CUSTOMERSATISFACTIONANDDIGITALBANKING

SERVICES IN NEPALESE COMMERCIAL BANKS

ADissertationsubmittedtotheOfficeoftheDean,FacultyofManagementinpartial fulfillment of
the requirements for the Master’s Degree

by:

Nabin
KarkiExamRollNo.:579
2/18
CampusRoll No.: 296/074
[Link]. No.:7-2-720-91-2013
ShankerDevCampus

Kathmandu,Nepal
December, 2023
CERTIFICATIONOFAUTHORSHIP

I hereby corroborate that I have researched and submitted the final draft ofdissertation
entitled “Customer Satisfaction and Digital Banking Services in Nepalese
Commercial Banks”. The work of this dissertation has not been submitted previously
for the purpose of conferral of any degrees nor it has been proposed and presented as
part of requirements for any other academic purposes.

The assistance and cooperation that I have received during this research work hasbeen
acknowledged. In addition, I declare that all information sources and literature used
are cited in the reference section of the dissertation.

NabinKarki
Signature: ………………..
Date:………………………

ii
REPORTOFRESEARCHCOMMITTEE

Mr. Nabin Karki has defended research proposal entitled “Customer Satisfactionand
Digital Banking Services in Nepalese Commercial Banks” successfully. The
research committee has registered the dissertation for further progress. It is
recommendedtocarryouttheworkaspersuggestionandguidelinesofsupervisor Dr. Dilli
Ram Bhandari and submit the thesis for evaluation and viva-voce examination.

Dr. Dilli Ram Bhandari

DissertationProposalDefendedDate:
Dissertation Supervisor …………………………………………
Signature:…………………….

DissertationSubmittedDate:
…………………………………………

[Link] Head,
DissertationVivaVoceDate:
Research Department …………………………………………
Signature:…………………….

iii
APPROVALSHEET

We, the undersigned, have examined the thesis entitled “Customer Satisfaction and
Digital Banking Services in Nepalese Commercial Banks” presented by Mina
Khanal,acandidateforthedegreeofMasterofBusinessStudies(MBSSemester)and
conducted the Viva voce examination of the candidate. We hereby certify that the
thesis is worthy of acceptance.

…………………………
Dr. Dilli Ram Bhandari
Dissertation Supervisor

…………………………
Internal Examiner

………………………….
Internal Expert

………………………….
External Expert

………………………….
[Link]
Chairperson, Research Committee

…………………………
[Link] Campus
Chief

iv
ACKNOWLEDGEMENTS

This study entitled “Customer Satisfaction and Digital Banking Services in

NepaleseCommercialBanks”hasbeenpreparedinpartialfulfillment fortheDegree of
Master of Business Studies (MBS) under the Faculty of Management, Tribhuvan
University is based on research models involving the use of qualitative aspect of
customer satisfaction and digital banking services in Nepalese commercial banks.

I have great satisfaction and pleasure to express my appreciation and sincerity to my

thesis supervisor Dr. Dilli Ram Bhandari of Shanker Dev Campus, TU for his
excellent and effective guidance and supervision. I will remain thankful for his
valuabledirection usefulsuggestion and comments duringthecourseofpreparingthis
thesis without his help this work would not have come in this form. I also would like
to extend my debt of gratitude Asso. Prof. Dr. Sajeeb Kumar Shrestha, Head of
[Link]
Acharya, Campus Chief of Shanker Dev Campus who provided me an opportunity to
undertake this research work.

I highly appreciate to NRB Library, Shanker Dev Campus Library and TU Central
Library for their valuable advices and support in collecting and presenting the
necessarydata. I would also like to express mythankfulness to my friends, myfamily
membersas wellas allknownpeoplewhosupportedaswellasinspiredmedirectlyor
indirectlyto complete this [Link] help and support, Ihave been able to complete
this work. I would like to take the responsibility of any possible mistakes that may
have occurred in the report. I would be delighted to welcome readers for their
suggestion and recommendation to improve the report.

NabinKarki
Date:

v
TABLE OFCONTENTS

PageNo.
Title Page i
CertificationofAuthorship ii
ReportofResearchCommittee iii
ApprovalSheet iv
Acknowledgements v
Table of Contents vi
List of Tables viii
Abbreviations ix
Abstract x

CHAPTER–IINTRODUCTION.................................................................................1
1.1 BackgroundoftheStudy.........................................................................................1
1.2 ProblemStatement.................................................................................................3
1.3 ObjectivesoftheStudy............................................................................................5
1.4 ResearchHypothesis..............................................................................................6
1.5 Rationaleofthe Study............................................................................................6
1.6 LimitationsoftheStudy..........................................................................................7

CHAPTER–IILITERATUREREVIEW....................................................................8
2.1 TheoreticalReview................................................................................................8
2.1.2 TheoriesofCustomerSatisfaction....................................................................8
[Link] TheDissonanceTheory...........................................................................8
[Link] TheContrastTheory................................................................................9
[Link] TheComparisonLevelTheory.................................................................9
[Link] TheValuePercept Theory.....................................................................10
2.1.2 Methodsto AssessCustomer Satisfaction......................................................11
2.1.3 RelationbetweenCustomerSatisfactionand ServiceQuality..........................12
2.1.4 ServiceQualityDimensions (ServiceQualityModel).....................................13
2.1.5 CustomerSatisfactioninBankingSector........................................................15
2.2 EmpiricalReview................................................................................................16
2.3 ResearchGap.......................................................................................................29

vi
CHAPTER–IIIRESEARCHMETHODOLOGY.....................................................31
3.1 ResearchDesign..................................................................................................31
3.2 PopulationandSample, andSamplingDesign.......................................................31
3.3 NatureandSourcesofDataandInstrumentof DataCollection.................................31
3.4 Methodof Analysis..........................................................................................32
3.4.1 DescriptiveAnalysis................................................................................32
3.4.2 CorrelationAnalysis................................................................................32
3.4.3 RegressionAnalysis................................................................................32
3.5 Research FrameworkandDefinitionoftheVariables.............................................33

CHAPTER–IVRESULTSAND DISCUSSION........................................................35
4.1 Results.................................................................................................................35
4.1.1 RespondentsDemographicProfile.................................................................35
4.1.2 DescriptiveStatisticsAnalysis.......................................................................37
4.1.3 Summaryof DescriptiveAnalysis.................................................................42
4.1.4 CorrelationsAnalysis....................................................................................43
4.1.5 RegressionAnalysis......................................................................................45
4.2 Discussion...........................................................................................................48

CHAPTERVSUMMARYAND CONCLUSION......................................................51
5.1 Summary.............................................................................................................51
5.2 Conclusion..........................................................................................................52
5.3 Implications.........................................................................................................53

References
Appendices

vii
LIST OFTABLES

PageNo.
Table1Summaryof Empirical Review..........................................................................24
Table2Gender Specification.........................................................................................35
Table3Age Descriptionof Respondents........................................................................36
Table4AnnualIncomeDescriptionofRespondents.........................................................36
Table 5Years ofUsingebankingServices.......................................................................37
Table6DescriptiveStatisticsofReliabilityof E-bankingServices...................................38
Table7DescriptiveStatisticsofResponsivenessof E-bankingServices...........................38
Table8DescriptiveStatistics ofAssuranceof E-bankingServices...................................39
Table9DescriptiveStatistics ofTangibles ofE-bankingServices...................................40
Table10DescriptiveStatistics ofEmpathyof E-bankingServices...................................41
Table11DescriptiveStatistics ofCustomer Satisfaction.................................................42
Table12Summaryof DescriptiveAnalysis.....................................................................43
Table13PearsonCorrelation CoefficientsofStudyVariables..........................................44
Table14Model Summary..............................................................................................45
Table15AnalysisofVariance (ANOVA).......................................................................45
Table16RegressionCoefficientof Variableson CustomerSatisfaction..........................46
Table17SummaryofHypothesisTesting........................................................................48

viii
ABBREVIATIONS

% : Percentage
& : And
AS : Assurance
ATM : AutomatedTellerMachine
CS : CustomerSatisfaction
e.g. : Example
EM : Empathy
i.e. : Thatis
IBM : InternationalBusinessMachineCorporation
MS. DO : Microsoft Disk Operating System
No. : Number
Res : Respondents
RL : Reliability
RS : Responsiveness
SEM : StructuralEquationModeling
SPSS : StatisticalPackageforSocial Sciences
T.U. : TribhuvanUniversity
TN : Tangibility
WHO : WorldHealth Organization
www : World WideWeb

ix
ABSTRACT

This study examines the customer satisfaction and digital banking services inNepalese
commercial banks. The study has followed descriptive and casual research design.
This study used descriptive statistic, correlation analysis and regression analysis to
analyze the data. This study found that majority of the respondents agreed that
empathy, assurance and reliability of e-banking services quality factor highly affects
the banking customers satisfaction and they believe that their satisfaction was also
high. The correlation analysis reveals that reliability of e-banking services has
positive and significant relationship with customer satisfaction and also correlation
between responsiveness and customer satisfaction is significant positive. At the same
time, there is significant positive association between assurance of e-banking services
and the customer satisfaction. Likewise, tangibles and empathy have positive and
significant relationship with customer satisfaction. The regression result concluded
that reliability of e-banking services, responsiveness of e-banking services, assurance
of e-banking services, tangibles of e-banking services and empathy of e-banking
services have significant positive impact on customers satisfaction in Nepalese
commercial banks. Therefore, this study concluded that the impact of e-banking
service quality on customer satisfaction is significant.

Keywords: Customer satisfaction, reliability, responsiveness, assurance and

tangibility

x
1

CHAPTER - I
INTRODUCTION

1.1 BackgroundoftheStudy
Banks playa significant and active part in a country's financial and economic growth.
An efficient banking system has a significant impact on a country's growth in
numerous areas of the economy. Banking professionals encounter a plethora of
complicated issues in the global marketplace. To compete more successfully with
global enterprises, banks must better comprehend changing client expectations anduse
cutting-edge information technology systems (Malhotra & Mukherjee, 2004). In
recent years, it has been critical for banks to have a strong and loyal client base in
order to withstand harder economics and more severe competition. To survive the
current fierce rivalry in the banking market, most banks are attempting to develop
convenient banking operations for their consumers. ATMs, money transfers, mobile
banking, and other similar activities fall within this category. Despite the fact that
numerous banks provide similar services, the focus currently is on the quality of
service delivered. Excellent service quality linked with consumer items is a potent
generator for catering to and engaging with clients. Given that many banks offer
homogeneous goods in a competitive environment, banks are focusing more on
Service quality to obtain a competitive advantage. Banks that excel at service quality
might acquire a competitive advantage in terms of increased revenue, client loyalty,
and retention (Kumar et al., 2010).

Customer happiness is considered as a crucial differentiator in a competitive

marketplace where firms fight for consumers and has increasingly become a
fundamental aspect of corporate strategy (Gitman & Carl, 2005). To comprehend the
economic difficulties and options confronting banks, it is helpful to think of them as
companiesand applygeneralmicroeconomicconceptsthatinfluencethesurroundings of
all enterprises. Banks, on the other hand, are specialized enterprises not just in terms
oftheservices theyprovide, but also in terms ofhowand bywhothoseservices are
supplied (John, 2003). Customers nowadays encounter several issues with the services
and overall customer satisfaction supplied by banks. According to research, many
foreign internet users exhibit comparable habits and preferences
acrosscountries(Masukujjaman&Akter,2010).Otherscholarshaveinvestigatedthe
2

internet in the context of traditional civilizations while being constrained by national

borders. Some have researched e-banking client preferences. Some have studied the
growth of e-banking and the success criteria in various e-delivery channels in the
banking situation (Sohail & Shanmugham, 2003).

Customersare critical to the growth and existenceof anyorganization, and this is true
for the banking industry as well. Since a result, there is a need not only to delight
clients, but also to keep them, since this may lead to improved profitability and
increased efficiencyofbanks. In this dayand age, technologyaffects everyone's lives,
and online banking is one of the technologies that is rapidly expanding in banking
practice. Furthermore, people are increasingly transitioning from conventional
banking to online banking due to a variety of advantages such as cost and time
efficiency. In this day and age, technology has an impact on everyone's life, both
qualitatively and quantitatively. The rapid advancement of information technologyhas
permeated the lives of millions of individuals and caused significant changes in the
global economic and corporate environment (Belbase & Paudel, 2023).

Banking technological advancements have accelerated client communication and

transactions. It is described as a bank providing information or services to its clients
via the internet. It is seen as an additional channel that is used along with existing
channels to provide convenient banking from home or at work whenever needed,
without having to pay for the expenses associated with visiting a branch, such
traveling there or standing in line. Online banking removes physical and geographic
limits as well as temporal constraints from financial services (Simon & Thomas,
2016).

Customers today are looking for a variety of benefits from a bank, such as higher
service quality, lower transaction fees, complaint handling, a sign of prestige, and
access to new products through various channels, and this scheme forces banks tolook
for new ways to satisfy customers before any other bank or financial service provider
does (Winer, 2001). As a result, in order to be more profitable in the market and
improve an organization's performance, particularly a service provider company,
[Link]
3

such components enables organizations to fulfill their goals by delighting their

consumers, resulting in customer loyalty and retention (Claude, 2022).
Maintaining a high level of service quality is critical to increasing customer
satisfaction and winning the competition (Duncan & Elliot, 2002). This suggests thata
service provider's success is dependent on providing constant quality service and
sustaining relationships with clients (Panda, 2003; Belbase, & Paudel, 2023).

This is intended to influence client happiness and loyalty for a service provider.
Service quality influences organizational outcomes such as performance superiority
(Poretla & Thanassoulis, 2005), increasing sales profit (Levesque & Mc. Dougal,
1996; Duncan & Elliot, 2002), and market share (Fisher, 2001), improving customer
relations, enhancing corporate image, and promoting customer loyalty (Newman,
2001; Ehigie, 2006). Furthermore, repurchase intentions were found to be connected
to service quality and customer satisfaction (Levesque & Mc. Dougall, 1996;
Newman, 2001; Claude, 2022).

