Measuring Customer Satisfaction in Nationalized Commercial Banks and Private Commercial Banks of Bangladesh through SERVQUAL Model
Kashfia Ahmed Correspondence Author Senior Lecturer Department of Business Administration East West University Plot No-A/2, Jahurul Islam City, Aftabnagar, Dhaka-1212 E-mail:
[email protected] Phone: 880-1552408279
Dr. Tanbir Ahmed Chowdhury Professor Department of Business Administration East West University Plot No-A/2, Jahurul Islam City, Aftabnagar, Dhaka-1212 E-mail:
[email protected] Phone: 880-1199131645
ABSTRACT Customer satisfaction is the main key of retaining customers and to flourish business in banking sector. In Bangladesh where a number of banks operate, the competition to get and retain customer is a vital issue to survive in the business. For accessing customer satisfaction SERVQUAL model is a well-known scale taking consider of reliability, responsiveness, assurance, empathy and tangibles. Among 100 respondents it was found that 12% switched account from nationalized commercial bank to private commercial bank. It was found that nationalized commercial banks and private commercial banks are almost equally reliable to the customers but services of private commercial banks give more assurance to the customers. The study revealed that the performance of nationalized commercial banks suffer in terms of empathy and tangibles. The customers feel that private commercial banks are performing better than nationalized commercial banks. So Nationalized Commercial Banks needs to take initiative to improve the service quality. KEYWORDS Nationalized Commercial Banks, Private Commercial Banks, Customer Satisfaction, Service, Quality
1. INTRODUCTION The banking industry in Bangladesh has flourished over the years. The Banking Sector of Bangladesh has not only proliferated in terms of numbers among the service sector but also improved in quality of customer care. Today, four state-owned commercial banks, five state owned specialized banks, 30 domestic private banks, nine foreign banks and 29 non-bank financial institutions operates in Bangladesh. Few days back Bangladesh Bank approved the application for license of nine new commercial banks: six from local entrepreneurs and the others from NonResident Bangladeshis. As most of the banks, both public and private offer similar products and services, improving customer satisfaction and loyalty is the most important factor in maintaining as well as increasing market share for these organizations. It is the utmost duty of an organization to safeguard interests of customers and meet customers’ expectations with the products/services offered. When a customer expects a certain level of service and he actually perceives more than what he expected then he will be satisfied and if he perceives less than his expectation then he will be dissatisfied. Customer satisfaction is more important for the survival and growth of a service industry like banks as offerings are intangible.If customer retention rate will decrease and customer attrition will be at rise, the competitors may try to satisfy the desired services of the customers. To survive the cut-throat competition of the market it is a challenge for the banks to retain customer not only through providing attractive returns to their investment but through effective service. In a study Leeds (1992), mentioned that approximately 40 percent of customers switched banks because of what they considered to be poor service. Bank customer satisfaction is seen as one of the key factors for banks’ survivalin a competitive, global financial market. Banks must deliver quality services that result inhigher levels of customer satisfaction to succeed intoday’s competitive banking environment (Andersonet al., 1994; Cohen et al., 2006).Bank customer satisfaction can be regarded as a bank fully meeting its customers’ expectations (Bloemer, Ruyter, and Peeters, 1998). 2. LITERATURE REVIEW 2.1 Customer Satisfaction Jamal and Naser (2002) mention that satisfaction is a feeling or attitude formed by bank customers after service, which directly links to the various purchasing behaviors. Ioanna (2002) proposed that product differentiation is impossible in a competitive environment like the banking industry. Banks all over the place are delivering the identical products. Bank prices are fixed and driven by the marketplace. Therefore, bank management tends to distinguish its company from competitors through service quality. Service quality is an imperative factor impacting customers’ satisfaction level in the banking industry. In banking, quality is a multi-variable idea, which includes differing types of convenience, reliability, services portfolio, and critically, the staff delivering the service. Kotler et. al (2000) said that Customer satisfaction depends on how products and services meet or surpass customer expectation. Levesque and McDougall (1996) indicate that customer satisfaction and retention are critical for retail banks. They study the major determinants of customer satisfaction through situational factors, service quality, service features, and customer complaint handling and future intentions in the retail bank sector. Reidenbach (1995) found that customer value is a more viable factor than customer satisfaction because it includes not only the usual benefits that most banks focus on but also a consideration of the price that the customer pays. Customer value is a dynamic that must be managed. Customer satisfaction is merely a response to the value proposition offered in specific products/markets. Rust and Zahorik (1993) identified through their research that investments in customer satisfaction, customer relationships and service quality leads to profitability and market share of bank. File et. al (1992) mentioned that satisfied customers are also likely to tell others of their favorable experiences and thus engage in positive word of mouth advertising. Laroche (1988) said that customer satisfaction underlying position are the customer benefits of convenience and accessibility which are enabling factors that make it easy for the customer to do business with the bank.
