A Model for Service Quality and Customer Loyalty in Banking Industry of Bangladesh

Md. Hafizur Rahman, Md. Rakibul Islam, Farhana Mitu, Mohitul Ameen Ahmed Mustafi

Customers of the banks in Bangladesh are highly service sensitive. Thus, the quality of the services provided by the banks to its customers is the key to success. There is also a relationship between service quality and the customer loyalty in banks. Therefore, this study aims at determining the influence of service quality factors such as, assurance, empathy, reliability, responsiveness, and tangibility on customer loyalty in banking sector in Bangladesh. By using structured questionnaire, this study was conducted on 529 customers of 15 private commercial banks of Bangladesh. Convenient sampling method was used for collecting the data for this study. A multivariate analysis technique like Structural Equation Modeling (SEM) was used for analysing the relationships among service quality dimensions, and customer loyalty. Results show that the service quality factors like assurance and reliability positively affect on customer satisfaction in banking sector of Bangladesh. Results also show that the customer satisfaction is also positively related to customer loyalty in the bank. It is suggested that the policymakers of the banking industry of Bangladesh should give importance on service quality factors like assurance, reliability, specially empathy, responsiveness and tangibility for increasing the customer loyalty in their banks.

https://dx.doi.org/10.31873/IJEAS/6.4.2019.33