Customer satisfaction is essential for success and survival in today's competitive

banking environment. Most academics propose that a high level of service quality be
supplied by the service provider to attain a high level of customer happiness, as
service quality is typically regarded an antecedent of customer satisfaction (Anderson
1994; Cronin&Taylor,1992;Joshi, 2021). In this respect, thepurposeofthis studyis to
look at the impact of service quality aspects (tangibility, responsiveness,
dependability,andassurance)oncustomersatisfactioninNepalesecommercialbanks.

1.2 ProblemStatement
It is critical that service organizations assess and monitor service quality and
satisfaction in order to influence their customers' behavioral intentions (Saha &
Theingi, 2009). In today's competitive market, consumers are becoming more awareof
their options for services and service providers. As a result, expectations grow, and
consumers become more critical of service quality.

In today's extremely competitive and international economy, customer contentment is

a highlysought after phenomena. Customers todaydemand more than just low prices;
theywanthelpful,trustworthy,[Link]
4

embraced the use of information and communication technology in their service

delivery at a rapid pace. Huge sums of money have been invested in the
implementation of self-service and virtual banking services with the goal
[Link],the quality,availability,and expenseof
accessing telecommunication infrastructures, a lack of competent staff, poor internet
penetration, a lack of bank accounts, and a lack of timely delivery of physical items
have all hampered e-commerce adoption (Jalal et al., 2011).

Banks now operate in a rapidly changing environment, fueled by increased

competition, rapid developments in financial instruments, goods, and services,shifting
customer needs, and explosive expansion in information technology. Banks that
perform well across all trend lines will survive the financial technologyrevolution that
has produced an era of informational standardization of banking services (Gazi et al.,
2021).

Technology offers clients with a streamlined path to acquiring banking products that
were previously unavailable due to the large capital investments necessary to solve
internal obstacles. The main issue is that banks must give clients not just what they
want, but also when and how they want it. However, in such conditions, particularlyin
Nepal, the perceived quality of services supplied by banks falls short of client
expectations (Joshi, 2021). This is true for all metrics of service quality in general, as
illustrated by the problem of a lack of well-trained and professionally competent
banking staff.

Offensive and bad attitude and behavior on the part of bank employees in their
interactions with present and potential clients, insufficient facilities and equipment to
perform contemporary banking services, Excessively extensive processes for
responding to consumer demands Both public and private banks have been judged to
be deficient in terms of infrastructure and branch placement (Tigineh et al., 2012).
Updating knowledge about customer satisfaction levels in terms of service quality
across banks in general, and Abyssinia bank in particular, is thus critical for
understanding the elements that impact customer contentment (Janahi & Mubarak
(2017).
5

Tien et al. (2021) discovered that the elements of dependability, system, guarantee,
interest rate and cost, tangible factors (facilities and forms), and tangible factors
(facilities and forms) had a favorable impact on customer satisfaction at Vietcombank
in Ho Chi Minh City. Toor et al. (2016) discovered a significant association between
service quality characteristics and customer satisfaction in Pakistani E-banking, with
higher weightage given to dependability, responsiveness, and assurance among the
five factors. We may infer from this study that service quality in E-banking leads to
pleased clients.

Joshi (2021) showed a statistically significant positive influence on customer

satisfaction. It indicates that better service quality contributes to greater customer
satisfaction. Claude (2022) found that there was a strong link between technology,
electronic mobile devices, electronic banking transactions, and financial regulations
and their effects on consumer satisfaction. Belbase and Paudel (2023) found a
favorable association between four factors reliability, responsiveness, assurance,
tangibles and consumer satisfaction. In this competitive environment, Nepalese banks
strive to build and maintain relationships with their clients by using customer
relationship management. The goal of this study is to look at the influence ofcustomer
relationship management on customer satisfaction in Nepal's banking business. The
tries to answer the following questions:
 What are the digital banking service quality major factors in term ofreliability,
responsiveness, assurance, tangibility and empathy in Nepalese commercial
banks?
 Is there any relationship between reliability, responsiveness, assurance,
tangibility and empathy and customer satisfaction in Nepalese commercial
banks?
 Do the impact of reliability, responsiveness, assurance, tangibility andempathy
have an impact on customer satisfaction in Nepalese commercial banks?

1.3 Objectivesof theStudy

The main objective of the study is to analyze factors influencing on customer in
commercial banks of Nepal. The other specific objectives are;
6

 To explore the state of digital banking service quality in term of reliability,

responsiveness, assurance, tangibility and empathy in Nepalese commercial
banks.
 To assess the relationship between reliability, responsiveness, assurance,
tangibility and empathy and customer satisfaction in Nepalese commercial
banks.
 Toanalyzetheimpactofreliability,responsiveness,assurance,tangibilityand
empathy on customer satisfaction in Nepalese commercial banks.

1.4 ResearchHypothesis
Basedontheobjectivesofthestudyandthepreviousempiricalevidencesthe following
hypothesis are developed.
1.
H1:Thereissignificantimpactofreliabilityoncustomersatisfactionin commercial
banks of Nepal.
2.
H2: There is significant impact of responsiveness on customer satisfaction
incommercial banks of Nepal.
3.
H3:Thereissignificantimpactofassuranceoncustomersatisfactionin commercial
banks of Nepal.
4.
H4:Thereissignificantimpactoftangibilityoncustomersatisfactionincommercial
banks of Nepal.
5.
H5:Thereissignificantimpactofempathyoncustomersatisfactionin commercial
banks of Nepal.

1.5 Rationaleof the Study

Since Nepalese commercial banks currentlyprovide excellent domestic, international,
and special banking services to their esteemed and valuable customers, this type of
research can be carried out to serve various purposes of the bank by containing the
most useful information to service quality improvement decisions.

It also assists the bank in taking remedial activities based on the given
recommendations,andthestudyservesasaspringboardforotherresearcherstodoin- depth
research on the relevant variables of customer satisfaction in Nepalese commercial
banks.
7

The distribution of knowledge by delighted customers accelerates the growth of

[Link],[Link] are
unsatisfied, marketers and bankers must ask them why they are dissatisfied and strive
to remedy the situation as thoroughly as possible.

Customers who come to the bank to complain must be encouraged. They must
attentively consider each and every client complaint and even take action to make
them happy. In this context, it is also critical for both customers and bankers.

1.6 Limitationsof theStudy

Themajorlimitations ofthe studyareasfollows;
 The study focuses on the customer satisfaction with digital banking service in
commercial banks in Nepal and thus does not embrace the other marketing
aspects.
 This study is limited inside Kathmandu Metropolitan City and requires areas
where targeted responses would be available, so it might not represent the
overall consumer’s view of Nepal.
 The data analysis section has relied on primary data to greater extent, and the
accuracy of the data depends upon the reliability of the opinions of the
respondents.
 The sample size is not more than 200. So, the generalization will be very
difficult.
 The sampling method used in this study is non-probabilistic sampling
technique. Thus, it mayhave some errors resulting from the sampling method.
8

CHAPTER - II
LITERATUREREVIEW

This chapter attempts to assess the relevant body of knowledge in order to grasp the
concept of customer satisfaction with the quality of online banking service from an
academic viewpoint. First and foremost, the literature that relates the research
questions and objectives. There is a review of several books on the subject under
discussion. This chapter includes a theoretical review, an empirical review, and a
research gap.

2.1 TheoreticalReview
2.1.2 TheoriesofCustomerSatisfaction
This section's review of general ideas of customer satisfaction helps provide a clearer
picture of how consumers are happy in banks, despite differences in particular
procedures among banks. Some customer satisfaction ideas are as follows:

[Link] TheDissonanceTheory
A person who receives a low-value product instead of a high-value one would notice
thediscrepancyand experience cognitivedissonance, accordingto Cardozo (1965). In
other words, psychological discomfort or cognitive dissonance result from unfulfilled
expectations (Yi, 1990). According to this hypothesis, the presence of dissonance
creates demands to reduce it, which might be accomplished by altering the apparent
discrepancy. According to this idea, post-exposure evaluations are mostly a function
of anticipation level since detecting disconfirmation is thought to be psychologically
painful. As a result, customers are said to perceptually distort expectation-discrepant
performance in order to match their past expectation level (Oliver, 1977).

Customersmayfeelpsychologicallystressedoutandtrytode-stressbychangingtheir perception
of the goods, for instance, if there is a discrepancy between their expectations and the
performance of the product (Yi, 1990). Customers may rate a product highly if it
comes at a considerable cost to them personally. Consider the following scenario: a
customer walks into a restaurant they expect to be amazing and is greeted with an
unattractive meal. In an attempt to mitigate dissonance, the patron
whohadmadethelongjourneyandpaidasubstantialamountforthedinnermay
9

argue that the cuisine was not as bad as it appeared or that she like overly prepared
dishes, etc.

Though it can help explain how expectations are not constant and might changeduring
a consuming experience, the Dissonance Theory does not offer a complete account of
consumer enjoyment. For instance, throughout the holiday, the importance given to
pre-holiday expectations may change, and holiday activities may lead to the
establishment of new expectations. This indicates that depending on how well the
previous contact performed, customers' expectations regarding the room may shift as
they go from one experience to the next, such as from the hotel's reception to theroom
or the restaurant (Danaher & Arweiler, 1996).

[Link] TheContrastTheory
The contrary view of the dissonance theory is implied by the contrast theory. This
hypothesis states that consumers tend to exaggerate discrepancies between
expectations and results when the actual product's performance does not meet
consumer expectations (Yi, 1990). A customer who receives a lower-value product
than anticipated will, in accordance with the Contrast theory, exaggerate the variance
between the expected and actual products (Cardozzo, 1965). This theory states that a
product's performance that doesn't live up to expectations will be given a lower
evaluation than it deserves (Oliver & DeSarbo, 1988). Stated differently, the Contrast
Theory postulates that when expectations are not met, the subject will either react
favorably or unfavorably to the disconfirmation experience, where a positive
disconfirmationwillleadtoahighproductappraisalandanegativedisconfirmationto a low
evaluation (Oliver, 1977). Regarding the previously described restaurant, the patron
may assert that it was among the worst experiences of their life, that the food was
unfit for human eating, and so forth.

[Link] TheComparisonLevelTheory
Several scholars have attacked the Expectancy-Disconfirmation paradigm, arguing
that it assumes that the fundamental predictor of consumer happiness is the
expectations produced by producers, business reports, or other sources (Yi, 1990). La
Tour and Peat (1979) stated that the EDP bypasses the other sources of expectations,
suchastheconsumer'spriorexperienceandtheexperienceofotherconsumerswith
1

comparable structures. Thibaut and Kelley (1959) offered a refinement to the

Comparison Level Theory. Unlike the Expectancy-Disconfirmation paradigm, which
uses predictive or situationally-produced expectations as the comparison standard, the
Comparison Level Theory contends that there are multiple basic determinants of a
product's comparison level: (1) consumers' previous interactions with similarproducts,
(2) contextually generated desires (those created through marketing and promotional
efforts), and (3) the experience of other consumers who serve as referent persons.

LaTour and Peat (1979) discovered that experience-based standards or norms serveas
a foundation for comparisons in consumer satisfaction evaluations by applying the
Comparison Level Theory to the confirmation/ disconfirmation process. They
discovered that situationally generated expectations had minimal influence on
consumer satisfaction, but expectations based on earlier experiences were the most
influential predictor of customer pleasure. This research implies that when customers
have personal experience and relevant knowledge about other consumer experiences,
they may assign less weight to manufacturer-provided information (Yi, 1990).

[Link] TheValuePerceptTheory
Accordingto Westbrookand Reilly(1983) the Expectancy-Disconfirmation paradigm
was not the best model for explaining consumer satisfaction since
satisfaction/dissatisfaction is more likely to be driven by comparison criteria rather
than expectations. As an alternative to the Expectation Disconfirmation paradigm,
theyoffered a Value-Percept Disparityhypothesis, initiallydeveloped by La Tour and
Peat (1979). Westbrook and Reilly suggest that what is expected from a product may
or may not correlate to what is wanted or valued in a product, criticizing thepredictive
expectations utilized as a comparison standard in the classic Disconfirmation
paradigm. In contrast, what is valued may or may not match to what is expected.
Thus, values, rather than expectations, have been advocated as a superior comparable
measure for explaining consumer satisfaction/dissatisfaction. According to Westbrook
and Reilly (1983) satisfaction is an emotional reaction generated by a
cognitiveevaluativeprocedureinwhichperceptions ofoffersarecompared withone's
values,requirements,wants,[Link]'sdesiresandone's
1

values (value-perception) implies the increasing level of unhappiness, similar to the

Expectancy/ Disagreement paradigm.

2.1.2 MethodstoAssessCustomerSatisfaction
According to the findings, client affective states had a direct influence on CS/D
[Link],whichdetermine the
customer's contentment or dissatisfaction. Thus, in addition to the cognitive
knowledge that expectations were not met, the emotions surrounding the post-
acquisition process appear to impact product satisfaction (Gazi et al., 2021). Ahandful
of the strategies listed below can be used to assess client satisfaction.

ComplaintandSuggestionSystem
To assess consumer happiness, the company may use the complaint and suggestion
system. Forms are accessible at restaurants and motels for guests to sign out their
preferences, dislikes, and ideas. Many firms set up toll-free customer service hotlines
where customers may make recommendations, complaints, or queries. Customer
satisfaction is important to companies such as P&G, General Electric, and Whirlpool.
They set established hotlines with numbers that do not require the use of any gear.
Businesses also utilize email and websites for immediate, two-way contact. Theyhelp
firms develop unique concepts for enhanced goods and services (Mowen, 1990).

