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Service quality models in banking: a review

Jaya Sangeetha
Modern College of Business and Science (MCBS), Muscat, Sultanate of Oman, and

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S. Mahalingam
BSMED, Bharathiar University, Coimbatore, India
Abstract
Purpose The purpose of this paper is to appraise various service quality models and identify issues for future research based on the analysis of literature. Design/methodology/approach The paper examines 14 different service quality models reported in the literature applicable to the banking sector. The critical review of the different service quality models is intended to compile the various dimensions which emerged out of the studies, compare the commonality between them, study their relevance and importance in banking in the various cultural and cultural contexts and highlight the limitations of the studies. Findings The review of various service quality models in banking revealed that the meaning of service quality may have some universal aspects, as demonstrated by the similarities in the underlying dimensions as proposed in the different studies. This paper lends support to the contention that the dimensionality of SERVQUAL and importance of the dimensions vary with the cultural and country context even within the banking industry. Research limitations/implications This paper comprises a compiled report on the different service quality models and the effect of application of SERVQUAL in banking in different countries. Practical implications Service quality has some common dimensions across the different models, however, the items involved and their operationalization in different cultural contexts within the same banking sector may vary. The paper indicates that a generic instrument for measurement of service quality or even one specically developed for banking may not be applicable in its original form for all cultural contexts including Islamic society and banks. Development of the customized scale for measuring the service quality for a particular cultural or country context at that particular time is warranted. This paper brings a lot of information on service quality in banking under one roof and provides new directions to service quality researchers. Originality/value This paper offers practical help to researchers and practitioners in providing a direction for service quality improvement by indicating the common theme that emerges from the service quality models. Also, the differences in the relevance and importance of the dimensions, due to the change in the cultural and country contexts, have been brought to the forefront. Keywords Banking, SERVQUAL, Customer satisfaction, Customer services quality, Customer behaviour, Electronic channels Paper type Literature review

Introduction During the past two decades or so, regulatory, structural and technological factors have signicantly changed the banking environment throughout the world
The authors are grateful to Dr Badr-El-Din A. Ibrahim, Dean, MCBS, and the two anonymous reviewers for their constructive comments and valuable ideas on earlier versions of the manuscript.

International Journal of Islamic and Middle Eastern Finance and Management Vol. 4 No. 1, 2011 pp. 83-103 q Emerald Group Publishing Limited 1753-8394 DOI 10.1108/17538391111122221

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(Angur et al., 1999). In a milieu which becomes increasingly competitive, service quality as a critical measure of organizational performance continues to compel the attention of banking institutions and remains at the forefront of services marketing literature and practice (Lasser et al., 2002). The interest is largely driven by the realization that high service quality results in customer satisfaction and loyalty, greater willingness to recommend to someone else, reduction in complaints and improved customer retention rates (Levesque and McDougall, 1996). There has been a continued research on the denition, modeling, measurement, data-collection procedure, data analysis, etc. issues of service quality, leading to development of sound base for the researchers. This documented knowledge base through several studies on the subject can be of great use to researchers and practitioners in the banking industry in providing a direction on how to explore/modify the existing service quality concepts with the changing world scenario (shift from conventional personalized services to web-enabled services). For an organization to gain competitive advantage it must use technology to gather information on market demands and exchange it between organizations for the purpose of enhancing the service quality. Researchers and managers thrive for learning details about components of service quality in their organization for obvious reasons of customer satisfaction, increased protability, etc. In this context, model gains specic importance as it not only helps in learning the factors associated with it, but also provides a direction for improvements. A conceptual model attempts to show the relationships that exist between salient variables. It is a simplied description of the actual situations. It is envisaged that conceptual models in service quality enable management to identify quality problems and thus help in planning for the launch of a quality improvement program thereby improving the efciency, protability and overall performance. This paper makes an attempt to study various service quality models covering the aspects of conventional services to web-interacted services for banking. The primary aim of these models is to enable the management to understand and enhance the quality of the organization and its offering. A total of 14 conceptual service quality models reported during the period (1984-2006) which are applicable to the banking sector (both conventional and Islamic) are reviewed in this paper. Each of them is representative of a different point of view about services. The organization of this paper is as follows: initially after highlighting the need for the present study, a generalized framework of the study is presented. This is followed by a brief discussion of the models and the next section deals with summary, discussion and conclusion of the same. Finally, the agenda for future research is spelt out. 1. Need for present study Recently, globalization and liberalization are affecting economies of not only developing, but also developed countries. The focus areas for organizations are also changing from prot maximization to maximizing prots through increased customer satisfaction. The pressures of competition are forcing the organizations to not only look at the processes, but also on the way they are delivered. During past two decades, business scenario has changed drastically. Some of the key changes that have taken place in the business are: . horizontal business processes replacing vertical functional approach; . greater sharing of information with all connected links and customers;

. . .

