 (6231 words) Published: July 5, 2011
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Customer perception on service quality in retail banking in Middle East: the case of Qatar Mohammed Hossain and Shirley Leo
Department of Accounting and Information Systems, College of Business and Economics, Qatar University, Doha, Qatar Abstract
Purpose – The 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/approach – This 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. Findings – The result indicates that customers’ perception is highest in the tangibles area and lowest in the competence area. Practical implications – In 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/value – This paper makes a useful contribution given that there are only a few studies dealing with the assessment of service quality in banking environments. Keywords Customer services quality, Customer satisfaction, User studies, Banking, Qatar Paper type Research paper


International Journal of Islamic and Middle Eastern Finance and Management Vol. 2 No. 4, 2009 pp. 338-350 q Emerald Group Publishing Limited 1753-8394 DOI 10.1108/17538390911006386

1. Introduction In service industries, globally, the subject of service quality remains a critical one as businesses strive to maintain a comparative advantage in the marketplace. Since financial services, particularly banks, compete in the marketplace with generally undifferentiated products, and service quality becomes a primary competitive weapon (Stafford, 1996). It is true that structural changes have resulted in banks being allowed a greater range of activities, enabling them to become more competitive with non-bank financial institutions (Angur et al., 1999). Currently, technological changes are causing banks to rethink their strategies for services offered to both commercial and individual customers. Moreover, banks that excel in quality service can have a distinct marketing edge since improved levels of service quality are related to higher revenues, increased cross-sell ratios and higher customer retention (Bennett and Higgins, 1993), and expanded market share (Bowen and Hedges, 1993). Moreover, the banks understand that customers will be loyal if they can produce greater value than competitors

(Dawes and Swailes, 1999). In addition, higher profits will be earned by the banks if they can position themselves better than their competitors within a specific market (Davies et al., 1995). Therefore, banks should focus on service quality as a core competitive strategy (Chaoprasert and Elsey, 2004). Within this background, customer satisfaction and service quality are compelling the attention of all banking institutions around the world and Qatar is not an exception. It is indeed true that delivery of high-service quality to customers offers firms an opportunity to differentiate themselves in competitive...
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