Factors Affecting Customers Choice in Retail Banking

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					                Final Year Project


  Factors Affecting Customer Choice in Retail Banking




                   Submitted by
                  Hassan Mustafa
                  Reg. No. 52306
                   MBA Fall ‗09


                   Supervisor
             Mr. Iftikhar Mubbashir




PAF- Karachi Institute of Economics and Technology


                                                        1
Thesis Approval


Thesis Title:              Factors Affecting Customer Choice in Retail Banking

By:                        Hassan Mustafa (52306)

Thesis Supervisor:         Mr. Iftikhar Mubbashir

Academic Year:             2010




The Board of Advanced Studies at PAF KIET has approved this thesis, submitted in partial
fulfillment of the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION




Approval Committee:




__________________________                      _____________________

Mr. MIRZA IMTIAZ ASKARI

(Supervisor)                                        (Director Academics)




                                                                                       2
Letter Of Authorization




Dear Reader,

19th April 2010

The report prepared on “Factors Affecting Customer Choice in Retail Banking” was assigned
by Sir Iftikhar Mubbashir overseer of Final Project at PAF – KIET as a requirement of MBA
course.

This report covers a detailed research study on the impact of working capital management on
profitability of sugar industry of Pakistan. I took the responsibility to complete the report in the
assigned time, which is a prerequisite of MBA Degree Program.




Sincerely,

Hassan Mustafa

(52306)




                                                                                                   3
Letter Of Acknowledgement




Dear Reader,                                                                               19th April 2010

I would like to extend my sincere thanks to my respected teacher Mr. Iftikhar Mubbashir, who is well
known for his vast expertise, for guiding me in the final project on ―Factors Affecting Customer Choice in
Retail Banking‖, I believe that this experience have not only added value to my knowledge but have also
strengthen the core knowledge of the previous courses at PAF-KIET, with his vast experience and
knowledge, lead me in every step during the course and also in the preparation of this report.




Sincerely,




Hassan Mustafa




                                                                                                         4
Letter Of Transmittal


Sir Iftikhar Mubbashir                                                     19th April 2010

Project Instructor

PAF – KIET

Karachi




Dear Sir:

I am submitting a report on Factors Affecting Customer Choice in Retail Banking, as partial
fulfillment of the requirement of degree of MASTER OF BUSINESS ADMINISTRATION.

I am grateful to your guidance without which this task could have not been completed.




Yours Sincerely,

Hassan Mustafa

(52306)




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Abstract

In the modern customer centric competitive arena, satisfaction, quality and loyalty prove to be
key factors. The higher the (perceived) service quality, the more satisfied and loyal are the
customers. In particular, financial institutions (i.e. banks) realized the strategic importance of
customer value and seem to be continuously seeking innovative ways to enhance customer
relationships. In fact, as the offers of many financial services are very similar and slightly
differentiable, loyal customers have a huge value, since they are likely to spend and buy more,
spread positive word-of-mouth, resist competitors‘ offers, wait for a product to become available
and recommend the service provider to other potential customers.
This paper focuses on those factors that affect customers‘ choice in retail banking. Firstly, the paper
tries to investigate about the products and services of the banks that affect the customers and
establishing the relationships. Secondly, this paper also tries to investigate which dimensions are
important in customer relationship with the banks. Then, the paper tries to study the effect of
social network in establishing long lasting relationships.




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Table of Contents

Thesis Approval ...................................................................................................................................... 2
Letter Of Authorization ........................................................................................................................... 3
Letter Of Acknowledgement .................................................................................................................... 4
Letter Of Transmittal ............................................................................................................................... 5
Abstract................................................................................................................................................... 6
Table of Contents .................................................................................................................................... 7
Introduction............................................................................................................................................. 8
Main Types of Bank ................................................................................................................................ 8
Market Sectors ........................................................................................................................................ 8
Basic Reasons Contributed To Retail Banking Growth ............................................................................ 9
Challenges of Retail Banking .................................................................................................................. 9
Bank Selection Criteria .......................................................................................................................... 10
Factors Affecting Customer Choice in Retail Banking ........................................................................... 10
Retail Banking in Pakistan ..................................................................................................................... 11
Performance of Banking Sector in Pakistan ........................................................................................... 12
Changes and Challenges of Banking Sector in Pakistan ......................................................................... 12
Problems of Banking Industry in Pakistan.............................................................................................. 13
Literature Review .................................................................................................................................. 15
Hypotheses ............................................................................................................................................ 23
Methodology ......................................................................................................................................... 24
Data Analysis Method ........................................................................................................................... 24
Approximation of Binomial to Normal Distribution ............................................................................... 24
Data Analysis ........................................................................................................................................ 26
Conclusions ........................................................................................................................................... 40
Recommendation................................................................................................................................... 41
References............................................................................................................................................. 42
Appendices............................................................................................................................................ 45
Appendix A ........................................................................................................................................... 45
Appendix B ........................................................................................................................................... 49




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Introduction

A bank is an organization, usually a corporation that accepts deposits, makes (grants) loans,
issues credit and debit cards, pays, cheques, and performs some other services. A bank acts as an
intermediary between suppliers of funds (depositors) and users of funds (borrowers) (Whiteley,
A.1999). Banks take over the major risks related to monetary transactions and provide the main
element of security for both depositors and borrowers.
An organization, usually a corporation, chartered by a state or federal government, which does
most or all of the following: receives demand deposits and time deposits, honors instruments
drawn on them, and pays interest on them; discounts notes, makes loans, and invests in
securities; collects checks, drafts, and notes; certifies depositor's checks; and issues drafts and
cashier's checks. (Devlin, J.F.2001).
Main Types of Bank
Investment Banks
Financial intermediaries who perform a variety of services, including aiding in the sale of
securities, facilitating mergers and other corporate reorganizations, acting as brokers to both
individual and institutional clients, and trading for their own accounts.(Grönroos, 1994; Berry,
2002). It provides a range of financial and investment related services, advising clients on
security issues, acquisitions and disposals of assets.
Central Bank
A central bank, reserve bank, or monetary authority is the entity responsible for the monetary
policy of a country or of a group of member states. It is a bank that can lend money to other
banks in times of need. The entity responsible for establishing a nation's monetary and fiscal
policy and controlling the money supply and interest rates. In the US, the Federal Reserve Board
is often referred to as the central bank. It is an institution designed to oversee the banking system
and regulate the quantity of money in the economy.
Commercial Banks
Gather funds from depositors and inter-bank markets and invest them principally both personal
and commercial loans. An institution which accepts deposits, makes business loans, and offers
related services. Commercial banks also allow for a variety of deposit accounts, such as
checking, savings, and time deposit. These institutions are run to make a profit and owned by a
group of individuals, yet some may be members of the Federal Reserve System. While
commercial banks offer services to individuals, they are primarily concerned with receiving
deposits and lending to businesses.
A commercial bank is a type of financial intermediary and a type of bank. Commercial banking
is also known as business banking. It is a bank that provides checking accounts, savings
accounts, and money market accounts and that accepts time deposits. (Gronroos, C.1994).
Market Sectors
Corporate Banking




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Banking services for large corporations or firms. This type of banking is designed to deal with
major financial transactions. (Abratt, R. and Russell, J.1999). The Corporate Banking sector
involves providing services for businesses including demand & deposit accounts, overdrafts and
lines of credit, term loans and leasing.
Retail Banking
Retail banking is a banking service that is geared primarily toward individual consumers. Retail
banking is usually made available by commercial banks, as well as smaller community banks.
Retail banking entities provide a wide range of personal banking services, including offering
savings and checking accounts, bill paying services, as well as debit and credit cards. (Kaynak,
E. and Whiteley, A.1999). Through retail banking, consumers may also obtain mortgages and
personal loans. Although retail banking is, for the most part, mass-market driven, many retail
banking products may also extend to small and medium sized businesses. Today much of retail
banking is streamlined electronically via Automated Teller Machines (ATMs), or through virtual
retail banking known as online banking.
Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks
with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current
/ savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and
educational) on the assets side, are the more important of the products offered by banks. (Jones et
al, 2000) Related additional services include credit cards, or depository services. Today‘s retail
banking sector is characterized by three basic characteristics:
Multiple products (deposits, credit cards, insurance, investments and securities);
Multiple channels of distribution (call centre, branch, Internet and kiosk); and
Multiple customer groups (consumer, small business, and corporate).
Basic Reasons Contributed To Retail Banking Growth
First, economic prosperity and the consequent increase in purchasing power have given a boost
to a consumer boom. Second, changing consumer demographics indicate vast potential for
growth in consumption both qualitatively and quantitatively. Third, technological factors played
a major role. Convenience banking in the form of debit cards, internet and phone-banking,
anywhere and anytime banking has attracted many new customers into the banking field.
Technological innovations relating to increasing use of credit / debit cards, ATMs, direct debits
and phone banking has contributed to the growth of retail banking. (Sharma and Patterson,
2000).
Challenges of Retail Banking
Firstly, retention of customers is going to be a major challenge. According to a research by
(Reichheld and Sasser) in the Harvard Business Review, 5 per cent increase in customer
retention can increase profitability by 35 per cent in banking business, 50 per cent in insurance
and brokerage, and 125 per cent in the consumer credit card market. Thus, banks need to
emphasize retaining customers and increasing market share. Secondly, information technology
poses both opportunities and challenges. Even with ATM machines and Internet Banking, many
consumers still prefer the personal touch of their neighborhood branch bank. Technology has
made it possible to deliver services throughout the branch bank network, providing instant
updates to checking accounts and rapid movement of money for stock transfers. However, this