. . . . . . .

greater emphasis on organizational and process exibility; necessity to coordinate processes across many sites; employee empowerment and the need for rules-based real-time decision support systems; competitive pressure to introduce new service/products more quickly; integrated customer-driven processes; quick response to customers needs; worldwide relationships between various trade partners, suppliers, etc.; easily accessible information through internet; exible and efcient service/product customization; and emergence and growing importance of Islamic economies.

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Owing to the factors like opening up of markets, increase in use of IT, increased customer knowledge and awareness, etc. it becomes a must to deliver the services better than its competitor at agreed price. In this context, the subject of service quality needs a fresh understanding in the current business scenario. This study can help to identify the various general models applicable for banking and the changes found in the results owing to context or cultural changes in the various countries including conventional and Islamic banking system. It is also aimed to review the models specically developed for the banking industry, their strengths and limitations. This study thus attempts to provide benets to practicing managers and researchers by compiling a large amount of information on service quality in banking at one place. 2. Framework for study The subject of service quality is very rich in context of denitions, models and measurement issue. Several researchers explored the subjects with varying perspectives and using different methodologies. The following factors seem to be suitable for comparative evaluations of the models: . identication of factors affecting service quality; . exibility to account for changing nature of customers perceptions; . directions for improvement in service quality; . suitability to develop a link for measurement of customer satisfaction; . diagnosing the needs for training and education of employees; . exible enough for modications as per the changes in the environment/conditions; . accommodates use of IT in services; and . capability to be used as a tool for benchmarking. With these issues as focus this present study is undertaken to understand the service quality models in the above light. 3. Service quality models The present study is an attempt to review service models in the light of the changed business scenario as applied to conventional and Islamic banking and analyze the models

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for the suitability/need for modication in the current context. In this section, we would provide a brief explanation of all the major service quality models which are applicable to banking and those that have been developed for banking. The models are presented using a standard structure, i.e. covering brief discussion and the major observations on the models. The brief discussions on the models are as under. 3.1 SQ1: GAP model Parasuraman et al. (1985) proposed that service quality is a function of the differences between expectation and performance along the quality dimensions. They developed a service quality model (Figure 1) based on GAP analysis. The various GAPs visualized in the model are: GAP 1. Difference between consumers expectation and managements perceptions of those expectations, i.e. not knowing what consumers expect. GAP 2. Difference between managements perceptions of consumers expectations and service quality specications, i.e. improper service quality standards. GAP 3. Difference between service quality specications and service actually delivered, i.e. the service performance GAP. GAP 4. Difference between service delivery and the communications to consumers about service delivery, i.e. whether promises match delivery?

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Words of mouth communication Consumer

Personal needs

Past experience

Expected service GAP 5 Perceived service GAP 4

Marketer GAP 1

Service delivery (including pre and post contacts) GAP 3 Translation of perceptions into service quality specifications GAP 2 Mangement perceptions of the consumer expectations

External communications to the consumer

Figure 1. GAP analysis model

Source: Parasuraman et al. (1985)

GAP 5. Difference between consumers expectation and perceived service. This GAP depends on size and direction of the four GAPs associated with the delivery of service quality on the marketers side. According to this model, the service quality is a function of perception and expectations and can be modeled as: SQ where: SQ k Pij Eij
k X j1

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P ij 2 E ij

overall service quality; number of attributes; performance perception of stimulus i with respect to attribute j; and service quality expectation for attribute j that is the relevant norm for stimulus i.

This exploratory research was rened with their subsequent scale named SERVQUAL for measuring customers perceptions of service quality (Parasuraman et al., 1988). At this point, the original ten dimensions of service quality collapsed into ve dimensions: reliability, responsiveness, tangibles, assurance (communication, competence, credibility, courtesy and security) and empathy which capture access and understanding/knowing the customers. Later SERVQUAL was revised in 1991 by replacing should word by would and in 1994 by reducing the total number of items to 21, but ve-dimensional structure remaining the same. In addition to this empirical research, the authors characterized and further delineated the four GAPs identied in their research of 1985. This led to extended service quality model (Figure 2). According to this extended model most factors involve communication and control process implemented in organizations to manage employees. 3.2 SQ2: Technical and functional quality model A rm in order to compete successfully must have an understanding of consumer perception of the quality and the way service quality is inuenced nroos, 1984). (Gro Managing perceived service quality means that the rm has to match the expected service and perceived service to each other so that consumer satisfaction is achieved. The author identied three components of service quality, namely: technical quality, functional quality and image: (1) Technical quality is the quality of what consumer actually receives as a result of his/her interaction with the service rm and is important to him/her and to his/her evaluation of the quality of service. (2) Functional quality is how he/she gets the technical outcome. This is important to him and to his/her views of service he/she has received. (3) Image is very important to service rms and this can be expected to build up mainly by technical and functional quality of service including the other factors (tradition, ideology, word of mouth, pricing and public relations).

