Online Banking Service Practices and Its Impact on E-Customer Satisfaction and E-Customer Loyalty in Developing Country of South Asia-Nepal

Abstract

The aim of this paper is to investigate the association and impact between online banking service practices on e-customer satisfaction, and e-customer loyalty. In addition, it aims to analyze mediating role of e-satisfaction to online banking service practices and e-loyalty. The research followed the E-S-QUAL model to measure the online banking service quality (OBSQL) by five dimensions: e-customer service, site of the organization, website efficiency, user-friendliness, security, and privacy. It is based on quantitative research approach with a structured questionnaire through primary data collection by stratified random sampling. Out of 475 questionnaires distributed, 384 usable questionnaires were used, and SPSS and AMOS were used to analyze. An exploratory factor analysis was used to confirm the online banking service quality dimensions and structural equation modeling was employed to estimate the parameters and structure. The result explained that the efficiency of the website and e-customer service were highly influential dimensions of online banking service practices, followed by user-friendliness, security and privacy, and the organization’s site. E-customer satisfaction significantly influences e-customer loyalty, and e-satisfaction mediates the association between online banking services and e-customer loyalty, which is a prime concern to bankers, users, and policymakers for continuous development. This research presents a model to recognize the quality of online banking services that affects electronic customer loyalty and satisfaction in developing countries of South Asia.

Measuring the Relationship between Service Quality, Customer Satisfaction and Customer Loyalty in the Banking Sector of Nepal

“…In addition this study has determined the partial mediation effect of customer satisfaction in the relationship of banking service quality and customer loyalty. These findings are consistent with previous studies of (File & Prince, 1992;Lenka, Saur, & Mohapatra, 2010;Mosahab, Mahamad, & Ramayah, 2010;Pradhan & Shrestha, 2017;Tee, Preko, & Tee, 2018;Gautam & Sah, 2023). ).…”

“…Empirical evidence on the relationship between service quality, customer satisfaction and customer loyalty indicate that there is a positive significant relationship between service quality and customer satisfaction (Koirala & Shrestha, 2012;Gyawali & Kunwar, 2014;Pradhan & Shrestha, 2017;Lamichhane, 2018). Furthermore, customer satisfaction mediates the relationship between service quality and customer loyalty (Rajeswari, Srinivasulu, & Thiyagarajan, 2017;Gautam & Sah, 2023). Based on the presented evidence, hypotheses of this study have been formulated as follows:…”

“…Studies have established that high level of service quality leads to high level of customer satisfaction. In addition to it, studies have established that there exists relationship between service quality and customer loyalty mediated by customer satisfaction through an indirect effect (Rajeswari, Srinivasulu, & Thiyagarajan, 2017;Gautam & Sah, 2023). According to previous studies, there are several factors which influence customer loyalty among which customer satisfaction is known as a principal factor.…”

Exploring the Impact of Internet Banking Service Efficiency on Customer Loyalty: The Mediating Role of Customer Satisfaction and the Moderating Effect of Customer Trust

“…Extensive literature provides robust support for the significance of speed, efficiency, and improvements as pivotal factors that shape customers' perceptions of service quality. This, in turn, aligns positively with their utilization of online services (Gautam & Sah, 2023;Fassnacht & Koese, 2006;Polatoglu & Ekin, 2001;Raza et al, 2020;Lodhi, 2020;Wu and Chang, 2013;Chen and Hitt, 2002;Kheng, 2010), consistently demonstrating that efficiency profoundly impacts e-customer satisfaction.…”

Evaluating the Impact of E-Banking on Customer Satisfaction: A Comprehensive Systematic Review

“…On the basis of the presented analysis, other than tangibility, all quality-of-service dimensions have shown a positive impact on customer satisfaction for e-banking services [53]. Authors in this work have counted for system quality dimensions along with quality of services and have considered that e-services and website efficiency are among the most contributing factors for customer satisfaction, along with factors like security/privacy, ease of use and website quality as other contributing factors for customer satisfaction [54]. The authors in [55] and [56] tried to stretch the mediating role of customer satisfaction towards purchase intentions, for which, based on work analysis author evaluated many of the dimensions as major contributors to customer satisfaction for e-banking services, which includes privacy and security, Efficiency, responsiveness, reliability, etc.…”