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dependency on the network has brought IT department‘s additional responsibilities and
challenges in managing, maintaining and optimizing the performance of retail banking networks.
Thirdly, KYC Issues and money laundering risks in retail banking is yet another important issue.
Retail lending is often regarded as a low risk area for money laundering because of the
perception of the sums involved. However, competition for clients may also lead to KYC
procedures being waived in the bid for new business. Banks must also consider seriously the type
of identification documents they will accept and other processes to be completed.
Bank Selection Criteria
In the past decades the issue of bank selection criteria has been researched a lot. Mostly these
studies analyzed the question of why people choose a specific bank. Among the first researchers
who did a scientific study on this in the U.S. were Anderson et al. (1976) and Evans (1979).
Later on more research followed in other countries, like Hong Kong (Denton and Chan, 1991),
Poland (Kennington et. al, 1996) and Egypt (Hegazi, 1995). Over time the emphasis of the
studies headed more in direction of other aspects of bank choice, like the investigation of
customer choice criteria for multiple bank users and an analysis of trends in choice behavior
(Devlin, J.F.2001).
The most important selection criteria are the banks reputation, availability of parking space near
the bank, friendliness of bank personnel and availability and location of automated teller
machines (ATM) (Almossawi, 2001). In addition to this, customer focuses on that banks which
provide facilities like Internet Banking, Online Banking, mobile phone banking etc. Overall,
people tend to stay with a bank for a long period (Gronroos, C.1994) and therefore the initial
selection of an institution is very important for the banking sector. In a study by Lee and
Marlowe (2003) it comes clear that consumers are switching banks for two reasons; poor
personal service and perceived increases in fees. Because the costs for switching are perceived to
be high, a consumer will not switch unless the benefits are more important than the transaction
costs.
Factors Affecting Customer Choice in Retail Banking
Beside the above criteria for selection of bank some other variables also influences that affect the
customer choice in retail banking.
Demographic Variable
Numerous attempts have been made to examine the relationship between bank choice and socio-
demographic characteristics (e.g., Laroche et al., 1986; Denton and Chan, 1991; Jain et al., 1987;
Metal and Almossawi, 1998). In these studies significant differences in attitudes and opinions
between the sexes, language, age, income and level of education were revealed. Furthermore,
consumers with a higher income level will choose a bank which provides a wider range of
services than consumers with a relative low income (Denton and Chan, 1991).
Economic Recession
Due the uncertainty and their own liquidity problems, banks do not provide money with the same
ease anymore and central banks across the world have to intervene to keep the financial system
alive. The crisis has its effect on consumers as well. Consumers avoid big expenditures; have
less money to spend and their confidence level in the economy dropped to one of the lowest
points in history. Due the crisis the assumed safety of a bank is not naturally anymore. Healthy



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banks were not that healthy as many people thought and the list of troubled banks has became
bigger and bigger. Many banks appeared to be vulnerable and consumers are afraid of becoming
a victim of bank failures. It is likely that there is an influence of the current financial crisis on
potential customers‘ bank choice as well. (Devlin, J.F. 2001). The possible relationship between
the crisis and bank choices has been detected because of huge differences in results of banks in
this sector. While some banks have to work really hard to avoid bankruptcy others seems to gain
from the crisis.
Convenience
Although the bank selection criteria are different, the results of the studies suggest that
convenience is the most important criterion (Shankar, V., Smith, A.K. and Rangaswamy, A.
2003). In a research of (Rust and R.J. Oliver Eds.) respondents had to indicate the importance of
fifteen bank selection criteria. Convenience appears to be the main driver for customers to
choose for a bank. These convenience-oriented customers give relatively low importance to any
selection criteria and, with reference to Anderson: ―apparently incorporate their bank visits into
their regular pattern of frequent downtown shopping expeditions.‖ Therefore it seems that
convenience related factors like the location of the bank and opening hours of the bank are
important in the decision making process of the consumer.
Service Level
In most of the previous research the service level of the personnel is an important criterion for
consumers when considering becoming a member of a bank. Unidex Reports (1982) concluded
that besides convenience, the personal service level of the bank is a significant criterion in the
United States as well.
Retail Banking in Pakistan
The financial sector in Pakistan has evolved over the years in response to the growth of the
economy and the government‘s plans for the growth and development of the country.
Commercial banks were nationalized in 1974 and are now in the process of being privatized.
Two nationalized commercial banks have been privatized since 1990: Muslim Commercial Bank
was sold by auction/ negotiation, while Allied Bank was sold to its employee‘s .The market
share of the nationalized commercial banks has been declining with the introduction of new
private banks.
The three nationalized commercial banks in Pakistan—Habib Bank Limited, United Bank
Limited, and National Bank of Pakistan—have a large branch network that allows them to
expand and compete with the private banks in deposit mobilization. The newly privatized banks
have acquired the branch network that will allow them to expand and compete with the state-
owned banks (Khan, Ashfaque H., and Lubna Hasan, 1998).While these institutions play an
important role in financing short-term credit requirements, their success in raising deposits
ensures that they have a significant surplus of funds that can be lent or invested in government
securities.
Financial Sector in Pakistan possesses a wide spectrum of financial institutions-Commercial
banks, specialized banks, national savings schemes, insurance companies, development finance
institutions, investment banks, stock exchanges, corporate brokerage houses, leasing
companies, discount houses, micro-finance institutions and Islamic banks. They offer a whole



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range of products and services both on the assets and liabilities side. Financial deepening has
intensified during the last several years but the commercial banks are by far the predominant
players accounting for 90 percent of the total financial assets of the system.
The Banking sector is an integral part of the country‘s financial services industry. The sector
witnessed a phenomenal growth in 2001-03 where deposits rose by almost 100%. There are
39 scheduled banks (including 11 foreign banks) operating in Pakistan. Competition
is relatively high, especially after the challenging capital adequacy benchmarks set by the
State Bank of Pakistan to nourish a stable banking system. Attracting foreign investment and
winning profitable customers are the only options left to banks for survival.
Opportunities for foreign banks, especially in consumer and retail banking, are greater than ever
before. In the financial year of 2004-05, the banking sector experienced growth rates of 21%
and 36% in its deposit and advances portfolio respectively, which in turn, has increased the
banks‘ stability as compared to the preceding year. A significant shift of focus from industrial
lending to consumer products has allowed the banks to enjoy enormous spreads. However, the
manufacturing sector is still enjoying the highest share in credit facilities extended by the
banking industry. The industry is passing through a transitional period from long established
patterns and norms to the unknown land of threats and opportunities. And what will demarcate
the banking organizations that will turn every change into an opportunity, taking the bull by the
horns using the art of change management successfully from the losers. These are some of the
daunting questions which will pose a challenge to the potential future banking brains but flowing
are a few areas of banking industry where the wind of change is presently quite visible.
Performance of Banking Sector in Pakistan
Pakistan‘s banking sector has transformed the sector into an efficient, sound and strong banking
system. The recent comprehensive assessment carried out jointly by the World Bank and the
IMF in 2007 came to the following conclusion:
―For reaching reforms have resulted in a more efficient and competitive financial system in
particular, the predominantly state-owned banking system has been transformed into one that is
predominantly under the control of the private sector. The legislative framework and the State
Bank of Pakistan‘s supervisory capacity have been improved substantially. As a result, the
financial sector is sounder and exhibits an increased resilience to shocks.‖
Changes and Challenges of Banking Sector in Pakistan
The major changes and challenges that have occurred in the banking sector during the last
decade or so can be summarized as follows:
(a)     80 percent of the banking assets are held by the private sector banks and the privatization
of nationalized commercial banks has brought about a culture of professionalism and service
orientation in place of bureaucracy and apathy.
(b)     The banks that were losing money due to inefficiencies, waste and limited product range
have become highly profitable business. These profits are, however, being used to strengthen the
capital base of the banks rather than paying out to the shareholders. The minimum capital
requirements have been raised from Rs. 500 million to Rs. 6 billion over an extended period in a
phased manner. The consolidation of the banking sector into fewer but stronger banks will lead
to better management of risk.



