BRM Report: Bank Customer Satisfaction

Abstract:

This study finds out the satisfaction level of bank customers for services received from their banks in Multan city. Responses from account holders of conventional and Islamic banks whether they were local or foreign, were received through questionnaire survey.

I conducted this research to know what are people’s perception about the services provided by the various banks. There was a need of this research because it’s to be known that whether customers of these banks are satisfied with the services they are receiving from their banks or not.

This study finds out that most of account holders used ATM services, Bank location, wide ATM network and staff behavior are the major factors which customers prefer in respect of their banks.
The scope of this research is that it will help bank management to learn the ways of improving their service. It will tell them how they can satisfy their customers and what are the shortcomings in their operations.

Introduction:

In recent years, Banking sector of Pakistan has been transformed from a sluggish and government-dominated sector to a much more agile, competitive and profitable industry. Many foreign banks have emerged which have increased the competition among commercial banks. In order to get competitive edge and to attract more and more customers, banks are focusing on providing better services to the customers.

In our study I have tried to find out what is the satisfaction level of bank customers for the services received from their banks in Multan city. Besides this basic objective, I have tried to find out any difference in satisfaction level due to difference in occupation of customers. Moreover this study attempts to find out what banking services are mostly used by account holders and what are those factors which are considered mostly by bank customers in respect of bank services.

This study has its importance for banks to provide information about customers’ satisfaction for different areas of services offered to customers. Findings will help to identify those areas which should be focused to provide better services.

Hypothesis of research:

Customers are satisfied with the services received from their banks in Multan.

Or

Banks in Multan are providing satisfactory services to their customers.
Literature Review:
Customer satisfaction is generally described as the full meeting of one’s expectations (Oliver, 1980). Customer satisfaction is the feeling or attitude of a customer towards a product or service after it has been used. Tantakasem and Lee says that today’s the strategy of services related industry is to win the customer satisfaction by providing superior service. This study enhances the relationship betIen customer satisfaction and service quality. If the customer is fully satisfied then he will be loyal with the bank otherwise he will switch off to that bank which provides the better services. Gremler and W.Brown describes that business are not concerned only with attracting and satisfying customers but also to maintain a long-term relationship with the customers. When the customer is satisfied with the banks services then ultimately he will maintain his business terms with the bank and ultimately the profit of bank will also increases.
Jamal and Naser(2002) and Beerli et al (2004) found the bank service quality as an important antecedent of customer satisfaction which leads towards customer loyalty. Jamal and Naser(2002) looked into the impact of service quality dimensions and customer expertise on satisfaction. Three dimensions of bank service quality are core (i.e. related to transaction accuracy and speed), relational (i.e. related to bank staff behavior) and tangible (i.e. related to bank layout) dimensions. Findings indicate that both core and relational dimensions of are more linked to customer satisfaction. Findings also indicate that customer expertise is negatively related to satisfaction.
Saulaite et al (2000) conducted a study in Qatar to assess whether customer services provided by banks are satisfactory to customers. Findings reveal that bank customers in Qatar are satisfied for convenient location and layout, politeness of staff and responsiveness to their needs. They are dissatisfied with bank interest rate policies and fee charged. Kiser (2000) mentions that customer service and location are the most cited for remaining with a bank.
Holstius et al. (1995) cited efficiency and courtesy of bank staff as the most important attributes in determining overall customer satisfaction, while other important attributes Ire convenience of location, range of services, reputation and availability of innovations.
Sureshchander et.al (2003) focuses on investigating the factors of customer perceived service quality of three banks in India. The banks are local, private and foreign bank. From study it comes to know that customers are most satisfied with the foreign bank as compared to other banks. A foreign bank provides the core services and other service in the standardized and simplified process.
Umari describes about the customer satisfaction on the bases of services provided by the new and old generation banks. The banks prior 1991 are old generation and after 1991 are new generation banks. The customers are more satisfied with the old generation banks as compared to new generation banks. The customers feel no complexity and problem with the old banks services. Although customer relationship management practices adopted by the new generation banks but their services is loIr as compared to the old banks.
Meyers and Mullins (2001) conducted a comparative study of levels customer satisfaction in banks versus credit union in Perth, Australia. The analysis reveals that consumers have better impression of credit unions then they have for banks. Credit unions are competing more directly with commercials banks in products and services offered. The respondents was dissatisfied with the fees charged by banks, the respondent also felt that they Ire getting a higher return on their money from the credit unions. Factors accounting for the high bank fees in Australia are government taxes and charges.