Oliver (1981) explained that customer satisfaction entails the full meeting of customer expectations of certain products and services. 2.2 SERVQUAL Model Khondaker and Mir found (2001) that assessing customer satisfaction in the banking sector poses a few challenges, particularly in developing countries like Bangladesh. The most critical challenge is: what criteria should be used for satisfaction measurement? There are many research models developed to measure the perceived service quality. Among such general models, the most popular being the SERVQUAL model a well-known scale developed by Parasuraman et al. SERVQUAL consists of a list of ten dimensions (reliability; responsiveness; competence; access; courtesy; communication; credibility; security; understanding the customer; and tangibles) to measure service quality (Rod et al., 2008). Later in 1988, these ten dimensions were cut down to five ones: tangibility, reliability, responsiveness, assurance, and empathy. According to Parasuraman, Zeithaml and Berry (1988), five principal dimensions that customers use to judge service quality include- reliability, responsiveness, assurance, empathy, and tangibles as shown below. 2.2.1 Reliability: the ability to perform the promised services both dependably and accurately. Reliable service performed is a customer’s expectation and means that the service is accomplished on time, in the same manner, and without error every time. 2.2.2 Responsiveness: the willingness to help customers and to provide prompt service. Keeping customers waiting particularly for no apparent reason creates unnecessary negative perceptions of quality. If a service failure occurs, the ability to recover quickly and with professionalism can create very positive perceptions of quality. 2.2.3 Assurance: the knowledge and courtesy of employees as well as their ability to convey trust and confidence. The assurance dimension includes the following features: competence to perform the service, politeness and respect for the customer, effective communication with the customer, and the general attitude that the service provider has the customer‘s best interests at heart. 2.2.4 Empathy: the provision of caring, individualized attention to customers. Empathy includes the following features: approachability, sensitivity and effort to understand the customer‘s needs. 2.2.5 Tangibles: the appearance of physical facilities, equipment, personnel, and communication materials. The condition of the physical surroundings is tangible evidence of the care and attention to detail that are exhibited by the service provider. This assessment dimension also can extend to the conduct of other customers in the service Dutta and Kirti (2009) explored the gulf between customer expectations and perceptions of service quality factors throughout public, private and foreign banks in India based on the SERVEQUEL model. According to the findings of their paper – tangibles such as assurance, empathy and reliability dimensions explain customer satisfaction in Indian banks. Khondaker and Mir (2011) mentioned that the basic assumption underlying the SERVQUAL scale is that performance below expectation (obtaining a negative score) leads to a perception of low service quality (SQ), while exceeding expectations (obtaining a positive score) leads to a perception of high SQ. Therefore, perceived SQ is the result of the customer’s comparison of expected service with the service received. Then overall customer satisfaction is measured by the perceived SQ of the customer from a specific service encounter. 2.3 Banks Haq and Muhammad (2012) found that service quality is one of main elements of customer satisfaction and their intention to purchase.However, the customers of public and private sector banks different in terms of their perception of servicequality. Private Banks have been observed to be higher on dimensions of service quality: effectiveness andconvenient while, the nationalized banks are better on the dimensions of price and consistency. Uma et. al (2011) identified that good sites and suitable site of the branch are essential for bank branches for smooth operation ofbanking business. When the private banks were compared with public banks, all the private banks haveexcellent locations from business point of view compared to public banks in India and for providing betterservice to customers proper training should be given to the staff by the banks also public sector banks shouldinvest and concentrate more on staff development where as private sector gives more priority on