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(c)     The human resources base of the banks has been substantially upgraded by the adoption
of the principles of merit and performance throughout the industry. Recruitment is done through
a highly competitive process and promotions and compensation are linked to training, skills and
high performance. The banks now routinely employ MBAs, M.Coms, Chartered Accountants, IT
graduates, economists and other highly educated persons rather than Clerical and Non Clerical
Workers. The banking industry has become the preferred choice of profession among the young
graduates.
(d)     Banking Technology that was almost non-existent in Pakistan until a few years ago is
revolutionizing the customer services and access on-line banking, Internet banking, ATMs,
mobile phone banking and other modes of delivery have made it possible to provide convenience
to the customers while reducing the transaction costs to the banks. Credit Cards, Debit Cards,
Smart Cards etc. are a thriving and expanding business in Pakistan. Once the RTGS is put in
place the payment system in Pakistan. Would enter a new phase of modernization.
(e)     Competition among the banks has forced them to move away from the traditional limited
product range of credit to the government and the public sector enterprises, trade financing, big
name corporate loans, and credit to multinationals to an ever-expanding menu of products and
services. The borrower base of the banks has expanded four fold in the last six years as the banks
have diversified into agriculture, SMEs, Consumers financing, mortgages, etc. The middle class
that could not afford to buy cars or apartments as they did not have the financial strength for cash
purchases are the biggest beneficiaries of these new products and services.
(f)      The foreign exchange market that was highly regulated through a system of direct
exchange controls over suppliers and users of foreign exchange has been liberalized and all
purchases and sales take place through an active and vibrant inter-bank exchange market. All
restrictions have been removed with full current account convertibility and partial capital account
convertibility. Foreign investors can now bring in and take back their capital, remit profits,
dividends and fees without any prior removal and directly through their banks. Similarly, foreign
portfolio investors can also enter and exit the market at their own discretion.
Problems of Banking Industry in Pakistan
There are several areas of dissatisfaction with the banking sector that need to be addressed.
(a)     The most serious complaint against the banking system in Pakistan today is that the
depositors are not getting adequate return on their bank deposits. The difference between the
monthly weighted average rates of lending and deposits is taken as an indicator of the spreads
earned by the banks. It is true that these spreads have widened in the recent months land this
phenomenon has caused resentment among those whose only source of income is their returns
from bank deposits. But it is important to examine the facts and their form judgments.
(b)     The monthly comparisons are meaningless because PLS deposit rates are changed every
six months, while the lending rates are continuously adjusting because they are automatically
linked to T-bills or KIBOR rates.
(c)     During the last decade the weighted average deposit rate has risen from 1.6 percent in
July – Feb, 2005 to 3.9 percent in July – Feb, 2006. This trend reflects that the return on the new
deposits mobilized is much higher than what the average rate indicates. The old deposits are
earning much lower rate because they were lodged at the time when the overall structure of
interest rates had come down significantly. This lag is adjustment between the deposit and




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lending rates is due to the costs incurred by the depositor in shifting deposits from one bank to
the other.
(d)      Most of the financial assets and deposits are owned by nationalized commercial banks
(NCBs) which suffer from a highly bureaucratic approach, overstaffing, unprofitable branches
and poor customer service.
(e)      NCBs along with specialized banks such as ADBP, IDBP and Development financial
institutions such as NDFC have a high ratio of non-performing loans.
(f)      Banking industry faces a high tax rate which affects its profitability and attractiveness for
new entrants.
Despite these problems and difficulties it is fair to say that a lot of progress has been made to
improve the health and soundness of the banking sector in recent years. Although a lot more
needs to be done and there are few weak and vulnerable institutions the banking sector in
Pakistan is much stronger today compared to five years ago or in comparison to other countries
in the region.




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Literature Review
The researchers have explained that the customer satisfaction, service quality and loyalty are the
key factor for building long term relationship. Banks have been realized the strategic importance
of customer value therefore continuously seeking new and innovative ways to enhance customer
relationship. Many banks offer almost similar products and services but customers have more
choice and more controls and they are like to spend and continue their relationship with those
banks that provide them better quality of products and services as compared to their rivals. The
social bonds play a very important role in bank customer relation ship which effect in
establishing long lasting relationship that minimizes the customer switching cost.
The findings of the researches suggested several implications firstly banks have to ensure that
utmost importance is given to quality, product features and product availability. Secondly the
role of staff is also necessary in understanding the customer needs and satisfying them. Higher
the satisfaction will increase the retention of the customers.
The researchers have also conducted to identify the factors that consumers considering in
selecting a bank and the performance of the banks. Choice criteria determination and evaluation
of banks in terms of these criteria are two critical steps. The objective is to first determine the
underlying configuration of bank choice criteria and then analyze the importance and
performance of banks to meet these criteria.
The analysis resulted in seven factors i.e. Staff quality, integrity, exterior, service variety, hours
of operations, fees, locations etc. The result suggested that the bank should keep up their good
work in term of their staff quality, being trustworthy, fees and locational convenience. All these
factors are important to consumers and the banks seem to be successful in meeting the demands
of their customers in these areas. Banks must take some decisive step to improve their
performances in other area like exteriors, auxiliary services, hours of operations etc. Banks
should enhance their standings in the eyes of their clients.
In order to develop an understanding of Iranian customer‘s attitude and adoption of internet
banking service, the researchers provide a set of factors that are perceived to have an impact on
adoption of internet banking behavior of Iranian customers. Internet banking is a useful tool in
banking sector that offers less time consuming and is more convenient than traditional branch
banking. This new and modified banking system has significantly lower cost structure than the
traditional delivery channel (traditional branch banking system). The adoption of this technology
in banking system in Iran was a few decades behind that of developed countries. In terms of
global and international comparison, use of internet in Iran is relatively low and therefore online
banking is still in the infancy stage.
The findings showed that adoption of internet has a great impact on banking service. Higher use
of internet banking has been evident for those who have higher educational level. Also a similar
trend of internet banking usage is detected to those customers with middle-class income. If the
bank‘s manager strategy approaches towards these customers, by providing special offers it may
be successful to increase the adoption rate if internet banking service. There fore bank managers
should focus their promotion activities aimed at such customers.
The researchers concluded that the majority of the customers are very comfortable and willing to
use internet banking service. It is very important for Iranian banks to have online banking
service. It is well accepted fact that, providing good service and convincing the customers about



                                                                                                   15
the non-economic relative advantages such as easy and safe payments and protecting from theft
or losing of cash, will increase the number of adopters. The researchers have also explained the
factors that affect the choice of retail banking by men and women customer in Nigeria.
The objective is to determine the relative strengths used by the Nigerian customer in the retail
banking to evaluate the corresponding behavioral and demographic characteristics of Nigerian
consumers. The findings presented useful and provide information for bank managers to
formulate their marketing strategies. The study fills the gap by studying the differences in bank
choice based on gender and focusing on the Nigerian Bank. The factors used in the study help to
identify and define the reason for differences in choice of retail banking. The most important
factor considered by male consumers when selecting retail banking is safety of funds. On the
other hand female customer considered speed of transactions as the most important factor.
The most significant fact revealed is that there is no significant difference in the choice criteria
between male and female customers. This provides the fact that banks should not rely on the
gender factor as a strategy in their efforts to attract customers.
Luca Petruzzellis, Salvatore Romanazzi, Antonia Rosa Gurrieri (2006): Loyalty and customer
satisfaction in retail banking. The researchers have explained that the customer satisfaction,
service quality and loyalty are the key factor for building long term relationship. Banks have
been realized the strategic importance of customer value therefore continuously seeking new and
innovative ways to enhance customer relationship. Many banks offer almost similar products and
services but customers have more choice and more controls and they are like to spend and
continue their relationship with those banks that provide them better quality of products and
services as compared to their rivals.
The relationship between the customers and the banks seems to be built around two different
type of factors.1) social bonds. (Result in direct relationships) And 2) structural bonds.
(Components which provide the knowledge about the parties involved).
The paper focuses on bank customer relationships, in which social bonds play a very important
role. Firstly, the paper will investigate which dimensions are important in customer relationships
with banks. Secondly, paper will attempt to study the effect of social network in establishing
long lasting relationship that minimizes the customer switching cost.
In modern competitive environments services are gaining increasingly more importance in the
competitive formula of both firms and countries. In the service economy especially, these prove
to be key factors reciprocally interrelated in a causal, cyclical relationship. The higher the
(perceived) service quality, the more satisfied and loyal the customers (Petruzzellis, D‘Uggento
and Romanazzi, 2006). Financial services in Italy have experienced several changes over the last
decades with a growing attention to customer needs. Financial institutions (i.e. banks) realized
the strategic importance of customer value and seem to be continuously seeking innovative ways
to enhance customer relationships.
The traditional product-oriented bank became more and more customer-oriented, focusing on
protecting and retaining actual customers‘ loyalty as the main source of competitive advantage.
Traditional financial services providers have to work even harder to retain customers.
The services market is becoming more competitive. Many industries have already experienced a
rearrangement of marketing budgets in order to devote more resources to defensive marketing,
namely customer retention. Several initiatives have been undertaken to improve retention,