CustomerSatisfactionSurveys
Companies may gain direct evaluations of consumer satisfaction by conducting
surveys on a regular basis. Companies can call clients or send them surveys to
understand what they think about the company's goods, services, and performance.
According to research, even if one out of every four transactions is not satisfying to
the buyer, less than 5% of them will register a complaint. Most customers will lower
their purchasing or switch suppliers. Period surveys are used by respondent firms to
get firsthand data on client happiness. When obtaining data on customer satisfaction,it
is beneficial to inquire more about repurchase intention and the possibility or desire to
refer the firm and brand to others (Tien et al., 2021).
1

GhostShopping
It may also be used to assess customer satisfaction. Under this scenario, the company
may hire a few people to pose as prospective consumers in order to get feedback on
the benefits and drawbacks of purchasing both its own and its competitors' [Link]
type of shopper can even evaluate how the company's sales personnel behave to
certain situations. Managers should sometimes leave their workstations, enter
unexpected sales settings for their firms and rivals, and see how they are treated.
Managers might take a different approach and phone their own company with
questions and complaints to see how the calls are handled (Lamichhane, 2018).

LostCustomerAnalysis
Reaching out to customers who have switched to a competitor or stopped purchasing
is another effective way to gauge consumer satisfaction. Businesses may recoup a
considerable portion of lost revenue by reaching out to customers, listening to their
concerns, and really seeking to resolve the problem (Siddiqi et al., 2018).

2.1.3 RelationbetweenCustomerSatisfactionandServiceQuality
In today's banking business, both private and state banks are involved in market
rivalry regarding the quality of their services in all aspects of their competitive
strategies. This is because customers are becoming more aware of the need to select
the bank that provides higher-quality services relative to the level of satisfaction they
expect, and as a result, various banks have developed winning strategies that provide
the best service quality in order to outperform their competitors in the competitive
market. Numerous research have been conducted to investigate the relationship
between customer expectations, perceived service quality, and customer pleasure
(Zeithaml et al., 1996). Customer satisfaction and service quality have a significant
association (Parasuraman et al., 1985; 1988). Increased bank service quality can
satisfy and promote attitudinal loyalty, resulting in the retention of valued clients
(Nadiri et al., 2009).

Increased customer satisfaction stems from a better degree of perceived service

quality. Customers would be disappointed if perceived service quality is lower than
intended service quality (Jain & Gupta, 2004). According to Cronin and Taylor
(1992),contentmentissubordinate toqualitysincequalityisone of the servicefactors
1

considered when determining customer satisfaction. According to Parasuramanet et

al., (1985) and Zeithaml et al., (1996) providing quality services to consumers is a
critical strategy for the success and survival of any commercial organization.
Customer satisfaction and attitudinal loyalty are determined by the quality of services
provided (Ravichandran et al., 2010).

According to studies, service quality is increasingly recognized as a critical

component of any company's success (Parasuraman et al., 1988), and the banking
industry is no exception. Client satisfaction in retail banking was highly impacted by
the service provider's performance on the relational and core components of services,
according to Parasuraman et al. (1988).

Service quality has become a popular metric for assessing the performance offinancial
services (Cowling & Newman, 1995). Customers are loyal if banks provide more
quality services than competitors (Dawes & Swailes, 1999). Banks can only increase
profits if they put themselves in better position than competitors within a specific
market (Davies et al., 1995). Customer happiness and quality of service havea positive
linear connection. As a result, banks must prioritize quality of service and customer
happiness as a key strategyin the competitive market (Chaoprasert & Elsey, 2004).

2.1.4 ServiceQualityDimensions(ServiceQualityModel)
According to Johnston (1995) identifying the drivers of service quality is required in
order to specify, measure, regulate, and enhance customer perceived level of service.
SERVQUAL (Parasuram et al., 1988) and SERVPERF (Cronin and Taylor 1992) are
the most often used measures in measuring perceived service quality. Both are the
product of research from the US School of Quality; consequently, among the models
for evaluating service quality, the SERVQUAL (service quality) model created by
(Parasuraman et al., 1985) is the most recognized and implemented modelin a variety
of sectors.

Parasuraman et al. (1988) established the SERVQUAL model to assess service

quality,whichpresentedafive-dimensionalconstructencompassingperceivedservice
qualitytangibles,dependability,responsiveness,assurance,andempathy
1

(Parasuramanetel al., 1988; Zeithaml et al., 1990). As a result, the SERVQUALmodel

is used in this study to assess customer satisfaction with electronic banking services
provided by a select group of banks.

Reliability
It comprises two concepts: reliabilityand consistency in performance. Reliability also
entails keeping promises in areas such as invoicing accuracy, good record
maintenance, and deliveringservices within an acceptable time frame. It also refers to
the proper technical operation of a self-services technology and the precision with
which services are delivered. Many writers have discovered that dependability plays
an important role in determining service quality (Davis et al., 1989; Parasuraman et
al., 1988). And dependability is one of the most important aspects for clients when
evaluating service quality. Customers, according to Zeithaml et al. (1996), should be
especiallyimpacted bythedependabilityofnewtechnologysinceitmaybe connected with
hazards such as the equipment failing.

Service dependability, according to Paul et al. (2016), is a critical component of

service quality. It has also been shown that dependability is the most essential aspect
in assessing the quality of a service. Performance, or dependability, is a critical
attribute that is impacted bycomputer and associated technological research (Davis et
al., 1989). Finally, Dabholkar (1996) discovered that accuracy and dependability are
appropriate indicators for evaluating technology-related services.

Responsiveness
The extent of participation and care for consumers in need of assistance is determined
byresponsiveness. Understanding theneeds and desires of clients is also partofbeing
responsive. It also includes flexible operation hours, personalized attention from
personnel to clients, responsiveness to customer concerns, and consumer safety in
their transactions (Kumar et al., 2009; Othman & Owen, 2001).

Assurance
Parasuramanetal.(1985)definedassuranceasstaffmembers'expertise,courtesy,and
[Link]
1

(2020), confidence in British banks includes the following elements: polite and
friendly people; financial coaching; interior comfort; ease of access to account
records; and a management team with experience and competence. This includes
assurances that account security and financial activity records will not be exposed.
2004 (Yang and Fang). Another important factor in consumers' decision to utilize
internet banking is security. Individuals are often concerned about security, which is
why they are hesitant to utilize online banking (Madu & Madu, 2002).

Empathy
As defined by Parasuraman et al. (1985) empathy is the caring and individualized
service that a company provides to its customers. It requires giving each consumer
personalized attention, having staff members who understand their requirements, and
keepingconvenient business hours. Khamis and Rashid (2018) characterized empathy
in their research of private sector banks as recognizing the specific requirements ofthe
client, delivering individualized attention, keeping the customer's best interests at
heart, and offering flexible operating hours.

Tangibility
Parasuraman et al. (1985) defined tangibility as the physical appearance of written
materials, staff, equipment, and facilities. Janahi and Mubarak (2017) defined
tangibilityin their studyof private sector banks as havingmodern-lookingequipment, a
physical facility, well-groomed individuals, and visually appealing items.

2.1.5 CustomerSatisfactioninBankingSector
Customer happiness, according to Tsoukatos and Rand (2006) was critical to long-
term corporate success. To maintain or increase market share, firms must outperform
rivals by providing high-quality products or services that satisfy [Link]
to Magesh (2010) satisfaction was a feeling of joy because one possesses something
or has accomplished something. It was the act of meeting a need, want, demand, or
anticipation. Customers contrast their expectations of a certain product or service with
its actual advantages. According to Kotler and Armstrong (2010) satisfaction is
defined as a person's sentiments of joy or disappointment as a result of comparing a
product's perceived performance to expectations. Customers' sentiments and beliefs
can have an impact on their degree of satisfaction.
1

According to Claude (2022) the capacity of a product or service to meet a customer's

needs or expectations was assessed or evaluated by their degree of satisfaction or
discontent. According to Razak et al. (2007) a customer's total pleasure wasinfluenced
by how well they score a set of experiences associated with a certain service provider.
It has been observed that a company's emphasis on matching customer expectations
increases satisfaction. When customers are satisfied with a company's services, they
become loyal customers, and the company keeps them. It was beneficial to the
company since it may lead to more income, a larger market share, and a larger
clientele (Belbase & Paudel, 2023). Customer satisfaction has become
increasinglysignificant as a factor in determininga bank's competitiveness as a result
of rising competition (Berry et al., 2002).

Continuousandsystematicassessmentofsatisfactionlevelisrequired(Chakravartyet al.,
1996). Because a delighted client is a true asset for any firm, ensuring long-term
prosperityevenintimes [Link].(2000)saidintheirstudy that
pleased consumers repeat their purchase of the items and also create new customers
by spreading the word about it to others. Dissatisfied customers, on the other hand,
may migrate to other products/services and spread a bad word to others. Customer
satisfaction is defined as a collection of feelings or outcomes associated with a
customer's experience with a product or service (Solomon, 1998). As a result, firms
must assure client pleasure with their goods/services.

2.2 EmpiricalReview
Kumbhar (2011) explored customer satisfaction elements in e-banking: some data
from Indian banks. This study examined the primary elements influencing customer
satisfaction in e-banking service settings (service quality, brand perception, and
perceived value). This study also looked at how service quality affects brand
perception, perceived value, and satisfaction in e-banking. Customers' surveys were
used to acquire the necessary data. Following a review of the literature and talks with
bank management as well as specialists in customer service and marketing, a likert
scale-based questionnaire was designed for conducting customer surveys. SPSS 19.0
was used to analyze the collected data using principle component analysis (PCA).
Perceived value, brand perception, cost effectiveness, ease of use, convenience,
problemhandling,security/assurance,andresponsivenessarecriticalelementsin
1

customer satisfaction in e-banking, according to the results, which explain 48.30% of

the variation. Contact Facilities, System Availability, Fulfillment, Efficiency, and
Compensation are considerably less important, explaining 21.70 percent of the
variance in customer satisfaction. Fulfillment, Efficiency, Security/Assurance,
Responsiveness, Convenience, Cost Effectiveness, Problem Handling, and
Compensation are predictors of perceived value in e-banking, while
Security/Assurance, Responsiveness, Easy to Use, Cost Effectiveness, Problem
Handling, and Compensation are predictors of brand perception in e-banking.

Mistry (2013) studied evaluating customer happiness in the banking sector, with a
focus on Surat City banks. The goal of this study was to determine the elements
influencing customer happiness in banks and examine their influence on customer
satisfaction levels. The questionnaire was administered to 120 people, and theirreplies
were statistically evaluated in SPSS, and the mean of their scores wasobtained.
According to the findings of this survey, customers place the greatest value on the
dependability component. Within that reliability dimension, they place more emphasis
on how banks keep their promises and demonstrate a desire in doing work. According
to the findings of the analysis, the responsiveness of bank workers is ranked second. It
covers factors like as promptness in providing service, readiness to assist consumers,
and so on. Customers place third priority on the assurance element, which includes
factors such as transaction security, consistency in service, and so on.

Sabir et al. (2014) investigated factors influencing customer satisfaction in Pakistan's

banking industry. The study's goal was to investigate the elements influencing
customer satisfaction in Pakistan's banking sector and to discover the link between
Service Quality, Customer Satisfaction, and Customer Loyalty. The study's research
design is quantitative, and the survey research method was employed. Data was
gathered in four cities: Sahiwal, Arifwala, Okara, and Pakpatan. Data was acquired
from 72 respondents using a pre-tested structured questionnaire. According to the
findings of this study, there is a substantial association between service quality
features and customer happiness. It was also shown that there is a positive association
between customer satisfaction and customer loyalty. This study shows that service
excellenceleadstopleasedcustomers,andcustomerpleasureleadstocustomer
1

loyalty. Banks may get a competitive advantage in today's competitive market by

delivering greater services to their consumers.

Simon and Thomas (2016) investigated the effect of electronic banking on customer
satisfaction in a sample of Kenyan commercial banks. The study's overarching goal
was to examine the impact of electronic banking on customer satisfaction among
Nairobi's first-tier banks. A sample size of 225 respondents was chosen using the
stratified sampling procedure. Structured questionnaires were used to obtain primary
data from individuals. The researcher used descriptive statistical methods to conduct
preliminary data analysis. In order to ascertain the relationship between the research
variables, a regression analysis was also carried out. The study concluded, based on
the data, that customer satisfaction is significantly impacted by the flexibility ofonline
banking. Moreover, a large number of customers use online banking due to its ease of
use, and customized internet banking greatly increases customer satisfaction.
Thepollalsoshowedthatcustomersatisfactionwasonlylittleimpactedbytheeaseof use and
friendliness of online banking. The poll also revealed that customer satisfaction is
significantly impacted by how simple mobile banking is. In addition,the poll found
that customer satisfaction was significantly impacted by ATM privacy, accessibility,
and user-friendliness. Moreover, the use of ATM cards at supermarkets and the
reasonableness of ATM rates have little effect on customer happiness. Customer
satisfaction is significantly impacted by the point of sale system's performance,
according to the study. Ultimately, it was evident that internet banking had the least
influence on consumer satisfaction, while mobile banking had the biggest, followed
by automated teller machines and point-of-sale systems. Banking institutions should
enhance their online banking to make it easier to use, faster, and more versatile. To
increase customer happiness, financial institution management should enhance the
mobile banking application.

Worku et al. (2016) investigated the effect of electronic banking on customer

satisfaction in the Ethiopian banking market. This study set out the objectives to find
out how electronic bankingaffected customer satisfaction in comparison to traditional
brick and mortar banking services; how it related to age, occupation, and education;
how it affected branch visits; how well-informed customers were about e-
banking;[Link],
1

percentages, regression analysis tests to explain the factors that determine customers'
satisfaction with e-banking, independence t-tests to determine whether or notcustomer
visits to offices before and after e-banking are significant, and chi-square
independence tests to determine the relationship between demographic factors and e-
banking. It was found that the majority of e-banking users are young, educated,
salaried, and students, according to the study's findings. Business men and women do
not actively use e-banking, there is a correlation between e-banking and demographic
characteristics, e-banking is currently only available to current account holders and
savers, and e-banking has improved customer satisfaction, decreased the frequency of
bank halls for banking services, and shortened customer wait times. In a similar vein,
some customers had no idea that using e-banking would cost them money; bank
customers reported feeling happier after using e-banking; users could monitor the
activitiesoftheiraccounts; and thereis agood probabilitythat e-bankingservices will
expand in the city.

