Measuring Customers' Perception on Service Quality in Indian Banking Sector

Customer satisfaction is an increasing challenge for banking companies. In the last few years, the banking sector has witnessed a substantial growth and rapid changes. Customer satisfaction is a critical issue in the success of any business system. This paper describes the customer perceptions towards service quality in banking sector. To evaluate perception levels of customers, SERVQUAL instrument covering Reliability, Assurance, Empathy, Responsiveness and Tangibles has been used. For the analysis item-to-correlations, means, standard deviations. Scale's reliability, factor structure, and validity have been used. Me results of the study indicated that the overall service quality provided by the banks was good. Tangible was rated as the most important dimension followed by assurance, responsiveness, reliability, and empathy. Further, the findings also found that the Alpha coefficients are considered sufficient enough to imply reliability and proved the internal cohesiveness of the items forming each dimension. Factor analysis reveals that customers are happy with the appearance of physical facilities, equipment, personnel, and other materials and employees' knowledge and courtesy and their ability to inspire trust and confidence. On the other hand the dimensions reliability, responsiveness and empathy scored lesser than the tangibility and assurance. This reflects that there is a need for service improvements in these areas.