RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER SATISFACTION: A STUDY OF MALAYSIAN BANKING INDUSTRY

Abstract

This paper is conducted to find out the relationship between service quality and customer satisfaction in the Malaysian banking industry. This paper uses SERVQUAL instrument questionnaire. The variables include in this paper are Service Quality as independent variable and Customer Satisfaction as dependent variable. The questionnaire includes 22 items of service expectations, 22 items of service performance perceptions, two different single items of service quality and customer satisfaction. A sample size of 200 respondents is conducted in Klang Valley Cities, Malaysia. A multivariate regression analysis is performed to study the impact of banking service quality on customer satisfaction in Malaysian banking industry. The results reveal that the expectations of Malaysian banks are higher than perceptions in terms of service quality. Their expectations are not met and that the largest gap is found in Reliability dimension. The findings from regression analysis suggest that banking service quality significantly influenced by customer satisfaction. In addition, the results from multiple regressions analysis show that the Tangible dimension has the largest influence on customer satisfaction. The findings provide several implications for bank managers and service organizations on the utilization of service quality evaluation to influence customer satisfaction. Also, limitations of the research are provided and the direction for future research is suggested for further study in the area of banking service quality and customer satisfaction. Implications of this paper are provided to both academic researchers and managerial practitioners.