Does Service Quality Matters in the Context of Internet Banking? A Perceptual Analysis of India’s Internet Banking Customer’s Perception Regarding Service Quality, Trust, Satisfaction and Loyalty

Purpose: The purpose of this paper is to explore the various Internet banking service quality factors and how these certain antecedents influencing the customer’s trust, satisfaction and loyalty.

Research Methodology: A total of 200 questionnaires were distributed among B2C Internet banking customers in India and 133 were returned resulting 66.5% response rate. The implication of Internet banking service quality on customer’s trust, satisfaction and loyalty was examined. The study’s conceptual model and hypothesis were tested using SPSS19.

Findings: The results proved that the all four antecedents of Internet banking service quality are distinct construct. They all have appropriate reliability and each construct influences online customers trust, their satisfaction level and help in building a loyal customer base. The efficiency of banking website is important construct of Internet banking service quality. The study confirms that the impact of e-satisfaction is more on e-loyalty than e-trust and e-satisfaction drives e-trust also.

Research Implication

Limitation-The sample size is not large enough, so the results should be interpreted with caution as regards to generalization of research finding of Indian consumer as a whole because sample is collected from some part of Punjab and Chandigarh.

Future Work-Future research needs to focus on a larger cross section of internet users and more diversified random samples to verify findings of current study. Focus can be made regarding the comparative studies with other states or other developed / developing countries in order to find out whether effect of individual service quality factor influencing adoption of Internet banking in competitive mix may be more/less in other markets, and whether effect of customer satisfaction and trust on loyalty may be more or less. Moreover, research could be enhanced by expanding current model and cultural factors could be investigated to add further depth as India, a multi-cultural country.

Practical Implication: This paper can help in fostering growth of Indian online banking in the future as these can be used as guidelines for financial service sector companies who want to enter into click-to-click in Indian market or want to have a long lasting customer relationship. Banks should focus their efforts on website service quality which will help in long lasting relation with the customer. This area needs more attention from banks / financial service sector, so that required added facilities can be attached to website for having competitive advantage.

Originality: This is the first time that such an exhaustive study has been carried out based on Punjab and Chandigarh bank customers. It gives a perspective on how certain Internet banking service quality affect customer’s satisfaction, trust and loyalty and to check whether e-satisfaction drives e-trust.