The influence of quality of service on customer satisfaction in private and public

sector banks was investigated by Paul et al. (2016). The goal of this study was to
compare private and public sector banks in India and investigate the influence of
several service quality characteristics on overall customer satisfaction. The authors
demonstrate how a number of variables influence customer satisfaction both
negatively and favorably using forward stepwise regression. The authors gathered
information from 500 Indian respondents, 250 of whom were users of private sector
banksand250ofwhom [Link] 65
percent response rate. Accordingto thefindings ofthis study, in the caseofprivate sector
banks, understanding of products, reaction to need, query resolution, rapid service,
quick connection to the proper person, and attempts to decrease queue time are the
aspects that were positively related with overall satisfaction. Customer assistance,
appearance, and follow-up are all adversely related with customer satisfaction. In the
case of public sector banks, however, understanding of the product and quick service
are favorably related, whereas appearance is the sole aspect that is adversely
associated. The service quality components that were positively relatedwere not the
same in public and private sector banks.
2

Toor et al. (2016) investigated the influence of E-Banking on customer satisfaction:

Evidence from Pakistan's banking sector. The purpose of this study was to look at the
influence of E-banking factors on customer satisfaction in Pakistan. The study's
research design is quantitative. Data was collected using an already tested
questionnaire from 264 E-banking customers from various cities in Pakistan.
According to the study's findings, there was a significant association between service
quality characteristics and customer satisfaction in Pakistani E-banking, with higher
importance given to dependability, responsiveness, and assurance among the five
aspects. We can infer from this study that service quality in E-banking leads topleased
clients, and banks may gain a competitive edge by providing higher-quality services
to their customers in today's emulous environment.

Janahi and Mubarak (2017) investigated the relationship between customer service
qualityandcustomerhappinessin Islamicbanking. Theaimofthisstudywastomake a
contribution to the literature on Islamic banking by examining the impact of several
quality of service metrics on customer satisfaction. The results demonstrated that all
hypotheses were supported and statistically significant, suggesting that customer
satisfaction with Islamic banks was positively impacted by the caliber of customer
service provided. In the context of Islamic banking transactions, all implemented
elements in this study—Compliance, Assurance, Reliability, Tangibility, Empathy,
and Responsiveness—showed how important it is to incorporate service quality
components in order to attain a high degree of customer satisfaction.

Siddiqi et al. (2018) used a structural equation modeling technique to investigateCRM

aspects influencing customer satisfaction in the Bangladeshi banking [Link] a
result, Structural Equation Modeling was used on a sample size of 210 toidentify
those elements, investigate their interaction, and estimate their combined influence on
customer satisfaction. Three latent factors were established in this respect, namely
orientation to customers, experience of customers, and service process. The outcome
indicates that, of the three factors considered, orientation to customers and experience
of customers have a substantial influence on each other and on customer satisfaction
when combined, whilst the other element, service procedure, has been shown to be
insignificant. The study also evidenced the hypothesis thatCRM aspects help
organizations improve customer satisfaction.
2

Lamichhane(2018)evaluatedtheimpactofcustomersatisfactiononservicequalityin
Nepalese commercial banks. This study examined bank customers' perceptions of
service quality elements that explain customer satisfaction. This study used a
descriptive and regression research design with the SERVQUAL technique toexamine
service quality parameters that influence customer satisfaction. In 2017, a study was
done in Kathmandu valley to obtain data from bank clients using a
[Link],250surveyswereissuedtobankclients,withonly175
returned in acceptable condition, representing a 70% response rate. According to the
study's findings, bank service quality parameters influence customer satisfaction.
Finally, this study indicated that the reliability, assurance, palpable, empathy, and
responsiveness of bank service quality aspects impact the level of customer
satisfaction. In Nepalese commercial banks, tangible, assurance, and empathy are
strong and have greater explanatory power of client happiness.

Wilson and Christella (2019) investigated the elements that influence consumer
satisfaction in the Indonesian e-commerce market. The goal of this research was to
examine the impact of website design, dependability, time saved, product diversity,
and delivery performance on consumer satisfaction in the Indonesian e-commerce
business. The questionnaire is used as the data collection instrument. The number of
samples acquired in this study was 200, of which 15 should be excluded since the
questionnaireswerenotcompletelyfilledout,resultinginatotalof185samplesbeing
declared useable and utilized for this investigation. The PLS-SEM Method was usedto
evaluate the data. According to the findings of this study, dependability, timesaved,
product variety, and delivery performance all have a positive and substantial influence
on customer satisfaction, with product variety having the greatest effect among the
other categories. This study, however, discovered that there was no substantial
relationship between website design and consumer happiness. This study also advises
that companies specialized in the e-commerce business should always improve their
products and services to their clients, which will increase their likelihood of repeating
their purchase experience with the firm in the future.

Leelavathi and Saravanan (2020) investigated the influence of e-banking services on

[Link] studywas
togiveanexaminationofclientattitudesandsatisfactionwiththreefinancialservice
2

technologies: automated teller machines (ATMs), mobile banking, and internet

(online) banking. The study began with a correlation and regression analysis of valid
replies from a convenience sample of bank clients. The purpose of this study was to
look into the influence of E-banking factors on consumer attitude and satisfaction in
the Chennai District. Data was collected via questionnaire from 200 E-banking
customers from various regions in the Chennai district. The study's findings
demonstrated a significant association between service quality parameters and
customer satisfaction in E-banking in the Chennai District. This study showed that
service quality in E-banking leads to fulfilled customer demands and wants, and that
banks may acquire a competitive edge in today’s world by providing better-quality
services to their consumers. The findings indicated that the online banking service
quality parameters had a substantial influence on internet banking customer
satisfaction. Each of the dimensions, namely efficiency, system availability,
fulfillment, privacy, contact, responsiveness, and contact, contributes 70% to overall
consumer satisfaction in internet banking. The study presents empirical data to
demonstrate that the online banking service quality characteristics are an essential
aspect in satisfying consumers since they are all positively associated to customer
satisfaction.

Tien et al. (2021) investigated the elements that influence customer satisfaction at
Vietcombank in Vietnam. The purpose of this study was to identify the elements
influencing customer satisfaction and service quality for Vietcombank in Ho ChiMinh
City. The quantitative research approach was used, with the study objective being
clients who directly involve at the bank. There are 347 valid surveys that have been
analyzed using exploratory factor analysis (EFA) and linear regression to assess the
study hypotheses. The findings revealed that the elements of dependability, system,
warranty, rate of interest and cost, and tangible factors (facilities and forms) had a
favorable impact on satisfaction of customers. In which the relevance of two aspects,
interest rate, service charge, and system, in boosting customer satisfaction with the
service, hence increasing loyalty to the bank, is emphasized. CRM is a smart
businessapproach foridentifyingthebank's mostlucrativeclientsandnewcustomers. As a
result, customer relationship management in the bank is one of the requirements for
the bank to fulfill its objectives.
2

Gazietal.(2021)conductedanempiricalinvestigationofthefactorsofbankingclient
satisfaction. The purpose of this study was to identify the elements that influence
customer satisfaction in Bangladesh's banking industry, because a country's economic
progress and stability are dependent on the effectiveness of its banking sector. The
study attempts to explore and measure the impact of quality of service on customer
satisfaction in the banking industry. Data were obtained as a sample from 382
respondents who were clients of 32 chosen commercial banks in Bangladesh. To
obtain the necessary data and information, a pre-structured questionnaire was
employed. Data was analyzed using the OLS regression model and descriptive
statistical methods. The findings of this study showed that service quality (e.g.,
tangibility, dependability, and empathy) has a statistically significant influence on
customer satisfaction. The findings also demonstrate a favorable relationship between
customer satisfaction and service quality parameters in Bangladesh's bankingindustry.
The current study discovered that the service quality aspects (tangibility,
dependability, and empathy) had a considerable beneficial influence on customer
satisfaction in the domestic banking market. The current study's findings recommend
that the Bank Supervisory Authority, the Central Bank of Bangladesh, and bank
management should place special attention on ensuring maximum customer
satisfaction.

Joshi (2021) conducted research on perceived service quality and customer

satisfaction in the Nepalese banking business. The main aim of this study was to
investigate the link between banking service quality parameters and customer
satisfaction in the Nepalese bankingmarket. Data was gathered through an online and
in-person survey of consumers at linked banks, commercial groups, and government
andnon-governmententitiesinKailali.ThedatawasanalyzedusingSPSSversion20,
Pearson's correlation, and multiple regression analysis. The study's findings
demonstrated a favorable association between service quality and customer
satisfaction. Except for tangibility, all service quality parameters showed astatistically
significant positive influence on customer satisfaction. It indicates that better service
quality contributes to greater customer satisfaction. The findings of this study will
assist bank managers in focusing on customer satisfaction in order to compete
competitively in the banking industry. Future academics might focus their research on
the role of customer satisfaction in service quality and customer loyalty.
2

Claude (2022) researched the influence of electronic bankingon customer satisfaction

in Rwanda: the instance of the Kigali Headquarter of the Bank of Rwanda.
Thecurrentstudy'smajorgoalwastolookattheimpactofelectronicbankingoncustomer
satisfaction in Rwanda, specifically at the Bank of Kigali. In this study, validity and
reliability were used since it was easier to maintain high reliability if the experiment
could be performed numerous times and the results were consistent. To allow data
analysis, collected quantitative data were examined using the computer program
Statistical Package for Social Sciences (SPSS) version 23.0. The coefficient of
correlation and descriptive statistics were utilized to determine the impact ofelectronic
banking on customer satisfaction. Regression analysis was performed to
[Link]
descriptive statistics were very beneficial in summarizing the data in this study. The
study revealed that the there was a higher degree of relationship between the study's
dependent and independent variables. Similarly, the R square demonstrated the
relationship between the total variance of all dependent variables and customer
satisfaction. It was concluded that there was a strong link between technology,
electronic mobile devices, electronic banking transactions, and financial regulations
and their effects on consumer satisfaction.

Belbase and Paudel (2023) investigated impact of e-banking on customer satisfaction.

The study's main goal was to investigate the influence of e-banking on customer
[Link]
200 respondents who use banking services using structured questionnaire
methodologies. The research design is descriptive and cause and effect. The data in
this study was analyzed using correlation and regression analysis. This study
discovered a favorable association between four factors and consumer satisfaction.
According to the data, security was the most influential variable on consumer
satisfaction with e-banking.

Table1
SummaryofEmpirical Review
S.N. Authors Title Objective Methodology Findings
1 Kumbhar, Electronic This study Thisstudy Thisstudydiscoveredthatall
(2011). banking evaluatedservice used factors were significant and
serviceand quality,brand correlation werestrongpredictorsoftotal
2

customer perceptionand and multiple e-bankingsatisfaction.

satisfaction: perceivedvalueas regression However,aprincipal
Some majorfactors analysisto componentanalysisshows
evidence affectingon analyzethe thatperceivedvalue,brand
fromIndian customers’ data. perception,costefficiency,
banks. satisfactionine- easeofuse,convenience,
bankingservice issuemanagement,
settings. security/assurance,and
responsivenessarecritical
aspectsine-banking
consumersatisfaction.
2 Mistry, Measuring Thepurposeof The Itwasdiscoveredthat
(2013). customer thisstudywasto questionnaire customersplacethegreatest
satisfaction identifythefactors wastestedon importanceonthe
in banking affectingcustomer 120 dependabilitycomponent.
sector:With satisfactionin respondents Withinthatreliability
special banksandanalyze andtheir dimension,theyplacemore
referenceto theireffectsonthe responses emphasisonhowbankskeep
banksof levelofcustomer were theirpromisesand
SuratCity. satisfaction. statistically demonstrateadesireindoing
testedinSPSS [Link]
andmeanwas findingsoftheanalysis,the
computedfor responsivenessofbank
theirratings workersisrankedsecond.
3 Sabiret Factors Thepurposeofthe Thisstudy Accordingtothefindingsof
al., affecting studywas to used thisstudy,thereisa
(2014). customer analyzethefactors correlation substantialassociation
satisfaction affecting and multiple betweenservicequality
in banking Customer regression featuresandcustomer
sectorof Satisfactionin analysisto [Link]
Pakistan. PakastaniBanking analyzethe thatthereisapositive
Sector. data. associationbetweencustomer
satisfactionandcustomer
[Link]
serviceexcellenceleadsto
pleasedcustomers,and
customerpleasureleadsto
customerloyalty.
4 Simon,& Effect of Thegeneralaimof Thestudyalso Basedonthedata,the study
Thomas, electronic thestudywasto conducteda foundthattheflexibilityof
(2016). bankingon determinethe regression onlinebankinghasa
customer effectofelectronic analysisto significantimpacton
satisfaction bankingand establishthe consumerhappiness.
in selected customer relationship Furthermore,many
commercial satisfactionamong betweenthe consumersutilizeonline
banks, firsttierbankin study bankingbecauseit was
Kenya. NairobiTown. variables. simpletouse,andtailored
internetbankinghasa
significantimpacton
customerhappiness.
Furthermore,thesurvey
revealedthatuser-friendly
ATMs,convenienceofaccess
toATMs,andATMprivacy
allhadasignificantimpacton
2

