Perception and Usage Study of Banking Services On Customer Loyalty

MBR Term Report
PERCEPTION AND USAGE STUDY OF

BANKING SERVICES ON CUSTOMER
LOYALTY
Research Term Report Prepared Exclusively for:
Date:
30th December 2013
Letter of Transmittal
Prof. Sibghatullah Husaini

Course Instructor of
Methods in Business Research
Institute of Business Administration
Karachi
Date: December 27, 2013
Respected Sir,
We hereby present our final report on “How satisfied customers are with the
services provided by their Banks and how should banks manages to maintain
Methods in Business Research Term Report
customer loyalty among their clients” assigned by you as a mandatory part of the
course.
This report is based on the satisfaction of the customers of various banks taking
into consideration some important attributes which customers consider for rating
their satisfaction with a particular bank
Hopefully, our report will fulfill its purpose and prove to be beneficial for business
students.
Sincerely,
Letter of Authorization
I hereby authorize to make and sign this request on behalf of my company for
research being conducted on “How satisfied customers are with the services
provided by their Banks and how should banks manages to maintain customer
loyalty among their clients’’ by the following Institute of Business Administration
BBA 5 students’ named below:
Pravin Kumar
Rabia Ahmad Malik
Amjad Ali Memon
Sereen Khalid Satti
The report extensively covers all the aspects of business research, focusing on how
these will be applied within and outside practical environment. The report being
2
conducted is one of the pre-requisites for the course of Methods in Business
Research.
Mr. Khalid Ahmed Aamir
Premier Relationship Manager
Barclays Bank, Shahbaz Branch
Email ID: khalid.aamir@barclays.com
3
Contents
Letter of Transmittal ..................................................................................................................................... 1
Letter of Authorization ................................................................................................................................. 2
Acknowledgements ....................................................................................................................................... 6
Executive Summary ...................................................................................................................................... 8
Problem Definition...................................................................................................................................... 12
Background of the Banking Sector ......................................................................................................... 12
Strengths and Threats Analysis of the Banking Sector ....................................................................... 17
Background of Barclays Bank Pakistan .................................................................................................. 21
Barclays Purpose and Values .............................................................................................................. 23
Background to the Problem ........................................................................................................................ 27
Statement of the Problem ........................................................................................................................ 30
Approach to the Problem / Literature Review ............................................................................................ 33
Research Objectives .................................................................................................................................... 48
Research Hypothesis ............................................................................................................................... 49
Research Questions ................................................................................................................................. 49
Information to Be Collected.................................................................................................................... 53
Research Design.......................................................................................................................................... 54
Type of research design .......................................................................................................................... 54
Scaling techniques .................................................................................................................................. 54
Sampling Methodology ............................................................................................................................... 55
Target Respondents................................................................................................................................. 55
Population under Study ........................................................................................................................... 55
Sample .................................................................................................................................................... 55
Sampling Design ..................................................................................................................................... 56
Sampling Technique ............................................................................................................................... 56
Methodology of Data Analysis ................................................................................................................... 57
Results ......................................................................................................................................................... 58
Demographic Characteristics of the Respondent .................................................................................... 58
Limitations .................................................................................................................................................. 73
Recommendations ....................................................................................................................................... 74
Conclusions ................................................................................................................................................. 76
4
Appendix ..................................................................................................................................................... 77
Questionnaire .......................................................................................................................................... 77
Research Proposal ................................................................................................................................... 80
References .............................................................................................................................................. 91
Work done by each member .................................................................................................................. 93
5
Acknowledgements
One of the great pleasures of preparing this report is to acknowledge the efforts of
many people, whose hard work, cooperation, support and guidance has been
crucial for us in the development of this project.
First of all we would like to thank our Creator for giving us the courage, and
capacity to achieve our objectives, that is, the completion of this project. The
confidence and patience bestowed on us by our God has no doubt accelerated our
progress.
In retrospect, we are very thankful to our course instructor Mr.SibghatullahHusaini
who has been extremely co-operative and helpful throughout the research of this
project at hand. He not only assisted us in clearing our concepts, but gave us
direction, and eased our path towards the compilation of this report.
This report is a combination of sincere hard work, dedication, and persistence on
the parts of our group members, and their valuable ideas and suggestions. They
have been extremely very co-operative and helpful throughout the process of
compilation of this report. All the members have contributed equally productively.
6
We will highly appreciate suggestions for improvement in this report, or be ready
to entertain any other queries regarding this report, and its contents from our
audience, as it is our strong belief and the law of nature, that nothing or none is
perfect in this universe, and that there is always room for further improvement.
Thank you.
7
Executive Summary
The report contains the brief description of the Banking Industry in Pakistan. It
contains the findings and analysis of the survey conducted to gather primary data
to judge the idea of quality service being provided by both private and public
banks operating within Pakistan, based on the level of satisfaction which the
customers of these banking services place themselves to be and how banks manage
to maintain their customer loyalty in the highly competitive banking industry of
Pakistan.
The attempt has also been made to categorize respondents based on various
demographic factors such as age, gender and income to present a comparative
analysis of the various demographic factors.
The size of the sample is limited to 100 only. The customers of the six banks
(Barclays, HBL, ABL, Standard Chartered, MCB and UBL) were assigned quotas
and individuals were randomly selected according to the quotas assigned. The
weightage of the respondents from each bank was pre-determined with 25% of the
sample from Barclays and 15% from the remaining five banks. Barclays was given
8
the maximum weightage as the study was designed with aid from a representative
of that bank.
Females make 38% of the customers surveyed on the other hand male respondents
represented 62% of the survey population. The largest group of respondents (46%)
is aged between 30 and 40. The next largest group (35%) is aged below 30. The
smallest group of respondents is aged above 50 (19%).
The data related to customer satisfaction is analyzed using descriptive statics. A set
of scales were used to compare the service quality between above stated 6 banks.
Numerical highlighted 48 percent of the respondent visited their banks 1 – 3 times
and 59% of the survey population did not spend more than 15 minutes at their
bank.
The satisfaction level of respondents with banking helpline facilities stated that
most banks have improved their helpline in order to facilitate their customers. It
has become necessary for banks to have a well-managed and informed helpline
9
services this is because of electronic banking, online banking, telephone banking
which prompts certain queries that need to be answered on helpline.
The satisfaction level of respondents with consumers’ service representative stated
a high percentage of people fell in bracket of fifty plus percentage satisfied with
the knowledge customer representatives had. Also the responses indicate that there
are certain areas where the Banks need to improve their service quality which
include Recognition of individuals as valued customers. Banks shall make sure that
they go into relationship building with customers this again improve their
commitment to the customers.
Empirical studies show that the quality of service offered is related to overall
satisfaction of the customer. Around 40 % of the respondents choose satisfied with
the facilities provided. Thus it can be concluded from the sample that respondents
were happy with the facilities provided at banks and near to none complains to
facilities.
On other hand, the data analyzing various aspect of customer satisfaction among
the 6 banks stated most of the customers were satisfied with the quality provided
10
by their banks. Standard chartered has maintained a standard quality service
internationally which has been monitored from time to time.
In spite of the contributions this study has made to business research in general and
service quality management in particular, there are limitations associated with the
research. The study is limited only to the six major banks and conducted in Karachi
thus the findings of this research cannot be generalized to the entire country.
Customer satisfaction is one of the major parameters for the service providers in
the banking sector. This research has made an attempt to understand the construct
of customer satisfaction in banking, to explore the factors which might affect
customer satisfaction and how banks can change these factors to maximize
customer satisfaction.
11
Problem Definition
Background of the Banking Sector
An effervescent and self-motivated banking sector is dynamic for a strong and
flourishing economy. Apart from being the depository of a nation’s funds, banks
are a dynamic cause of capital for industry, commerce and agriculture. A solid
banking sector is therefore vital for development, the creation of employments, the
generation of capital, eliminating poverty, commercial activity, and for the
economy to achieve double digit GDP growth to enable the country to develop as a
developed country by 2020 (The Financial Express, 2003).Today, international
capital movements have guaranteed that there is no lack of reserves for good
applications. Around the world the importance is on the reformation and up
gradation of the financial markets.
Pakistan has a finely honed banking structure, which comprises of a wide range of
institutions ranging from a central bank to commercial banks and to specific
organizations to accommodate for special requests of particular sectors. The
country started without any worthy banking network in 1947 but witnessed
remarkable growth in the first two eras.
12
The banking sector has revamped itself globally. Increased competition has set the
bar high and to sustain in this industry, one needs to take hold of technology. The
21st century banking practices in Pakistan have not changed much. There is no
doubt that technology has its role in the industry, but that role has not made a
staring impact in Pakistan. The banking sector in the country offers free internet
banking to all its individual customer accounts, however, for the corporate
customers, there are no free services at all.
The businesses in Pakistan do day-to-day transactions through bank accounts. They
get payment from customers, and pay suppliers on their bank accounts. This is
done to record every transaction, so that each transaction can be taxed.
The banking sector has influenced its supporting industries in a way that there is
much to offer, but not free of cost. The banking for corporations is no free meal!
Banks argue that corporate companies have number of shareholders, and providing
the shareholders free services will create a hassle. Who is to be held responsible in
the case of default would be an issue.
13
SBP plays a central role in the financial system of the country. It is the prerequisite
of country’s financial system. Today, a state bank is the central roguish of the
monetary and fiscal charter in many countries of the world and its undertakings are
vital for the proper operational of the economy and critical for the fiscal operations
of the government. Will Roger (1992) describe a central bank as one of the great
inventions of the 20th century? After independence, Pakistan’s central bank, The
State Bank of Pakistan was established in 1948 under quasi-government
ownership.
Till 1970, the role of domestic banks was particularly limited, accounting for only
25 of the total 195 bank branches in the country. Between 1970-1980, commercial
banking grew favorably in Pakistan, 13 banks were bought under full government
control and consolidated into 6 nationalized banks. While directed lending
increased, the SBP’s role as a regulator was marginalized. Nationalization of banks
in the seventies was a major distraught to internal banking industry of Pakistan,
which changed the entire face of the banking sector. With unreasonable verdict at
the top all the commercial banks were made compliant to the governmental
leadership. Specialized banking institutions were already working in the public
sector. The new accountability paradigm altered the business ethics in the banking
industry, and with this modification started the adversity. Nationalization of

