Factors Affecting On Customer Satisfaction in Retail Banking: An Empirical Study Ms. Jayshree Chavan, Mr. Faizan Ahmad
MBA, M.Phil. M.Com (adv.cost), M.Com, (Adv. a/c), Ph.D (reg.) Assistant Professor & HOD at Institute of Computer and Management Studies, pandhrpur. Dist: - solapur, Maharashtra. 2 Mr. Faizan Ahmad- MBA, B.Sc (maths) Senior Officer at Business Standard ltd, New Delhi
Abstract: Today, banking is regarded as a consumer-oriented services industry and banks have started realizing that their business increasingly depends on the quality of the consumer service provided and overall satisfaction of the customer. Relationship marketing has become the most critical aspect to corporate banking success. Today, customers expect higher quality services from banks which, if fulfilled, could result in significantly improved customer satisfaction, and potentially retention levels. This empirical research study focuses on exploring the major factors that lead to customer satisfaction in retail banking in Western Maharashtra in India. It also leads to developing a conceptual framework of relationship marketing practices in Indian banks by capturing the perspectives of consumers with respect to their satisfaction with various services. The findings revealed that customer satisfaction, a transaction-specific attribute, is dependent on nine different factors. It is hoped that this research paper would help the bank management not only in improving the overall level of customer satisfaction but also strengthening the bond between the banks and their customers, thereby helping the banks to retain and/or expand their overall customer base.
CUSTOMER SATISFACTION AND RETAILBANKING
Retail banking is a service industry focused towards the customer‟s money and its management. An element that strongly drove the satisfaction of customers in the banking sector was the conviviality factor related to the features of a bank and the attributes of its personnel. Rust and Zahorik (1993), Krishnan et al (1999) conducted various studies and put forward that satisfaction with perceived product quality was the prime driver of overall customer satisfaction. Furthermore, their studies also found and recommended that the impact of service delivery factors varies considerably on customer satisfaction. To further exemplify, they became aware of the fact that for customers who traded heavily and had high investable assets, the effect of an automated telephone service was elevated than that of the other drivers of satisfaction. In another research, Hallowell (1996) looked into the relationship between customer satisfaction and loyalty and his conclusions were quite analogous to Parasuraman et al., (1994). The study concluded that satisfaction with the service, and satisfactions with price were key elements in the overall satisfaction measurement. The measurements used in the above mentioned study were reasonably all-inclusive, and concluded that all the elements measured had a bearing on overall satisfaction. The findings of the study emphasized that the service features of branch, staff and information were dominant factors. Johnston (1997) promoted the notion that banks, in general, were to all intents and purposes, „barking up the wrong tree‟ by enhancing service quality and these efforts in turn had little or no effect on improving customer satisfaction. The study (Johnston, (1997)) suggested that satisfaction or dissatisfaction with retail banking did not arise from the same factors. To be more precise, some elements of service quality, if improved, enhance the satisfaction levels of the customers, while on the other hand, other elements may not improve satisfaction but simply function to keep dissatisfaction at bay or at best, reduce dissatisfaction alone. This...