Customer Satisfaction in the Indian Banking Sector

Customer Satisfaction in the Indian Banking Sector

Volume 20, Number 1 Article by Vimi Jham & Kaleem Mohd Khan March, 2008

Customer Satisfaction in the Indian Banking Sector: A Study :

In today’s competitive environment relationship marketing is critical to banking corporate success. Banking is a customer oriented services industry and Indian banks have started realising that business depends on client service and the satisfaction of the customer. This is compelling them to improve customer service and build relationships with customers.

This study, conducted among five Indian banks, aimed at identifying customer satisfaction variables which lead to relationship building, and developing a conceptual framework of relationship marketing practices in Indian banks by capturing the perspectives of customers with respect to their satisfaction with various services. It also sought to identify whether demographics have a role to play in customer satisfaction. A questionnaire designed from a literature review and in-depth interviews were utilised to arrive at the 16 variables which determined the satisfaction of 555 customers of the five banks..

The three relationship dimensions, namely, traditional services, multi channel banking and internal marketing, which lead to customer satisfaction, were identified through factor analysis. A repeated measure of ANOVA was run on the relationship dimensions to assess significant difference in the level of satisfaction of the customer. A perceptual map was created using the factor scores of each of the five banks which helped identify how each bank was positioned in the customers’ minds.

Reporting on the different satisfaction levels of the customers, the findings suggest that while private banks have been able to attract the younger customers with higher educational levels, who are comfortable with multi channel banking, the customers of the national bank are older and more satisfied with the traditional facilities. The results from this study could provide managerial lessons on assessment of strengths and improvement of services and in evolving a research strategy that will benefit the management of banks.

Reprint No 08106