consumerhappiness.
5 Worku,et TheImpact Thisstudyaimed Thestudy Accordingtothestudy's
al.(2016). ofelectronic toexaminewhat usedtables, findings,themajorityofe-
bankingon impactelectronic percentages, bankingusersareyoung,
customers’ bankinghason chi-square educated,salaried,and
satisfaction customer independency students;businessmenand
in Ethiopian satisfaction. testand womenarenotactivelyusing
banking multiple theserviceofe-banking;
industry:The regression thereisalsoarelationship
caseof analysis. betweene-bankingand
customersof demographiccharacteristics;
Dashenand e-bankingiscurrently
Wogagen availableonlytoholdersof
Banksin savingandcurrentaccounts;
GondarCity. ande-bankinghasimproved
customersatisfaction.
6 Paul, et Impactof Thestudy Thisstudy Accordingtothefindingsof
al., service examinedthe used multiple thisstudy,inthecaseof
(2016). qualityon impactofvarious regression privatesectorbanks,
customer servicequalityon analysisto understandingofproducts,
satisfaction the customers analyzethe reactiontoneed,query
inprivateand satisfaction. data. resolution,rapidservice,
publicsector quickconnectiontothe
banks. properperson,andattempts
todecreasequeuetimearethe
aspectsthatarepositively
relatedwithoverall
[Link]
assistance,appearance,and
follow-uparealladversely
relatedwithcustomer
satisfaction.
7 Toor,et Theimpact Thisresearch Datacollected Accordingtothestudy's
al., ofe-banking workintendsto wereanalyzed findings,thereisasignificant
(2016). on customer investigatethe and associationbetweenservice
satisfaction: effectof E- hypotheses qualitycharacteristicsand
Evidence bankingvariables weretested customersatisfactionin
frombanking on customer usingmultiple PakistaniE-banking,with
sectorof satisfactionin regression. higherimportancegivento
Pakistan. Pakistan. dependability,
responsiveness,andassurance
amongthefiveaspects.
Accordingtothefindingsof
thisstudy,servicequalityin
E-bankingleadstohappy
clients.
8 Janahi& Theimpact Thepurposeto Datacollected Thefindingsshowedthatall
Mubarak, ofcustomer examinethe wereanalyzed hypotheseswereacceptedand
(2017). service impactofdifferent and statisticallysignificant,
qualityon factorsof hypotheses indicatingthatcustomer
customer customerservice weretested servicequalityhada
satisfaction qualityon usingmultiple favorableinfluenceon
in Islamic customer regression. customersatisfactionwhen
banking. satisfaction. interactingwithIslamic
[Link] operationalized
2

factors in this study

(Compliance, Assurance,
Reliability, Tangibility,
Empathy, and
Responsiveness)demonstrated
the need of implementing
service quality
elementsinordertoachievea
highlevelofcustomer
satisfaction.
9 Siddiqi,et CRM The main Thisstudy Theoutcomeindicatedthat,
al., dimensions objectiveofthis used multiple ofthethreefactors
(2018). affecting studywastofind regression considered,customer
customer outtheimpactof analysisto orientationandcustomer
satisfaction CRM on the analyzethe experiencehavebeenshown
in satisfactionofthe data. tohaveasubstantial
Bangladeshi customers of influenceoneachotherand
banking Bangladeshi oncustomersatisfaction
industry:A banks. whencombined,whilstthe
structural otherelement,service
equation procedure,hasbeenshownto
modeling bestatisticallyinsignificant.
approach.
10 Lamichha Service Thisstudy Inthisstudy According to the study's
ne, qualityon analyzedbank descriptive findings,bankservicequality
(2018). customer customers’ andregression parameters influence
satisfaction perceptionin research [Link],
in Nepalese relationtothe designwere thisstudyrevealedthatthe
commercial servicequality used and dependability, assurance,
banks. factorsexplaining SERVQUAL palpable, empathy, and
customer approachwas responsiveness of bank
satisfaction. usedto servicequalityaspectsimpact
analyze the level of customer
servicequality satisfaction. In Nepalese
factors commercialbanks,tangible,
affecting assurance,andempathywere
customer strong and had higher
satisfaction. explainingpowerofclient
happiness.
11 Wilson,& Effect of Thepurposeof Thedata were Accordingtothefindingsof
Christella, socialmedia thisstudywasto analyzed thisstudy,dependability,time
(2019). on Nepal analyzetheeffect usingPLS- saved,productvariety,and
consumer ofwebsitedesign, SEMMethod. deliveryperformanceallhave
purchase reliability,time apositiveandsubstantial
decision. saved,product influenceoncustomer
variety,and satisfaction,withproduct
delivery varietyhavingthegreatest
performance effectamongtheother
towardscustomer [Link],
satisfaction however,discoveredthat
therewasno substantial
relationshipbetweenwebsite
designandconsumer
happiness.
12 Leelavath, Astudyon Thisresearch Thisstudy The study's findings
2

& customer’s workintendedto used multiple demonstrated a significant

Saravanan attitudeand investigatethe regression associationbetweenservice
, (2020). satisfaction impactofE- analysisto quality parameters and
towards bankingvariables analyzethe customersatisfactioninE-
online on customer data. banking in the Chennai
banking attitudeand [Link]
servicesin customer thatservicequalityinE-
VelloreCity. satisfactionin banking leads to fulfilled
ChennaiDistrict. customerdemandsandwants,
andthatbanksmayacquirea
competitive edge in
today'sworld byproviding
better-qualityservicestotheir
consumers.
13 Tien, et Factors Thisstudytriedto The Thefindingsrevealedthatthe
al., impacting discoverthe exploratory elementsofdependability,
(2021). customer factorsaffecting factoranalysis system,warranty,rateof
satisfactionat servicequalityand (EFA)and interestandcost,tangible
Vietcombank customer testingthe factors(facilitiesandforms),
inVietnam. satisfactionfor research andtangiblefactors(facilities
Vietcombankin hypothesesby andforms)hadafavorable
HoChiMinhCity. linear impactoncustomer
regression satisfactionatVietcombank
[Link]
whichtherelevanceoftwo
aspects,interestrate,service
charge,andsystem,in
boostingcustomer
satisfactionwiththeservice,
henceincreasingloyaltyto
thebank,isemphasized.
14 Gazi,et Anempirical Theaimofthis OLS Thefindingsofthisstudy
al., studyof studywas to regression showthatservicequality
(2021). determinants determinethe modeland (e.g.,tangibility,
ofcustomer factorsthataffect descriptive dependability,andempathy)
satisfaction customer statistical hasastatisticallysignificant
of banking. satisfactioninthe toolswere influenceoncustomer
bankingsectorof usedto [Link]
Bangladesh. analyzedata. demonstrateafavorable
relationshipbetween
customersatisfactionand
servicequalityparametersin
Bangladesh'sbanking
industry.
15 Joshi, Perceived Themainpurpose SPSSversion Thestudy'sfindings
(2021). service ofthisstudywas 20, Pearson’s demonstratedafavorable
qualityand toexaminethe correlation associationbetweenservice
customer relationship and multiple qualityandcustomer
satisfaction betweenbanking regression [Link]
in Nepalese servicequality analysishave tangibility,allservicequality
banking dimensionsand beenusedto parametersshoweda
industry. customer analyzethe statisticallysignificant
satisfactionin data. positiveinfluenceon
Nepalesebanking [Link]
industry. indicatesthatbetterservice
2

qualitycontributestogreater
customersatisfaction.
16 Claude, Effect of The mainobjective To test the As a consequence, the study
(2022). electronic of the current linear indicated that the regression
banking on study was to relationship model was statistically
customer investigate the between significant and accurately
satisfaction effectofelectronic predictor predictedtheoutcomesofthe
in Rwanda: banking on variablesand study variables. This
Caseofbank customer outcome indicated a higher degree of
of Kigali satisfaction in variables correlation between the
Headquarter. Rwanda regression study's dependent and
analysis was independent [Link]
used. short, there was a strong link
between information
technology,electronicmobile
devices, electronic banking
transactions, and financial
regulations and their effects
onconsumersatisfaction.
17 Belbase, Impactofe- The main This study This study discovered a
&Paudel, banking on objectiveofthe used favorableassociationbetween
(2023). customer study was to correlationand four factors and consumer
satisfaction. examine the regression satisfaction. According to the
impact of e- analysis to data, security was the most
banking on analyze the influential variable on
customer data. consumer satisfaction with e-
satisfaction in banking.
Nepalese

2.3 ResearchGap
According to the literature research, the many definitions were depending on the
context, circumstance, and environment in which the notion existed. The common
concept that runs across all of the definitions, however, was highlighted by key terms
such as the flow of information via ICT tools to build strong customer relations. In
other words, electronic banking was defined as a technique used by banks to provide
excellent services to their customers.

The literature review also looked at several types of electronic banking. The chapter
also covered the benefits and obstacles of using electronic banking. Finally, empirical
research were examined. Several published and unpublished articles are used to make
the research more successful and to cover gaps in prior investigations. This study aids
in conceptualizing the theoretical framework under which this investigation was
carried out.
3

There is a gap between the current study and earlier studies in terms of some aims,
instruments utilized for analysis, data collecting time, and so on. The topic is also
regarded to represent the distinction between prior and current research. The major
goalhereistogetagenuineconclusiononcustomersatisfactionwith e-bankingbased on
past research. Previous research cannot be overlooked in this context since they serve
as the foundation for the current investigation. To finish this research task, numerous
books, journals, papers, and other published and unpublished dissertations are used as
a guideline to make the research effective and smooth.
31

CHAPTER - III
RESEARCHMETHODOLOGY

The goal of this chapter is to outline the research methods used to achieve the study's
stated objectives. It looks on customer satisfaction and digital banking in Nepalese
banks. This study comprises research design, population and sample design, data
nature andsources,data collectingtools,method ofanalysis, research framework,and
variable definition.

3.1 ResearchDesign
The research design used for this study is casual and descriptive. The different
elements of digital banking services are described using a descriptive study design. In
the same way, the link between the independent variable (digital banking services)and
the dependent variable (consumer happiness) may be ascertained by casualdesign. The
influence of digital banking services being provided on customer satisfaction in
Nepal's banking sector is investigated using a casual research design in this study.

3.2 PopulationandSample,andSamplingDesign
At the present, there are all together 20 commercial banks in Nepal and who are the
customers of these banks are the total population of this study. However, a total
of250questionnairesweredistributedtothebankingcustomer,outofthemonly200
i.e.80 percent valid responses are takes as the sample size in this study. These clients
were chosen using a straightforward sampling method. Convenience sampling, also
known as non-probabilistic sampling, was the method used for the study. Hands-on
distribution of survey questions was done around the Kathmandu Valley to elicit
answers from a range of responder groups. The participants in this study consented to
participate in answering the questionnaire after being solicited when they entered the
banking hall for business.

3.3 NatureandSources ofData andInstrumentofDataCollection

In terms of data sources, both primary and secondary sources were employed to
provide important and relevant data. The major source of data was also employed on
purposeinthestudy'[Link]
32

managers, commercial bank customers, and supervisors of banking customer care

were used to gather this data. Secondary data were gathered from relevant online
reading materials, books in journals, articles, magazines, commercial bank annual
reports,andnewspapers,allofwhichhadaconnection tovariablesaffectingcustomer
satisfaction.

3.4 Methodof Analysis

We utilized frequency tables that provide the proportion of each category and
frequency in an easy-to-understand and interpretable format. To validate the
hypothesis, correlation and regression analyses were performed in addition to the
descriptive analysis.

3.4.1 DescriptiveAnalysis
Descriptive statistics were utilized to describe the respondents' demographic features,
as well as e-banking services and customer satisfaction. To explain the variables,
frequencies, percentages, mean, and standard deviation were determined.

3.4.2 CorrelationAnalysis
The correlation coefficient was used to depict the relationship between e-banking
services and customer satisfaction.

3.4.3 RegressionAnalysis
Toexaminetheeffectofe-bankingservicesoncustomersatisfaction,followingregression model
was used. The model is specified as
Y=β0+β1Reliability+β2Responsiveness+β3Assurance+β4Tangibility+β5Empathy + eit(1)
Y = Customer Satisfaction
β0=Theintercept(constant)
β1,β2,β3,β4,β5, =Theslopewhichrepresentsthe degree withwhichbankingservices quality
and customer satisfaction changes as the independent variable changes by one unit
variable.
e=errorcomponent
33

3.5 ResearchFrameworkandDefinitionoftheVariables
The research is based upon the analysis and interpretation of dependent (customer
satisfaction) and independent variables (Reliability, Responsiveness, Assurance,
Tangibility and Empathy).
IndependentVariables DependentVariables
Reliability

Responsiveness
Customer Satisfaction
Assurance

Tangibility

Empathy

Source:Tooretal.(2016); Lamichhane (2018);Gazi etal. (2021)

IndependentVariables
The independent variables in terms of customer satisfaction determinants are those
components that have an influence on customer satisfaction. The suggested researchof
service quality's independent factors include dependability, responsiveness, assurance,
and tangibility.

Reliability
According to Joshi (2021) dependability is a bank's and its employees' sincerity and
interest in addressing client difficulties and providing accurate services the first time.
Accordingto Gaziet al.(2021)dependabilityisdefinedasprovidingservicesontime,
maintaining an error-free record, keeping one's word, and providing clients with
correct and complete information.

Responsiveness
The extent of participation and care for consumers in need of assistance is determined
byresponsiveness. Understanding theneeds and desires of clients is also partofbeing
responsive. It also includes flexible operation hours, personalized attention from
personnel to clients, responsiveness to customer concerns, and consumer safety in
their transactions (Kumar et al., 2009; Othman & Owen, 2001).
34

Assurance
Assurance is essential in order to provide excellent service in banks. Customers may
becomfortedbyemployees that act with friendliness, respect, appreciation, and anice
look. Furthermore, it entails providing financial advice to clients, establishing a
welcoming environment in banks, and providing clients with readily understandable
and accessible information (Joshi (2021; Gazi et al. (2021).

Tangibility
The physical characteristics of the goods and services provided to customers are
referred to as tangible. For example, the way bank employees respond, the tools they
use, and thematerials connectedto services that catchtheattention ofcustomers (Guo &
Hair, 2008). Service tangibility has physiological, emotional, and cognitive
consequences on both clients and workers (Aslam et al., 2011).