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Upward communication Levels of management Management commitment to service quality Goal setting

Gap 1

Gap 2 Task standardization Perception of feasibility Team work Employee job fit Technology job fit Perceived control Gap 3 Supervisory control systems Gap 5 (service quality)

Tangibles Reliability Responsiveness Assurance Empathy

Role conflict Role ambiguity Horizontal communication Gap 4 Propensity to overpromise

Figure 2. Extended model of service quality

Source: Zeithaml et al. (1988)

3.3 SQ3: Service quality attributes from customers perspective by Mersha and Adlakha (1992) The purpose of the study was to identify and rank quality attributes from the consumers perspective, the authors modied and extended the SERVQUAL instrument as per the Haywood-Farmer and Stuart model by including additional questions to assess service core, service customization and knowledge and information. This was an attempt to make SERVQUAL more applicable in professional settings. However, the approach used is different. Here, the attributes of good and poor quality of services are identied and ranked separately. The use of this approach was initiated by the expectation that a particular attribute may have different degrees of importance as an indicator of poor or good quality of service. Five services were selected for the study physician services, retail banking, auto maintenance, colleges/universities and fast food restaurants. As per the study, the top six attributes for good service quality were: (1) knowledge of the service; (2) thoroughness/accuracy; (3) consistency/reliability; (4) reasonable cost; (5) willingness to correct errors; and (6) timely/prompt service. And the most important attributes for poor service quality were: . lack of knowledge about the service; . employee indifference or I dont care attitude; . reluctance to correct errors; . service inconsistency; . sloppy service; and . high cost. For retail banking service type, the most important characteristics of good quality were found to be: . willingness to correct errors; . thoroughness/accuracy of service; . consistency/reliability; and . knowledgeability. And the most important characteristics of poor service quality were found to be: . reluctance to correct errors; . employees indifference; . lack of knowledge about the service; and . sloppy service.

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3.4 SQ4: Importance-performance analysis and service quality by Ennew et al. (1993) Approaches to the measurement of service quality have typically been based on the analysis of the relationship between customer expectations of a service and their perceptions of the quality of provision. Operationalizing these measures has been either as simple comparisons of mean scores or extensive and detailed statistical modeling. In this study, the authors examine the problems associated with the measurement of the quality of service provision and present a set of indices to provide measures of expectations, perceptions and overall satisfaction. As a result they propose a compromise solution in the form of a series of indices and related scores which makes more thorough use of survey data on expectations and perceptions and which is considerably less complex than the widely used statistical models. The 11 dimensions of service quality used in this analysis have been acknowledged by the authors as relatively narrow and are listed as follows: (1) knows business; (2) knows industry; (3) knows market; (4) gives helpful advice; (5) wide range of services; (6) competitive interest rates; (7) competitive charges; (8) speed of decision; (9) tailors nance; (10) deal with one person; and (11) easy access to loan ofcer. The authors suggest that the method provides easily interpretable results, indicating areas which might be of concern to the banking sector as a whole, or to individual banks. 3.5 SQ5: Customer service quality scale by Avkiran (1994) The purpose of the research was to develop a utilitarian multi-dimensional instrument that can be applied to measuring customer service quality as perceived by branch bank customers. In developing the measurement instrument, results of the rst stage scale purication by Parasuraman et al. (1985) was used as the starting point. A 17-item four-dimensional scale emerged following a study to develop an instrument for measuring customer service quality at trading bank branches, with a focus on retail banking. The four dimensions that emerged are staff conduct, credibility, communication and access to teller services: (1) Staff conduct responsiveness, civilized conduct and presentation of branch staff that will project a professional image to the customers. (2) Credibility maintaining staff-customer trust by rectifying mistakes, and keeping customers informed. (3) Communication fullling banking needs of customers by successfully communicating nancial advice and serving timely notices.

(4) Access to teller services the adequacy of number of staff serving customers throughout business hours and during peak hours. The instrument can be applied as part of branch performance measurement, as well as help diagnose problems in delivery of service and segment the banks customer base for healthier decision making in marketing.