                                                                                                 16
including value chain analysis, customer satisfaction and loyalty programmes (Gummerson,
1998).
Several authors (Bloemer and Lemmink, 1992; Bloemer and Kasper, 1995; Sharma and
Patterson, 2000) highlighted, that the links between customer satisfaction and customer retention
is reliant, to some extent, upon other factors such as the level of competition, switching barriers,
proprietary technology and the features of individual customers.
Satisfaction has a significant impact on customer loyalty (Sharma and Patterson, 2000) and,
leads to commitment in business relationships (Burnham et al., 2003). Customer commitment
cannot be dependent only on satisfaction (Burnham et al., 2003). The longer the relationship, the
more the two parties gain experience and learn to trust each other (Dwyer et al., 1987).
Switching barrier is one the key factor to retain the customers. High switching barriers may mean
that customers have to stay. If the firm is able to manage the customer switching costs, it can still
retain the customer even though the satisfaction may be lower. Customer satisfaction is usually
the key element in securing repeat patronage; this outcome may be dependent on switching
barriers in the context of service provision (Jones et al., 2000).
The extreme competition and saturation in the financial markets i.e. banks and the growing
demand of products and services through new media, such as the Internet-banking, ATMS,
Online banking and mobile phone banking (Methlie and Nysveen, 1999; Jun and Cai, 2001;
Bradley and Stewart, 2003), have forced banks to quickly respond to the new changes and
challenges with new and different business models. In the service industry, a long term
relationship with customers (Grönroos, 1994; Berry, 2002) is the key success factor that is
enormously increasing with the electronic channels.
Banks have the opportunity to capitalize on the beneficial characteristics of the various products
and channels, for example while electronic channels help to reduce the costs of interaction with
the customer by substituting labor intensive operations with automated sales processes
(Campbell, 2003), the interactivity of a face to face consultation provides various cross-sell
opportunities (Clemons et al., 2002).
The importance of satisfaction in literature is shown by its significant impact on the repurchase
intentions of product and services. The literature indicates the positive relationship between
satisfaction and commitment. Higher satisfaction levels increase the attractiveness of a
relationship to customers and hence, their commitment to the relationship (Morgan and Hunt,
1994). The positive relationship among customer satisfaction, customer loyalty, and profitability
has been highlighted consistently with the literature (Reichheld and Sasser, 1990; Gould, 1995).
The increased profit from satisfaction and loyalty comes from several factors, i.e. reduced
marketing and operational costs, and increased sales. Loyal customers are less likely to switch
because of price and they make more purchases than similar non-loyal customers (Reichheld and
Sasser, 1990). Loyal customers also help in promoting the business.
Customers perceive a higher risk in using new services, for example the online banking, in
relation to the physical distance between customer and bank, their inexperience with the new
service, shortcomings and delays in the systems, insecurity in the information and transactions,
and lack of clarity in legislation (Chen et al., 2003; Mukherjee and Nath, 2003). This impacts
negatively on customer‘s trust and satisfaction, and consequently on their loyalty to service.




                                                                                                  17
In order to investigate the level of satisfaction a questionnaire submitted to a random sample of
bank customer. The data collected in one month during the time in which customer go to the
banks. The average response rate was 49.5%. The descriptive analysis of the sample assessment
of the satisfaction in relation to relationship with the bank shows the demographics of
satisfaction and dissatisfaction. The descriptive analysis highlighted three factors.1) Social
capital as representative of the customer attributes.2) service quality for the product. And 3)
empathy for the bank attributes.
The constant effort of managers to stimulate customer loyalty involves customer integration in
the firm value chain as a result of personalized marketing (Vesanen, 2007). Customer loyalty can
be seen as a result of switching costs, opportunity costs and sunk costs based on technological,
contractual and psychological obligations faced by a customer (Jackson, 1985; Riemer and Totz,
2003).
The findings of this research suggest several implications firstly banks have to ensure that utmost
importance is given to quality, product features and product availability. Secondly the role of
staff is also necessary in understanding the customer needs and satisfying them. Higher the
satisfaction will increase the retention of the customers. The findings of this study also
highlighted the strong role of social network in influencing consumer behavior. Therefore,
customers are more willing to participate and interact in the creation of the offer.
Ugur Yavas, Emin Babakus, Nicholas J. Ashill (2003): An empirical study on what do consumer
look for in a bank: The researchers have conducted an empirical study and identify the factors
that consumers considering in selecting a bank and the performance of the banks. We have seen
that many factors like regulatory, structural, technological factors have changed the banking
environment through out the world, as a result so much competition take place in the banking
industry.
During the past decade, regulatory, structural and technological factors have significantly
changed the banking environment throughout the world (Angur, Nataraajan and Jahera, 1999;
Lee, 2002) and resulted in intensified competition in the market place.
In 1994 the enactment of a law removed virtually all of the restrictions on interstate banking
expansions. Restrictions on expansion by bank holding companies were removed in 1995 and
restriction in interstate branches were removed in 1997.These actions was especially trouble for
small community banks which faced competition from larger multi state banks that benefited
from the new legislation in several ways. The Gramm –Leach Billey act passed in 1999 amended
both Glass Steagall act 1933 and the Bank holding company act 1956 and repealed prohibitions
against affiliation of banks, financial service provider and securities firm. As a result, financial
services industry today is facing intensive competition not only within traditional banking
institutions but also with other non banking institutions (Fay, 2000).
The new form of competition makes an understanding of consumer choice behavior to the
banking industry importantly (Devlin, 2001; McKechnie, 1992). Choice criteria determination
and evaluation of banks in terms of these criteria are two critical steps. The objective of this
study is to first determine the underlying configuration of bank choice criteria and then analyze
the importance and performance of banks to meet these criteria.
In order to determine the bank choice criteria four hundred questionnaire submitted to a bank
customer. The response rate was 65.5%. A comparison sample consist with known



                                                                                                 18
characteristics of the area population revealed that the respondents were slightly upscale in terms
of household income.
The analysis resulted in seven factors i.e. Staff quality, integrity, exterior, service variety, hours
of operations, fees, locations etc. To investigate the banks performance in terms of the identified
factors which was based on conceptual foundation of multi attribute choice model. Dichotomous
technique used to identify strength and weaknesses regarding the importance and performance of
the banks.
The study reported here identified the underlying configurations of bank choice criteria
employed by consumers and assessed the performance of banks in meeting these criteria. The
results of this study show, first, that bank choice criteria for consumers can be reduced to seven
underlying factors .i.e. (Staff quality, integrity and trust worthiness, exterior, hours of operation,
fee and location). Second, they indicate which of these factors are important and which ones are
relatively unimportant to consumers when they choose a bank. Third, they highlight banks‘
performance in terms of these factors.
The result of this study enlightening several ways. The result suggested that the bank should
keep up their good work in term of their staff quality, being trustworthy, fees and locational
convenience. All these factors are important to consumers and the banks seem to be successful in
meeting the demands of their customers in these areas. Banks must take some decisive step to
improve their performances in other area like exteriors, auxiliary services, hours of operations
etc. Banks should enhance their standings in the eyes of their clients.
Arezou Pour Mirza, Mohammad. T. Hamidi. Beheshti, Asa Wallstrom, Omid Pour Mirza:Journal
of Applied Sciences 9(14):2567-2575, 2009: Adoption of Internet Banking by Iranian
Consumers. This study was conducted to develop an understanding of Iranian customer‘s attitude
and adoption of internet banking service. The study provides a set of factors that are perceived to
have an impact on adoption of internet banking behavior of Iranian customers.
In the world of banking, the development in information technology has an enormous effect in
development of more flexible payment methods and more efficient banking services. In 1981,
Automated Teller Machines (ATMs) were introduced. In early 1990‘s, Automated Voice
Response (AVR) were introduced to financial industry which gave the institutions the ability to
launch the tele banking services and facilities to their customers. Now days, technology runs
through every part of the banking business in Iran. Adoption of internet banking in Iran is
relatively very low. Customers are less familiar and often more doubtful toward online banking
transactions due to lack of knowledge and security.
The new and modified technology offer banks some efficient delivery channels through which
customers banking requirement can be delivered more conveniently and economically (Akinci et
al, 2004; Brodie et al, 2007; David et al, 2008). One of the delivery channel introduced for
financial service is internet banking (IB) or online banking. To used internet based financial
services, consumers not only need to understand the technology but also need to understand the
financial services. At recent years e-banking has experienced explosive growth and has
transformed traditional practice in banking dramatically (Gonzalez et al, 2008).
Internet banking is a useful tool in banking sector that offers less time consuming and is more
convenient than traditional branch banking. This new and modified banking system has




                                                                                                   19
significantly lower cost structure than the traditional delivery channel (traditional branch banking
system).
Financial sector is the spinal cord of sovereign economy of any country. The adoption of this
technology in banking system in Iran was a few decades behind that of developed countries. In
terms of global and international comparison, use of internet in Iran is relatively low and
therefore online banking is still in the infancy stage. This study reveals that not only bank
customers use but also the acceptance from the customers supports and determine the success of
internet banking and this has a great influence on its adoption (Pikkarainen et al, 2004).
Adoption is the acceptance and continued use of a product, service or idea. According to Rogers
(1995) before customer can adopt an innovation they must learn about it, which this learning
called the adoption process and consist of awareness, interest, evaluation, trial and finally
adoption.
Financial institutes world wide become more interested in diversifying their traditional service
delivery channels, which is known to be associated with high staff and over head cost. The
advantages of internet channels over traditional branch banking were also underlined) listed the
advantages for banks: cost saving, increased customer based, mass customization, marketing and
communication, innovation n and development of non core business.
In order to determine, the questionnaire was developed which include two sections. The first
section gathers demographic information and the second section gathers personal information
regarding the usage and experience of internet and online banking, attitudes of respondents about
the usefulness of banking service and the level of satisfaction about the internet banking service.
Data collection was conducted from September to November, 2006 in four different branches of
Mellat bank (one of the largest commercial bank in Islamic Republic of Iran) in Tehran. The
population is divided into two groups. Group one are those who have already adopted the
internet banking service and group two are those who haven‘t adopted the internet banking
service. The method of sampling used in this research was simple random sampling. Five
hundred questionnaires were distributed out which four hundred sixty nine useable
questionnaires were collected.
The findings of this study indicated that almost 65.83% of the respondents were using internet
for gathering information and news. An interesting piece of information was that, branch counter
with 56.93% was the most preferred delivery channel of the customers. This indicated that
customers preferred traditional retail banking channel. One of the main obstacles in online
banking service usage was the lack of information technology. Another obstacle in internet
banking usage was the lack of trust to financial services security.
Several scholars have analyzed mainly the demographic characteristics of internet banking
customers but lesser emphasis on analyzing the behavioral, attitudinal, and social characteristics
of the bank clients. The findings showed that these characteristics have a great impact on
adoption of internet banking service. Higher use of internet banking has been evident for those
who have higher educational level. Also a similar trend of internet banking usage is detected to
those customers with middle-class income. If the bank‘s manager strategy approaches towards
these customers, by providing special offers it may be successful to increase the adoption rate if
internet banking service. There fore bank managers should focus their promotion activities aimed
at such customers.