14
banking industry was cavalcaded by powerful variations in the external worth of
rupee. The commercial banks thus mislaid their assets management equipoise,
resourcefulness and progress impetus. They ceased to be a corporate apprehension
and became big bureaucracies. This was accompanied by careless loaning under
political compressions. They suffered from three terminal diseases: non-
performing loans; higher intermediation cost; and loss of initiatives. The escalation
to Labor Unions and Officers Associations made life hard and working conditions
unpleasant to authentic, dedicated and industrious workers in the jurisdictions of
domestic banking industry.
By 1980-1990, the financial sector served mainly large corporate businesses,
politicians and the government. During this time, lending decisions were politically
influenced and billions of rupees were driven out of the system as bad loans. The
period of 1990-1997 was a period of privatization where 23 banks were
established. The era of nineties was the pinnacle of denationalization, deregulation
and restructuring in the domestic banking industry and financial institutions.
Muslim Commercial Bank was the first bank to denationalize followed by Allied
Bank limited, United Bank Limited and Habib Bank Limited. One thing upright for
that specific period was the enlistment of fresh officers in the domestic banking
industry through efficient policies of Banking Council. With the decay of Banking
15
Council there was deluge of hypocritical, nonprofessional, incompetent candidates
directly appointed/ recruited in all the domestic banks of the country. By 1997,
there were 4 major government owned banks which now faced competition from
21 domestic and 27 overseas banks. More importantly, administered interest rates
were restructured, bank wise credit maxima were removed and a system of
auctioning government securities was established. After privatization,
transformational reforms have been pushed with SBP’s regulatory powers restored.
Liberalization changed the landscape of the banking sector with banks starting to
cater to small and medium enterprise.
The Pakistani banking sector is continuously improving with diversified pattern of
ownership due to an active participation of foreign and local stakeholder. There are
an increased number of competitions to attract a large base of consumers through
an improved level of service. Currently, there are 6 fully fledged Islamic banks and
13 conventional banks offering their services according to the principles of
Shariah.
16
The banking system in Pakistan witnessed rapid progress in recent years; however,
a concentrated structure of the industry coupled with persistently high banking
spreads has raised important policy issues especially related to competition in the
banking sector.
The banking sector in Pakistan has been mostly dominated by the 5 largest banks
whose market share was around 84% by the end of 1990. With the passage of time,
the number of banks increased which helped to reduce the concentration of the top
banks. The small banks were, however not able to compete consistently with the
top banks.
Strengths and Threats Analysis of the Banking Sector
Strengths
Pakistan’s banking sector has a large Market size and it is an attractive location for
exports to South Asia, Middle East and the Central Asia. This contributes to the
significant per Capita Income of Purchasing Power Parity $2000 and 40 years’
record of 6% GDP growth annually. The Water resources, Natural Gas are in
abundant quantities and not fully utilized and not used efficiently (which is a
reason for the current Gas shortages). Pakistan has an Easy Sea port, also known as
17
a warm water sea port and it has Airport connections with Europe, Asia and
Middle East which makes it a highly connected global location.
Pakistan has a large emerging middle class which is resulting in the growing
demand for consumer durables, autos and services such as Banking. The literacy
rate is improving and the number of English speaking educated and trainable
manpower with aptitude for fast learning is also increasing which is contributing
positively to the economy today and will continue to do so in the future.
Pakistan is self-sufficient in food production and a buoyant agriculture and it has a
good potential to grow with the proper and efficient use of Fertilizers and
machinery. Its liberal foreign exchange regime allows unrestricted repatriation of
profits, dividends and remittances (this being a significant source of Pakistan’s
foreign currency.
Tariff rates are being brought down to maximum rate of 25% with average
incidence of 14-15%, whereas Quota restrictions on imports have largely been
removed. This is allowing for more free importing transactions to take place. Also,
18
the financial sector is open to foreign investors and is diversified and has been
strengthened in the decade of President Musharaf, although it has weakened to
some extent during the recent years and political restlessness (which comes under
the Weakness hypothesis of our report). However, Capital markets continue to
offer a range of instruments for raising domestic finance and a fiber optic based
infrastructure up and running for IT (Information Technology) enabled services
that aids in making banking procedures and transactions to occur much faster and
efficiently on a larger scale.
Threats
Pakistan’s Domestic and External debt burden is very high relative to the capacity
to service them and therefore, these need to be reduced to manageable levels
before it becomes more devastating for the economy in the long run. The Tax-GDP
ratio is one of the lowest among the developing nations and resource mobilization
effort has to be stepped up and this ratio needs to be improved by better and
efficient taxation system. Including this, the fiscal deficits also have been high and
need to be corrected by narrowing these deficits down as much as possible and as
soon as possible.
19
The Public sector corporations need to be restructured and strengthened as these
are flooded with excess manpower, weak financial base and poor management.
The poverty levels of the country has also risen during the last decade and poverty
targeted interventions need to be accelerated before it drops further. Due to the
lack of investments, both domestic and foreign, has given rise to educated
unemployment which is resulting in the talent and skills being flushed out of the
country into other nations, making them benefits from Pakistani talent. Other than
this, the high degree of centralization is eroding provincial autonomy and local
government capacity both of which need to strengthened and improved.
20
Background of Barclays Bank Pakistan
Barclays is a major global financial services provider engaged in personal banking,
credit cards, corporate and investment banking and wealth and investment
management with an extensive international presence in Europe, the Americas,
Africa and Asia. With over 300 years of history and expertise in banking, Barclays
operates in over 50 countries and employs 140,000 people. Barclays moves, lends,
invests and protects money for customers and clients worldwide.The service it
offers includes the following:
 Retail banking
 Credit cards
 Investing banking
 Wealth management
In Pakistan, Barclay's caters to a different market segment as opposed to the other
competitors in the industry. Apart from normal banking and the services which
adhere to it, Barclay's has introduced the concept of Premium Banking in Pakistan.
This caters to the high level customers who consist of the upper class society of the
community hence the services provided by Barclay's to them is specifically to cater
for this segment of the market.
21
Barclay's has been operating in Pakistan for over 3 years now and their global
strength and confidence has taken them to new levels. Today they offer an array of
banking services and products to their relevant branch customers and corporate
clients whilst maintaining their value creation and international standards.
"Discover a world where the ordinary does not exist, where every day
is special, where every moment is exceptional. Discover designer
banking developed exclusively for you, offering customized products
and services."
This extract from their website shows Barclay's exclusivity in Pakistan and how it
has brought about a new segment altogether, being the first to introduce it and
bringing about a new form of competition to the existing banks in Pakistan and
catering to a different type of market altogether.
"Extraordinary banking for extraordinary people."
22
Barclays Purpose and Values
Barclays has undertaken a fundamental review of how our business operates. We
have looked at the bank in terms of business performance and in terms of culture
because we know that only a business driven by strong values can deliver strong,
sustainable returns.
Barclay’s common purpose is to help people achieve their ambitions – in the right
way. We’ll measure and reward our people, not just on commercial results, but on
how they live our Values and bring them to life every day.
Purpose
 Helping people achieve their ambitions – in the right way.
Values and behaviours:
Respect
 We respect and value those we work with, and the contribution that they
make.
23
 Build trust with the colleagues and partners we work with Seek out
alternative perspectives and put our shared interests ahead of any individual
or team.
 Collaborate proactively with colleagues across all of Barclays to get the best
results Embrace, and seek to increase, the diversity of our organisation.
Integrity
We act fairly, ethically and openly in all we do.
 Show the courage to do and say the right thing.
 Act in private as I do in public, and honour my commitments.
 Challenge things I believe to be wrong and be open to challenge from others.
 Be accountable for failure as well as success, and not allocate blame.
Service
We put our clients and customers at the centre of what we do
 Take the time to understand clients’ and customers’ needs, regardless of my
role
 Always strive to surpass clients’ and customers’ expectations
24
 Create and provide solutions for clients and customers that balance the short
and long term
 In serving my clients and customers, incorporate the perspectives of all our
stakeholders
Excellence
We use our energy, skills and resources to deliver the best, sustainable results.
 Aim for flawless delivery and learn from my mistakes
 Take pride in both my own work and that of the team
 Actively contribute to the performance, development and engagement of my
colleagues
 Create the environment to attract and keep the best people who share our
values
25
Stewardship
We are passionate about leaving things better than we found them.
 Pioneer innovative and better ways to do things
 Protect and enhance our reputation and legacy at all times
 Find ways to positively impact all of the communities we interact with
 Value sustainable progress as much as immediate achievements
Marketing objectives
Some of the marketing related objectives (or motives) behind this research include:
 Better understanding of factors affecting service quality in Banks
 Improving the ways in which customer satisfaction can be increased
 Increase Customers base present a better brand of the bank
26
Background to the Problem
Cutting edge administration science's theory recognizes client satisfaction as a
standard of execution and a conceivable standard of incredibleness for any
business association. Client satisfaction estimation gives a feeling of
accomplishment and attainment for all representatives included in any phase of the
client administration process. In along these lines, satisfaction estimation inspires
individuals to perform and attain more elevated amounts of benefit.
Managing an account operations are getting to be progressively client situated. The
interest for 'saving money supermalls' putting forth one-stop reconciled fiscal
administrations is well on the ascent. The capacity of banks to offer customers’
access to numerous markets for distinctive classes of money related instruments
has turned into an important aggressive edge. Joining in the industry to coddle the
changing demographic desires is presently more than obvious. Bank certification
and different manifestations of cross offering and key organizations together will
soon modify the business flow of banks and fuel the procedure of combining for
expanded extent of business and income. The push on ranch division, health part
and administrations offers some speculation linkages. In short, the local economy
27
is an expanding pie which offers far reaching economies of scale that just vast
banks will be in a position to tap.
With the amazing build in the nation's populace and the expanded interest for
keeping money administrations; pace, administration quality and client satisfaction
are set to be key differentiators for each one bank's future victory.
To strengthen client introduction on a regular premise, a developing number of
organizations pick client satisfaction as their principle execution pointer. It is just
about outlandish however to stay with a whole for all time persuaded by idea as
unique and immaterial as client satisfaction. Accordingly, client satisfaction must
be made as various measurable parameters which the customers think about the
most for rating their satisfaction.
Client retention is an essential component of keeping money system in today's
progressively intense environment where banks are rivaling their associates as well
as with the non-banks and other fiscal organizations and the client retention is
conceivable just with the client satisfaction. Bank administration must recognize
28
and enhance figures that furnish satisfaction to customers. These incorporate
representative execution and professionalism, readiness to take care of issues,
agreeableness, and level of information, relational abilities and offering aptitudes
around others. Some studies have accentuated the centrality of client satisfaction in
the saving money industry.
Most bank item advancements are not difficult to copy and when banks furnish
about indistinguishable administrations, they can just recognize themselves on the
premise of value and quality. Along these lines, client satisfaction and retention is
possibly an adequate apparatus that banks can use to addition a vital focal point
and make due in today's regularly expanding saving money nature's domain.
Additionally the client retention is vital in light of the fact that cost of securing new
customers is more than the expense of keeping up existing customers.
Likewise long haul customers if fulfilled may produce positive expressions of
mouth advancement for the organization. Hence fulfilling customers the bank can
build their benefits and increase vital vicinity in the business.
29
Statement of the Problem
The "desires" of customers impact of client impact their purchasing conduct. The
customers identify this desire to the nature of administration furnished by the
banks. The level of desire varies from individual to individual however everybody
needs the banks to give the items and administrations which can fulfill their
necessities up to their normal level or to a larger amount in order to offer them a
higher satisfaction. The level of satisfaction of shoppers is influenced by a few
traits additionally other than nature of administration, for example, their experience
with the bank representatives and so forth.
Fulfilled customers are fundamental to optimal execution and money related
returns. In numerous spots of the planet, business associations have been hoisting
the part of the client to that of a key stakeholder in the course of recent years.
Customers are seen as a gathering whose satisfaction with the undertaking must be
fused in vital arranging endeavors. Forward-looking organizations are finding
esteem in specifically measuring and following client satisfaction as a vital key
triumph pointer.
30
Confirmation is mounting that setting a high necessity on client satisfaction is
basic to enhanced organizational execution in a worldwide commercial center.
With better comprehension of customers' discernments, organizations can figure
out the activities needed to help. They can distinguish their own particular qualities
and shortcomings, where they remained in correlation to their rivals, outline the
way of future advancement and change.
Customer satisfaction estimation serves to push an expanded keep tabs on client
results and fortify changes in the work practices and methodologies utilized inside
the organization. The point when purchasers are capable, the health and quality of
the organization's association with its customers – its most basic monetary stake –
is its best indicator of what's to come. Stakes on the accounting report –
fundamentally possessions of processing – are great indicators just when
purchasers are feeble. So it is no big surprise that the relationship between those
holdings and future pay is getting to be more dubious. As purchasers get engaged,
dealers have no decision however to adjust.
Keeping tabs on rivalry has its place, yet with purchaser control on the ascent, it is
more significant to give careful consideration to the client. Client satisfaction is an
31
amazing complex issue and there is a great deal of open deliberation and disarray
about what precisely is obliged and how to go about it.
As there is enormous rivalry in the saving money part in Pakistan the client
satisfaction is a significant element in the accomplishment of the banks. So with
this foundation an endeavor has been made to study the satisfaction of the
customers of different banks looking into some vital qualities which customers
think about for rating their satisfaction with specific banks.
32
Approach to the Problem / Literature Review
“According to Philip Kotler, “Satisfaction is a person’s feelings of pressure or
disappointment resulting from product’s perceived performance (outcome) in
relation to his or her expectations. Customer satisfaction is the level of a
person’s felt state resulting from comparing a product’s perceived
performance (outcome) in relation to the person’s expectation”.
This satisfaction level is a function of difference between perceived performance
and expectations. If the product’s performance exceeds expectation the customer
highly satisfied or delighted. If performance matches the expectations the customer
is satisfied. If the products performance fall shorts of expectations the customer is
dissatisfied.
Many companies are aiming for high satisfaction because customers who are just
satisfied still find it easy to switch when a better offer comes along. High
Satisfaction or delight creates an emotional affinity with brand.
33
A variety of factors that affect customer’s satisfaction includes product quality,
product availability and after sales support (e.g. warranties and services). Customer
Satisfaction is seen as a proof of delivering a quality product or service. It is
believed that customer satisfaction brings high sales growth and market Share. A
Company can always increase customer satisfaction by lowering its price or
increasing its services but this may result in lower profits. Thus the purpose of
Marketing is to generate customer value profitability. The two major factors of
marketing are the recruitment of new customers (acquisition) and the retention and
expansion of relationships with existing customers (the base management). All this
is possible only when the customers are satisfied with the companies.
Companies use the following methods to measure satisfaction:
1. Complaints and suggestion system: The companies obtain complaints and
suggestions through customer service centers.
2. Customer satisfaction surveys: The companies send questionnaires to
random sample of their customers to find out how they feel about various
aspects of the company’s performance and also solicit views on their
competitor’s performance.
34
3. Lost Customer Analysis: The companies contact customers who have
stopped buying or who have switched to another supplier to learn why this
happened.
There is a great deal of discussion and disagreement in the literature about the
distinction between service quality and satisfaction. The service quality school
view satisfaction as an antecedent of service quality – satisfaction with a number of
individual transactions “decay” into an overall attitude towards service quality. The
satisfaction school holds the opposite view that assessments of service quality lead
to an overall attitude towards the service they call satisfaction and customer
retention – customer’s perception of Service and Quality of product will determine
the success of the product or service in the market.
If experience of the client from the previous services, greatly exceeds the
expectations then satisfaction will be high, and vice versa. In the service quality
literature, perceptions of the service delivery are measured separately from
customer expectations, and the gap between the two provides a measure of service
quality.
35
Customer satisfaction has been gaining increasing attention from the researchers
and practitioners as a recognized field of scholarly study and is a fundamental tool
used by financial institutions for enhancing customer loyalty and ultimately
organizational performance and profitability. The importance of customer
satisfaction cannot be dismissed because happy customers are like free advertising.
Many of us have heard of the current trend for businesses to become highly
customer-centric, that is to put the customer at the center of our business in terms
of our strategies, actions and processes. For most of us, old truths still hold well,
such as it is easier and more profitable to sell to existing customers than to find
new ones. In practice, organizations are increasingly setting themselves strategies
to measure and ensure customer retention, and charging their staff to be more
customer-focused and service-oriented.
Customer satisfaction holds significant importance in corporate sector because
without satisfied and loyal customers, you don't have a business. A single
unsatisfied customer can send away more business from your organization than 10
highly satisfied customers. The more you focus on customer satisfaction and
retention, the more long-term business you will get. It’s worth to focus on
customer satisfaction strategies; no matter how large or small your organization is
as a well-known fact is that referrals only come from customers who are
36
“apostles”. Banking industry in Pakistan is highly competitive. Moreover the
existence of foreign players in the form of Standard Chartered Bank Ltd., HSBC
Bank Middle East Ltd., and Dubai Islamic Bank Ltd. Etc. in the banking sector of
Pakistan pressures the local banks to be more innovative in order to compete
aggressively in the development of products and services in the same market
segmentation. As the competition increases banks begin to offer products and
services that differ from one another. Besides that, the quality of service and
customer satisfaction is an obligation. This is no exception for Pakistani banks,
where customer satisfaction is potentially an effective tool that banks can use to
enrich a strategic competitive advantage in banking markets. Due to the high level
of competition in the Pakistani banking market, many banks losing existing
customers to their rivals as a result of successful attempts to entice customers
away. However, the inability of banks to retain customers highlights the factors
that result in customer defection, affecting the banks‟ ability to increase future
growth of business. At the same time, dissatisfaction drives customers away and is
a key factor in switching behavior. In this situation, customer satisfaction has been
regarded as a fundamental determinant in maintaining long-term customer
relationship behaviors (Oliver, 1980; Zeithaml, Berry, &Parasuraman, 1996;
Anthanassopoulos, Gounaris, &Sathakopoulos, 2001; Anderson, & Sullivan, 1993;
Fornel, 1992; Levesque, & McDougall, 1996). Therefore, enhancing customer
37
satisfaction should be a key driver for banks in maintaining a long term
relationship with their customers.
From the literature two main theoretical constructs are obvious before the
reconciliatory work of Brady et al., (2002). The European school of thought led by
the work of Gronroos (1984), arguably served as the theoretical point of departure
for studies on the conceptualisation of service quality. This school of thought
believes that consumers perceive service quality from two perspectives: the
technical quality and the functional quality of the service. Technical quality asks
the question of whether the service meets customers’ expectations. The functional
quality measures how consumers perceive the production and delivery of the
service. While this distinction is technically feasible, both are required to influence
consumers’ service quality evaluations and loyalty behaviours (Richard and
Allaway, 1993). The European school attracted criticism because it excludes the
service physical environment. Later conceptualisation of service quality- the
American school of thought leans on the work of Parasuraman et al., (1985, and
1988). This view has since been adopted by many scholars researching service
quality. Parasuraman et al., (1985, 1988) conceptualised service quality as overall
assessment of the difference between perception and expectation of service
delivery. According to this conceptualisation based on data collected on 12 groups