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3.6 SQ6: Service quality model by Blanchard and Galloway (1994) The objective of the authors was to determine the perceptions of customers regarding the requirements of quality service in retail banking using SERVQUAL. The failure of the SERVQUAL model to provide any particularly useful insights into how service might be improved led to the attempt to develop an alternative model of greater utility. The model proposed by the authors is based on three dimensions which are as follows: (1) Process/outcome key issues with regard to service design and outcome. (2) Subjective/objective provides a measure of the degree to which the quality of that aspect of the service under consideration can be objectively specied. (3) Soft/hard hard represents physical aspects of the service while soft represents interpersonal interaction. 3.7 SQ7: Service quality factors based on satisfaction by Johnston (1997) A disturbing paradox found by the author in the UK banking industry is the amount of reported customer dissatisfaction with banks, despite large-scale efforts of the banks, over many years, to try to improve their service to customers. This led him to derive a framework to help assess the likely impact of any service quality initiative. The study categorizes quality factors in terms of their relative importance and their effect on satisfaction and dissatisfaction. The 18 determinants of service quality proposed are: (1) Access the physical approachability of service location, including the ease of nding ones way around the service environment and clarity of route. (2) Aesthetics extent to which the components of the service package are agreeable or pleasing to the customer, including both the appearance and the ambience of the service environment, the appearance and presentation of service facilities, goods and staff. (3) Attentive/helpfulness the extent to which the service, particularly contact staff, either provide help to the customer or give the impression of being interested in the customer and show a willingness to serve. (4) Availability the availability of service facilities, staff and goods to the customer. In the case of contact staff, this means both the staff/customer ratio and the amount of time each staff member has available to spend with each customer. In the case of service goods, availability includes both the quantity and range of products made available to the customer. (5) Care the concern, consideration, sympathy and patience shown to the customer. This includes the extent to which the customer is put at ease by the service and made to feel emotionally (rather than physically) comfortable.

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(6) Cleanliness/tidiness the cleanliness, neat and tidy appearance of the tangible components of the service package, including the service environment, facilities, goods and contact staff. (7) Comfort the physical comfort of the service environment and facilities. (8) Commitment staffs apparent commitment to their work, including the pride and satisfaction they apparently take in their job, their diligence and thoroughness. (9) Communication the ability of the service to communicate with the customer in a way he or she will understand. This includes the clarity, completeness and accuracy of both verbal and written information communicated to the customer and the ability to listen to and understand the customer. (10) Competence the skill, expertise and professionalism with which the service is executed. This includes the carrying out of correct procedures, correct execution of customer instructions, degree of product or service knowledge exhibited by contact staff, the rendering of good, sound advice and the general ability to do a good job. (11) Courtesy the politeness, respect and propriety shown by the service, usually contact staff, in dealing with the customer and his or her property. This includes the ability of staff to be unobtrusive and uninterfering when appropriate. (12) Flexibility a willingness and ability on the part of the service worker to amend or alter the nature of the service or product to meet the needs of the customer. (13) Friendliness the warmth and personal approachability (rather than physical approachability) of the service, particularly of contact staff, including cheerful attitude, the ability to make the customer feel welcome. (14) Functionality the serviceability and tness for purpose or product quality of service facilities and goods. (15) Integrity the honesty, justice, fairness and trustworthiness with which customers are treated by the service organization. (16) Reliability the reliability and consistency of performance of service facilities, goods and staff. This includes punctual service delivery and ability to keep to agreements made with the customer. (17) Responsiveness speed and timeliness of service delivery. This includes the speed of throughput and the ability of the service to respond promptly to customer service requests, with minimal waiting and queuing time. (18) Security personal safety of the customer and his or her possessions while participating in or beneting from the service process. This includes the maintenance of condentiality. 3.8 SQ8: Technology in delivery of perceived service quality by Joseph et al. (1999) The use of technology in the delivery of banking services is becoming increasingly prevalent as it is being employed to reduce costs and eliminate uncertainties. This research investigates the role that technology plays in Australian banking and its impact on the delivery of perceived service quality. Martilia and James (1977) developed a simple importance/performance technique whose most attractive feature is that the mean importance and performance results can be graphically illustrated on a two-dimensional grid.

Hemmasi et al. (1994) redeveloped the importance-performance grid by drawing the axes based on the overall importance and performance means rather than based on the midpoint of the scale. Arguably, the Hemmasi et al. (1994) grid provides a useful alternative tool for strategy development as it provides a clearer picture of the factors that are critical for resource allocation. The authors use the Hemmasi et al. (1994) importance-performance grid and identied a six-factor model consisting of: (1) convenience/accuracy; (2) feedback/complaint management; (3) efciency; (4) queue management; (5) accessibility; and (6) customization. 3.9 SQ9: Banking service quality model by Bahia and Nantel (2000) The instruments available for measuring service quality include either scale contextually developed by specic banks to cope with occasional problems or instruments not especially designed for banking service but rather to measure the perceived service quality across a broad spectrum of services. In view of the non-availability of publicly available and standard scale to measure the perceived quality of banking services, the authors propose the banking service quality (BSQ) scale comprising of 31 items spanning six dimensions, namely: (1) effectiveness and assurance; (2) access; (3) price; (4) tangibles; (5) services portfolio; and (6) reliability. 3.10 SQ10: Service quality model by Sureshchander et al. (2001) The criticisms about SERVQUAL in the research literature, made the authors undertake a careful scrutiny of the 22 items of SERVQUAL and it implied that the items at large deal with the element of human interaction/intervention in the service delivery and the rest on the tangible facets of service. The instrument seems to have overlooked some other important factors of service quality, namely: service product or the core service, systematization/standardization of service delivery (the non-human element) and the social responsibility of the service organization. In an effort to conceptualize service quality, Sureshchandar et al. (2001) identied ve factors of service quality covering a total of 41 items as critical from the customer point of view. These factors are: (1) Core service or service product the content of a service. (2) Human element of service delivery aspects such as reliability, responsiveness, assurance, empathy and service recovery, which are part of the human element in service delivery.