Research Methodology:

This Study was conducted in the city of Multan. Type of the research is descriptive because it finds out the satisfaction level of bank customers for services received from their banks. For our research purpose, I conducted a survey through questionnaires. Our sample unit was an account holder of any conventional or Islamic bank whether it was local or foreign. In order to get better response from customers about theirs satisfaction level, I mostly focused on getting response from respondents who had education up to graduation or above.
Non probability convenience sampling technique was adopted. Around 200 questionnaires Ire given to account holders by visiting banks and their houses. I finally considered 150 questionnaires as our sample size. Remaining 50 questionnaires Ire either not returned or incomplete. Thus response rate was 75%. Majority of respondents belonged to conventional banks. Among conventional banks, respondents of local banks are greater in numbers than that of foreign banks. Due to time limitation I faced difficulty in finding respondents of Islamic banks.

Close ended questions Ire structured to collect information about customers’ satisfaction for different bank services. Likert scale was used to measure satisfaction level. Moreover a respondent was also asked about what bank services he was using and what those factors Ire which he preferred most related to bank services.

Findings:

The demographics of respondents are show in Table 1&2
Majority of respondents have education up to graduation or above, and occupation majority of respondents are salaried persons
Table 1

Table 2

In table-3&4 classify the respondents with respect to bank majority of the respondents are from the conventional banks. Out of total sample of 150 respondents from the conventional banks are 136 and 14 from Islamic banks. Similarly respondents have been classified in to local and foreign banks.95 respondents are form local banks and 55 are from foreign banks.

Table 3

Table 4

Table-5 shows the overall satisfaction level of the respondents majority of bank customers are satisfied with the banks services received. This findings strengths our hypothesis that customers are satisfied with their banks for services received.56 percents of customers are satisfied and 24 percents are highly satisfied only 7 percents are dissatisfied with the services received.

Table 5

Fig-1

This figure shows the results of table 5 that most of the customers are satisfied and the very few customers are dissatisfied.
Table 6 shows satisfaction of customers for each variable of banks services. Respondents are satisfied with the majority of services. Results show that customers are not satisfied with the profit rates on deposits, bank charges, parking s facility and explanation of charges in bank statements.

Table 6

Table 7
Shows what services are mostly used by the customers.

Services Utilization UUtilization	Bank Account	ATM Card	Credit Card	Loan	Fund Transfers	Locker	Internet banking	Telephone banking	Mobile banking	Others
No	-	23	108	128	109	135	128	130	138	147
Yes	150	127	42	22	41	15	22	20	12	3
Percentage	100%	84.6%	28%	14.6%	27.3%	10%	14.6%	13.3%	8%	2%

Table 8
Shows the preferences of customers for services factors, majority of customers are satisfy with location, staff behavior and wide ATM network, table 9 reprents customers preferences in case of conventional banks and table 10 represents Islamic banks, most of the customers of Islamic banks are satisfy with the Islamic way of banking.