                                                                                                 20
The majority of the customers are very comfortable and willing to use internet banking service. It
is very important for Iranian banks to have online banking service. It is well accepted fact that,
providing good service and convincing the customers about the non-economic relative
advantages such as easy and safe payments and protecting from theft or losing of cash, will
increase the number of adopters. Based on the results, the negative perception of the internet
banking service such as safety and risk of error has negative impact on adoption
(Rotchanakitumnuai and Speece, 2003). These are the main reasons for not opening online
banking or investment accounts. Therefore, the bank managers should focus their promotional
activities, aimed to counteract such negative perceptions and need to explain the high level of
security which supports the bank‘s computer system from third party intrusions into an internet
account.
The key contribution of this study is the identification of prominent demographic, behavioral and
attitudinal characteristics as predictor of customer choice in the context of internet banking
service in Iran. This could lead to enhance the abilities for bank managers to develop more
secure and trustable products.
Ogenyiejye Omar: Journal of Retail Marketing Management Research Vol.1, No.1, 1752-6191,
2007: Gender –based retail bank choice decision in Nigeria. This paper is an analysis of the
factors that affect the choice of retail banking by men and women customer in Nigeria. The
transformation of the Nigerian retail banking sector has redefined the role of banks in Nigeria
more effectively to customer needs. A similar study conducted elsewhere in West Africa of
personal banking habits and preferences (see Owusu-Frimpong, 1999) shows that the reasons
people choose retail banks appear to be based on location, reputation, service and security of
funds. The purpose of the study was to determine the factors considered important in the choice
of retail banks in Nigeria. The study determined that if there are differences in the factors used
by men and women in retail bank choice.
The objective of this paper is to determine the relative strengths used by the Nigerian customer in
the retail banking to evaluate the corresponding behavioral and demographic characteristics of
Nigerian consumers. The findings presented in this study useful and provide information for
bank managers to formulate their marketing strategies.
In order to develop a customer choice model two observations about selection of bank and
behavior were made. Firstly, most customers divide their regular bank transactions into a main
financial deposit and /or cash withdrawal (Anderson, de Palma and Thisse, 1992; Trubik and
Smith, 2000) and secondly, customers of different income levels and on different types of
banking transactions are attracted to different retail banks(Devlin, 2001).
Boyd, Leonard, & White (1994) studied differences in selection criteria for retail banks with
respect to basic demographic factors and found that white collar households emphasized
reputation, modern facilities and location, high income households attached greater importance
to interest rates, opening hours and friendliness of staff, and low income households relied on
favorable publicity and word of mouth. Bank choice criteria based on a particular ethnic, sex
equality, cultural or religious context (Haron, Ahmed & Planisek, 1994; Stafford, 1996;
Woodward & Ozbiligin, 1999).
For this study, a single bank transaction period is the consideration taken into account in the
development of the choice model. Thus, in any period the customer makes one primary and a
secondary banking, where primary banking is that on which the largest financial transaction is



                                                                                                21
conducted (deposit and/or withdrawal). The distinction between primary and secondary
transaction is referred to as the ‗mode‘ of banking. The decisions on primary and secondary
transactions are analyzed separately and treated as independent.
This study fills the gap by studying the differences in bank choice based on gender and focusing
on the Nigerian Bank. The nature of male-female role differences has been summarized by
Hofstede (1991). Some gender differences between men and women have been attributed to role
perception. The factors used in this study help to identify and define the reason for differences in
choice of retail banking. These factors may also help to identify and define reasons for
differences in choice of retail banks.
Women‘s market in Nigeria is largely untapped by the banking industry because of the relatively
lower income of female workers. Although on average women‘s earnings are less than those of
their male (Ojo, 1994; Central Bank of Nigeria, 2001). A growing percentage of women have
annual incomes in excess of N20, 000 (Central Bank of Nigeria, 2001). As the educational level
of women increases, along with the number of women in top management positions, their
importance as financial services consumers will increase. The female market segment is also
important because the wealth of Nigeria will increasingly lie in the hands of women as the
population ages and as the life expectancy of women continues to exceed that of men.
The study was undertaken at Abuja (the capital of Nigeria). The study was conducted during the
month of November 2005. Non probability sampling technique used in this study to measure the
primary and secondary retail bank transactions. the choice of the model was made to measure
primary and secondary retail bank transactions, samples were drawn from five leading retail
banks (with the largest market share) including First Bank, United bank for Africa (UBA),
Intercontinental Bank, Zenith International Bank, and Union Bank. In order to select the
appropriate sample from men and women who operate a bank account purposive sampling
method (non-probability sampling) was adopted. This approach was used because it was
impossible to know precisely the total population of men and women that operate a bank
account.
The most important factor considered by male consumers when selecting retail banking is safety
of funds. On the other hand female customer considered speed of transactions as the most
important factor. Many similarities and differences between the findings of this research and the
findings of previous studies. The selection of fast and efficient service is one of the important
factors in selection decision by both male and female customers are consistent with the findings
by (Kaynak and Whiteley, 1999). One of the facilities most frequently used by both male and
female customers was saving account and fixed deposit accounts.
One of the interesting finding from this study is that both male and female customers value their
time highly and expect their banking transactions as quickly as possible. The inefficiency
indicators in Nigerian banking such as long queues in the bank, un operational counters during
banking hours and delays in making decision.
The most significant fact revealed by this study is that there is no significant difference in the
choice criteria between male and female customers. This study provides the fact that banks
should not rely on the gender factor as a strategy in their efforts to attract customers.




                                                                                                 22
Hypotheses
Based on the objective of the study and literature review the following hypotheses have
formulated which attempt to find statistical evidences to support these hypotheses.
H1:       Product attributes1 positively affect the customer satisfaction.
H2:       Bank attribute2 positively affect the customer satisfaction.
H3:       Customer attribute3 positively affect the customer satisfaction.




1
    Product and Service Quality
Product and Service quality represent for the product attributes, as product and service quality results from cognitive
progress, being more relational and so refers to sensations and evaluation of the external stimuli (Anderson and
Fornell, 1994).
2
    Empathy
Empathy represents for the bank attributes, i.e. caring, individualized attention to every customer, thus performing
the service promised dependably and accurately.
3
    Social Capital
Social capital as representative of the customer attributes, that highlights the importance of the relational aspects and
impacts in customer behavior.




                                                                                                                      23
Methodology
This is an analytical study based mainly on the primary data collected through a scientifically
developed questionnaire. The questionnaire has been personally administered on a sample size of
140, chosen on a convenient basis from 14 banks. There are 36 commercial banks in Pakistan in
which 4 banks are public sector banks, 20 are local private banks, 7 are foreign banks, and 5 are
Islamic banks. 14 banks were selected as a sample size because the selected banks have the
network more than 100 branches so that it might help to investigate the customer attribute,
product attribute and the service quality provided by the banks to their customers (see Table 1).
TABLE -1
Habib Bank Limited.                               Bank Islami Limited.
MCB Bank Limited.                                 Allied Bank Limited.
UBL Bank Limited.                                 Bank Alfalah Limited.
National Bank Of Pakistan.                        Soneri Bank Limited.
NIB Bank Limited.                                 Askari Bank Limited.
Bank AL Habib Limited.                            Standard Chartered bank Limited.
Meezan Bank Limited.                              Habib Metropolitan Bank Limited.
Data Analysis Method
The data was analyzed by using approximation of Binomial to Normal Distribution.
Approximation of Binomial to Normal Distribution
The distribution associated with the random variable, defined as the number of 'successes' in n
independent trials each having the same probability, p, of success. The random variable is said
to be a binomial variable and to have a binomial distribution with parameters n and p. The
normal distribution is the most common type of distribution, Given enough observations within a
sample size, it is reasonable to make the assumption that returns follow a normally distributed
pattern, but this assumption can be disproved.
According to the Central Limit Theorem, the sample mean of any distribution will become
approximately normal if the sample size is sufficiently large. The binomial distribution can be
approximated using the normal distribution if np and nq are both at least 5.
                                              =

Where
 = mean of sample.
µ= mean of population.
σ= Standard deviation.
 = number of observations.