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(3) Systematization of service delivery the process, procedures, systems and the technology that make a service seamless. (4) Tangibles of service the equipment, signage, appearance of employees and the man-made physical environment surrounding the service, which is commonly known as the servicescape. (5) Social responsibility the ethical behavior of the service provider. 3.11 SQ11: SYSTRA-SQ by Aldaigan and Buttle (2002) nroos model of service The authors objective to develop a new scale based on the Gro quality. In doing so, the authors undertook a three-phase, four-sample, quantitative study to derive a new 21-item scale comprising four dimensions: (1) Service system quality. This factor is the strongest among the four. It represents the evaluation of service quality that can be clearly attributed to the service organization as a system rather than individuals within the system. It contains a combination of items that are related to both functional and technical performance at an organizational level. The functional quality attributes include listening to customer, ease of availability and accessibility, speed or response and organizational appearance. The technical organizational attributes include quality of advice, exibility and customized service solutions, promise fulllment, employee empowerment and customer updating on services. (2) Behavioral service quality (BSQ). This factor represents the evaluation of how the service is performed by employees. It is composed of FSQ/behavioral attributes, such as politeness, courtesy, friendliness and helpfulness of the employees. It also contains the employees service attitude. (3) Service transactional accuracy. This TSQ factor focuses on employee and system accuracy. It is derived from the customers experience of the frequency of errors in transactions and employees mistakes when performing service for customer. This dimension is a measure of how accurate the transaction is as experienced by customers in relation to both the system output and employees output. (4) Machine service quality. This factor focuses on machine and equipment quality. It is related to the reliability of machines as well as their performance in terms of satisfactory output when used by customers. 3.12 SQ12: Automated service quality model by Al-Hawari et al. (2005) Automated service quality has been regained as the factor which determines the success or failure of electronic commerce. The authors claim that the models currently available to measure automated service quality are limited in their focus, encompassing only one electronic channel the internet thereby ignoring attributes of the other automated service channels. In relation to the banking sector, research has identied that bank customers tend to use a combination of banking automated service quality. As such, in this research, the authors strive to develop a comprehensive model of banking automated service quality taking into consideration the unique attributes of each delivery channel and other dimensions that have a potential inuence on quality issues. They propose ve factors as follows:

(1) (2) (3) (4) (5)

ATM service; internet-banking service; telephone-banking service; core service; and customer perception of price.

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3.13 SQ13: Service quality scale for banking by Karatepe et al. (2005) Karatepe et al. (2005) developed a 20-item survey instrument to measure bank customers perceptions of service quality in Northern Cyprus. The results showed that service quality could be conceptualized and measured as a four-dimensional construct consisting of: (1) service environment (four items); (2) interaction quality (seven items); (3) empathy (ve items); and (4) reliability (four items). Interaction quality is found to be the most important dimension of service quality followed by empathy, reliability and service environment. The technology dimension of service quality was initially considered based on the qualitative stage of the study. However, it did not emerge as a viable dimension in the later stages when subjected to empirical criteria. 3.14 SQ14: Customer expectations and perceived service quality by Ehigie (2006) In the attempt to examine how customer expectation, perceived service quality and satisfaction predict loyalty among bank customers in Nigeria, measurement scales were developed to measure the variables of the study using qualitative technique to explore customers expectations from bank services. The measures of bank customers expectation in Nigeria were found to be: (1) bank workers possession of required skill; (2) bank workers possession of knowledge and experience; (3) continuity of service to customer in future years; (4) understand customers needs; (5) offering of fast and efcient service; (6) providing physical safety to customer; (7) condentiality of transactions; (8) positive attitude of staff to customer services; (9) trustworthiness of bank; (10) banks good reputation; (11) staff friendliness; (12) keeping people informed; (13) listening to customers;

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(14) introduction of Saturday banking; (15) extended banking closing hours; and (16) insurance cover for customers. The same 16 constructs were used to measure the performance of the customers.