infrastructuralaspects. The rigid policy of public banks creates more dissatisfaction among the customers while for privatebanks mostly the value of service is the key factor of satisfaction. Mengi (2010) identified that the consumers of nationalized banks are more satisfied with service quality, than private banks and it’s required to ascertain the key success aspects in the industry, in terms of satisfaction of customers by keeping inview the growing market size and the strong competition. Puja et. al (2009) mentioned in a study that in India Private sector Banks seem to have satisfied its customers with good services and they have beensuccessful in retaining their customers by providing better facilities than Public sector Banks. But, still Private Banks need to go a long way to become customer’s first preference. In an economy of innovative technologies and changing markets, each and every service quality variable has become important. New financial products and services have to be continuously introduced in order to stay competent and Private Banks need to concentrate more on their credit facilities and insurance services since customers do not have a very good opinion about these facilities being offered by Private Banks also Public sector banks enjoy the trust of the customers, which they have been leveraging to stay in the race however they need to improve their service quality by improving their physical facility, infrastructure and giving proper soft skill trainings to their employees. Naveed (2009) said that private bank customers are more satisfied with the services then public banks. Managers in the banking sector undertake significant efforts to conduct customer satisfaction surveys and it is appears that customers are saying that they expect good products and quality to their banks and that may the only thing important to them. 3. RESEARCH METHODOLOGY To conduct the research the relevant information and data were collected from primary and secondary sources. Secondary data were collected from the publication of Bangladesh Bank, commercial banks reports, from relevant publications, articles and books. To collect primary data we prepared questionnaire.Interviewtechnique was applied with structured questionnaire for the collection of primary data.The judgmental sampling procedure was used to select the sample units fromdifferent customers of different commercial banks who were willing to respond tothe questionnaire. All the Bangladeshi NCBs and private commercial banks have taken as the population of the study and 100 customers are taken as the sample of the survey. The survey was administered in December 2012 and January 2013. The survey questionnaire was designed and distributed to target respondent randomly. Targeted respondents were the general public who were at the legal age to hold a Savings and/or Current Account in any of the NCBs or Private Commercial Banks of Bangladesh. The survey questionnaires are designed to apply to a heterogeneous population, where targeted respondents came from the general open public (from difference genders, races, age groups, marital status, education backgrounds, designations and professionalisms). Owing to the fact that different levels of the society have different expectations and needs, therefore, the idea of choosing respondents from different backgrounds will most certainly generate a more reliable outcome towards Service Quality by commercial banks. The first part of the questionnaire was taking consideration in the demographic factor of the respondents. The questions were designed with multiple choice selections for convenience. The second part of the questionnaire was required the respondent to rate the satisfaction level of the bank they have chosen or attached with into a five predefined level scale - “Strongly Disagree”, “Disagree”, “No Comment”, “Agree” and “Strongly Agree”. All data collected were fed into the Statistical Package for the Social Sciences (SPSS) 17. 4. FINDINGS OF THE STUDY The first phase of questionnaire was designed to gather information regarding respondents’ demographic profile such as age, gender, income, occupation, education and bank account. It indicates that 58% of the respondents are male and 42% are female. The large number of the respondents (42%) is doing private jobs. It also revealed that a significant number of respondents (50%) are Master’sDegree holder. 10% have account in Nationalized Commercial Banks, 17% have account in Private Commercial Banks and majority (73%) has account in both the banks. The survey as well revealed that 88% respondents never close any account but 12% have switched from Nationalized Commercial Bank to Private Commercial Bank. 4.1 Reliability