38
of consumers, Parasuraman et al., (1985) concluded that consumers evaluated
service quality by comparing service to be received (expected) and service actually
received (perceived) on 10 dimensions. In a subsequent and more elaborate work,
Parasuraman et al., (1988) collapsed the original 10 dimensions into 5 pointing out
that there were overlap amongst these 10 dimensions and could thus be soundly put
into 5. This pioneering research (Parasuraman et al., 1988) suggested that
perceived service quality is based on multi-dimensional factors relevant to the
context. The five dimensions of service quality that customers rely on to form their
judgement of perceived service quality as posited by Parasuraman et al., (1988)
include the following:
(1) Reliability: ability to perform the promised service dependably and accurately.
(2) Responsiveness: willingness to help customers and provide prompt service.
(3) Assurance: employees’ knowledge and courtesy and their ability to inspire trust
and confidence.
(4) Empathy: caring, individualised attention given to customers.
(5) Tangibles: appearance of physical facilities, equipment, personnel, and written
materials.
39
A scale, known as SERVQUAL, consisting of 22 items was developed to
operationalise the five dimensions of perceived service quality. This scale
measures service quality based on the gap between perception and expectation (P-
E). Customers provide two scores, in identical Likert scales, for each of 22 service
attributes; one score indicating their expectations of the service delivered by
excellent companies in a specific service sector and the other reflecting their
perceptions of the service delivered by a service provider within that sector
(Tsoukatos and Rand, 2006). Service quality for each attribute is then quantified as
the difference between these two scores. Thus SERVQUAL measures gaps in a
firm’s service delivery and has been used extensively in the United States and
Europe.
Notwithstanding the popularity of SERVQUAL, (Pollack, 2009) and its application
among managers and academicians (Buttle, 1996), critics have questioned its
reliability, operationalisation of the gap score (Brown et al., 1993), definition of
expectation (Teas, 1994), generalisation of the dimensions and the definition of
good service quality (Peter et al., 1993; Oliver, 1993, Asubonteng et al., 1996).
This has led to an alternative conceptualisation of service quality.
40
In the banking industry, a key element of customer satisfaction is the nature of the
relationship between the customer and the provider of the products and services i.e.
banks. Thus, both product and service quality are commonly noted as a critical
prerequisite for satisfying and retaining valued customers. Previous research has
identified many factors that determine customer satisfaction in retail banking
sector, and that there are differences in how consumers perceive services across
countries and cultures that cannot be generalized. In Pakistani banking industry,
customers have put the criteria of customer satisfaction towards service quality
provided by their banks. For example; fast and efficient service, confidentiality of
bank, speed of transaction, friendliness of bank personnel, accuracy of billing,
billing timeliness, billing clarity, competitive pricing, and service quality are the
key factors which significantly affect customer’s satisfaction (Hokanson, 1995). A
survey conducted on college students in Bahrain indicated that young customers
places more emphasis on factors like a bank’s reputation, friendliness of bank
personnel, convenient location, 24/7 ATM, and availability of parking space in
selecting their banks (Almossawi, 2001).
Meanwhile, Levesque and McDougall (1996) found that the performance of the
service provider on core and relational dimensions of service quality was an
important driver for customer satisfaction in retail banking. Furthermore, customer

