Financial Service Quality: Evidence from Banking Sector of Pakistan

A need for the incessant improvement of service quality within most if not all organisations has been engendered over the past three decades (Karatepe et al., 2005). This requirement is due, in part, to its significance for the success of organisations (Yasin et al., 2015), including banks (Veli Şafakli, 2007), along with the worldwide shift towards service-based economies (Arshad et al., 2015) and increased competition (Ushantha et al., 2014). Today, many financial services, specifically those dealt with in banks, are organizing themselves to become increasingly customer-centric (Ijaz and Ali, 2013). <br/><br/>It is known that competition tends to result in the provision of higher quality services, especially in service sector organisations (Mazzeo, 2003; Gaynor, 2006). The banking sector of Pakistan is one of the most important sectors of the economy there (Mukhtar et al., 2014), and the significance of this sector has increased after its substantial transformation from an arguably lethargic government-dominated sector to a more receptive and competitive one in which privately owned banks now have a role. Unfortunately, there is a dearth of literature on service quality in developing countries in general (Angur et al., 1999; Sureshchandar et al., 2003 ), and in the context of the banking industry of an emerging economy, Pakistan, in particular (Haq and Mohammad, 2012; Khan and Fasih, 2014). Therefore, it is interesting at this juncture to examine comparatively the service quality of public, private and Islamic banks of Pakistan, and that is the major objective of my study. An additional objective, no less important, is to identify the gaps between the customers’ expectations and employees’ perceptions of those expectations.<br/><br/>This thesis has used an expectation-confirmation perspective with an interpretivist approach to analyse the retail customers’ and contact-employees’ viewpoints regarding the service quality of the sample banks. Two theoretically driven research questions lead to the philosophical assumptions of my study, which determined the nature of my data collection. Thus, my research methods involved semi-structured interviews and a modified SERVQUAL-based questionnaire survey. The interviews were held with 18 bank customers and 6 employees representing banks as detailed above, while a total of 648 questionnaires were also self-administered to 432 bank customers and 216 employees. The customer questionnaire attracted expectation and perception responses from 283 customers, while the employee questionnaire obtained the perceptions of 165 employees’ on what their customers expected in terms of service quality. This approach resulted in 448 usable questionnaires, which amounts to a 69% response rate. A set of statistical techniques, namely the Shapiro-Wilk, Mann-Whitney, Kruskal-Wallis and Wilcoxon tests, were applied, using SPSS software to analyse the questionnaire data. <br/><br/>The findings from the two elements of empirical work indicated that service quality is an emerging concept in Pakistani banks and the ‘Assurance’ is the most important dimension of service (Gilal et al., 2015). Nevertheless, no significant gaps were found between the customers’ and employees’ understandings of service quality, while the private bank employees showed a comparatively better understanding of their customers’ expectations. Finally, the results indicated that while customer expectations are high, their perceptions of service are not as high as their expectations. As a consequence, Islamic and public bank customers appeared satisfied and dissatisfied respectively, while the private bank customers lie somewhere in-between the two (Ali and Zhou, 2013; Qadri, 2015). Finally, this study suggests that SERVQUAL is a suitable instrument for monitoring the service quality of retail banking in Pakistan, but also that the use of interviews can be further enlightening. <br/><br/>The study contributes to the understanding of service quality in the context of Pakistani banking; its significance emanates from the fact that it explored the service quality of public, private and Islamic banks, which constitute, along with foreign banks, the entire banking sector of the country. The study has implications for bankers, regulators, policy makers and academics in both practical and theoretical contexts.

Name dc:type.qualificationname

Doctor of Philosophy

Level dc:type.qualificationlevel

Doctoral Thesis

Grantor dc:publisher.institution

University of Dundee

Year dc:date.issued

2016

Author dc:creator

• Murtaza, Ghulam

Advisor dc:contributor.advisor

• Fearfull, Anne

Language dc:language

eng

Identifier

oai:discovery.dundee.ac.uk:studenttheses/9c1b4bbe-3153-46ea-a5eb-6b8025f267ff

OAI identifier oai:identifier

oai:discovery.dundee.ac.uk:studenttheses/9c1b4bbe-3153-46ea-a5eb-6b8025f267ff