Customer Satisfaction Dimensions of a Bank in Malaysia

1. Customer Satisfaction Dimensions of a Bank in Malaysia

2. Introduction Through liberalization and globalization, Malaysian banking sector has undergone a lot of structural changes where banks were required to go through a series of merging exercises. As a result of that exercise, number of banks has reduced to 22 where nine are Malaysian-controlled commercial banks and 13 are foreign-controlled commercial banks in Malaysia (Bank Negara Malaysia, 2009; MIDA, 2009). Competition between banks became even more intense as all anchor banks are big enough to afford offering matched range of products or services (Allred and Addams, 2000). This makes maintaining customer satisfaction as single most important factor to remain relevant in financial service institutions, as pointed out by many researchers (e.g. Rust and Zahorik, 1993; Trubik and Smith, 2000).

3. Problem Statement • For many years customer satisfaction has been a major goal of business organizations, since it has been proven to affect customer retention and companies’ market share (Hansemark and Albinsson, 2004), especially in markets that are highly competitive and saturated, like financial services (Rust and Zahorik, 1993 and Trubik and Smith, 2000). • However, not many researches have been done in Malaysia to understand customer satisfaction level in banking industry. Similar research reported so far in Malaysia were conducted before merging exercises (e.g. Adilah, 1999; Chin, 2001). Thus, this study adds value to the literature by understanding customer satisfaction level after merging exercises based on Malaysian context.

4. The objectives of this study 1 to understand differences in various aspects of customer satisfaction by gender, ethnicity and academic qualification 2 to assess relationship between customer satisfaction and revisit intention.

5. Research Questions • Is there a satisfaction difference between male and female customers? 2. Is there satisfaction difference across ethnic groups? 3. Are more educated customers experiencing lesser level of satisfaction? 4. Are more satisfied customers more likely to continue visit the bank?

6. Significance of the study • Knowing which customer service dimensions weakly performed by the bank, helps bank managers determine aspects that needed urgent improvement before customer lose confidence in their services. • Training Programs can then be more accurately designed to cater to improve staff’s performance on weak areas. For example, training on professional knowledge on the bank’s products and services if staff are found to have insufficient banking product knowledge. • Knowing who are less satisfied (male/female; high/low education; Malay/Chinese/India), help bank designs more effective message targeting that market segment. • Lastly, finding on the relationship between Satisfaction and revisit intention adds value to literature whether the relationship is applicable in Malaysia banking context

7. Conceptual Framework H1 H4 H2 H3

8. Definition: Customer Satisfaction • Satisfaction in services can be conceptualized as facet (attribute-specific) or as overall (aggregate); • and it can be viewed as transaction-specific (encounter satisfaction) or as cumulative (satisfaction over time) (Host and Knie-Andersen, 2004). • In this study, satisfaction is conceptualized as customers’ satisfaction towards a service provider’s performance in various aspects of bank services basing on attitude-specific dimension.

9. H1 • Gender shown quality ranking perception differences where men ranked effectiveness and reliability highest while women ranked price highest in banking sector (Spathis et al., 2004). • In a different study investigating gender’s effect on perceptions of satisfaction in a public service environment, men were reported to enjoy higher level of service satisfaction compared to women (Dimitriades and Maroudas, 2007). • Based on various findings reported in banking and public service context, it is likely that gender too will show different satisfaction level in this study. Therefore, the following hypothesis is tested: H1: There are significant mean differences in various aspects of satisfaction between female and male customers.

10. H2 • Lopez, Hart and Rampersed (2007) examined the association between ethnicity and customer satisfaction level in the financial service sector and revealed that respondents from the three largest regional ethnic groups (African-American, Latinos and Non-Latino Caucasians) weighted the importance of several of the ten service quality dimensions quite differently. • Thus, it is likely that ethnic groups in Malaysia would also perceive various aspects of satisfaction differently. Hence, H2 is proposed as below. H2: There are significant mean differences in various aspects of satisfaction across ethnic groups.

11. H3 • Mittal and Kamakura (2001) investigated the moderating effect of customer characteristics between customer satisfactions, repurchase intent and repurchase behavior. They found consumers with some college or higher educational level recorded lower satisfaction level than those with only a high school education or less (Mittal and Kamakura, 2001). • The finding was further validated by Cloud (2003) who also found a negative relationship between education level and customer satisfaction in a community health centers. Thus, H3 is proposed: • H3: There is a negative relationship between academic qualification and satisfaction level.

12. H4 • Revisit Intention refers to the tendency the customer desire to engage a bank in future (Boshoff and Gray, 2004). • Specific to banking industry, Boshoff and Gray (2004) confirmed a positive relationship between satisfaction level and revisit intention. • A recent study by Lee and Hwan (2005) also indicated that customer satisfaction directly affects purchase (revisit) intentions in the Taiwanese banking industry. Similarly, a study conducted by Pont and McKuilken (2005) in Australian banking industry supported the above findings. • Thus, the more satisfied the customers are, the more likely they are to revisit the bank in future. Hence, H4 is proposed as below. • H4: There is a positive relationship between various aspects of satisfaction level and revisit intention.

13. DATA COLLECTION • Data will be collected from academic and non-academic staff in a public university in Malaysia.

14. MEASURES • Customer satisfaction aspects - 27 item scale of Hallowell (1996) • Overall customer satisfaction - single-item measure of Hallowell (1996) • Revisit Intention – 4 item scale of Boshoff and Gray (2004) • Demographic information - gender, ethnic group, academic qualification

15. DATA ANALYSIS H1 - Independent sample t-test H2 – ANOVA H3 - Spearman Rank Correlation H4 – Pearson Correlation Analyses

16. Thank you