41
satisfaction in retail banking also influenced by the perceived competitiveness of
the bank’s interest rates.’
The bank’s ability to deliver these benefits on a continuous basis probably has a
significant impact on the level of customer satisfaction. Therefore, bank
management has to identify and improve upon factors that can increase customer
value. Although, it is apparent that for superior service, it is not sufficient to only
focus on satisfying customers, as customers switched their financial institutions
because of service quality problems and failures (Gerrard, & Cunningham, 1997),
and stop the use of a financial service provider because of poor service
performance (Allred, & Addams, 2000). This attitude is a significant factor, which
influences customer intention to engage in positive or negative behavior decisions.
Consequently, satisfaction is a necessary prerequisite for building long term
customer relationships and likely to increase loyalty (Anthanassopoulos, Gounaris,
&Sathakopoulos, 2001; Selnes, 1993; Bloemer, &Ruyter, 1998).
According to Sivadas and Baker-Prewitt (2000), satisfaction also influences the
likelihood of recommending a bank as well as repurchase. It fosters loyalty to the
extent that it is a prerequisite for maintaining a favorable relative attitude and for
42
recommending and repurchasing from the bank. Once customers recommend a
financial institution it fosters both repurchase and loyalty towards that financial
institution. Thus the key to generating loyalty is to get customers to recommend a
service provider to others. Also, customers are likely to recommend a service
provider when they are satisfied with the services and when they have a favorable
relative attitude towards that service provider. Evans and Lindsay (1996) stated
that companies with satisfied customers have a good opportunity to convert them
into loyal customers who purchases from those firms over an extended time period.
Today’s highly competitive and dynamic corporate environment compels the
financial institutions to have satisfied customers and retain them in order to survive
and compete with other market players successfully. However, Bowen and Chen
(2001) said that having satisfied customers is not enough, there has to be extremely
satisfied customers. This is because customer satisfaction must lead to customer
loyalty. Building customer loyalty is not a choice any longer with businesses. It is
in fact the only way of building sustainable competitive advantage. Building
loyalty with key customers has become a core marketing objective shared by key
players in all industries catering to business customers. Sivadas and Baker-Prewitt
(2000) examined that there is an increasing recognition that the ultimate objective
of customer satisfaction measurement should be customer loyalty. Fornell (1992)
found that high customer satisfaction will result in increased loyalty for the firm
43
and that customers will be less prone to overtures from competition. This view was
also shared by Anton (1996) who stated that satisfaction is positively associated
with repurchase intentions, likelihood of recommending a product or service,
loyalty and profitability. Loyal customers would purchase from the firm over an
extended time (Evans, & Lindsay, 1996). Guiltinan, Paul and Madden (1997) also
examined that satisfied customers are more likely to be repeat (and even become
loyal) customers and don’t think to switch to other service providers.
Similarly, Bontis, Nick, Booker, Lorne and Serenko (2007) examined the causal
construct between customer satisfaction and customer loyalty in the North
American banking industry and found that there is positive association between
customer satisfaction and customer loyalty. Rust and Zahorik (1993) stated that
greater customer satisfaction leads to greater intent to repurchase. According to
Anderson and Sullivian (1993), a high level of customer satisfaction will decrease
the perceived need to switch service provider, thereby increasing customer
repurchase and ultimately enhancing profitability of the organization (Bowen, &
Chen, 2001).
44
In the services sector literature, strong emphasis is placed on the significant
importance of service quality perceptions and the association between service
quality and customer satisfaction (Cronin, & Taylor, 1992; Taylor, & Baker,
1994). Therefore, some organizational researchers concluded that service quality is
an important indicator of customer satisfaction intentions. That is, consumers may
be loyal to a bank if it is viewed as generating satisfaction among other consumers,
particularly in credence products and services. This alone may create an amount of
unwillingness to switch. Furthermore, Chakravarty, Feinberg and Rhee (2004),
explained that a high proportion of customers in the high propensity to switch
group appear to have had problems with their bank in the past. In the real world,
unsatisfied customers tend to convey their negative impression to other customers
or create a negative word of mouth. Consequently, customer dissatisfaction leads
to low loyalty (Lewis, 1991; Newman, 2001; Caruana, 2002). This implies that
customer satisfaction and customer loyalty are highly related, and that
dissatisfaction fosters a customer's intention to switch.
No doubt customer satisfaction should be the primary objective of an organization
to enhance customer loyalty but a business that focuses exclusively on customer
satisfaction runs the risk of becoming an undifferentiated brand whose customers
believe only that it meets the minimum performance criteria for the category.
45
Long-term customer retention in competitive markets requires the supplier to go
beyond mere basic satisfaction and to look for ways of establishing ties of loyalty
that will help ward off competitor attack (Clarke, 2001). Sivadas and Baker-Prewitt
(2000) also stated that it is not merely enough to satisfy a customer. According to
Reichheld (1996), 60 to 80 percent of customers who defect to competitors‟ brands
said that they were either satisfied or very satisfied with the product or service they
left. Therefore, in order to ensure customers‟ retention, Bowen and Chen (2001)
were of the view that customers must to be extremely satisfied. As far as
organizations are concerned, they want their customers to be loyal to them and
customer satisfaction does not fully guarantee this. Customer satisfaction is in fact
not necessarily a guarantee of loyalty. In certain industries up to 70% of customers
who switch providers say that they were satisfied or even highly satisfied with their
previous service provider. Customers may change service providers because of
price, or because the rival is offering new opportunities, or simply because they
want some variation.
Today, financial institutions are seeking information on how to build customer
loyalty. The increased profit comes from reduced marketing costs, increased sales
and reduced operational costs. Finally, loyal customers often cost less to the firm
because they know the products and services and require less information. They
46
even serve as part-time employees up to some extent. Therefore loyal customers
not only need less information themselves about product and service offerings but
also serve as an information source for prospective customers of the firm. In order
to ensure customer loyalty and restrict switching behavior, financial institutions of
21st century must be able to anticipate the needs of their customers because a
customer’s interest in maintaining a loyal relationship is depended on the firm’s
ability to anticipate customer’s future needs and demands and offering them before
anyone else ( Kandampully, & Duffy, 1999)”.
47
Research Objectives
‘’How satisfied customers are with the services provided by their Banks and how
should banks manages to maintain customer loyalty among their clients’’
The major objective of our research paper surrounded around the idea of quality
service being provided by both private and public banks operating within Pakistan,
based on the level of satisfaction which the customers of these banking services
place themselves to be. Secondly, along with this, our research was also based on
finding out how banks manage to maintain their customer loyalty in the highly
competitive banking industry of Pakistan. Firms need to establish and attract a
potential consumer market which can only be attained through the satisfaction of
its customers and hence this is linked with the business performance being based
by the organization in terms of how customers and their needs are being dealt with
when banks are taken into consideration as the banking industry is based purely on
customer service which ensure loyalty and success and this is what our research
report aims to study, that is, how to banks retain and satisfy their customers and
differ their services from competitors operating within the same industry.
48
Research Hypothesis
• Customers give importance to all attributes related to banks environment,
service delivery experience, relationship experience and grievance handling
in determining their satisfaction level
Research Questions
The research questions were answered with the help of a questionnaire from
respondents who are customers of banking services from banks based within
Pakistan. The questions around which our research is based upon are as follows:
1) What factors affect the service quality in banks?
2) How can these factors be altered in order to improve customer satisfaction?
On the basis of these research questions, we were able to develop the questions for
our questionnaire which allowed us to research and gain answers to these. These
questions of our questionnaire were developed after consultation from the premier
relationship manager of Barclays, Mr. Khalid Ahmad Aamir, who guided us
towards how we should phrase our research and conduct it effectively for the
sample comprising of banking service users and the questions framed and used in
our questionnaire are as follows:
49
Q1: What is your age?
 Below 30
 30 to 40
 50 and above
Q2: What is your gender?
 Female
 Male
Q3: Profession
 Physician
 Lawyer
 Psychologist
 Engineer
 Professor
 Diplomats
 Student
 Other (please specify)
Q4: Approximately how many times have you visited your branch in the past one month?
 Never
 1-3 times
 4-9 times
 10-15 times
 More than 15 times
Q5: Approximately how much time do you spend with the bank?
 10-15 minutes
 15-25 minutes
 25-40 minutes
 Above 40 minutes
50
Q6: How satisfied were you with the following aspects of the branch facility?
Very Satisfie Neutra Dissatisfied Very