Empathy
Empathy is described as the firm's caring, personalized attention to its clients. The
core of empathy is demonstrating to clients that they are unique and special, and that
their requirements are understood, through personalized or tailored [Link]
want to feel understood and important by companies who offer them with services.
Toor et al. (2016) discovered that empathy has a favorable but negligible affect on
bank customer satisfaction.

Dependent Variable
CustomerSatisfaction
In this study, customer satisfaction is defined as an emotional reaction to an
experience linked with bankingservices in relation to the client's expectations (Simon
& Thomas, 2016). Customer satisfaction may be measured in terms of satisfaction
with the bank's services, favorable impression, continued transactions, and referral.
35

CHAPTER - IV
RESULTSANDDISCUSSION

The primary goal of this study, as described by the researcher in earlier chapters, is
to analyze the satisfaction of customers and digital banking services in Nepalese
commercial banks. As a result, this chapter is divided into three sections that deal
with the discussion's outcomes and analysis. The first portion gave the demographic
profile, descriptive and correlation analysis on study variables; the second section
presented the fulfillment of the linear regression model assumptions; and the third
section presented the regression findings. For further statistical analysis, the data
analysis methodologies utilized for ratio scale measurement, as well as the ratio of
the given dependent and independent variables, were determined. The data gathered
was analyzed using the statistical program SPSS version 26.

4.1 Results
4.1.1 RespondentsDemographicProfile
This section is concerned with the summarization and presentation of demographic
profiles of respondents in the survey. In this part, the gender and age profiles of the
respondents were examined. The Kathmandu Valley was home to all of the
responders.

Table2
GenderSpecification
Options No. ofRespondents Response(percent)
Male 128 64
Female 72 36
Total 200 100
Source:OpinionSurvey, 2023

Table 2 depicts the age wise composition of the respondents in this study. Responses
of [Link]
64.00 percent of responses are achieved from male and it indicates that banks’
majority of the respondents are male. Their out of 200 respondents most of response
are received from male in comparisons to female. However, 36.00 percent female
providedtheirresponseaboutdigitalbankinganditsimpactoncustomersatisfaction
36

in Nepalese commercial banks. From these result male respondents are likely to have
more users with digital banking than females. In this context, Nepalese commercial
banks can identify both male and females respondents as the main participants for the
survey.

Table3
AgeDescriptionofRespondents
Options No. ofRespondents Response(percent)
20-29 70 35
30-39 94 47
40and above 36 18
Total 200 100
Source:OpinionSurvey,2023

Table 3 shows that age description of respondents and found that the 47.00 percent
respondent’s age most of the respondents belong to age between 30-39-age groups.
The lowest percentage age group is 40 and above age group who are customers of
[Link],[Link]
35.00percentrespondedprovidedtheirresponsethatbelongsto20-39agegroupsand
18.00 percent representing the ages of 40 and above. This implies that 82.00 percentof
the total customers of the Nepalese commercial banks were within the active age,
energetic and they can use digital banking etc.

Table4
AnnualIncomeDescriptionof Respondents
Options No. ofRespondents Response(percent)
Up to Rs. 300,000 66 33
Rs. 301,000 to Rs. 500,000 80 40
MorethanRs. 501,000 54 27
Total 200 100
Source:OpinionSurvey, 2023

Table4presentstheincomelevelwiseprofileofrespondentsandfoundthatthe40.00 percent
respondent’s income most of the respondents belong to income from Rs.301,000-
Rs.500,000 groups. The lowest percentage income group is Rs.501,000 and above
group who are customers of commercial banks. However, respondents are
majorityaremediumlevel.Inadditionstothis33.00percentrespondedprovidedtheir
37

response that belongs to income group up to Rs.300000 and 27.00 percent

representing the income of Rs.501,000 and above.

Table5
Years of Using ebankingServices
Options No. ofRespondents Response(percent)
Lessthan 1year 14 7
1-2years 24 12
2-3years 40 20
3-5years 64 32
Morethan 5years 58 29
Total 200 100
Source:OpinionSurvey, 2023

Table 5 shows the length of using e-banking services by the respondents. Out of 200
customers, 64 representing 32.00 percent have been using the e-banking for about 3-5
years whereas a total of 58 representing 29.00 percent are using the services for about
more than 5 years. It was also revealed that, 40 customers representing 20.00 percent
are using the e-banking services for 2-3 years, 24 customers representing 12.00
percent are using the e-banking service services for about 1-2 years and remaining 14
representing 7.00 percent are using the services for less than 1 year.

4.1.2 DescriptiveStatisticsAnalysis
The data in this studyare analyzed usingthe mean and standard deviation methods. A
higher mean value indicates that a greater number of respondents concur that the
variable may have a significant effect on customer satisfaction.

ReliabilityofE-bankingServices
Through descriptive research, this part investigates the influence of e banking service
dependability on customer satisfaction in Nepalese commercial banks. Three
statements are included in this study's definition of dependability. The variable is
quantified on a 5-point likert scale, with 1 being strongly disagree and 5 being highly
agree. The mean and standard deviation of respondents' opinions are computed. The
information shown below depicts the effect of dependability on customer satisfaction
in Nepalese commercial banks.
Table6
38

DescriptiveStatistics ofReliabilityofE-banking Services

Scale ItemsofReliabilityofE-bankingServices Mean Std. Dev.
RL1 Theuseof e-bankingis reliable 3.7400 1.19983
RL2Thebank’swebsiteprovidesalldetailsofproducts and 3.8700 1.09961
services
RL3WhenIhaveaproblemthebankshowsasincere interest in 3.8250 1.04875
solving it
RL4Thebankhasemployeeswhogivecustomerpersonal 3.8550 1.05334
attention
Source: Appendix-I

Table 6 shows descriptive statistics of three different scale items of reliability of e

banking services. Among all scale items, RL2 “The bank’s website provides alldetails
of products and services” had high score mean 3.8700. Scale item RL1 “The use of e-
banking is reliable” had the lowest mean 3.7400. It can be concluded from the above
table the bank’s website provides all details of products and services. Respondents
also feel when they have a problem the bank shows a sincere interest in solving it.

Responsivenessof E-bankingServices
Through descriptive analysis, this section demonstrates the responsiveness of banks' e
banking services. It has three distinct assertions. This concept was assessed using a 5-
point likert scale ranging from 1-strongly disagree to 5-strongly agree. The mean and
standard deviation of the respondents' opinions were computed.

Table7
DescriptiveStatisticsofResponsivenessofE-banking Services
Scale ItemsofResponsiveness ofE-bankingServices Mean Std. Dev.
RS1Bankstaffstell youexactlywhentheservicewillbe 3.8050 1.03067
performed
RS2Fastprocessingatreasonable cost 3.8250 1.03912
RS3Responseofservicethroughebankingisveryarouse and 3.7850 1.14689
quick
RS4Employeesinbank canunderstandcustomers’needs 3.8000 1.07507
Source: Appendix-I
Table 7 shows descriptive statistics of three different scale items of responsiveness of
[Link],RS2“Fastprocessingat
39

reasonable cost” had high score mean [Link] means most of the customers agreed
[Link],thelowest
meanscoreis 3.7850 forthestatementRS3 “Responseofservicethroughe bankingis
veryarouse and quick” which shows that most of the customers agreed less compared
to other statements.

AssuranceofE-bankingServices
Through descriptive research, this part investigates the state of assurance of banks' e-
banking services. Three statements are included in this investigation. The variable is
assessed using a 5-point likert scale: From 1 (strongly disagree) to 5 (strongly agree).
The mean and standard deviation of respondents' opinions are computed. The mean
value represents the average state of the respondents' feelings, while the standard
deviation represents the difference from the average mean of the respondents. The
figures shown below depict the influence of e-banking service assurance on customer
satisfaction in Nepalese commercial banks.

Table8
DescriptiveStatisticsof AssuranceofE-bankingServices
Scale ItemsofAssurance ofE-bankingServices Mean Std. Dev.
AS1Bankstaffshavetheknowledgetoanswermyquestions about 3.9100 0.89212
e banking service
AS2Employeesinbanksprovidesufficienttrustto customers 3.8800 1.03000
placing confidence in heart
AS3Ifeel securedand safein mytransactions with the bank 3.8050 1.02579
AS4Thebank can honortheircommitments 3.8600 0.96699
Source: Appendix-I

Table 8 shows descriptive statistics of five different scale items of assurance of e-

banking services of banks. Among all scale items, AS1 “Bank staffs have the
knowledge to answer my questions about e banking service” had high score mean
3.9100. Scaleitem AS3 “Ifeel secured and safein mytransactions with thebank”had the
lowest mean 3.8050. It can be concluded that customers believed that bank staffs have
the knowledge to answer my questions about e banking service. Moreover, employees
in banks provide sufficient trust to customers as much as possible.
40

TangiblesofE-bankingServices
Through descriptive research, this section demonstrates the influence of tangibles ofe-
banking services on customer satisfaction in Nepalese commercial banks. It has three
distinct assertions. This concept was assessed using a 5-point likert scaleranging from
1-strongly disagree to 5-strongly agree. The mean and standarddeviation of the
respondents' opinions were computed. The mean value represents the average state of
the respondents' feelings, while the standard deviation represents the difference from
the average mean of the respondents.

Table9
DescriptiveStatisticsof TangiblesofE-banking Services
ScaleItemsofTangiblesofE-bankingServices Mean Std. Deviation
TN1Thebanks physicalfeatures arevisuallynice 3.7750 1.12280
TN2Thee-bankingphysicalfacilitiesofbankare modern 3.8150 1.08474

TN3Thebankhasmodernlookingequipmentand tools 3.8300 1.11233

TN4Thebankfacilitiesanddesignsmakecustomers feel 3.8250 1.02940

comfortable
Source: Appendix-I

Table 9 shows descriptive statistics of three different scale items of tangibles of e-

banking services in Nepalese commercial banks. Among all scale items, TN3 “The
bank has modern looking equipment and tools” had high score mean [Link]
item TN1 “The banks physical features are visually nice” had the lowest
[Link] can be concluded that customers agreed on tangibles of e-banking
services is very secured and reliable. In addition, the e-banking physical facilities of
bank are modern.

EmpathyofE-bankingServices
Through descriptive research,thissectiondemonstratestheinfluenceof empathyin e-
banking services on customer satisfaction in Nepalese commercial banks. It has three
distinctassertions.Thisconceptwasassessedusinga5-pointlikertscalerangingfrom 1-
strongly disagree to 5-strongly agree. The mean and standard deviation of the
respondents'[Link]
41

the respondents' feelings, while the standard deviation represents the difference from
the average mean of the respondents.

Table10
DescriptiveStatistics ofEmpathyofE-banking Services
ScaleItems ofEmpathyof E-bankingServices Mean Std. Deviation
EM1Theemployeesofbankscanunderstandcustomer 3.8150 1.04221
specific needs
EM2Banks gives customerindividualattention 3.9500 1.00626
EM3Bankshasworkinghourssuitableforall customers 3.8400 0.99970

EM4Whencustomershaveproblems,employeesinan 3.8350 1.04558

thebank will besupported and encouraging
Source: Appendix-I

Table 10 shows descriptive statistics of three different scale items of empathy of e-

banking services in Nepalese commercial banks. Among all scale items, EM2 “Banks
gives customer individual attention” had high score mean [Link] item EM1
“The employees of banks can understand customer specific needs” had the lowest
mean [Link] can be concluded that customers agreed on banks always gives pay
attention to the customers. Besides that, customers think banks’ working hours is
suitable.

CustomerSatisfaction
Through descriptive analysis, this component depicts the state of client happiness. It
has three distinct assertions. This concept was assessed using a 5-point likert scale
ranging from 1-strongly disagree to 5-strongly agree. The mean and standarddeviation
of the respondents' opinions were computed. The mean value represents the average
state of the respondents' feelings, while the standard deviation represents the
difference from the average mean of the respondents.
42

Table11
DescriptiveStatistics ofCustomer Satisfaction
ScaleItemsofCustomerSatisfaction Mean Std. Deviation
CS1 Iam satisfied withtheservices provided bybank 3.6650 1.14426
CS2Overallserviceofonlinebankingisbetterthanmy 3.8100 1.01442
expectation
CS3IthinkImadethecorrectdecisiontousetheE- 3.8350 1.01138
Bankingservices
CS4Thee-bankingserviceconditionsofthisbankare 3.7900 1.12795
excellent
Source: Appendix-I

Table 11 showed individual scale items of customers’ satisfaction. Among three scale
items CS3 “I think I made the correct decision to use the E-Banking services” scored
the highest mean value 3.8350 with standard deviation 1.01138. Then, scale itemsCS1
“Iam satisfied with theservices provided bybank”scored thelowest mean value 3.6650
and 1.14426 standard deviation. It is concluded from the study that the customers
think they take the correct decision to use the E-Banking services. Moreover,
consumers are highly satisfied overall service of online banking and meet their
expectation.

4.1.3 SummaryofDescriptiveAnalysis
To identify digital marketing and its impact on customer satisfaction in Nepalese
commercial banks, the mean and standard deviation of each variables were analyzed.
Using reliable sources that Creswel (2012) gave, the decision rule (cut-off point) for
the mean values was determined and interpreted. Creswel (2012) states that a mean
value of < 1.5 indicates very low, 3.5-4.5 indicates high, 2.51-3.5 indicates moderate,
and ≥4.5 indicates very high. The researcher reported the participants' mean score for
each category of variable descriptions based on this mean score assessment.
43

Table12
SummaryofDescriptiveAnalysis
StudyVariables Mean Std. Deviation Evaluationof
MeanScore
Reliability(RL) 3.8225 .83448 High
Responsiveness(RS) 3.8037 .78294 High
Assurance(AS) 3.8638 .75555 High
Tangibles(TN) 3.8113 .80024 High
Empathy(EM) 3.8600 .75382 High
CustomerSatisfaction(CS) 3.7750 .79965 High
Source: Appendix-I

Table 12 shows the result of the study shows that mean score for the customer
satisfactionisrecorded3.7750whichshowthelevelishigh. It showsthat allelements of
commercial banks in Nepal are at high level which all falls in the range from3.8037 to
3.8638. The mean score value of assurance is 3.8638 which is the highest mean score
value compared to the other elements, reliability, responsiveness,tangibles and
empathy. This indicates that assurance of e-banking services is the dominant element
in this study when it can be evidenced by the overall value of the highest mean score
of 3.8638. In other word, it is obvious that majority of the customers agreed that
assurance is the highly affecting factor of customer satisfaction and they accepted that
satisfaction level is also high when the assurance level is high. Meanwhile, reliability
(RL), responsiveness (RS), assurance (AS), tangibles (TN), empathy (EM) and
customer satisfaction (CS) element got an overall mean score of 3.8225, 3.8037,
3.8638, 3.8113, 3.8600 and 3.7750 respectively.

