Effect of Service Quality on Customer Satisfaction in Nepalese Banking Industry

Abstract

Service quality is an important tool for success of service industry sector like banks. Quality is such an important issue that it is considered a really significant concept in our real life. It is regarded as a strategic organizational weapon. And, the pressing need of developing service organizations and upgrading their services necessitates the measuring of service quality. Service quality has a significant impact on a bank’s success and performance. Service quality is particularly essential in the banking services context because it provides a high level of customer satisfaction, and hence it becomes a key to competitive advantage. The studies devoted to customer satisfaction and service quality, service quality is of greater significance for customers’ satisfaction. Hence, this study focuses on examining customer satisfaction towards service quality of Nepalese commercial banks. It was conducted to know the effects of service quality on customer satisfaction in Nepalese banking sector. This study was based on descriptive and causal comparative research designs. To analyze the impact on customer satisfaction from service quality dimensions, primary data were used and tested with correlation and regression analysis. For this Five-point Likert scale technique were used for the sample survey. A total of 400 samples were taken. From the correlation and regression analysis it was found that independent variables namely tangibility, reliability, assurance and empathy had positive significant relationship to the customer’s satisfaction in Nepalese banking sector. However, responsiveness does not have significant effect on customer satisfaction.

Key Words Customer Satisfaction, Tangibility, Responsiveness, Reliability, Assurance, Empathy