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4. Summary, discussion and conclusion In this section, an attempt has been made to summarize the following: (I) The different service quality models that have been developed for the banking sector and the generic service quality models which have been applied to the banking sector worldwide. (II) The studies using the GAP model in different countries all over the world and the comparison of the results obtained thereof. I General service quality models applicable to banking and the specic service quality models developed for banking A summary of the salient features of the service quality models has been provided in Table I. A common theme emerging from these comparisons is that the meaning of service quality may have some universal aspects as demonstrated by the similarities in the underlying dimensions. Essentially, service quality has some common dimensions across the different models, however, the items involved and their operationalization in different cultural and country contexts within the same banking sector i.e. for conventional and Islamic systems may vary. II Results from application of GAP model in different countries Studies have revealed mixed results on: . dimensionality of SERVQUAL; . the order of importance of SERVQUAL dimensions; and . the identication of GAPs in the dimensions. The dimensionality of service quality in different countries with respect to SERVQUAL highlights many differences. The study by Levesque and McDougall (1996) in Canada identied 17 items based on SERVQUAL but categorized under three dimensions core, relational and labeled features. Tangibles were found to be captured by core and relational factors. Newman and Cowling (1996) in their study in the UK found that reliability comprises of a mixture of both hard and soft quality elements and found a degree of overlap between empathy and assurance. Lasser et al. (2002) in their study in the USA and South America propose that empathy may contain elements of both technical and functional quality. The study by Caruana (2002) in Malta proposes three factors people/process factor (comprising of responsiveness, assurance and empathy), tangibles and reliability. Cui et al. (2003) undertook a study in South Korea for measurement of service quality in banking sector found that: . the weighted SERVQUAL consisted of three dimensions tangibles, reliability and empathy;

SQ1

SQ2

SQ3

SQ4

SQ5

SQ6

SQ7

SQ8

SQ9

SQ10

SQ11

SQ12

SQ13

SQ14

Various dimensio ns of SQ Mersha & Adlakha (1992) Avkiran (1994)

*Commitment *Staff Conduct *Reliability *Integrity *Reliability *Reliability *Convenien ce/ accuracy *Service transational accuracy

Parasura man et al (1988) Karatepe et al (2005) Benjamin Osayawe Ehigie (2006)

* Accuracy *Deal with one person *Speed of decision *Helpfulness *Responsivenss *Availability *Timely/ prompt service *Credibility *Friendliness *Care *Knows business *Communication *Competence *Knows industry *Courtesy *Queue Mgmt. *Efficiency *Gives helpful advice *Feedback/ complaint mgmt. *Fast and efficient service

Gronroos model (1984)

Ennew, Reed & Binks (1993) Robert Johnston (1997) Mathew Joseph et al (1999) Bahia & Nantel (2000) Aldaigan & Buttle (2002) Mohd. AlHawari et al (2005)

Blanchar d& Galloway (1994)

Sureshc handar et al (2001)

Reliability *Reliability

*Reliability

*Functional quality

*Continuity of service to customers in future years

*Positive attitude *Staff friendliness

*Responsiv eness

*Responsiv eness

*Keeping people informed *Trustworthiness *Posession of reqd. skill

*Knows market *Knowledge

*Security

*Posession of reqd. knowledge & experience

*Assurance

*Assurance *Tailors finance *Access *Comfort *Flexibility *Accessibili ty

*Communic ation

*Effectiven ess & assurance

*Interaction quality

*Physical safety *Confidentiality of transaction *Understanding customer needs

*Empathy

*Empathy

*Willingnes s to correct errors

*Easy access to loan officer *Access to teller services

*Process/ subjective/ soft aspects

*Access

*Human element

*Behaivoral service quality

*Empathy

*Listening to customers *Introduction of saturday banking

*Tangibles

*Tangibles

*Hard aspects

*Aesthetics

*Tangibles

*Servicescapes

*Machine service quality

*Service environment

*Extended banking closing hours. (continued)

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Table I. Comparison of dimensions proposed by the service quality models in banking

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Table I.
SQ3 SQ4
Ennew, Blanchard Sureshc

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SQ1 SQ5 Avkiran (1994) & Galloway (1994) Robert Johnston (1997) Bahia & Nantel (2000) handar et al (2001) Mathew Joseph et al (1999) Aldaigan & Buttle (2002) SQ9 SQ12 Mersha & Adlakha (1992) Reed & Binks (1993)
*Competi tive interest rates *Price

SQ2

SQ6

SQ7

SQ8

SQ10

SQ11

SQ13 Karatepe et al (2005)

SQ14 Benjamin Osayawe Ehigie (2006)

Various dimension s of SQ

Parasuram an et al (1988)

Gronroos model (1984)

Mohd. AlHawari et al (2005)

*Core service

Technical quality / outcome *Reasonabl e cost *Functionality *Service Portfolio *Outcome/ Objective aspects *Customiza tion

*Technical quality

*Competi tive charges *Wide range of services *Core service/ service product

*Service system quality

*Perception of price *ATM service *Internet banking *Systema tization *Phone banking *Social resp.