Satisfied d l Dissatisfied
Clean environment
Well kept facilities
No wait service
Availability of information
Pleasant and attractive
decor
Automatic bank machines in
convenient locations
Q7: In terms of the service you received from the customer service representative/tellers, how
satisfied were you with the following?
Very Satisfied Neutral Dissatisfied Very

Satisfied Dissatisfied
Friendly and courteous
manner
Knowledge of banks products
and services
Willingness to listen and
respond to your needs
Fast and efficient service
Recognition of you as valued
customer
Professional and attractive
appearance
51
Q8: How satisfied were you with the following aspects of the helpline facility at your bank? Rate
on a scale of 1-5 (5 being highest and 1 lowest)
1 2 3 4 5
The time taken by member of the staff of answer the telephone?
The way in which staff members answer your call?
The clearness of the staff member’s voice?
The ease of reaching the person you need to speak with?
How quickly your inquiry was understood and responded to?
Q9: In which Bank do you have Account in?
Q10: Please tick mark which Bank delivers the best service in following cases
Habib Allied Standard Barclays UBL MCB

Bank Bank Chartered
Initial experience
Service Delivery Experience
Service
Relationship Experience
Grievance Handling
Other recommendations for banks to improve services
Q11:What is your monthly income?
 Below Rs. 50,000

 Between Rs. 50,000 to Rs. 100,000
 Rs. 100,000 and above
52
Information to Be Collected
A mixture of primary and secondary data collection techniques shall be used to
collect the information needed as posed in our research questions. The secondary
research would be conducted through mainly the internet from which we would
acquire the necessary trends and changes experienced in customer preferences
related to baking services, including what are the needs of customers in today's era
and what is expected by them from banks in terms of services and their quality.
Apart from this, primary data collection techniques shall be the main focus through
which data shall be acquired for analysis of our research objectives and questions
mentioned. A questionnaire shall be filled by potential banking customers who will
be asked a variety of different questions regarding banking services which are
useful for our study. The questionnaire is posted online and customers are asked to
fill them out in a fast and convenient along with cost effective manner.
A one on one interview was also scheduled with Mr. Khalid Ahmad Aamir, the
Premier Relationship Manager at Barclays Shahbaz Branch in which he provided
us in-depth information regarding why customers choose Barclays over other
Pakistani and local banks and how customer loyalty is retained and enhanced by
the bank.
53
Research Design
Type of research design
Our research design is based on a study type of exploratory and descriptive
analysis which surrounds around our research questions and hypotheses which is
done through the respective means being adopted by us for data collection, a
mixture comprising of different methods of primary and secondary data collection
research tactics.
Scaling techniques
Scaling techniques would be on the basis of ordinal and nominal data types for
which our questions are based on comparative scaling techniques like the use of
rank-ordering as is used in Q8 of our questionnaire. Along with this, non-
comparative scaling techniques are also used in our survey which includes the
Likert scale being used in Q6 and Q7.
54
Sampling Methodology
Target Respondents
The target respondents from our study are individuals who are above the legal age
of 18, all of whom possess a bank account in the six banks under study operating
within Pakistan.
Population under Study
The criterion for the selection of respondents was based on demographic factors of
which major segments of the audience are identified of the banks they have
accounts in. The procedure for qualitative research which was used for the
collection of data was done through the use of an in depth interview with the
Premier Relationship Manager of Barclays Bank, Mr. Khalid Ahmad Aamir. Apart
from this, questionnaires were also conducted with individuals of various different
professions on the basis of a fixed quota of respondents belonging to each bank.
Sample
A sample of 100 respondents is used in our research since it formed the most
suitable basis of our research and best represented our target audience as it was
fulfilled by a variety of different individuals of different age and income brackets
along with diverse professions.
55
Sampling Design
Banking Services are luxuries that are enjoyed by a select few in Pakistan. It is
mainly the Socio-Economic Classes A and B that are most likely to use the
product, while the Socio-Economic Class C and below usually don’t have
accounts. The report, thus, would only focus on participants belonging to Socio-
Economic Classes A and B.
Sampling Technique
Sample Size for Questionnaire: 100
The sampling procedures used in procuring the responses will include:
1. Non-Probability sampling which included the use of Convenience Sampling
through which friends and family, which fulfilled the description of the
target population of the survey was asked to fill the survey.
2. Judgment sampling, whereby a definitive age group was isolated for the
survey prior to any cursory research that may have validated it
3. Quota Sampling method, the customers of the six banks were assigned
quotas (will be discussed later) and individuals were randomly selected
according to the quotas assigned.
56
Methodology of Data Analysis
The research process will be using and employing a number of steps. The
methodology will use both primary and secondary data. The primary data are the
results and the data that will be gathered and taken from the respondents of the
study. The study will primarily employ descriptive quantitative methodological
approach. This approach is helpful in quantifying intangible factors and elements
such as satisfaction, but analysis will be guided and done descriptively. The
quantitative part will help control and manage large and bulky information, while
the descriptive part will help explain and link trends that could be observed with
the dada which cannot be expressed and explained by numbers. The aims of the
methodological approach are to concretize the theoretical model or approach that
has been constructed and illustrated in the earlier part of this research, and be able
to fulfill the requirements set by the study.
57
Results
Demographic Characteristics of the Respondent
The following tables provide data on the demographiccharacteristics of the sample
selected for the study. It includes variables such as age, gender, frequency of visits
in a month and respective banks.
The sample includes a total of 100 customers of the top six banks of Pakistan
namely Habib Bank Ltd., Allied Bank, Standard Chartered Bank, Barclays, MCB
and UBL. The weightage of the respondentsfromeach bank was pre-determined
with 25% of the sample from Barclays and 15% from the remaining five banks.
Barclays was given the maximum weightage as the study was designed with aid
from a representative of that bank.
Bank
Frequenc Percen Valid Cumulative
y t Percent Percent
Barclays 25 25.0 25.0 25.0
MCB 15 15.0 15.0 40.0
Allied
15 15.0 15.0 55.0
bank
58
Habib bank 15 15.0 15.0 70.0
Std Ch 15 15.0 15.0 85.0
UBL 15 15.0 15.0 100.0
Total 100 100.0 100.0
59
Females make 38% of the customers surveyed on the other hand male respondents
represented 62% of the survey population. This can be seen in the pie charts below.
Gender
Frequenc Percen Valid Cumulative
y t Percent Percent
Male 62 62.0 62.0 62.0
femal 38 38.0 38.0 100.0
Total 100 100.0 100.0
60
The largest group of respondents (46%) is aged between 30 and 40. The next
largest group (35%) is aged below 30. The smallest group of respondents is aged
above 50 (19%).
61
With regard to income level; respondents with income below Rs. 50,000 a month
make 21% of the customers. While customers with incomes between Rs. 50,001 to
Rs. 100,000 a month are the largest group comprising of 52% of the respondents.
Finally, earners of income of Rs. 100,001 and above make 27% of the customers.
This variable forms a normal distribution and follows a bell curve pattern as shown
below.
62
Income
Frequency Percent Valid Percent Cumulative Percent
Below 50,000 21 21.0 21.0 21.0
50,001 to 100,000 52 52.0 52.0 73.0
100,001 and 27 27.0 27.0 100.0
above
Total 100 100.0 100.0
63
Regarding the frequency of visits of customers to their respective banks’ branches
in the past month, majority of the respondent visited their banks 1 – 3 times (48%);
whereas an almost equal amount of people visited their branches 4 – 9 times
(44%). Some people do not feel the need to visit their banks often as they indulge
in online and mobile banking instead.
Visits
Frequency Percent Valid Cumulative