In reliability section we have asked 7 questions to the respondents. The findings of the study are as follows. Regarding the accuracy of bank statements about 87% respondents have strongly agreed/agreed that State Owned Commercial Banks provide accurate bank statements and about 6% have disagreed. About 92% of the respondents have strongly agreed/agreed that Private Commercial Banks are in better position in comparison to Nationalized Commercial Banks. So, Nationalized Commercial Bank is required to give more attention to provide accurate statements to the customers. Only about 18% of the respondents have strongly agreed/agreed that the Nationalized Commercial Bank informs customer about policy changes and about 69% have mentioned that Nationalized Commercial Banks did not inform them about the change of bank policy. About 48% respondents have agreed/strongly agreed that the Private Commercial Banks inform them about the change of bank policy. Regarding this issue the position of Nationalized Commercial Bank is very poor. So they may take necessary measures to inform the changes of bank policy to the customers. Situation of Private Commercial Banks is comparatively better in this respect, even though they need to improve as well. Both the banking sectors may try to provide the information about general changes of policies through e-mails, newspapers and for confidential information, private mail may be used. Approximately 70% of the respondents of Nationalized Commercial Banks have strongly agreed/agreed regarding the clarity of loan terms and conditions. About 61% respondents have agreed/strongly agreed that the Private Commercial Banks have clear and adequate terms and conditions while taking loans. Situations of Nationalized Commercial Banks are comparatively better in this respect. In case of Private Commercial Banks the EMI and floating rates are not clearly explained to the customers. Therefore, Nationalized and Private Commercial Banks need to mention the loan terms and conditions in details in the sanction letter of loan. Regarding the trustworthiness about 91% respondents have strongly agreed/agreed that State Owned Commercial Banks are more trustworthy than other banks and about only about 2% have disagreed. About 58% of the respondents have strongly agreed/agreed that Private Commercial Banks are trustworthy than other banks. In case of this particular issue Nationalized Commercial Banks win more trust of customers than private commercial banks. Only about 28% of the respondents have strongly agreed/agreed that the Nationalized Commercial Banks offer competitive interest rate on savings account and about 38% of the respondents feel that the interest rate on savings account for Nationalized Commercial Banks are not competitive. About 85% respondents have agreed/strongly agreed that the Private commercial banks have more competitive interest rate on savings deposit scheme. Regarding this issue the position of Nationalized Commercial Banks is quite poor. Situations of Private Commercial Banks are comparatively better in this respect. To improve the situation Nationalized Commercial Banks may offer more competitive interest to the savings deposit scheme. Regarding the competitive interest rate on loans about 67% respondents have strongly agreed/agreed that State Owned Commercial Bank offer more competitive rate on loans than other banks and about only about 5% have disagreed/strongly disagreed. About 45% of the respondents have strongly agreed/agreed that Private Commercial Banks offer more competitive interest rate on loans. It seems that credit interest of Private Commercial Banks is more in comparison to State Owned Commercial Banks. Central Bank may take effective measures to …. the credit interest of Private Commercial Banks for healthy comparison. About 84% of the respondents have strongly agreed/agreed that the Nationalized Commercial Banks charge reasonable service charges and about only 5% have disagreed. Whereas about only 22% respondents have agreed/strongly agreed that the Private Commercial Banks offer reasonable service charge but 53% disagreed/strongly. Regarding this issue the position of Private Commercial Banks bank is very poor. Central Bank may try to ensure that Private Commercial Banks will charge reasonable charge for maintaining account with them. Otherwise, small depositors will be penalized with higher account maintaining cost. 4.2 Assurance In assurance section we have asked 4 questions to the respondents. The findings of the study are as follows: About 87% of the respondents have strongly agreed/agreed that the Nationalized Commercial Banks offer more safety of funds. 75% respondents have agreed/strongly agreed that the Private Commercial Banks have safety of funds. Situation of Nationalized Commercial Banks is comparatively better in this respect. Some Private Commercial Banks were managed poorly e.g. Oriental Bank, Bank of Commerce & Investment etc. Due to this