                                                                                              24
                                                                               + α

The graph of standard normal distribution is bell shaped curve. The curve concentrated on the
either side (- α, + α). The bell shaped curve is symmetric which describe that the probabilities
of the deviation from the mean are comparable in either direction. The level of significance α is
the total risk of erroneously rejecting the hypothesis (H0) when it‘s actually true.
If the distribution from which the samples are derived is considered to be normal, Gaussian, or bell-
shaped, then the test is referred to as a one- or two-tailed test. If the test is performed using the actual
population mean and variance, rather than an estimate from a sample, it would be called a one- or two-
tailed Z test. The one-tailed test is a statistical test used in inference, in which a given statistical
hypothesis , H0 (null hypothesis) will be rejected when the value of the statistic falling into one
specified tail of its sampling distribution. If the alternate hypothesis is greater than the
hypothesized value so that the rejection region is in the right side of the sampling distribution,
then the one-tailed test is also known as right-tailed test. But if the alternate hypothesis is less
than the hypothesized value so that the rejection region is in the left tail, then the one-tailed test
is a left-tailed test.




                                                                                                         25
Data Analysis

For Product Attribute
H1:        Product attributes positively affect the customer satisfaction.
1) Habib Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.66           0.34          59.00         4.51           31           1.65    0.65



Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.65.
Interpretation:
The above result shows that product attributes of Habib Bank Limited play an important role that
positively affects the customer satisfaction.
H1:        Product attributes positively affect the customer satisfaction.
2) MCB Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.64           0.36          58.00         4.54           32           1.65    0.60

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.60.
Interpretation:
The above result shows that product attributes of MCB Bank Limited play an important role that
positively affects the customer satisfaction.
H1:        Product attributes positively affect the customer satisfaction.
3) United Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.89           0.11          80.00         2.98           10           1.65    2.47

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=2.47.
Interpretation:




                                                                                             26
From the above result it can be concluded that the product and service quality of United Bank
Limited do not affect the customer satisfaction positively.
H1:        Product attributes positively affect the customer satisfaction.
4) National Bank of Pakistan.
       p               q             µ             σ            X            Z tab   z cal
      0.22           0.78          20.00         3.94           70           1.65    1.34

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.34.
Interpretation:
The above result shows that product attributes of National Bank of Pakistan play an important
role that positively affects the customer satisfaction.
H1:        Product attributes positively affect the customer satisfaction.
5) NIB Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.83           0.17          75.00         3.54           15           1.65    1.79

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=1.79.
Interpretation:
From the above result it can be concluded that the product and service quality of NIB Bank
Limited do not affect the customer satisfaction positively.
H1:        Product attributes positively affect the customer satisfaction.
6) Bank Al Habib Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.81           0.19          73.00         3.71           17           1.65    1.59

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.59.
Interpretation:
The above result shows that product attributes of Bank Al Habib Limited play an important role
that positively affects the customer satisfaction.
H1:        Product attributes positively affect the customer satisfaction.
7) Meezan Bank Ltd.



                                                                                             27
       p               q             µ             σ            X            Z tab   z cal
      0.82           0.18          74.00         3.63           16           1.65    1.69

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=1.69.
Interpretation:
From the above result it can be concluded that the product and service quality of Meezan Bank
Limited do not affect the customer satisfaction positively.
H1:        Product attributes positively affect the customer satisfaction.
8) Bank Islami Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.88           0.12          79.00         3.11           11           1.65    2.31

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=2.31.
Interpretation:
From the above result it can be concluded that the product and service quality of Bank Islami
Limited do not affect the customer satisfaction positively.
H1:        Product attributes positively affect the customer satisfaction.
9) Allied Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.33           0.67          30.00         4.47           60           1.65    0.71

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.71.
Interpretation:
The above result shows that product attributes of Allied Bank Limited play an important role that
positively affects the customer satisfaction.
H1:        Product attributes positively affect the customer satisfaction.
10) Bank Alfalah Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.93           0.07          84.00         2.37            6           1.65    3.47

Conclusion:




                                                                                              28
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=3.47.
Interpretation:
From the above result it can be concluded that the product and service quality of Bank Alfalah
Limited do not affect the customer satisfaction positively.
H1:        Product attributes positively affect the customer satisfaction.
11) Soneri Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.88           0.12          79.00         3.11           11           1.65    2.31

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=2.31.
Interpretation:
From the above result it can be concluded that the product and service quality of Soneri Bank
Limited do not affect the customer satisfaction positively.
H1:        Product attributes positively affect the customer satisfaction.
12) Askari Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.99           0.01          89.00         0.99            1           1.65    9.33

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=9.33.
Interpretation:
From the above result it can be concluded that the product and service quality of Askari Bank
Limited do not affect the customer satisfaction positively.
H1:        Product attributes positively affect the customer satisfaction.
13) Standard Chartered Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.88           0.12          79.00         3.11           11           1.65    2.31

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=2.31.
Interpretation:




                                                                                             29
From the above result it can be concluded that the product and service quality of Standard
Chartered Bank Limited do not affect the customer satisfaction positively.
H1:        Product attributes positively affect the customer satisfaction.
14) Habib Metropolitan Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.79           0.21          71.00         3.87           19           1.65    1.42

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.42.
Interpretation:
The above result shows that product attributes of Habib Metropolitan Bank Limited play an
important role that positively affects the customer satisfaction.
For Bank Attribute
H2:        Bank attribute positively affect the customer satisfaction.
1) Habib Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.61           0.39          43.00         4.07           27           1.65    0.47

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.47.
Interpretation:
From the above result it can be concluded that Habib Bank Limited positively affect the customer
satisfaction in terms of their bank attribute, empathy and individualized attention to every
customer.
H2:        Bank attribute positively affect the customer satisfaction.
2) MCB Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.57           0.43          40.00         4.14           30           1.65    0.29

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.29.
Interpretation:
From the above result it can be concluded that MCB Bank Limited positively affect the customer
satisfaction in terms of their bank attribute, empathy and individualized attention to every
customer.


                                                                                             30
H2:        Bank attribute positively affect the customer satisfaction.
3) United Bank Ltd.
       p               q             µ             σ            X        Z tab      z cal
      0.73           0.27          51.00         3.72           19       1.65       1.03

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.03.
Interpretation:
From the above result it can be concluded that United Bank Limited positively affect the
customer satisfaction in terms of their bank attribute, empathy and individualized attention to
every customer.
H2:        Bank attribute positively affect the customer satisfaction.
4) National Bank of Pakistan.
       p               q             µ             σ            X        Z tab      z cal
      0.00           1.00          0.00          0.00           70       1.65        ∞
Conclusion:
The hypothesis can be rejected at α=0.05, since the calculated value of z=∞.
Interpretation:
From the above result it can be concluded that the bank attributes like empathy and
individualized attention to every customer, of National bank Of Pakistan do not affect the customer
satisfaction positively.
H2:        Bank attribute positively affect the customer satisfaction.
5) NIB Bank Ltd.
       p               q             µ             σ            X        Z tab      z cal
      0.91           0.09          64.00         2.34           6        1.65       2.96

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=2.96.
Interpretation:
From the above result it can be concluded that the bank attributes like empathy and
individualized attention to every customer, of NIB Bank Limited do not affect the customer
satisfaction positively.
H2:        Bank attribute positively affect the customer satisfaction.
6) Bank Al Habib Ltd.




                                                                                                31
       p               q             µ             σ            X        Z tab   z cal
      0.79           0.21          55.00         3.43           15       1.65     1.39

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.39.
Interpretation:
From the above result it can be concluded that Bank AL Habib Limited positively affect the
customer satisfaction in terms of their bank attribute, empathy and individualized attention to
every customer.
H2:        Bank attribute positively affect the customer satisfaction.
7) Meezan Bank Ltd.
       p               q             µ             σ            X        Z tab   z cal
      0.76           0.24          53.00         3.59           17       1.65     1.20

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.20.
Interpretation:
From the above result it can be concluded that Meezan Bank Limited positively affect the
customer satisfaction in terms of their bank attribute, empathy and individualized attention to
every customer.
H2:        Bank attribute positively affect the customer satisfaction.
8) Bank Islami Ltd.
       p               q             µ             σ            X        Z tab   z cal
      0.77           0.23          54.00         3.51           16       1.65     1.29

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.29.
Interpretation:
From the above result it can be concluded that Bank Islami Limited positively affect the
customer satisfaction in terms of their bank attribute, empathy and individualized attention to
every customer.
H2:        Bank attribute positively affect the customer satisfaction.
9) Allied Bank Ltd.
       p               q             µ             σ            X        Z tab   z cal




                                                                                             32
      0.00           1.00          0.00          0.00           70       1.65     ∞
Conclusion:
The hypothesis can be rejected at α=0.05, since the calculated value of z=∞.
Interpretation:
From the above result it can be concluded that the bank attributes like empathy and
individualized attention to every customer, of Allied bank Limited do not affect the customer
satisfaction positively.
H2:        Bank attribute positively affect the customer satisfaction.
10) Bank Alfalah Ltd.
       p               q             µ             σ            X        Z tab   z cal
      0.83           0.17          58.00         3.15           12       1.65     0.83

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.83.
Interpretation:
From the above result it can be concluded that Bank Alfalah Limited positively affect the
customer satisfaction in terms of their bank attribute, empathy and individualized attention to
every customer.
H2:        Bank attribute positively affect the customer satisfaction.
11) Soneri Bank Ltd.
       p               q             µ             σ            X        Z tab   z cal
      0.76           0.24          53.00         3.59           17       1.65     0.76

