Service Quality In Banking

1332 Words6 Pages
Increased competition, highly educated consumers, and increase in standard of living are forcing many businesses to review their customer service strategy. Many business firms are channeling more efforts to retain existing customers rather than to acquire new ones since the cost of acquiring new customer is greater than cost of retaining existing customers.
There is enough evidence that demonstrates the strategic benefits of quality in contributing to market share and return on investment. Maximizing customer satisfaction through quality customer service has been described as ‘the ultimate weapon’ by Davidow and Vital (1989).
According to them, in all industries, when competitors are roughly matched, those with stress on customer’s service
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Therefore, customer service is an essential in the banking service to compete in the market driven environment. Measurement of service quality is difficult in banking sector as compare to the manufacturing sector as services are intangible in nature. Increasingly, service quality has used as a strategic tool by the various market players to position themselves effectively in the market.
Service quality has become a critical prerequisite for satisfying and retaining valued customers in banks. The interest is largely driven by the realization that high service quality results in customer satisfaction and loyalty with the product or service, greater willingness to recommend someone else, reduction in complaints and improved customer retention (Zeithaml et al., 1996). Further, a satisfied customer is likely to be a loyal customer who will give repeating business to the bank (Heskett et al., 1994). Most importantly, the cost of retaining current customers by improving product and services is significantly lower than the cost of winning new customers. Because of the importance of the service quality and customer satisfaction as a route to competitive advantage and corporate profitability in banking, it has become difficult to identify a single bank which has not initiated some kind of service quality improvement
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The relationship between e-banking and service quality can be studied with the level of satisfaction. E-banking plays a pivotal role in giving satisfaction to the customers because e-banking fills the gap between the expected and perceived service quality. So in order to fill this gap, banks should find ways of making electronic services more accessible and by allowing the customer to verify the accuracy of the e-banking transactions.
There are number of reasons due to which customer satisfaction on account of e-banking has improved. The reasons are as follows;
1. Customer can withdraw funds, transfer funds anytime, anywhere they want.
2. Accessibility has been extended through technological development as it allows customers to do business from their home and office.
3. It makes the banking activities and transaction very simpler to understand
4. There is no requirement of direct control with bank, as services can be operated wherever customer wants.
5. It has reduced the waiting time of the customer;
6. Availability of employees at all times is not required as these services are provided 24 hours a day, seven days a
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