Banks are playing a very important role in the economic development of a nation. The healthiness of the economy is directly connected to the soundness of its banking system. The role of banks has placed them as a very valuable partner in the process of economic development. Nowadays, banks are very useful for the utilization of the assets of a nation. If there would be no banks then a large segment of assets in the country would stay idle.
It is possible to attaining long-term success in the banking sector by providing excellent customer service. It is an effective strategy for taking full advantage from the engagement between customers with organizations and also offering a competitive edge to survive in this tough market environment. The profitability and sustainability of any businesses are mostly depends on how long the services and products their customers hold. Matter- of-course, the banking sector is not an exception to this concept; all of the banks attempt to make a different by using their customer service strategy and give their customers an exclusive experience with their products and services. The primary aim of them is to assure and win their loyalty for their company.
In order to accomplish this, each bank wishes to offer an outstanding service towards their customers. If a firm failed to keep and improve their services, it is impossible for them to accomplish their targets. So, customer loyalty can be said as a remarkable strategic objective for businesses. While studies on customer loyalty have been prolific within the marketing fulcrum (Mittal and Lassar, 1998; Teich, 1997; Aydin and Ozer, 2004; and Rowley, 2004), especially within the developed countries, the literature appears deficient in countries such as Indian. Hence, achieve customer satisfaction and loyalty is crucial to banks success and also acts as the key contribution to sustainable profit growth.
1.1 Research Background
The ongoing reforms process, technology advancement, increasingly competition and product innovations have provided customer with great alternative to fulfilling their needs. Thus, various organizations strive to focus their effort on retaining loyal customer to survive in this challenges environment, and banks are not an exception. However, significant challenges lie ahead for the banks in the nation as they get ready to embrace international standards and best practices. As the banking business has significantly influenced by the evolution of globalization, the very small differences in both of the financial services and products offered along with an increasingly more customer demand have lead to an immense transformation in the industry. Over the last couple years, banking industry has been experiencing a continuous transformation with strong competition in rising demand for banking services and products throughout the period of three years (2005 - 2007) and confront with significantly declining demand in the beginning of 2008. The increased cases of near-collapse of the global financial system in financial market crisis in 2008 have left bankers searching for a profitable path forward in a permanently altered competitive landscape. This worldwide financial market crisis in 2008 have encourages public trust in financial services companies to re-evaluate their customer relationship. Given the unfolding landscape, banks have initiated to concentrate on efficiency, cost optimization, service quality and driving customer value via the customer retention and loyalty programs. By doing this, however, banks are requiring to reorganize well-established business practices. Apart from that, new financial-reform legislation in the US has causes banks in rigid scrutiny, restricts them to operates businesses in which they will be permitted, sets higher capital requirements, confines fees and bringing in a new level of oversight in the form of a consumer financial protection watchdog. Thus,...