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.76.
Interpretation:
From the above result it can be concluded that Soneri Bank Limited positively affect the
customer satisfaction in terms of their bank attribute, empathy and individualized attention to
every customer.
H2:        Bank attribute positively affect the customer satisfaction.
12) Askari Bank Ltd.
       p               q             µ             σ            X        Z tab   z cal
      0.93           0.07          65.00         2.15           5        1.65     3.33

Conclusion:



                                                                                             33
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=3.33.
Interpretation:
From the above result it can be concluded that the bank attributes like empathy and
individualized attention to every customer, of Askari Bank Limited do not affect the customer
satisfaction positively.
H2:        Bank attribute positively affect the customer satisfaction.
13) Standard Chartered Bank Ltd.
       p               q             µ             σ            X        Z tab       z cal
      0.84           0.16          59.00         3.04           11           1.65    1.88

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=1.88.
Interpretation:
From the above result it can be concluded that the bank attributes like empathy and
individualized attention to every customer, of Standard Chartered Bank Limited do not affect the
customer satisfaction positively.
H2:        Bank attribute positively affect the customer satisfaction.
14) Habib Metropolitan Bank Ltd.
       p               q             µ             σ            X        Z tab       z cal
      0.74           0.26          52.00         3.66           18           1.65    1.11

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.11.
Interpretation:
From the above result it can be concluded that Habib Metropolitan Bank Limited positively affect
the customer satisfaction in terms of their bank attribute, empathy and individualized attention to
every customer.
For Customer Attribute
H3:        Customer attribute positively affect the customer satisfaction.
1) Habib Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.69           0.31          48.00         3.88           22           1.65    0.80

Conclusion:




                                                                                                34
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.80.
Interpretation:
From the above result it can be concluded that Habib Bank Limited positively affect the customer
satisfaction in terms of their customer attribute, social capital, social bonding and the behavior of
the customer.
H3:        Customer attribute positively affect the customer satisfaction.
2) MCB Bank Ltd.
       p              q             µ             σ            X             Z tab    z cal
      0.57           0.43         40.00          4.14          30            1.65     0.29

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.29.
Interpretation:
From the above result it can be concluded that MCB Bank Limited positively affect the customer
satisfaction in terms of their customer attribute, social capital, social bonding and the behavior of
the customer.
H3:        Customer attribute positively affect the customer satisfaction.
3) United Bank Ltd.
       p              q             µ             σ            X         Z tab        z cal
      0.74           0.26         52.00          3.66          18            1.65     1.11

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.11.
Interpretation:
From the above result it can be concluded that United Bank Limited positively affect the
customer satisfaction in terms of their customer attribute, social capital, social bonding and the
behavior of the customer.
H3:        Customer attribute positively affect the customer satisfaction.
4) National Bank of Pakistan.
       p              q             µ             σ            X         Z tab        z cal
      0.00           1.00          0.00          0.00          70            1.65      ∞
Conclusion:
The hypothesis can be rejected at α=0.05, because the calculated value of z=∞.
Interpretation:


                                                                                                  35
From the above result it can be concluded that the customer attributes like social capital, social
bonding and importance of customer behavior of National Bank of Pakistan do not affect the
customer satisfaction positively.
H3:        Customer attribute positively affect the customer satisfaction.
5) NIB Bank Ltd.
       p              q             µ             σ            X         Z tab      z cal
      0.96           0.04         67.00          1.69           3            1.65   4.51

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=4.51.
Interpretation:
From the above result it can be concluded that the customer attributes like social capital, social
bonding and importance of customer behavior of NIB bank Limited do not affect the customer
satisfaction positively.
H3:        Customer attribute positively affect the customer satisfaction.
6) Bank Al Habib Ltd.
       p              q             µ             σ            X         Z tab      z cal
      0.79           0.21         55.00          3.43          15            1.65   1.39

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.39.
Interpretation:
From the above result it can be concluded that Bank AL Habib Limited positively affect the
customer satisfaction in terms of their customer attribute, social capital, social bonding and the
behavior of the customer.
H3:        Customer attribute positively affect the customer satisfaction.
7) Meezan Bank Ltd.
       p              q             µ             σ            X         Z tab      z cal
      0.81           0.19         57.00          3.25          13            1.65   1.62

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.62.
Interpretation:




                                                                                               36
From the above result it can be concluded that Meezan Bank Limited positively affect the
customer satisfaction in terms of their customer attribute, social capital, social bonding and the
behavior of the customer.
H3:        Customer attribute positively affect the customer satisfaction.
8) Bank Islami Ltd.
       p              q             µ             σ            X         Z tab      z cal
      0.79           0.21         55.00         3.43           15        1.65       1.39

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.39.
Interpretation:
From the above result it can be concluded that Bank Islami Limited positively affect the
customer satisfaction in terms of their customer attribute, social capital, social bonding and the
behavior of the customer.
H3:        Customer attribute positively affect the customer satisfaction.
9) Allied Bank Ltd.
       P              q             µ             σ            X         Z tab      z cal
      0.00           1.00          0.00          0.00          70            1.65    ∞
Conclusion:
The hypothesis can be rejected at α=0.05, since the calculated value of z=∞.
Interpretation:
From the above result it can be concluded that customer attributes of Habib Bank Limited
positively affect the customer satisfaction.
H3:        Customer attribute positively affect the customer satisfaction.
10) Bank Alfalah Ltd.
       p              q             µ             σ            X         Z tab      z cal
      0.90           0.10         63.00          2.51           7            1.65   2.67

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=2.67.
Interpretation:
From the above result it can be concluded that the customer attributes like social capital, social
bonding and importance of customer behavior of Bank Alfalah Limited do not affect the
customer satisfaction positively.




                                                                                               37
H3:        Customer attribute positively affect the customer satisfaction.
11) Soneri Bank Ltd.
       p              q             µ             σ            X         Z tab       z cal
      0.71           0.29         50.00          3.78          20            1.65    0.95

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=0.95.
Interpretation:
From the above result it can be concluded that Soneri Bank Limited positively affect the
customer satisfaction in terms of their customer attribute, social capital, social bonding and the
behavior of the customer.
H3:        Customer attribute positively affect the customer satisfaction.
12) Askari Bank Ltd.
       p               q            µ             σ             X            Z tab   z cal
      0.96           0.04         67.00          1.69           3            1.65    4.51

Conclusion:
The hypothesis can be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=4.51.
Interpretation:
From the above result it can be concluded that the customer attributes like social capital, social
bonding and importance of customer behavior of Askari bank Limited do not affect the customer
satisfaction positively.
H3:        Customer attribute positively affect the customer satisfaction.
13) Standard Chartered Bank Ltd.
       p               q             µ             σ            X            Z tab   z cal
      0.94           0.06          66.00         1.94           4            1.65    3.82

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is less than
calculated value of z=3.82.
Interpretation:
From the above result it can be concluded that the customer attributes like social capital, social
bonding and importance of customer behavior of Standard Chartered bank Limited do not affect
the customer satisfaction positively.
H3:        Customer attribute positively affect the customer satisfaction.
14) Habib Metropolitan Bank Ltd.



                                                                                               38
     p             q             µ            σ            X         Z tab          z cal
    0.77          0.23         54.00         3.51          16         1.65          1.29

Conclusion:
The hypothesis cannot be rejected at α=0.05, since the tabulated value of Z=1.65 is greater than
calculated value of z=1.29.
Interpretation:
From the above result it can be concluded that Habib Metropolitan Bank Limited positively affect
the customer satisfaction in terms of their customer attribute, social capital, social bonding and
the behavior of the customer.




                                                                                               39
Conclusions
The findings of this study highlighted the strong role of social network in influencing consumer
behavior. Therefore, customers are more willing to participate and interact in the creation of the
offer, since they feel a sense of belonging. The study highlighted that three factors i.e. product
attributes in terms of product and service quality, bank attributes in terms of empathy and
customer attributes in terms of social capital plays an important role that affect the customer
choice in retail banking. It is believed that the level of the customer's trust plays important role in
assessing the quality of the service provided by the bank. The more the customer trusts, the better
the customer's perception on the service quality. If customers perceive that they are not receiving
concerned, personal, or individual attention from the bank, then their quality judgment will be
negatively affected.
This study suggested that customer satisfaction is the most important factor behind loyalty in
retail banking. Various study showed that satisfaction plays an important role to establish loyal
customer base. This study points out that satisfaction and loyalty relationship is critical for retail
banks. It has also been suggested that there are two areas where a bank could achieve a distinct
advantage; the commitment and attentiveness shown by staff during encounters with customers.
These are areas which are considered to be very important by customers and ones which provide
the greatest opportunity to delight. Commitment and attentiveness however, are difficult to
script-in to a service encounter and any disingenuous show of warmth and empathy would throw
into doubt the integrity of staff, an important dissatisfier. The challenge for banks wishing to
delight their customers is to get their staff to demonstrate genuine warmth and empathy to their
customers. Thus, the banking industries must continuously measure and improve these
dimensions in order to gain customers' loyalty.