4.1.4 CorrelationsAnalysis
Correlation analysis was used to determine the marketing of e-banking services andits
influence on customer satisfaction in Nepalese commercial banks. The tablesbelow
show the relationship between the dependent and independent variables,namely bank
customer satisfaction and factors. Correlation analysis was used in this study to
determine the link between variables. Using the SPSS software, theresearcher
discovered the value of the correlation co-efficient in this [Link]
correlation research concentrated on the overall link between e-banking services and
customer satisfaction at banks.
44

Table13
PearsonCorrelationCoefficientsofStudy Variables
RL RS AS TN EM CS
Reliability(RL) 1
Responsiveness(RS) .675** 1
(0.000)
Assurance(AS) .512** .518** 1
(0.000) (0.000)
Tangibles(TN) .572** .582** .490** 1
(0.000) (0.000) (0.000)
Empathy(EM) .528** .472** .533** .492** 1
(0.000) (0.000) (0.000) (0.000)
** **
Customer .692 .695 .699** .693** .601** 1
Satisfaction(CS) (0.000) (0.000) (0.000) (0.000) (0.000)
**.Correlationissignificantatthe0.01level(2-tailed). (Source:
Appendix-II)

Table 13 reveals the relationship analysis results between both dependent and
independent variables using correlation coefficient. The correlation value between
reliability of e-banking services (RL) and customer satisfaction (CS) is as
0.692whichhassignificantvalue0.000meaningthatthereissignificantpositiveassociation
between reliability of e-banking services and customer satisfaction (P<0.05), also
correlation value between responsiveness of e-banking services (RS) and customer
satisfaction (CS) is as 0.695 which has significant value 0.000 showing that there is
significant positive association between responsiveness of e-banking services and the
customer satisfaction (P< 0.05). Similarly, correlation value between assurance of e-
banking services (AS) and the customer satisfaction is as 0.699 which has significant
value 0.000 which indicates that there is significant positive association between
assurance of e-banking services and the customer satisfaction (P< 0.05).

At the meantime, the correlation between tangibles of e-banking services (TN) andthe
customer satisfaction is as 0.693 which has significant value 0.000 meaning that there
is significant positive association between tangibles of e-banking services and the
customer satisfaction (P< 0.05). Finally, correlation value between empathy of e-
banking services (EM) and the customer satisfaction (CS) is as 0.601 which has
significantvalue0.000soitcanbeclearlystatedthatthereissignificantpositive
45

association between empathy of e-banking services and customer satisfaction (P<

0.05).

4.1.5 RegressionAnalysis
When examining the association between a dependent variable as customer
satisfaction and separate variables such as reliability, responsiveness, assurance,
tangibles, and empathy of e-banking services in Nepalese commercial banks, the
regression analysis technique is used in this study. And the results are presented
below;

Table14
ModelSummary
Model R R Square AdjustedR Square [Link]
Estimate
1 .858a .736 .729 .41637
a. Predictors: (Constant), Empathy, Tangibles, Responsiveness, Reliability,
Assurance
(Source:Appendix-III)

The specification of the five variables such as reliability, responsiveness, assurance,

tangibles and empathy of e-banking services variables in the model revealed, predict
to customer satisfaction. R2value is 0.736 which are in the models shows that 73.60
percent of variation in customer satisfaction are explained by the changes in the
independent variables. Remaining 26.40 percent of the change in customersatisfaction
is not explained in this regression model.

Table15
AnalysisofVariance(ANOVA)
Model Sum of df MeanSquare F Sig.
Squares
1 Regression 93.617 5 18.723 107.999 .000b
Residual 33.633 194 .173
Total 127.250 199
[Link]:CustomerSatisfaction
b. Predictors: (Constant), Empathy, Tangibles, Responsiveness, Reliability,
Assurance
(Source:Appendix-III)
46

An examination with ANOVA (F–value) indicates that explains the most possible
combinationofpredictorvariablesthatcouldcontributetotheimpactof dependent
variables. Results show significant impact of customer satisfaction indicator. On the
F- values of 107.999 (p = 0.000 < 0.05) for Empathy, Tangibles, Responsiveness,
Reliability, Assurance as customer satisfaction proxy, it clearly shows that there is a
significant effect of independent variables on the dependent variable.

Table16
RegressionCoefficientofIndependentVariablesonCustomerSatisfaction
Variables Coefficients t- p-value CollinearityStatistics
statistics Tolerance VIF
(Constant) -.422 -2.258 .025
Reliability .180 3.437 .001 .457 2.187
Responsiveness .208 3.766 .000 .467 2.141
Assurance .327 6.464 .000 .596 1.676
Tangibles .260 5.267 .000 .559 1.790
Empathy .121 2.394 .018 .603 1.657
[Link]:CS
(Source: Appendix-III)

Table 16 presents the regression coefficient of independent variables reliability,

responsiveness, assurance, tangibles and empathy of e-banking services and the
intercept value of dependent variable customer satisfaction. It shows that tolerance
values were not above 0.1 and VIF below 10. That’s why, there is multicollinearityin
the model.

The coefficient of regression β is 0.180 for reliability of e-banking services. It

indicatesthatchangesinoneunitofreliabilityofe-bankingservicesleadstoincrease
0.180 unitsin customersatisfaction and thep valueof reliabilityofe-bankingservices is
0.001 discloses that it is statistically significant at 5 percent level of significance.
Hence, this is significant positive effect of reliability of e-banking services on
customersatisfaction. Thecoefficient of regression β is 0.208 for responsiveness of e-
banking services. It indicates that if every responsiveness of e-banking services
increased by one then customer satisfaction increased by 0.208 units and the p
valueofresponsivenessofe-bankingservicesis0.000revealsthatitisstatistically
47

significant at 5 percent level of significance. Hence, this is significant positive effect

of responsiveness of e-banking services on customer satisfaction.

The coefficient of regression β is 0.327 for assurance of e-banking services. It

indicates that if everyassurance of e-banking services increased byone then customer
satisfaction increased by 0.327 units and the p value of assurance of e-banking
services is 0.000 reveals that it is statistically significant at 5 percent level of
significance. Hence, assurance of e-banking services has significant positive impacton
customer satisfaction. The coefficient of regression β is 0.260 for tangibles of e-
banking services. It indicates that if every tangibles of e-banking services increasedby
one then customer satisfaction increased by 0.260 units and the p value oftangibles of
e-banking services is 0.000 reveals that it is statistically significant at 5 percent level
of significance. Hence, this is significant positive effect of tangibles ofe-
[Link],thecoefficientofregressionβis
0.121 for empathy of e-banking services. It indicates that if every empathy of e-
banking services increased by one then customer satisfaction increased by 0.121 units
and thep valueof empathyofe-bankingservices is 0.018 reveals that it is statistically
significant at 5 percent level of significance. Hence, this is significant positive effect
of empathy of e-banking services on customer satisfaction.

HypothesisTesting
H1:Thereispositiveimpactreliabilityofe-bakingservicesandcustomer satisfaction in
Nepalese commercial banks.
P-value of reliability is 0.001 which is significant 5 percent level of significance. So,
hypothesis 1 is accepted.

H2:Thereispositiveeffectbetweenresponsivenessofe-bakingservicesand customer
satisfaction in Nepalese commercial banks.
P-valueof responsivenessis0.000which issignificant5percentlevelof significance. So,
hypothesis 1 is accepted.

H3:Thereispositiveimpactbetweenassuranceofe-bakingservicesand customer
satisfaction in Nepalese commercial banks.
48

P-value of assurance is 0.003 which is significant 5 percent level of significance. So,

hypothesis 1 is accepted.

H4: There is positive impact between tangiblesof e-baking services and customer
satisfaction in Nepalese commercial banks.
P-value of tangibles is 0.000 which is significant 5 percent level of significance. So,
hypothesis 1 is accepted.

H5: There is positive impact between empathy of e-baking services and customer
satisfaction in Nepalese commercial banks.
P-value of empathy is 0.018 which is significant 5 percent level of significance. So,
hypothesis 1 is accepted.

Table17
SummaryofHypothesisTesting
Hypothesis Standard t- p- Result
Coefficient Value Value
H1Impact of reliability of e- .180 3.437 .001 Supported
bankingservicesoncustomer
satisfaction.
H2Impactofresponsivenessof e- .208 3.766 .000 Supported
bankingservicesoncustomer
satisfaction.
H3Impact of assurance of e- .327 6.464 .000 Supported
bankingservicesoncustomer
satisfaction.
H4Impactoftangibleson .260 5.267 .000 Supported
customer satisfaction.
H5Impactofempathyon .121 2.394 .018 Supported
customer satisfaction.

According to table 17, p-value of reliability, responsiveness, assurance, tangibles and

empathyare0.001,0.000,0.000,000and0.018 respectivelywhicharesignificantat5
percent level so hypothesis 1 and hypothesis are accepted.

4.2 Discussion
The main objective of the study is to evaluate customer satisfaction and e-banking
[Link]
49

between e-banking service quality and customer satisfaction. Research and previous
literature supports the relationship between reliability of e-banking services,
responsiveness of e-banking services, assurance of e-banking services, tangibility ofe-
banking services, empathy of e-banking services and customer satisfaction. The
research literature validates that e-banking services directly influence customer
satisfaction. Results obtained from the data analysis e-banking services have positive
and statisticallysignificant relationship with customer satisfaction and also significant
positive impact on customer satisfaction. If consumers think the use of e-banking is
reliable, banks show to solve a sincere interest of customer problems and banks
provides details of products and services through website and they will be more
satisfaction towards e-banking services. The result is consistent with Toor et al.
(2016); Gazi et al. (2021) which observed positive and significant effect of reliability
on customer satisfaction. The results are also consistent with Janahi and Mubarak
(2017). The results of this study also support the Joshi (2021) which states that
reliability of e-banking services greatly effect on the customer satisfaction.

A responsiveness e-banking service is found to have positive and significant

relationship with customers’ satisfaction. The impact is also found to be positive and
significant. Janahi and Mubarak (2017); Joshi (2021) concluded a positive association
between responsiveness of e-banking service and customer satisfaction. If consumers
believed that responseof servicethrough ebankingis veryarouseand quick and there is
fast processing at reasonable cost, they are highly [Link] result is similar with
the prior study of Toor et al. (2016); Lamichhane (2018); Gazi et al. (2021) mentioned
that internet banking services has significant positive effect on customer satisfaction.

There is positive and significant relationship of assurance of e-banking services and

customer satisfaction among consumers. The result shows that the impact is also
positiveand significant on consumers’satisfaction. Theresult is linewith thefindings of
Toor et al. (2016); Janahi and Mubarak (2017) concluded that an assurance of e-
banking services has positive and significant relationship with customer satisfaction.
When customer perceived bank staffs have the knowledge to answer any questions
about e banking service and employees in banks provide sufficient trust to customers
[Link]
50

with Gazi et al. (2021); Joshi (2021) mentioned that assurance of e-banking services
have significant positive influence on customers’ satisfaction.

There is positive and significant relationship of tangibility of e-banking services and

customer satisfaction among consumers in Kathmandu Valley. The result shows that
the impact is also positive and significant on consumers’ satisfaction. The result
islinewiththefindingsofJanahiandMubarak(2017);Gazietal. (2021)concludedthat
tangibility of e-banking services has positive and significant relationship with
customer satisfaction. When customer feels the bank has modern looking equipment
and tools and physical features are visually nice of the banks, they are more satisfied
with it. This is also consistent with Lamichhane (2018); Joshi (2021) mentioned that
tangibles e-banking services have significant positive influence on customers’
satisfaction.

Finally, empathy of e-banking services is found to have positive and significant

relationship with customers’ satisfaction. The impact is also found to be positive and
significant. Toor et al. (2016); Gazi et al. (2021) observed that a positive association
between empathy of e-banking service and customers’ satisfaction. If the consumer
feels banks always gives customer individual attention and working hours of banks is
suitable for all customers, they will more interested to use e-banking service. This
result is similar with the prior study of Janahi and Mubarak (2017) and Joshi (2021)
concluded that empathy of e-banking services has significant positive effect on
customers’ satisfaction. The result is also similar with the researcher expectation.
51

CHAPTER V
SUMMARYANDCONCLUSION

5.1 Summary
Banking operations have altered dramatically since the emergence of the Internet.
Banks offer a wide range of services to banking customers online. E-banking is theuse
of information and communication technologies by banks to better manage client
relationships and provide services. Given the critical role that electronic banking has
played in the growth of banks, information technology has been shown to increase
corporate efficiency and service quality, which in turn attracts and retains customers.
Online banking features include reliability, responsiveness, assurance, tangibles, and
empathy. Then, as a result of internet banking, the processes for transferring money,
viewing and analyzing savings account balances, paying mortgages, paying bills, and
purchasing financial instruments and certificates of deposit have all substantially
improved.