*Insurance cover for customers

Systematiz ation

Social responsibil ity

Corporate image

*Image

*Bank's good reputation

SERVQUAL scale showed only three dimensions tangibles, empathy and third which includes items of reliability and responsiveness; and original and weighted SERVPERF was acceptable only when the 21 original items were aggregated into ve items.

Service quality models

Jabnoun and Tamimi (2003) study in the UAE leads to a 22-item modied scale consisting of three factors human skills, tangibles and empathy. Beerli et al. (2004) adapted the SERVPERF scale to 20 items and used it for their study in Spain and mention that the dimensionality of the service quality scale varies from industry to industry. Mukherjee and Nath (2005) in their study in India suggest that 25 items (four more than SERVQUAL) were needed to suit the Indian banking context. Also, pattern of loading of each item did not exactly follow the ve-dimensional structure of SERVQUAL and had to be reorganized among the ve dimensions. Wang et al. (2003) in their study in China found that apart from 21 items over ve dimensions in SERVQUAL, other dimensions like product convenience (three items), product availability (three items), overall product quality (three items) and bank reputation (two items) needed to be included. The ndings also indicate that not all antecedents contribute equally to quality and their contributions might be subject to variation in different industries and different countries at different times. Angur et al. (1999) ndings in India indicate that implications of culture, marketing and service quality in the country-context need to be considered in the service quality instrument. This compilation of literature study reiterates the contention that the dimensionality of SERVQUAL varies with the cultural context even within the banking industry. Hence, a generic instrument for measurement of service quality or even one specically developed for banking may not be applicable in its original form. Development of the customized scale for measuring the service quality for a particular cultural and country context and at a particular time is warranted. Changes in the order of importance of the SERVQUAL dimensions have been reported in the different studies. The original study of Parasuraman et al. (1988) in the USA found reliability as the most critical dimension followed by assurance, tangibles, responsiveness and last was empathy. A study in Singapore (Kwan and Hee, 1994) rated responsiveness and reliability as most important and tangibles as the least important. In the UK, the study conducted by Dotchin and Oakland (1994) found the dimensions to be important in the following order assurance, tangibles, reliability, responsiveness and nally empathy. Newman and Cowling (1996) in their study in the UK found reliability, assurance and responsiveness to be the three most critical and tangibles to be least valued by customers. Yavas et al. (1997) nd tangibles, responsiveness and empathy to be signicant predictors of consumer satisfaction in Turkey. Angur et al. (1999) from their study in India report the following order reliability and responsiveness were the most important followed by empathy, tangibles and last came assurance. Lasser et al. (2002) found that empathy was found to be signicantly and positively related to overall satisfaction in the USA and South America. Newman (2001) found in their study in the UK that responsiveness, empathy and assurance are critical in service marketing provided reliability of service delivery is satisfactory. According to Wang et al.s study in, 2003 in China, assurance and responsiveness were found to be the two most important drivers of overall service quality and tangibles and reliability to be most signicant drivers of overall product quality. In Spain, Beerli et al. (2004) found reliability, responsiveness and assurance to be the most important followed by empathy

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and then tangibles. Yavas et al. (2004) in Germany found reliability and responsiveness to be positively related to satisfaction. Tangibles and empathy were found to inuence consumer commitment and positive word-of-mouth. Arasli et al. (2005) found in Cyprus that assurance dimension had largest inuence on customer satisfaction. Najjar and Bishu (2006) found responsiveness and reliability to be most important and directly related to overall service quality in the USA and Tahir and Abu Bakar (2007) in Malaysia found responsiveness to be most important followed by reliability, tangibles, assurance and empathy. The signicantly varying order of importance of the dimensions draws attention to the fact that the importance of the dimensions needs to be assessed for each and every study on service quality pursued in a country and for the specic industry at that time. Even within the banking sector due consideration must be given to whether the banking system is conventional or Islamic. SERVQUAL has been proposed as a useful instrument for diagnostic purposes. It has been found to effectively identify the GAPs in the dimension and thus help the service organization to assess service quality and do the needful to bridge the GAP. Kwan and Hee (1994) in their study in Singapore found the widest GAP in empathy and the smallest GAP in tangibles. Newman and Cowling (1996) in the UK found the biggest GAP for reliability followed by responsiveness. Arasli et al. (2005) found the largest GAP in empathy dimension by using SERVQUAL scale in Cyprus. These results also draw attention to the need to probe more into the service quality dimensionality in the Islamic banking context in view of its growing importance considering that the population of Muslims in the world is expected to reach 2 billion by year 2010 (Lada et al., 2009). 5. Implications, weaknesses and future scope of research From the study of these models, it appears that the key ingredients to service quality improvements are: . clear market and customer focus; . motivated staff; . clear understanding of concepts of service quality and factors affecting the same; . effective implementation, measurement and feedback system; . efcient customer care system; and . effective, problem-free availability of the electronic channels. The study also brings forth the different practical and managerial implications emerging from the results obtained from the various service quality studies. The use of SERVQUAL in the different studies has helped to identify the following issues: . SERVQUAL does not attempt to measure quality of core service. . The dimensionality and the items under each dimension vary with the context and hence the reliability and validity of the instrument needs to be assessed for every study. . The importance of the dimensions varies with the context of the study and hence needs to be assessed in every study.

