Customer Satisfaction with Banking Services: A Comparative Study

Service quality and customer satisfaction are very important concepts that companies must understand in order to remain competitive in business and hence grow. It is very important for companies to know how to measure these constructs from the consumers’ perspective in order to better understand their needs and hence satisfy them. Service quality is considered very important because it leads to higher customer satisfaction, profitability, reduced cost, customer loyalty and retention. The main purpose of this study theoretically is finding out how applicable the SERVQUAL model is in the context of banks branch and empirically, describe how consumers perceive service quality and whether they are satisfied with services offered by these branch in Hyderabad. A self-completion questionnaire was developed from the SERVQUAL instrument and distributed using a convenience sampling technique to all bank service users to determine their perceptions of service quality in bank branch. From the analysis carried out, it was found out that, the SERVQUAL model was not a good instrument to measure service quality because some of the items under the dimensions overlapped and regrouped under different dimensions from the factor analysis carried out. It also showed some items associated to more than one component.