The primary goal of the research is to examine the elements that influence customer
behavior in Nepalese commercial banks. Other specific objectives include examining
the digital banking service quality (reliability responsiveness, assurance, tangibility,
and empathy) in Nepalese commercial banks, measuring the relationship between
servicequalityfactors (reliabilityresponsiveness, assurance,tangibility, andempathy)
and customersatisfaction in Nepalesecommercial banks, and investigating the impact
of reliability responsiveness, assurance, tangibility, and empathy on customer
satisfaction in Nepalese commercial banks. The research is descriptive and
explanatory in nature. The descriptive research design is used to describe the
components of e-banking services. Explanatory study design, on the other hand, aids
in determining the link between the dependent variable (customer happiness) and the
independent variable (e-banking services). A more informal study approach is
employed to investigate the influence of e-banking service quality on customer
satisfaction in Nepal's banking industry. The major source of data was also employed
on purpose in the study's analysis stage. This information was acquired via
questionnaires and interviews designed for commercial bank clients,
branchmanagers,andbankingcustomerservice supervisors,[Link]
study'ssample
52

size is 200 people. To validate the hypothesis, descriptive analysis, correlation, and
regression analysis were performed.

According to the findings of this survey, the majority of respondents agreed that the
quality component of empathy, assurance, and dependability of e-banking serviceshas
a significant impact on banking customers' pleasure, and they feel that their
satisfaction is also high. According to the correlation research, the dependabilityof e-
banking services has a positive and substantial association with customer satisfaction,
as does the correlation between responsiveness and customer happiness.
Simultaneously, there is a considerable positive relationship between the guarantee of
e-banking services and consumer happiness. Similarly, tangibles and empathy have a
largeandpositiveassociationwithclientpleasure. Theregressionresultsrevealedthat e-
banking service dependability, responsiveness, assurance, tangibles, and empathy
have a substantial beneficial influence on customer satisfaction in Nepalese
commercial banks. As a result, this study indicated that the quality of e-banking
services has a considerable influence on consumer satisfaction.

5.2 Conclusion
The research looked on customer satisfaction with e-banking services in the banking
industry. According to the findings of the descriptive analysis research, the majorityof
male customers are more likely than females to utilize e-banking. The majority of
overall clients of Nepalese commercial banks are of active age, energetic, and can use
e-banking services, among other things. According to income level, the majority of
respondents are in the middle, and the majority of customers have been using digital
banking for 3 to 5 years. According to the findings of this survey, the majority of
respondents agreed that guarantee of e-banking services and empathy of e-banking
service aspect have a significant impact on banking customers' pleasure, and they feel
that their satisfaction is also high.

According to the correlation study, reliability of e-banking services (RL) has apositive
and substantial link with customer satisfaction (CS), and the correlation between
responsiveness (RS) and customer satisfaction (CS) is also significant.
Simultaneously, there is a considerable positive relationship between assurance of e-
bankingservices(AS)andcustomersatisfaction(CS).Similarly,tangible(TN)and
53

empathy(EM) have a strongand favorable link with customer satisfaction. According

to the regression results, dependability of e-banking services, responsiveness of e-
banking services, assurance of e-banking services, tangibles of e-banking services,and
empathy of e-banking services all have a substantial beneficial influence on customer
satisfaction of commercial banks in Nepal. As a result, this study showed that the
quality of e-banking services has a substantial influence on customer satisfaction in
Nepalese banks.

5.3 Implications
Based on the summary and conclusion of the study the researcher forwards the
following implications to the concerned bodies.
 According to the findings of this study, the dependability, responsiveness,
assurance, tangibles, and empathy of e-banking service quality have a
statistically significant influence on customer satisfaction. As a result, the
study's conclusions benefit IT policymakers, bankers, and customers.
 Given the importance of electronic banking in the development of banks,
information technology has been shown to boost company efficiency and
service quality, attracting and retaining clients.
 The study is extremely beneficial to students and academics who seek to
conduct more research on the issue as a source.
 The sorts of services provided by e-banking should be expanded, for example,
to take deposits, and banks should capitalize on the prospects for growing e-
banking by minimizing the hurdles. Finally, banks should place a greater
emphasis on the factors that have the greatest influence on consumer
satisfaction in e-banking.
 This study has laid the groundwork for future researchers to perform research
using client demographic data. This surveyonlylooks at customer satisfaction
in banks and financial organizations. In addition, research may be undertaken
in other industries such as healthcare, insurance, commerce, manufacturing,
and technology.

transformation's importance to contemporary organizations survival in the digital economy.

While there has been a number of IS (Information Systems) studies of Internet banking, factors
affecting the satisfaction with or the adoption of Internet banking, and there is a large
marketing literature on customer perceptions of luxury brands, research on luxury brands
54
service quality in the context of Internet banking is scarce. While many previous literatures
have studied the interplay among the factors that drive adoption, those that distinguish different
types of customers.i.e, general versus VIP customers, and the way customer type, which plays
a role of moderating variable for customer satisfaction relates to satisfaction with banking
services, are lacking

This introduction part of the paper will going to include the following sections: background of
the study, background of the organization, statements of the problem, research questions,
objectives of the study, scope of the study and significance of the study.

1.1. BACKGROUND

competitive. (Yasin et al, 2004; Rodie and Martin, 2001). Customer service is considered as an
integral part of any facet of industry and it defines the future sustainability of any organization.

The current business environment is becoming competitive and challenging than ever before.
With multidimensional challenges and demand of globalization, organizations are forced to
reengineer their products and systems to improve their service quality and remain The rapid
advances in technology based systems related to internet are leading to fundamental Goo et al.,
2004; Nguyen and Leblanc, 2002). Due to intangible nature of services it is difficult for the
firms to analyses how the customers perceive and evaluate the desired outcome of the service
quality (Zeithaml, 1981). As customer evaluates their level of satisfaction by experimenting the
service quality, satisfaction with services is related to conformation or disconfirmation of
expectations (Smith and Houston 1982).

ways in how different organizations interact. This applies same for relation of an organization
with its customer. In different service industries the relationship between customer satisfaction
and service attributes have been difficult to identify because services nature is intangible
(Hong.

The issue of highest priority today involves understanding the impact of service quality on
profit and other financial outcomes of the organization (Zeithaml et al., 1996). As
Organizations are increasingly becoming customer focused and driven by customer demands. It
is becoming equally challenging to satisfy and retain customer loyalty. Research by Oliver
(2009) suggests that both service quality and customer satisfaction are two distinct but related
constructs. It is particularly true for the service provider firms where increased level of
customer satisfaction results in profit maximization. Therefore experts say that customer
satisfaction should be the fundamental principle of all the service firms as it is the key indicator
55
of firm's effective and efficient performance. As said by Sakthivel et al., (2005) Customer
loyalty and satisfaction is
company (Jones and Sasser, 1995) also customers are considered as final judger to judge the
quality level of product and services offered. So it can be said that the improvements in quality
standards bring positive outcomes for the firm.

1.2. BACKGROUND OF THE ORGANIZATION

CBO is established to provide all banking service different development programs and
products. It was registered on 29 October 2004 in accordance with Article 304 of the
commercial code of Ethiopia and was licensed by National Bank of Ethiopia as per
proclamation No. 84/1994 that provides for licensing and supervision of banking businesses.
The bank commenced operation on 8th March 2005.

Objectives: The main objective of the bank is to stimulate the economic and social
development of Oromia through mobilizing financial resources from cooperates, private
business and public institutions and financing them. Specifically, COOP has the following
objectives: Mobilize deposit and promote the culture of saving that encourage the supply of
funds, Create access to loans and advances and other banking services for broad portions of
population, and of course. The commercial objective of the bank is to maximize shareholders
value.

(Source:

[Link])

13 STATEMENT OF THE PROBLEM

Service quality plays a critical role in a firm's competitive advantage. Studies investigating
service quality have extensively examined service quality measurement to assist practitioners
in effectively managing quality service.

Customer satisfaction has been studied in different directions, from measurement to its
relationships with other business aspects. Some researchers have provided possible means of
measuring customer satisfaction (Levy, 2009; NBRI, 2009). Meanwhile other authors like
Wilson et al. (2008) demonstrated some determinants of customer satisfaction to be product
and service quality, price, personal and situational factors (Wilson et el., 2008, p. 79-80). Other
authors have brought out theories relating customer satisfaction and service quality in their
56
researches. Providing excellent service quality and high customer satisfaction is the important
issue and challenge facing the contemporary service industry. High customer satisfaction and
loyalty have long been key concerns for operational management in service industries.
Consequently customer orientation, namely, understanding customer requirements and
expectations, is the first step service providers must take to enhance service quality. Service
quality plays a critical role in a firm's competitive advantage. Studies investigating service

15:38

quality have extensively examined service quality measurement to assist practitioners in

effectively managing quality service.

Since the cooperative bank of oromia is the youngest bank among the other banks' the findings
of my research is used as a reference to know how their customers are being satisfied with their
services and to carry corrective measures if their customers are not satisfied in order to make
them delightful.

It is used in future banks' developments plan, it dictates that by improving customers' services
it is possible to add the number of new customers and to sustain the previous one.

The main reasons that initiates me to choose this title are:-

Since the Cooperative Bank of Oromia is the youngest bank among the other private and
government's banks' the findings of my research is used as a reference to know how their
customers are being satisfied with their services and to carry corrective measures if their
customers are not satisfied in order to make them delightful.

It is used in future banks' developments plan, it dictates that by improving customer's services
it is possible to add the number of new customers and to sustain the previous one.

1.4 RESEARCH QUESTIONS

The study will going to seeks to answer the following research questions:

1. What levels of customers 'satisfaction towards the five service quality dimension interims of
(Reliability, Responsiveness, tangibility, Empathy and Assurance) in CBO of Bishoftu branch?
57
2. What are the gaps between customers 'expectation and perception towards service quality in
CBO of Bishoftu branch?

3. Are customers of the bank being satisfied (in the case of COOP of Bishoftu)?

4. What levels of customer's satisfaction in service provided by COOP of bishoftu branches?

1.5 RESEARCH OBJECTIVES

1.5.1 General Objective

The objective of the paper 1 will going to prepare is to seek and measure customers

'satisfaction

towards the five SERVQUAL dimensions.

1.5.2 Specific Objectives

To assess customer's expectation and perception level towards service quality of CBO of
Bishoftu branch according to the five SERVQUAL dimensions: tangibility, reliability.
responsiveness, assurance. and empathy. To analyze the gap between customers 'expectation
and perception towards service quality. To measure the service quality of the bank accordingly
to SERVQUAL model. 1.6 SCOPE OF THE STUDY The study will goes assesses service
quality and customer satisfaction in Cooperative bank of Oromia, the case of Bishoftu branch.
The study would have gone to conducted on customers and employees of CBO in Bishoftucity,
which is found around Bishoftu bus station, Lemlem and around Top tourist hotel, which
provides multiple services of the Bank. Furthermore, the aim of the study is to gain a better
understanding of the service quality dimensions that affect CBO's customer satisfaction from
their perspective.

1.7. DELIMITATIONS OF THE STUDY

To address all factors that affect customer satisfaction is too difficult due to the difficulty of
managing these variables. Therefore this study was specifically delimited to only the impact of
service quality on customer satisfaction by using SERVQUAL model of service quality
dimensions developed by Parasuraman et al (1988) (tangibility, assurance, responsiveness,
empathy and reliability) as an independent variable and customer satisfaction as a dependent
58
variable. To applying the above concept on all over the country's bank industry is too difficult
due to difficult to manage it. Because of this reason this study was specifically focused on
Cooperative bank of Oromia in Oromia region East Shewa Zone at Bishoftu city of all
branches.

1.8 SIGNIFICANCE OF THE STUDY

Generally, the finding and conclusions of the study may help CBO management in decision
making by understanding the problems from this findings with regards to the service quality
provided. And also to gain more knowledge about customer satisfaction in the banking industry
in general and in CBO in particular which Serve as guidelines for the formulation of policies
on the quality of bank's services and helping to recognize that customers hold different types of
expectations for service performance.

1.9 DEFINITION OF TERMS

Quality: Quality can be defined as satisfying or exceeding customer requirements and

expectations, and consequently to some extent it is the customer who eventually judges the
quality of a product or service. (Shen et al., 2000). Service Quality-Service quality is defined as
be installed. Such machine in WAN connectivity can allow any customer to deposit the cheque
for collection at any branch (KULKARNI P. R. 2012).

Centralized Customer Account Management Any customer becomes the customer of the bank
rather than of a branch. With unique ID/Account Number the accounts of the customers can be
viewed centrally by the bank. As such, customer profile, details of the services availed by him
and customer behavior about business of the bank can be well understood. Such customer view
gives the bank opportunity to decide directions for business development and marketing
strategies (KULKARNI P R 2012).

Centralized Reporting

Presence of centralized data constantly live up-dated at any time ensures comprehensive
report/statement generation. This tremendously helps in decision making as well as submission
to various authorities. Operational efficiency of the bank gets increased due to quick report
generation for bank as a whole (KULKARNI P. R. 2012).

Centralized System Administration

59
Centralized system/L T. administration enhances system security and user management.

There is reduction in man-power need and cost. Due to single point resource available IT

manpower is utilized properly (KULKARNI P. R. 2012)

Growth opportunities

Efficiency gains

Risk mitigation for aging systems

2.4.2. BENEFITS TO CUSTOMERS

Customer can operate his account from any of the branch of the bank and More service
channels can be made available to the customers.i.e if the transaction is between the branches
of the bank Customer gets immediate credit and gets full attention and service satisfaction at
the branches as the branches are freed from all back office functions, clearing functions and
almost all accounting functions. Additionally Customer can get SMS alerts on his mobile or e-
mail alerts through net for transaction taking place in his account, which gives him comfort and
security. It also provides customer service improvements

2.5. THREATS AND RISKS OF CORE BANKING

The main drawbacks of core Banking is that it Total dependency on technology and any failure
on technical ground can halt the working with uncertainty about restoring normally which
causes the Stoppage of work and has adverse effect on bank's image and reputation.

Perhaps Technical person's leaving the bank poses serious problem for the future and If not
mitigated by generating profit out of benefits of core banking the recurring costs are heavy.

2.6. CORE BANKING SERVICE QUALITY