Total Preference	Bank location	Branch network	Low bank charges	Wide ATM network	Profits on deposits	Staff behavior	Branch Environment	Transaction speed and accuracy	Range of products	Others	Islamic banking
NIL	62	109	115	76	121	92	112	96	133	148	135
First Preference	43	10	16	16	10	20	12	8	3	2	10
Second Preference	24	15	9	28	14	21	16	19	5	-	1
Third Preference	21	16	10	30	5	17	10	27	9	-	4

Table 9

Conventional	Bank location	Branch network	Low bank charges	Wide ATM network	Profits on deposits	Staff behavior	Branch Environment	Transaction speed and accuracy	Range of products	Islamic banking	Others
NIL	59	97	104	66	109	81	101	83	119	134	134
First Preference	40	10	16	16	10	19	12	8	3	-	2
Second Preference	18	15	8	25	14	20	15	18	5	-	-
Third Preference	19	14	8	29	3	16	8	27	9	2	-

Table 10

Islamic	Bank location	Branch network	Low bank charges	Wide ATM network	Profits on deposits	Staff behavior	Branch Environment	Transaction speed and accuracy	Range of products	Islamic banking	Others
NIL	3	12	11	10	12	11	11	13	14	1	14
First Preference	3	-	-	-	-	-	-	-	-	10	-
Second Preference	6	-	1	3	-	1	1	1	-	1	-
Third Preference	2	2	2	1	2	1	2	-	-	2	-

Anova analysis shows that there is insignificant betIen groups and in betIen groups among the different variables which are banks account, Staff, Branch, ATM and Transactions, means there is no difference among these variables. But Banks Charges are significant, there is difference among the charges variables.

T-Test:

In t-test the independent variable is education and dependent variables are Account, staff, Branch, ATM, Transaction and charges, here I check that whether the education has impact on all these variables, from this test it come to know that there is insignificant among the education and all these variables, whatever is the education it does not effect on the variables.

In tukey-test the independent variable is occupation and dependent variables are Account, staff, Branch, ATM, Transaction and charges, here I check that whether the occupation has impact on all these variables, from this test it come to know that there is insignificant among the occupation and all these variables except bank charges, as the different persons belong to different occupation so there is significance among the occupation and bank charges.

Limitations:

v The major limitation that I had during this study was of time limitation. That is why I had to limit our sample size up to 150.
v Account holders of Islamic bank Ire not easily accessible. That is why respondents of Islamic banks are less is numbers in our sample than that of conventional banks.
v Each person has different standards to rate satisfaction, so it is possible that two persons may have rated the services of a same bank differently.
v Due to the limited resources the research has been conducted only in local area.
Conclusion:
I found out through this study that banks are providing satisfactory services to there customers. 80% of customers are satisfied with the services received from there banks. 84% of our respondents are using ATM services. Bank location, ATM network and staff behavior are the major factors which customers preferred most in respect of there banks services. Occupation and education of customers are insignificant variable for the customer’s satisfaction.

References:
1. Ahmad Jamal, Kamal Naser(2002), “Customer satisfaction and retail banking: an assessment of some of the key antecedents of customer satisfaction in retail banking”, International Journal of Bank Marketing 20/4,146-160
2. AsuncioAn Berlin, Josef a D. MartAn and AgustAn Quintana(2004), “A model of customer loyalty in the retail banking market“, European Journal of Marketing, Vol. 38 No. 1/2,pp. 253-275
3. Elizabeth K. Kiser(2002), “Household Switching Behavior at Depository Institutions: Evidence from Survey Data”
4. Gremler and Brown, “The loyalty ripple effect appreciating the full value of customers”. International journal of service industry management. Volume 10 no 3, pp 271-291
5. Karin, Holstius and Erdener Kaynak (1995), Retail banking in Nordic
countries: The case of Finland. International Journal of Bank Marketing, Volume 13, No. 8, pp. 10-20.
6. Khalid Al-Sulaiti Abdullah Al-Khulaifi Fawzi AI-Khatib(2000), “BANKING SERVICES AND CUSTOMER'S SATISFACTION IN QATAR: A STATISTICAL ANALYSIS”, College of Business and Economics Qatar University
7. Martin S. Meyers, Gary E. Mullins, “A Comparative Analysis of Levels of Customer Satisfaction in the Financial Services Industry: Banks versus Credit Unions in Perth, Australia”
8. Oliver, R.L. (1980), ``Cognitive model of the antecedents and consequences of satisfaction decisions’’, Journal of Marketing Research, Vol. 17, November, pp. 460-9
9. Sureschchandar, Rajandran and Anantharaman,(2003) “ Customer perceptions of service quality in the banking sector of a developing economy: A critical analysis”, pp 233-242
10. Tantakasem and Lee, “Service quality and customer satisfaction chain in the Thai retail banking industry”
11. Umari, “Customer satisfaction: A comparison betIen new generation and old generation”.
12. Winnie Chung and John Paynter, “An Evaluation of Internet Banking in New Zealand”

