Customer service expectations in retail banking in South Africa

Abstract

Customer satisfaction and retention are critical for retail banks. Service quality is a major determinant of customer satisfaction, and is increasingly being seen as a key strategic differentiator within the financial services sector worldwide. However, little is known about service quality in an African context for retail banking. This research assesses customer expectations based on service quality factors for retail banks across ten countries in Africa. Specifically, the objectives are to determine whether cross-national differences in customer service expectations exist in the African retail banking sector, what the relative importance of key service dimensions in African retail banking are, and whether these service expectations are constant over time. A questionnaire based survey of 4035 respondents across ten African countries was used. The determinants of external service quality were identified, which include service quality dimensions and respective underlying attributes. The SERVQUAL model developed by Parasuraman, Zeithaml & Berry (1990) was adopted for modelling the data. The results were rescaled to interval data and then analysed by way of ANOVA testing, t-testing and rank ordering. The research shows, with the exception of the Responsiveness service expectation dimension, that there are no commonalities of service expectations among the African countries of this study. The implications of this are significant for managers of multinational retail banks in Africa wishing to improve the quality of service delivery. The Responsiveness service expectation dimension was found to consistently be the most important expectation across all countries. Thereafter, the relative importance of subsequent service dimensions varied considerably for each country, but, on average, ranked as follows: Responsiveness, Reliability, Tangibles, Assurance and, finally, Empathy.