Percent Percent
Never 4 4.0 4.0 4.0
1-3 times 44 44.0 44.0 48.0

4-9 times 48 48.0 48.0 96.0
10-15 times 1 1.0 1.0 97.0
More than 15 3 3.0 3.0 100.0
times
Total 100 100.0 100.0
64
When asked about the amount of time spent with the bank in each visit, the results
showed that a vast majority (59%) of the survey population did not spend more
than 15 minutes at their bank. On the other hand 38% of the survey population had
to spend 15 – 25 minutes. This is summarized in the graph below.
65
66
The questions rated the satisfaction level of respondents with banking helpline
facilities. In order to assess the helpline facility five dimensions of service quality
were used. With higher customer satisfaction the level of loyalty increases, as
proposed by several studies there exists a positive relationship between customer
satisfaction and customer loyalty. Areas with low rating indicate where banks need
to improve their service quality. Average rating for all the options lied at a mean of
3. The highest rating was obtained by how quickly the query was responded and
understood, which gave it a rating of 3.39. It can be said that most banks have
improved their helpline in order to facilitate their customers. It has become
necessary for banks to have a well-managed and informed helpline services this is
because of electronic banking, online banking, telephone banking which prompts
certain queries that need to be answered on helpline. So most of the banks have
their help lines running 24/7 making sure that customer queries are responded in
time. The customer perceived that the bank inquired queries more quickly than
other services. However the respondents gave an average rating of 3 to all the
helpline facilities which indicates that there is space for improvement of the
facilities that are being provided currently. This could be again done by recruiting
better staff members who operate helpline facilities and also by training the current
employees.
67
Average
Rating 1 2 3 4 5
rating
The time taken by members of staff of
1 7.87% 19.10% 38.20% 26.97% 7.87% 3.08
answer the telephone?
The way in which staff members answer
2 5.62% 17.98% 34.83% 34.83% 6.74% 3.19
your call?
The clearness of the staff member’s
3 4.49% 15.73% 42.70% 30.34% 6.74% 3.19
voice?
The ease of reaching the person you
4 8.05% 13.79% 29.89% 37.93% 10.34% 3.29
need to speak with?
How quickly your inquiry was
5 5.68% 13.64% 32.95% 31.82% 15.91% 3.39
understood and responded to?
This question was directed at knowing how respondents felt of the service
provided the customer service representatives in banks. This involves all people
who on are call centers for banks and other representatives involved in customer
service. Efficient customer service is another competitive advantage that banks can
work on. Majority of the respondents said they were satisfied with the customer
services department on Banks. Efficient customer service means maintaining loyal
customers throughout. Sample respondents were at 40 %. A high percentage of
people fell in bracket of fifty plus percentage satisfied with the knowledge
customer representatives had. Also the responses indicate that there are certain
areas where the Banks need to improve their service quality which include
Recognition of individuals as valued customers. Banks shall make sure that they go
into relationship building with customers this again improve their commitment to
the customers.
68
The question directed on asking respondents on how they felt on facilities provided
by the banks. Service quality at banks is one of the measures of customer
satisfaction. Empirical studies show that the quality of service offered is related to
overall satisfaction of the customer. The options classified were into Clean
Environment, Well Kept facilities, No wait service, availability of information,
pleasant and attractive décor and the availability of ATMS at convenient locations.
Looking at the responses there were a very few number who went with option of
dissatisfied and none to very dissatisfied in overall facilities provided. Around 40
% of the respondents choose satisfied with the facilities provided. Thus it can be
concluded from the sample that respondents were happy with the facilities
69
provided at banks and near to none complains to facilities. Most the banks have
now set up standards in their facilities and provide them at the level of it. This
again is due to competition between the banks and such facilities appeal to the
customers.
The Likert scale used for this question has numerical values assigned to it in the
following manner
Very Dissatisfied Dissatisfied Neutral Satisfied Very Satisfied
-2 -1 0 1 2
Therefore the average scores were highest satisfaction for a clean environment
followed by well-kept facilities whereas the lowest was for the wait time followed
by the ambiance of the branch. These are the areas that clearly needed
improvement.
Clean Environment 1.24
Well kept facilities 0.90
No wait service 0.47
Availability of information 0.78
Pleasant and attractive décor 0.77
Automatic bank machines in convenient locations 0.81
70
The question was based on analyzing the difference in services quality provided by
different banks. Standard Chartered turned out to be the most popular choice
among respondents due to a number of reasons. The comparison was based on five
71
measures which included Initial experience, Service delivery Experience, Service,
Relationship Experience and Grievance Handling. Standard chartered has
maintained a standard quality service internationally which has been monitored
from time to time. Allied bank tuned out to be least popular choice amongst the
respondents scoring the lowest 5.19 % in grievance improvement which highlights
the area where they need improvement. Apart from that UBL has tried to improve
the customer experience by providing a number of benefits to its platinum
customers by introducing value added facilities free of cost. Also Habib Bank was
a popular choice where respondents had their bank account around 70 % named
Habib Bank. This may be because of the ease at which account can be opened and
also the accessibility for students to get their accounts with minimum deposits as
well. In recent times Banks have started providing free of charge online banking,
mobile banking and even ATM cards.
72
Limitations
In spite of the contributions this study has made to business research in general and
service quality management in particular, there are limitations associated with the
research we wish to highlight.
The study is limited only to the six major banks, which are Habib Bank Ltd.,
Allied Bank, Standard Chartered Bank, Barclays, MCB and UBL and will only
include twenty-five (25) participating customers for Barclays and fifteen (15) each
for the remaining five banks giving a total of 100. This is in consideration with the
time budget, so as with the financial budget of the researchers. Ideally, a
representative sample size should have been calculated before embarking on data
collection. This was however impossible due to limited resources and time
constraints especially since the period allotted for the thesis work was limited.
On other hand, the survey was conducted in Karachi; the findings of this research
cannot be generalized to the entire country
Also the survey conducted was based online therefore the sample was restricted to
only those who had access to the internet.
73
Recommendations
Banks operate in the tertiary sector hence the value of their product is judged by
the quality of service they provide. This intern can help them to achieve
competitive advantage. It has been observed that consumers tend to buy those
products in which they are provided with privileges. An example of such measure
is by UBL in Pakistan that provides its customers on purchase of UBL Platinum
Credit Card a bundle of benefits that are built around the needs and expectations of
customers. Banks need to find the right balance between incremental and strategic
innovation. Most resources should be targeted at continuous, incremental
innovation which requires discipline and focus, but some resource needs to be
aimed at identifying and testing strategic innovations. Customer relationship
development activity is already important, and is increasing in importance, but the
level of innovation could still be improved because there are relatively few
examples of significant innovations in this area compared to product and channel
developments.
Another recommendation proposed is that of improving helpline facilities of banks.
Customers now require quality service from helpline that needs to be quick in
answering their queries. The use of online banking, mobile internet prompts many
queries to individuals.
74
Apart from that, placements of ATM machines at convenient location across the
city helps, facilitates customers to save time and get access to liquid money at
appropriate time. This could be also applicable to the location of branches in the
city.
75
Conclusions
Customer satisfaction is one of the major parameters for the service providers in
the banking sector. Pakistani banks would be able to face competition better if the
requirements and the expectations of the customers are known. This necessitates
the understanding of the factors contributing to customer satisfaction. Although
existing studies have tried to understand the factors, the determination of the
factors has been done based on existing models of customer satisfaction. This
required an exploratory study to find the satisfaction levelof customers in banking.
This research has made an attempt to understand the construct of customer
satisfaction in banking, to explore the factors which might affect customer
satisfaction and how banks can change these factors to maximize customer
satisfaction.
76
Appendix
Questionnaire
Q1: What is your age?
 Below 30
 30 to 40
 50 and above
Q2: What is your gender?
 Female
 Male
Q3: Profession
 Physician
 Lawyer
 Psychologist
 Engineer
 Professor
 Diplomats
 Student
 Other (please specify)
Q4: Approximately how many times have you visited your branch in the past one month?
 Never
 1-3 times
 4-9 times
 10-15 times
 More than 15 times
Q5: Approximately how much time do you spend with the bank?
 10-15 minutes
 15-25 minutes
 25-40 minutes
 Above 40 minutes
77
Q6: How satisfied were you with the following aspects of the branch facility?
Very Satisfie Neutra Dissatisfied Very

Satisfied d l Dissatisfied
Clean environment
Well kept facilities
No wait service
Availability of information
Pleasant and attractive
decor
Automatic bank machines in
convenient locations
Q7: In terms of the service you received from the customer service representative/tellers, how
satisfied were you with the following?
Very Satisfied Neutral Dissatisfied Very

Satisfied Dissatisfied
Friendly and courteous
manner
Knowledge of banks products
and services
Willingness to listen and
respond to your needs
Fast and efficient service
Recognition of you as valued
customer
Professional and attractive
appearance
78
Q8: How satisfied were you with the following aspects of the helpline facility at your bank? Rate
on a scale of 1-5 (5 being highest and 1 lowest)
1 2 3 4 5
The time taken by member of the staff of answer the telephone?
The way in which staff members answer your call?
The clearness of the staff member’s voice?
The ease of reaching the person you need to speak with?
How quickly your inquiry was understood and responded to?
Q9: In which Bank do you have Account in?
Q10: Please tick mark which Bank delivers the best service in following cases
Habib Allied Standard Barclays UBL MCB