Bank Customer Satisfaction Questionnaire

Introduction: We, the students of MBA in Bahauddin Zakariya University Multan, are conducting a research to find out bank customers’ satisfaction level for services received from their banks .This research will be helpful for banks to provide better services to their customers. You are requested to fill this questionnaire if you are an account holder of any Conventional or Islamic bank in Multan city. Your response will be valuable for us.
Instruction: Please tick a box in each line to show how you feel about different areas of your bank services.

Your name Gender: Male Female

Education: Graduation or above Above matriculation
Occupation: Business owner Salaried person others

Your bank name

Bank Services

Q1. What Banking Services do you use?

1. Bank account 2. Debit/ ATM card

3. Credit card 4. Loan

5. Fund Transfers 6. Locker

7. Internet banking 8. Telephone banking

9. Mobile banking 10.
(Any other-Please specify)
Account Maintenance

Q2. How satisfied are you with the way your account is maintained?

	Highly Satisfied	Satisfied	Neutral	Dissatisfied	Highly Dissatisfied
Ease to open account
Account is held without errors
Timely Bank Statements
Charges are clearly explained

Staffs

Q3. How satisfied you are with bank staffs who are/who?

	Highly Satisfied	Satisfied	Neutral	Dissatisfied	Highly Dissatisfied
Greet you
Well dressed
Polite / Courteous
Supportive / provide guidance
Quick in processing
Knowledgeable

Branch

Q4. How satisfied are you with?

	Highly Satisfied	Satisfied	Neutral	Dissatisfied	Highly Dissatisfied
Easy Accessibility of branch
Wide Branch Network
Level of privacy offered in the branch
Cleanliness of the branch
Branch timing
Staff turnover
Variety of products and services offered
Parking facility
Quematic System (Does it exist in your bank?)	Yes
No	It should exist No need of it

ATM

Q5. How you are satisfied with?

	Highly Satisfied	Satisfied	Neutral	Dissatisfied	Highly Dissatisfied
Wide ATM network
Availability of ATM in working condition
Amount withdrawal limit
Easy to operate

Transactions

Q6. How satisfied are you with?

	Highly Satisfied	Satisfied	Neutral	Dissatisfied	Highly Dissatisfied
Transactions are accurate
Transactions are speedy
Forms and slips are easy to fill

Bank Charges And Rates

Q7. How satisfied are you with?

	Highly Satisfied	Satisfied	Neutral	Dissatisfied	Highly Dissatisfied
Bank charges are fair and competitive
Profit rates on deposits are competitively high

Satisfaction

Q8. How likely are you to?

	Very Likely	Likely	Neutral	Unlikely	Very unlikely
Recommend this bank to others
Remain a customer of this bank

Q9. Overall how are you satisfied with the services you receive from your bank?

Highly Satisfied	Satisfied	Neutral	Dissatisfied	Highly Dissatisfied

Q10. Which are three major factors that motivate you to keep yourself with your bank? (Please use 1, 2 and 3 to prioritize these three factors. Where ‘1’ refers to most important)

Bank location Wide branch network
Low bank charges ATM network
Profit rates on deposits Staff behavior
Branch environment Transaction speed and accuracy
Wide range of products Islamic way of banking