reason some people have confusion about the safety of Private Commercial Banks. Through more active surveillance by the Central Bank, may help to enhance the trustworthiness of Private Commercial Banks Regarding the safety and security within the bank (promises) only about 39% respondents have strongly agreed/agreed that they feel safe and secure when they are in the premise of State Owned Commercial Bank. But about 17% of the respondents have disagreed/strongly disagreed about the safety and security offered by Nationalized Commercial Banks. About 70% respondents strongly agreed/agreed that Private Commercial Banks are in better position in comparison to Nationalized Commercial Banks in case of ensuring safety and security within the bank. Private Commercial Banks recruit the third party security service agencies for ensuring safety within the bank. So, Nationalized Commercial Banks are required to give more attention to provide better safety and security to the customers when they are in the premise. About 60% respondents are dissatisfied with the safety and security of internet service provided by Nationalized Commercial Banks and only 9% feel satisfied. Whereas 54% respondents agreed/strongly agreed regarding the safety and security of internet banking provided by Private Commercial Banks. It seems situation is better in Private Commercial Banks in respect to internet service. State Owned Commercial Banks need to take necessary steps to ensure internet banking at large extent with effective security system. About 49% of the respondents have agreed/strongly agreed that the Nationalized Commercial Banks have strong credibility in the market and about 28% have disagreed/strongly disagreed. About 60% respondents have agreed/strongly agreed that the Private Commercial Banks have strong credibility in the market. Regarding this issue the position of Private Commercial Banks is better than Nationalized Commercial Banks. Poor public service, poor recovery, large classified loan, low interest in deposit scheme etc. leads to the confusion of credibility of Nationalized Commercial Banks. By addressing the above mentioned problems Nationalized Commercial Banks may try to increase credibility among the customers. 4.3 Responsiveness In responsiveness section we have asked 6 questions to the respondents. The findings of the study are as follows: Only 6% of the respondents have agreed/strongly agreed that Nationalized Commercial Banks provide fast and efficient services, whereas 63% respondents disagreed/strongly disagreed. Almost 98% respondents believe that Private Commercial Banks provide fast and efficient services than any other banks. Regarding this issue the position of Nationalized Commercial Banks is very poor. Most of the Nationalized Commercial Banks do not have computerized and online banking system. Private Commercial Banks also have lack of modern technology. This leads to take more time for rendering services to the customers. So both the commercial banks may take necessary measures to improve the quality of services. Only 10% of the respondents are satisfied regarding the waiting time for services in case of Nationalized Commercial Banks. But almost 71% respondents said that the waiting time for services in Nationalized Commercial Banks is not acceptable. On the other hand 91% of the respondents are highly satisfied regarding the waiting time for services in Private Commercial Banks. In case of this particular issue the performance of Nationalized Commercial Banks are really very poor and needs to minimize waiting time through reforming the mechanism of client service. Regarding the error free transactions and records 31% respondents have strongly agreed/agreed that State Owned Commercial Bank ensures error free transactions and records and about 20% have disagreed. About 73% of the respondents have strongly agreed/agreed that Private Commercial Banks are in better position in comparison to Nationalized Commercial Banks to ensure error free transactions and records. So, Nationalized Commercial Banks is required to give more attention to improve the quality of transactions and records. Only 16% of the respondents have agreed/strongly agreed that Nationalized Commercial Banks approve/disapprove loan/credit within acceptable time. Whereas 47% respondents disagreed/strongly disagreed regarding the fact that the time Nationalized Commercial Banks take to approve or disapprove is acceptable. Almost 74% respondents believe that the time Private Commercial Banks take to approve or disapprove loans is acceptable. Regarding this issue the position of Nationalized Commercial Banks is very poor. Nationalized Commercial Banks needs to reform their loan sanctioning procedure and needs to minimize the time required to sanction loan for providing better service to the customers.
