Service Quality and Customer Satisfaction in Online Banking

Introduction

Online banking refers to the automated delivery of banking products and services directly to customers through electronic communication channel, notably the Internet. Internet banking is defined as an ‘Internet portal, through which customers can use different kinds of banking services ranging from bill payment to making investments (Pikkarainen et al., 2004). With the exception of cash withdrawals, Internet banking gives customers access to almost any type of banking transactions at the click of a mouse. It moves the customers from local to global frontiers.

Due to their busy lives customers demand more convenient and sophisticated products and services from their banks. In this direction information technology gained significance in developing new tools and processes to attract and retain the customers. Banks have been using electronic and telecommunication networks for delivering products and services to the customers. With increased internet user population and World Wide Web, online banking emerged as one of the effective tools of the banking industry. In online banking, banks receive instructions and render services to their customers through internet. It allows the customer to access his or her bank account via the internet using personal computer or mobile phone and web-browser (Arunachalamand & Sivasubramanian, 2007).

The electronic delivery channels offer retail banking services to the customers for 24 hours, seven days in a week and collectively called as electronic banking. Automated teller machines, telephone/mobile banking and online banking are important electronic banking channels. But success of new model is not automatic. Success of information technology model depends on both its initial adoption and subsequent continued usage (Chiu et al., 2004). It is documented in the previous research that customer satisfaction plays an important role in customers’ behavioral intention to adopt and continue usage of a new technological model (Guo, 2009). Satisfaction is a person's feelings of pleasure or disappointment resulting from comparing a product's perceived performance in relation to his or her expectations (Kotler, 2000). Satisfied customer continues as a customer for longer period of time, buy more products and will not be influenced by price or competitors. This propels the studies on customer satisfaction to identify what makes a customer satisfied. The quality of service is one of the major determinants of the customer satisfaction (Parasuraman et al., 1985). Unlike the quality of goods, service quality is not tangible and requires to be defined in terms of ‘attitude’, ‘interaction’ and ‘perception’ and has to be judged by what a customer perceives rather than what a provider offers (Pattanayak & Maddulety, 2011). Service quality factors vary depending on the type of service setting, situation, time, need, etc. (Seth et al., 2004). Online banking service quality is the ability of the bank to provide secure and convenient online platform to the customers (Tong et al., 2012). Researchers fairly concluded that prescribing a global set of dimensions to define the service quality is not possible. However, the dimensions viz., reliability/fulfillment, responsiveness, accessibility, ease of use/usability, privacy/security, website design, information quality and empathy proven to be primary attributes that have influence on online customer satisfaction.