The study has also identied the future scope for research which is as follows: . The components of service quality and overall service offering should encompass not only the identied construct (e.g. core, relational), but also constructs/items that reect the service offering, i.e. it should focus on complete service package. . More cross-country and cross-cultural comparative studies will help in discovering the commonalities in the regional and/or cultural contexts and the differences especially in Islamic countries and banking. . More studies can help to investigate the sources that cause such deviation from the original factor structure and the changes in terms of importance and dimensionality of service quality. . Studies on the Islamic banks of GCC region and other Muslim countries and their comparison with the conventional commercial banks would shed light on the similarities and differences and would help conceive the future strategic course of action for banks in the Islamic countries. . More studies on assessment of service quality from the management perspectives would help understand and enhance the concept and implementation of service quality. . Inter-group assessment of service quality in countries with major ethnic/regional groups and consideration of demographic characteristics would help assess service quality from a better perspective.
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Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988), SERVQUAL: a multiple item scale for measuring consumer perception of service quality, Journal of Retailing, Vol. 64 No. 1, pp. 12-37. Sureshchandar, G.S., Rajendran, C. and Kamalanabhan, T.J. (2001), Customer perceptions of service quality: a critique, Total Quality Management, Vol. 12 No. 1, pp. 111-24. Tahir, I.M. and Abu Bakar, N.M. (2007), Service quality GAP and customers satisfactions of commercial banks in Malaysia, International Review of Business Research Papers, Vol. 3 No. 4, pp. 327-36. Wang, Y., Lo, H. and Hui, Y.V. (2003), The antecedents of service quality and product quality and their inuences on bank reputation: evidence from the banking industry in China, Managing Service Quality, Vol. 13 No. 1, pp. 72-83. Yavas, U., Bilgin, Z. and Shemwell, D.J. (1997), Service quality in the banking sector in an emerging economy: a consumer survey, International Journal of Bank Marketing, Vol. 15 No. 6, pp. 217-23. Further reading Baumann, C., Burton, S., Elliott, G. and Kehr, H.M. (2007), Prediction of attitude and behavioural intentions in retail banking, The International Journal of Bank Marketing, Vol. 25 No. 2, pp. 102-16. Cronin, J.J. and Taylor, S.A. (1992), Measuring service quality: a reexamination and extension, Journal of Marketing, Vol. 6, July, pp. 55-68. Malhotra, N.K., Ulgado, F.M., Agarwal, J., Shainesh, G. and Wu, L. (2005), Dimensions of service quality in developed and developing economies: multi-country cross-cultural comparisons, International Marketing Review, Vol. 22 No. 3, pp. 256-78. Parasuraman, A., Berry, L.L. and Zeithaml, V.A. (1991), Renement and reassessment of the SERVQUAL scale, Journal of Retailing, Vol. 67 No. 4, pp. 420-50. Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1994), Reassessment of expectations as a comparison standard in measuring service quality: implications for further research, Journal of Marketing, Vol. 58 No. 1, pp. 111-24. Seth, N. and Deshmukh, S.G. (2005), Service quality models: a review, The International Journal of Quality & Reliability Management, Vol. 22 No. 9, pp. 913-49. Soteriou, A.C. and Stavrinides, Y. (2000), An internal customer service quality data envelope analysis model for bank branches, International Journal of Bank Marketing, Vol. 18 No. 5, pp. 246-52. Yavas, U., Benkenstein, M. and Stuhldreier, U. (2005), Relationships between service quality and behavioral outcomes: a study of private bank customers in Germany, International Journal of Bank Marketing, Vol. 22 No. 2, pp. 144-57. Zhu, F.X., Wymer, W.J. and Chen, I. (2002), IT-based services and service quality in consumer banking, International Journal of Service Industry Management, Vol. 13 No. 1, pp. 69-90. Corresponding author Jaya Sangeetha can be contacted at: jayasangeeta@yahoo.com

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