Bank Bank Chartered
Initial experience
Service Delivery Experience
Service
Relationship Experience
Grievance Handling
Other recommendations for banks to improve services
Q11:What is your monthly income?
 Below Rs. 50,000

 Between Rs. 50,000 to Rs. 100,000
 Rs. 100,000 and above
79
Research Proposal
PERCEPTION AND
USAGE STUDY OF
BANKING SERVICES ON
CUSTOMER LOYALTY
Research Term Report Prepared Exclusively for:
Prepared by:
Rabia Ahmed Malik
Pravin Kumar
Amjad Ali Memon
Sereen Khalid Satti
Submitted To:
Sir Sibghatullah Husaini
Submitted On:
12/30/2013
80
PERCEPTION AND USAGE STUDY
Of
BANKING SERVICES
ON
CUSTOMER LOYALTY
Research Report Prepared Exclusively for:
BARCLAYS
Date: 21st October' 2013
Contact Person:
Mr. Khalid Ahmed Aamir
Premier Relationship Manager
Barclays Bank, Shahbaz Branch
Email ID: khalid.aamir@barclays.com
81
Contents
Introduction ................................................................................................................................................. 83
Marketing objectives ................................................................................................................................... 26
Research objective ...................................................................................................................................... 84
Information to be collected ......................................................................................................................... 85
Population under Study ............................................................................................................................... 85
Research Methodology ............................................................................................................................... 85
Sampling Design ......................................................................................................................................... 86
Selection of respondents ............................................................................................................................. 87
Analysis ...................................................................................................................................................... 88
Deliverables ................................................................................................................................................ 88
Limitations and Delimitations ..................................................................................................................... 89
Timeline ...................................................................................................................................................... 90
Costs............................................................................................................................................................ 90
82
Barclays Bank, Karachi
Introduction
Barclays is known to be the world's leader of financial services. It has acquired expertise in
banking over the last 300 years and now operates in more than 50 countries worldwide, lending,
investing and protecting money for all of its clients. The service it offers includes the following:
 Retail banking
 Credit cards
 Investing banking
 Wealth management
In Pakistan, Barclay's caters to a different market segment as opposed to the other competitors in
the industry. Apart from normal banking and the services which adhere to it, Barclay's has
introduced the concept of Premium Banking in Pakistan. This caters to the high level customers
who consist of the upper class society of the community hence the services provided by Barclay's
to them is specifically to cater for this segment of the market.
Barclay's has been operating in Pakistan for over 3 years now and their global strength and
confidence has taken them to new levels. Today they offer an array of banking services and
products to their relevant branch customers and corporate clients whilst maintaining their value
creation and international standards.
"Discover a world where the ordinary does not exist, where every day is special,
where every moment is exceptional. Discover designer banking developed
exclusively for you, offering customized products and services."
This extract from their website shows Barclay's exclusivity in Pakistan and how it has brought
about a new segment altogether, being the first to introduce it and bringing about a new form of
competition to the existing banks in Pakistan and catering to a different type of market
altogether.
"Extraordinary banking for extraordinary people."
83
Marketing objectives
Some of the marketing related objectives (or motives) behind this research include:
 Better understanding of factors affecting service quality in Banks
 Improving the ways in which customer satisfaction can be increased
 Increase Customers base present a better brand of the bank
Problem Statement
The “expectations” of customers influence of customer influence their buying behavior. The
customers relate this expectation to the quality of service provided by the banks. The level of
expectation differs from person to person but everyone wants the banks to provide the
products and services which can satisfy their needs up to their expected level or to a higher
level so as to offer them a higher satisfaction. The level of satisfaction of consumers is
affected by some attributes also other than quality of service such as their experience with the
bank employees etc. As there is huge competition in the banking sector in Pakistan the
customer satisfaction is an important factor in the success of the banks. So with this
background an attempt has been made to study the satisfaction of the customers of various
banks taking into consideration some important attributes which customers consider for
rating their satisfaction with a particular bank
Research objective
How satisfied customers are with the services provided by their Banks and how Barclays
manages to maintain customer loyalty among their clients
Research Hypothesis
• Customers give equal importance to all attributes related to initial experience, service
delivery experience, relationship experience and grievance handling in determining their
satisfaction level
84
Approach
Information to be collected
A mixture of primary and secondary data collection techniques shall be used to collect the
information needed as posed in our research questions. The secondary research would be
conducted through mainly the internet from which we would acquire the necessary trends and
changes experienced in customer preferences related to baking services, including what are the
needs of customers in today's era and what is expected by them from banks in terms of services
and their quality.
Apart from this, primary data collection techniques shall be the main focus through which data
shall be acquired for analysis of our research objectives and questions mentioned. A
questionnaire shall be filled by potential banking customers who will be asked a variety of
different questions regarding banking services which are useful for our study. The questionnaire
is posted online and customers are asked to fill them out in a fast and convenient along with cost
effective manner.
A one on one interview was also scheduled with Mr. Khalid Ahmad Aamir, the Premier
Relationship Manager at Barclays Shahbaz Branch in which he provided us in-depth information
regarding why customers choose Barclays over other Pakistani and local banks and how
customer loyalty is retained and enhanced by the bank.
Population under Study
The criterion for the selection of respondents was based on demographic factors of which major
segments of the audience are identified of the banks they have accounts in. The procedure for
qualitative research which was used for the collection of data was done through the use of an in
depth interview with the Premier Relationship Manager of Barclays Bank, Mr. Khalid Ahmad
Aamir. Apart from this, questionnaires were also conducted with individuals of various different
professions on the basis of a fixed quota of respondents belonging to each bank.
Research Methodology
We have selected a combination of two approaches or methodologies, namely, the Exploratory

Approach and the Descriptive Approach.
85
The exploratory research comprises of data collection through qualitative techniques, in-depth
interview conducted for the purpose. The descriptive research will further aid in fulfilling our
research objective; for better and detailed data quantification, carrying out surveys with the
customers.
Sampling Design
Banking Services are luxuries that are enjoyed by a select few in Pakistan. It is mainly the Socio-
Economic Classes A and B that are most likely to use the product, while the Socio-Economic
Class C and below usually don’t have accounts. The report, thus, would only focus on
participants belonging to Socio-Economic Classes A and B.
A sample of 100 respondents is used in our research since it formed the most suitable basis of
our research and best represented our target audience as it was fulfilled by a variety of different
individuals of different age and income brackets along with diverse professions.
86
Selection of respondents
In-depth Interviews:
Barclays Relationship Manager
Survey (Questionnaire)
Sample Size: 100
The sampling procedures used in procuring the responses will include:
4. Non-Probability sampling which included the use of Convenience Sampling
5. Judgment sampling, whereby a definitive age group was isolated for the survey prior to
any cursory research that may have validated it
6. Quota Sampling method
The Sample will consist of people who have Bank Accounts (Clients of Bank)
The following is a sample of demographics information of respondents and interviewee required:
Characteristics of Respondents
1. Gender  Male
 Female
2. Age >19, >40
3. Income Below 50000
50000-100000
Above 100000
4. Frequency of use (monthly) 1-3 times
4-9 times
10-15 Times
More than 15 times
Never
87
Analysis
The analysis will be done using qualitative and quantitative techniques as mentioned. The main
variable in the questionnaire will be customer satisfaction. Hence we will try to get the customers
point of view about their satisfaction level by simply asking the customers that “how satisfied are
you?”
Scaling techniques would be on the basis of ordinal and nominal data types for which our
questions are based on comparative scaling techniques like the use of rank-ordering. Along with
this, non-comparative scaling techniques are also used in our survey which includes the Likert
scale .
The data extracted can also be processed in SPSS in order to gain useful insights regarding the
consumer satisfaction
A dummy table for our survey findings could be:
Frequency Percent
Strongly Disagree 3 3.33
Disagree 10 11.11
Neutral 15 16.67
Agree 47 52.22
Strongly Agree 15 16.67
Total 90 100.0
Deliverables
Task No. Deliverables

1 Questionnaire
2 Final Timeline
3 Final Report
88
Limitations and Delimitations
This particularresearchendeavorwill be limited in its scope and undertaking because

ofobvioustime and financial resource limitations.
We are limited in our understanding of qualitative and quantitative researchtools and we
understand that the accuracy of ourfindings mightbe compromised due to this. We will
howeverconsult quite afew people fromthe IBA facultyas well as a few people we know from the
industry tomake sure this limitation is minimized. Consultation by the instructor,relevant faculty
and research professionals will also help us minimize if not eliminatefactors thatinevitably
jeopardize research accuracysuch asParticipantand Researcher Bias.
89
Timeline
•Deciding on the topic for the research project

•Finalizing a company
•Acquiring a contact within the company
September •Planning and designing the course of the research project
•Drafting a proposal
•Submission of proposal for acceptance
•Contacting the company for secondary data
•Collection of secondary data and preparation of a literature review
October
•Drafting a structured process for interview and surveys
•Collection of Primary Data

•Conducting interviews
•Distribution of surveys
November
•Compilation and analysis of compiled data

•Drafting the final report
December
Costs
The only costs so far predicted to be incurred are