                                                                                                    40
Recommendation
The paper contributes to the literature in identify new strength and weakness areas concerning
the actual range of services offered by retail banks, the re-purchase intentions, the state of
relationships with customers, and the competitors‘ image positioning. The findings of this
research suggest several recommendations, firstly, since only when the satisfaction with the core
service and relationship is high, the commitment will be higher, banks have to ensure that utmost
importance is given to attributes like quality, product features, product availability etc. Secondly,
banks must take decisive steps to improve their performance, caring individualized attention to
every customer, thus performing the service promised dependably and accurately and highlights
the importance of the relational aspects and impacts in customer behavior. Moreover, the staff
role is critical in understanding the customer needs and in satisfying them: the higher satisfaction
will then increase customer retention.
The social bonds play a very important role in bank customer relation ship which effect in
establishing long lasting relationship that minimizes the customer switching cost. Practitioners
should encourage social network in order to minimize the switching behavior which will lead to
better customer retention.
Banks must upgrade the level of advisory skills for staff dealing with customers, whether they
are working in branches, call centers, or delivering online services via email, and should embrace
a ―single customer view‖ mentality to maximize relationships with individuals. Relationship
marketing strategy and relationship based loyalty programs are important to retail banking
service providers, because it is a right way to build relationship and loyalty. Therefore, to be
successful, retail banks must provide service to their customers that meets or exceeds their
expectations
Customer focuses on that banks which provide facilities like Internet Banking, Online Banking,
mobile phone banking, banks reputation, friendliness of bank personnel and availability and
location of automated teller machines (ATM) etc. therefore the initial selection of an institution
is very important for the banking sector. All these factors are also an important to consumers and
the banks should focus on these factors to meet the demand of their customers.




                                                                                                  41
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                                                                                             44
Appendices
Appendix A
QUESTIONNAIRE
Q.1 Gender
      Male                           Female
Q.2 In which bank you have maintained the account?
      Habib Bank Ltd                 MCB Bank Ltd              United Bank Ltd
      National Bank of Pakistan      NIB Bank Ltd              Bank Al Habib Ltd
      Meezan Bank Ltd                Bank Islami Ltd           Allied Bank of Pakistan
      Bank Alfalah Ltd               Soneri Bank Ltd           Askari Bank Ltd
      Standard Chartered Bank Ltd                             Habib Metropolitan Bank Ltd
Q.3 What kind of account do you have in a bank?
      Current Account                 Saving Account                Term Deposit Account
Q.4 What type of account are you maintaining?
      Single Account                  Joint Account                 Partnership Account
      Proprietorship Account         Company Account
Q.5 How long have you been maintaining your account with the above mentioned bank?
      Less then 1 year               Between 1 to 3 years          For more then 3 years
Q.6 Have you visited the branch in the last three months?
      Yes                             No
Q.7 Approximately how many times have you visited the branch in the last three months?
      Never                           1 to 3 times                 4 to 9 times
      10 to 19 times                  More than 20 times
PRODUCT ATTRIBUTES
Q.8 In terms of the products and services you received from the bank representatives/tellers, how satisfied
were you with the following?
a) Knowledge of bank's products & Services.
     Very satisfied                    Satisfied                    Neutral
     Dissatisfied                     Strongly Dissatisfied
b) New financial products in terms of TDR‘s offered by the bank.
     Very satisfied                   Satisfied                      Neutral
     Dissatisfied                     Strongly Dissatisfied
c) Online banking facilities and the procedures provided by the bank.
     Very satisfied                   Satisfied                      Neutral




                                                                                                        45
      Dissatisfied                     Strongly Dissatisfied
d) Internet and Mobile banking facilities and procedures provided by the bank.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
e) Minimum balance requirement criteria for maintaining accounts.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
f) Loan disbursement procedures provided b the bank.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
g) ATM / Debit card facility provided by the bank.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
h) 24/7 ATM service provided by the bank.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
i) Fast and efficient service provided by the bank.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
BANK ATTRIBUTES
Q.9 In terms of the empathy you received from the bank‘s representatives, how satisfied were you with
the following?
a) Friendly and courteous manner received from the bank‘s representative.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
b) Available to customers when needed.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
c) Individualized attention to every customer.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
d) Professional and attractive appearance.
      Very satisfied                   Satisfied                    Neutral
      Dissatisfied                     Strongly Dissatisfied
e) Complaint handling time.



                                                                                                  46
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
f) Conducting CBC for huge transactions.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
g) No long line ups at counter.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
CUSTOMER ATTRIBUTES
Q.10 In terms of the social aspects you received from the bank‘s representatives, how satisfied were you
with the following?
a) Communication process with their customers.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
b) Personal Interaction of the staff with their customers.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
c) Motivational activities from the staff for social bonding and relationship.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
d) Personal Banking Consultants for providing services.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
e) Relationship of the staff with their customers.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
f) Willingness to listen and respond to your need.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
g) Recognition of you as valued customer.
      Very satisfied                   Satisfied                       Neutral
      Dissatisfied                     Strongly Dissatisfied
FINAL REMARKS
Q.11 On a scale of 1 to 5 where 1 represents "Extremely dissatisfied" and 5 represents "Extremely
Satisfied," how would you rate your level of overall satisfaction with a bank?




                                                                                                     47
  1                  2        3            4             5


Q.15 Based on your experience would you recommend your friend or relative to open an account in your
bank?
      Definitely
      Probably
      Probably Not
      Definitely Not


Optional

Your Name: ________________________
Age         : _________________________
Education : _________________________
Profession : _________________________
Contact No: _________________________




                                                                                                 48
Appendix B
Gender


Gender                            Counts
Male                              110
Female                            30
                                  140
Account maintained in the bank


Banks                             Counts
Habib Bank Ltd                    10
MCB Bank Ltd                      10
United Bank Ltd                   10
National Bank                     10
NIB Bank Ltd                      10
Bank Al Habib Ltd                 10
Meezan Bank Ltd                   10
Bank Islami Ltd                   10
Allied Bank                       10
Bank Alfalah Ltd                  10
Soneri Bank Ltd                   10
Askari Bank Ltd                   10
Standard Chartered Bank Ltd       10
Habib Metropolitan Bank Ltd       10
                                  140
Kind of account maintained in a
bank.


Kinds of account                  Counts
Current Account                   71
Saving Account                    48
Term Deposit Account              21




                                           49
                                       140
Types of account maintaining in a bank.


Types of account                       Counts
Single Account                         63
Joint Account                          46
Partnership Account                    5
Proprietorship Account                 25
Company Account                        1
                                       140
How long maintaining the account with a bank.


Maintaining the accounts               Counts
Less Than 1 year                       13
Between 1 to 3 years                   62
More than 3 years                      65
                                       140
Visited the branch in the last three months.


Branch Visit                           Counts
Yes                                    140
No                                     0
                                       140
How many Times Visited the Branch in the last Three months.


No. of Branch Visit                    Counts
Never                                  1
1 to 3 times                           44
4 to 9 times                           47
10 to 19 times                         31
More than 20 times                     17
                                       140




                                                              50
How much satisfaction received from bank representatives / tellers in terms of
the products and services.


                                          Very                                     Strongly
Product Attributes                        Satisfied Satisfied Neutral Dissatisfied Dissatisfied
Knowledge of bank products and
services.                                 15        59        39       22           5
Financial products in terms of TDR
offered by bank.                   5                54        47       29           5
Online Banking facilities and      the
procedures.                               19        41        39       29           12
Internet & Mobile Banking facilities
and the procedures.                  5              36        42       38           19
Minimum      Balance       requirement
criteria.                                 9         39        52       35           5

Loan Disbursement procedures.             9         29        59       36           7

ATM/Debit Card facility.                  25        78        27       8            2
24/7 ATM service provided by the
bank.                                     24        61        34       15           6
Fast and efficient service provided by
the bank.                              20           48        35       23           14




How much satisfaction received from bank representatives / tellers in terms of empathy?


                                          Very                                     Strongly
Bank Attributes                           Satisfied Satisfied Neutral Dissatisfied Dissatisfied
Friendly and courteous manner.            18        59        31       22           10

Available to customer when needed.        14        57        34       29           6
Individualized attention to every
customer.                         11                57        35       29           8
Professional      and        attractive
appearance.                               6         44        54       30           6

Complaint handling time.                  3         24        48       47           18




                                                                                                  51
Conducting    CBC         for    huge
transactions.                            10          14      41        56           19

No long line ups at counter.             6           40      46        32           16




How much satisfaction received from bank representatives / tellers in terms of social aspects?


                                         Very                                     Strongly
Customer Attributes                      Satisfied Satisfied Neutral Dissatisfied Dissatisfied
Communication process with their
customers.                       24                  45      38        28           5
Personal Interaction of the staff with
their customers.                       13            55      32        33           7
Motivational activities for social
bonding and relation ship.               9           28      48        38           17
Personal Banking Consultants for
providing services.              3                   17      44        58           18
Relationship of the staff with their
customers.                           14              55      39        26           7
Willingness to listen and respond to
your need.                               10          53      36        30           11
Recognition    of   you    as   valued
customer.                                13          47      48        25           7




On a scale of 1 to 5 where 1 represents "Extremely dissatisfied" and 5 represents
"Extremely Satisfied," over all level of satisfaction.


Level of satisfaction.                   Counts
5                                        21
4                                        48
3                                        46
2                                        19
1                                        6
                                         140




                                                                                                 52

				
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