Regarding customers’ need and want satisfaction only about 17% of the respondents have agreed/ strongly agreed that State Owned Commercial Banks satisfied the needs and wants of the customers and about 39% have disagreed. About 74% of the respondents have agreed/ strongly agreed that Private Commercial Banks are in better position in comparison to Nationalized Commercial Banks to satisfy the needs and wants of the customers. So, Nationalized Commercial Banksshould try to fulfill the needs and wants of the customers. About 57% of the respondents have agreed/strongly agreed that to open an account in Nationalized Commercial Banks is easy and approximately 21% of the respondents feel that it is not easy. Whereas about 91% of the respondents agreed/strongly agreed that opening an account in Private Commercial Bank is easy. It seems opening of bank account is comparatively easy in Private Commercial Banks. In some Private Commercial Banks representatives help to open bank account and they also provide campaign to open bank account. These types of service is absent in Nationalized Commercial Banks. Nationalized Commercial Banks may provide better counsel to the customers at the time of opening account. 4.4 Empathy In empathy section we have asked 6 questions to the respondents. The findings of the study are as follows: 62% of the respondents strongly agreed/agreed that staffs of Nationalized Commercial Banks possess adequate knowledge about the services of the bank and about 33% of the respondents disagreed/strongly disagreed regarding this fact. 50% of the respondents strongly agreed/agreed that staffs of Private Commercial Banks possess adequate knowledge about the services of the bank. The situation of the Private Commercial Banks seems alarming. They may train their staffs to increase their knowledge regarding the different services of the banks. Only about 15% of the respondents have agreed/strongly agreed that staffs of Nationalized Commercial Banks provide clear answers to customers’ questions and about 37% respondents disagreed/strongly disagreed the fact. 74% respondents believe that staffs of Private Commercial Banks provide clear answers to customers’ questions. Regarding this issue the position of Nationalized Commercial Banks is very poor. Most of the Nationalized Commercial Banks thinks their job is secured so they do not bother about customer satisfaction. So Nationalized Commercial Banks needs to monitor the attitude of their employees to ensure better service to the customers. Only about 9% of the respondents have agreed/strongly agreed that staffs of Nationalized Commercial Banks provide useful advice and almost 40% disagreed/strongly disagreed. Approximately 63% respondents agreed/strongly agreed that the employees of Private Commercial Banks provide useful advices. Regarding the professionalism of the staffs about 21% respondents have strongly agreed/agreed that employees of State Owned Commercial Bank act in professional manner and about 45% have disagreed. About 89% of the respondents have strongly agreed/agreed that employees of Private Commercial Banks are in better position in comparison to Nationalized Commercial Banks to act in professional manner. So, Nationalized Commercial Banks are required to give more attention to develop the professional manner among the employees. On the subject of neat and tidy appearanceof the staffs about 39% of the respondents have strongly agreed/agreed that employees of State Owned Commercial Bank maintain neat and tidy appearance and about 24% have disagreed. About 83% of the respondents have agreed/strongly agreed that employees of Private Commercial Banks are in better position in comparison to Nationalized Commercial Banks in maintaining neat and tidy appearance. None of the respondents feel that the staffs of Private commercial banks don’t maintain neat and tidy appearance. On the topic of friendliness of the staffs about 18% of the respondents have agreed that the employees of State Owned Commercial Banks are friendly and about 45% have disagreed. About 97% of the respondents have agreed/strongly agreed that employees of Private Commercial Banks are in better position in comparison to Nationalized Commercial Banks in maintaining a friendly relationship with the customers. 4.5 Tangibles In tangibles section we have asked 8 questions to the respondents. The findings of the study are as follows: Only about 7% of the respondents have agreed/strongly agreed that Nationalized Commercial Banks have efficient cash handling machine, whereas about 72% respondents disagreed/strongly disagreed. Almost 98% respondents believe that the Private Commercial Banks have efficient cash handling machine. Regarding this issue the position of Nationalized Commercial Banks is very poor.