 Arrangement of the interview costs which depends on the venue selected
 Transportation cost
 Survey printing and other miscellaneous costs
This area can be examined in detail only after the completion of the report and shall be discussed
in the final report.
90
References
Allred, T. A., & Addams, H. L. (2000). Service quality at banks and credit unions: What do their customers
say. Manage. Serv. Quality., 10(1), 52-60.
Almossawi, M. (2001). Bank selection criteria employed by college students in Bahrain: an empirical
analysis. Int. J. Bank. Mark., 19(3), 115-125.
Anderson, E. W., & Sullivan, M. W. (1993). The antecedents and consequences of customer satisfaction
for firms. Mark. Sci., 12, 125-143.
Anderson, H., & Jacobsen P. N. (2000). Creating Loyalty: Its Strategic Importance in Your Customer
Strategy. In S. A. Brown (ed.), Customer Relationship Management (pp. 55-67). Ontario: John Wiley.
Anthanassopoulos, A., Gounaris, S., & Sathakopoulos, V. (2001). Behavioral responses to customer
satisfaction: an empirical study. European. J. Mark., 35(5/6), 687-707.
Bleomer, J., & Ruyter, K. D. (1998). On the relationship between store image, store satisfaction and store
loyalty. Eur. J. Mark., 32(5/6), 499-513.
Bontis, Nick, Booker, Lorne, D., & Serenko, A. (2007). The mediating effect of organizational reputation
on customer loyalty and service recommendation in the banking industry. Manage. Decision.,
45(9),1425-1445.
Bowen, J. T., & Chen, S. L. (2001). The Relationship between Customer Loyalty and Customer
Satisfaction. International Journal of Contemporary Hospitality Management, 213-217.
Caruana, A. (2002). Service loyalty: the effects of service quality and the mediating role of customer
satisfaction. Eur. J. Mark., 36(7/8), 28-811.
Chakravarty, S., Feinberg, R., & Rhee, E. Y. (2004). Relationships and individuals‟ bank switching
behavior. J. Econ. Psychol., 25, 507-527.
Clarke, K. (2001). What Price on Loyalty When a Brand Switch is Just a Click Away?,. Qualitative Market
Research: An International Journal, 4 (3), 160-168.
Cronin, J. J.,& Taylor, S. A. (1992). Measuring service quality: a reexamination and extension. J. Mark.,
56, 55-68.
Evans, J. R., & Lindsay, W. M. (1996). The Management and Control of Quality. 3rd ed., St. Paul: West
Publishing Company.
91
Fornell, C. (1992). A national customer satisfaction barometer: the Swedish experience. J. Mark., 56, 6-
21
Gerrard, P., & Cunningham, J. B. (1997). Islamic banking: a study in Singapore. Int. J. Bank. Mark., 15(6),
204-216.
Guiltinan, J. P., Paul, G. W., & Madden, T. J. (1997). Marketing Management: Strategies and Programs.
6th ed., New York: McGraw-Hill.
Hansemark, O. C. & Albinson, M. (2004). Customer Satisfaction and Retention: The Experiences of
Individual Employees. Managing Service Quality, 14 (1), 40-57.
Hokanson, S. (1995). The Deeper You Analyse, The More You Satisfy Customers. Marketing News, p. 16.
Hoyer, W. D., & MacInnis, D. J. (2001). Consumer Behaviour. 2nd ed., Boston: Houghton Mifflin
Company.
Kandampully, J., & Duffy, R. (1999). Competitive Advantage through Anticipation, Innovation and
Relationships. Management Decision, 37 (1), 51-56.
LaBarbera, P. A., & Mazursky, D. (1983). A Longitudinal Assessment of Consumer Satisfaction,

Dissatisfaction: the Dynamic Aspect of Cognitive Process. Journal of Marketing Research, 20, 393-404.
Levesque, T., & McDougall, G. H. G. (1996). Determinants of customer satisfaction in retail banking. Int.
J. Bank. Mark., 14(7), 12-20.
Lewis, B. R. (1991). Service quality: an international comparison of bank customers‟ expectations and
perceptions. J. Mark. Manage., 7(1), 47-62.
McIlroy, A., & Barnett, S. (2000). Building Customer Relationships: Do Discount Cards Work?. Managing
Service Quality, 10(6), 347-355.
Newman, K. (2001). Interrogating SERVQUAL: a critical assessment of service quality measurement in a

high street retail bank. Int. J. Bank. Mark., 19(3), 126-139.
Oliver, R. (1980). A cognitive model of the antecedent and consequences of satisfaction decisions. J.
Mark., 17(10), 460-469.
Oliver, R. L. (1997). Satisfaction: A Behavioral Perspective on the Consumer. New York: McGraw Hill.
92
Reichheld, F. F. (1996). The Loyalty Effect: The Hidden Force Behind Loyalty. Boston: Harvard Business
School. Rust, R. T., & Zahorik,
J. (1993). Customer satisfaction, customer retention, and market share. J. Retail. Summer, 69, 193-215
Selnes, F. (1993). An examination of the effect of product performance on brand reputation, satisfaction
and loyalty, Eur. J. Mark., 27(9), 19-35.
Sivadass, E., & Baker-Prewitt, J. L. (2000). An Examination of the Relationship between Service Quality,
Customer Satisfaction, and Store Loyalty. International Journal of Retail & Distribution Management, 28
(2), 73-82.
Taylor, S. A., & Baker, T. L. (1994). An assessment of the relationship between service quality and
customer satisfaction in the formation of consumers‟ purchase intentions. J. Retailing., 70(2), 163-178.
Zairi, M. (2000). Managing Customer Dissatisfaction Through Effective Complaint Management Systems.
The TQM Magazine, 12 (5), 331-335.
Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The behavioral consequences of service quality. J.
Mark., 60(2), 31-46
Work done by each member
93
 Pravin Kumar: Heworked on the core of the report Letter of

transmittal, authorization, Background of problem, Background of
the industry and company, Approach to problem and Literature
review. He also worked on Executive Summary, Problem
Statement.
 Amjad Ali Memon : He worked on creating the form and

managing the survey results. Alsoworked on the analysis of survey
questionnaires. He worked along with Pravin on executive
summary. Also worked on the recommendation to the report.
 Sereen Khalid: She worked on the SPSS, analyzing descriptive

Stats. Also Analysis of the questionnaire surveys as well. She also
worked Conclusions and Limitations to the report. She worked on
major findings and questionnaire designing.
 Rabia Ahmad: She worked on Research Methodology, Research

design and sampling of the report, scaling techniques, target
respondent and selection of respondents. She got the contact for
Barclays Relationship Manager that was added to the report.
 Overall all members of the team worked together on in

depth interview analysis, putting forward creative ideas.
They all equally on the SPSS assignments that were sent to
Sir Abdus Salam. The team collaborated whenever there was
any need to submit topic to study and making the proposal
as well.
94
 In the end it was a nice learning experience for the team and
they learned how to conduct a proper research. The team
would like to thank Sir Sibghatullah for guiding throughout
the project 
95

Perception and Usage Study of Banking Services On Customer Loyalty

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Perception and Usage Study of Banking Services On Customer Loyalty

Încărcat de

Drepturi de autor:

Formate disponibile

MBR Term Report

PERCEPTION AND USAGE STUDY OF

30th December 2013

Prof. Sibghatullah Husaini

Date: December 27, 2013

loyalty among their clients’’ by the following Institute of Business Administration

BBA 5 students’ named below:

conducted is one of the pre-requisites for the course of Methods in Business

Mr. Khalid Ahmed Aamir

Premier Relationship Manager

Barclays Bank, Shahbaz Branch

Email ID: khalid.aamir@barclays.com

crucial for us in the development of this project.

In retrospect, we are very thankful to our course instructor Mr.SibghatullahHusaini

This report is a combination of sincere hard work, dedication, and persistence on

We will highly appreciate suggestions for improvement in this report, or be ready

to maintain their customer loyalty in the highly competitive banking industry of

demographic factors such as age, gender and income to present a comparative

analysis of the various demographic factors.

smallest group of respondents is aged above 50 (19%).

Numerical highlighted 48 percent of the respondent visited their banks 1 – 3 times

services this is because of electronic banking, online banking, telephone banking

which prompts certain queries that need to be answered on helpline.

The satisfaction level of respondents with consumers’ service representative stated

commitment to the customers.

satisfaction of the customer. Around 40 % of the respondents choose satisfied with

by their banks. Standard chartered has maintained a standard quality service

internationally which has been monitored from time to time.

of customer satisfaction in banking, to explore the factors which might affect

An effervescent and self-motivated banking sector is dynamic for a strong and

generation of capital, eliminating poverty, commercial activity, and for the

developed country by 2020 (The Financial Express, 2003).Today, international

applications. Around the world the importance is on the reformation and up

gradation of the financial markets.

institutions ranging from a central bank to commercial banks and to specific

organizations to accommodate for special requests of particular sectors. The

remarkable growth in the first two eras.

customers, there are no free services at all.

The businesses in Pakistan do day-to-day transactions through bank accounts. They

done to record every transaction, so that each transaction can be taxed.

the case of default would be an issue.

State Bank of Pakistan was established in 1948 under quasi-government

control and consolidated into 6 nationalized banks. While directed lending

increased, the SBP’s role as a regulator was marginalized. Nationalization of banks

in the seventies was a major distraught to internal banking industry of Pakistan,

leadership. Specialized banking institutions were already working in the public

industry, and with this modification started the adversity. Nationalization of

banking industry was cavalcaded by powerful variations in the external worth of

resourcefulness and progress impetus. They ceased to be a corporate apprehension

political compressions. They suffered from three terminal diseases: non-

unpleasant to authentic, dedicated and industrious workers in the jurisdictions of

domestic banking industry.

By 1980-1990, the financial sector served mainly large corporate businesses,

period of 1990-1997 was a period of privatization where 23 banks were

established. The era of nineties was the pinnacle of denationalization, deregulation

and restructuring in the domestic banking industry and financial institutions.

Council there was deluge of hypocritical, nonprofessional, incompetent candidates

21 domestic and 27 overseas banks. More importantly, administered interest rates

auctioning government securities was established. After privatization,

cater to small and medium enterprise.

The Pakistani banking sector is continuously improving with diversified pattern of

an increased number of competitions to attract a large base of consumers through

13 conventional banks offering their services according to the principles of