Regarding the convenience of ATM locations about 10% respondents have strongly agreed/agreed that State Owned Commercial Bank have ATM in convenient locations and about 80% have disagreed. About 59% of the respondents have strongly agreed/agreed that Private Commercial Banks have ATM in convenient locations. Both the banking sectors should increase the number of ATM booths in different locations to ensure the convenience of the customers. Only about 21% of the respondents have agreed/strongly agreed that to use ATM of Nationalized Commercial Banks is easy. Whereas about 49% of the respondents feel that using ATM of public commercial banks is not easy. 70% of the respondents agreed/strongly agreed that using ATM of Private Commercial Bank is easy. On the topic of sufficient car parking spaces for customers only about 11% of the respondents have agreed that the State Owned Commercial Bank s have enough parking spaces for customers and about 70% have disagreed. 40% of the respondents have agreed/strongly agreed that the Private Commercial Banks have sufficient car parking spaces for customers. Both Nationalized and Private Commercial Banks may set up the branches with sufficient car parking spaces. Regarding the convenience of branch locations about 71% of the respondents have strongly agreed/agreed that State Owned Commercial Bank have branches in convenient locations. About 47% of the respondents have strongly agreed/agreed that Private Commercial Banks have branches in convenient locations. In this particular issue Nationalized Commercial Banks are in better position in comparison to Private Commercial Banks. It seems that Private Commercial Banks need to enhance their branch network. Only about 12% of the respondents have agreed/strongly agreed that Nationalized Commercial Banks have user friendly internet banking services. Approximately 68% of the respondents feel that internet banking services of Nationalized Commercial Banks is not user friendly. 60% of the respondents agreed/strongly agreed that the internet service of Private Commercial Bank is user friendly. Only 7% of the respondents have agreed/strongly agreed that Nationalized Commercial Banks offer 24 hours access to internet banking services. About 75% of the respondents mentioned that Nationalized Commercial Banks do not offer 24 hours access to internet banking services. Approximately 52% of the respondents have agreed/strongly agreed that the access of internet service of Private Commercial Bank is round the clock. About 81% of the respondents mentioned that the banking services of Nationalized Commercial Banks are not easily accessed through phone. 42% of the respondents said that they can enjoy banking services of Private Commercial Banks through phone. 5. CONCLUSION It is imperative for all marketing managers in banking sector to strictly follow all the components of SEVVQUAL model to satisfy and retain the customers. Haq and Muhammad (2012) in a study mentioned that in banking business it is seen that only 5% increase in customer retention can extend 35% profitability. From our study it has been revealed that 12% of the respondents switched from Nationalized Commercial Banks to Private Commercial Banks. The study also explored that in Bangladesh the performance of Nationalized Commercial Banks suffer in terms of empathy and tangibles. Private Commercial Banks offer better services in case of empathy and tangibles. Although Private Commercial Banks perform better than Nationalized Commercial Banks in some instances but still they need to improve the quality of services to retain the customers. Both the banking sectors should focus on reducing their procedural complexities and ensuring the delivery of quick services to customers in order to retain existing as well as attracting new customers.The findings of the study are expected to guide Nationalized Commercial Banks as well as private commercial banks in Bangladesh to improve their levels of customer satisfaction
TABLES Table 1: Reliability
No Comment
Disagree
Strongly Disagree
Strongly Agree
Agree
No Comment
Disagree
Bank statements are accurate
33.3%
54%
4.6%
5.7%
2.3%
45.7%
46.7%
4.3%
3.3%
0%
The bank informs customer about policy changes
2.3%
16.1%
12.6
63.2
5.7
15.2
32.6
19.6
32.6
0
The loan terms and conditions are clear and adequate
10.3%
59.8%
16.1%
8%
5.7%
12%
48.9%
13.0%
23.9%
2.2%
Trustworthy compared with other banks
27.6
63.2
6.9
2.3
10.9
46.7
32.6
9.8
0
Interest rate on saving account is competitive
0
27.6
34.5
35.6
2.3
20.7
64.1
13
2.2
0
Interest rate on loans is competitive
23
43.7
28.7
2.3
2.3
14.1
30.4
27.2
28.3
0
34.5
49.4
11.5
2.3
2.3
0
21.7
25
44.6
8.7
Bank charge reasonable service charges
Table 2: Assurance
Agree
No Comment
Disagree
Strongly Disagree
Strongly Agree
Agree
No Comment
Disagree
Strongly Disagree
Private Commercial Bank
Strongly Agree
Nationalized Commercial Bank
Safety of funds
39.1
48.3
3.4
6.9
2.3
14.1
60.9
20.7
4.3
0
Customer feels safe and secure when in the bank
13.8
25.3
43.7
14.9
2.3
14.1
55.4
25
5.4
0
Internet banking is safe and secure
3.4
5.7
31.
43.7
16.1
12
42.4
37
8.7
0
The bank has strong credibility
8
41.4
23
21.8
5.7
21.7
38
37
3.3
0
Strongly Disagree
Agree
Private Commercial Bank
Strongly Agree
Nationalized Commercial Bank
Table 3: Responsiveness
Disagree
Strongly Disagree
Strongly Agree
Agree
No Comment
Disagree
Strongly Disagree
Bank provides fast and efficient service
0
5.7
31
49.4
13.8
23.9
73.9
0
2.2
0
Waiting time for service is acceptable
0
10.3
18.4
57.5
138
7.6
83.7
2.2
6.5
0
The bank insists on error free transactions and records
0
31
49.4
17.2
2.3
6.5
66.3
23.9
3.3
0
The time taken for loan approval/disapproval is acceptable
2.3
13.8
36.8
44.8
2.3
4.3
69.6
21.7
4.3
0
The bank satisfied my needs and wants
0
17.2
43.7
33.3
5.7
13
60.9
20.7
5.4
0
Opening an account is easy
21.8
35.6
21.8
18.4
2.3
22.8
68.5
6.5
2.2
0
Strongly Agree
No Comment
Private Commercial Bank
Agree
Nationalized Commercial Bank
Table 4: Empathy
Agree
No Comment
Disagree
Strongly Disagree
Strongly Agree
Agree
No Comment
Disagree
Strongly Disagree
Private Commercial Bank
Strongly Agree
Nationalized Commercial Bank
Bank staffs have adequate knowledge about the services
40.2
21.8
4.6
27.6
5.7
7.6
42.4
21.7
28.3
0
Bank staffs provide clear answers to customer’s questions
0
14.9
48.3
31
5.7
12
62
16.3
9.8
0
Bank staffs provide useful advice
0
9.2
50.6
32.2
8
9.8
53.3
30.4
6.5
0
Bank staffs act in a professional manner
0
20.7
34.5
39.1
5.7
17.4
71.7
5.4
5.4
0
Bank staff appearance is neat and tidy
2.3
36.8
36.8
19.5
4.6
22.8
59.8
17.4
0
0
Bank personal are friendly
0
18.4
36.8
33.3
11.5
9.8
87
3.3
0
0
Table 5: Tangibles
Agree
No Comment
Disagree
Strongly Disagree
Strongly Agree
Agree
No Comment
Disagree
Strongly Disagree
Private Commercial Bank
Strongly Agree
Nationalized Commercial Bank
The bank has efficient cash handling machine (ATM’s)
3.4
3.4
20.7
54.
18.4
18.5
79.3
2.2
0
0
Bank has ATM in convenient locations
3.4
6.9
9.2
58.6
21.8
13
45.7
32.6
8.7
0
Using ATM is easy
3.5
17.6
29.4
36.5
12.9
20
50
25.6
4.4
0
The bank has enough parking spaces for customers
2.4
8.2
20
61.2
8.2
10
30
14.4
45.6
0
The bank has a branch at convenient location for customers
9.4
61.2
12.9
5.9
10.6
13.3
33.3
23.3
30
0
The bank has user-friendly internet banking services
0
11.8
20
48.2
20
21.1
38.9
36.7
3.3
0
The bank give 24 hours access to internet banking services
3.5
3.5
17.6
55.3
20
15.6
36.7
33.3
11.1
3.3
Bank services can be easily accessed through phone
3.5
0
15.3
64.7
16.5
15.9
26.1
44.3
13.6
0
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