The influence of service innovation practices on customer satisfaction in the commercial banking sector in kenya

Abstract

Commercial Banks in Kenya have continuously invested in service innovation practices to be able to satisfy their customers. The level of innovation varies from Bank to Bank and service to service. Service innovation has been explained under three outlooks including innovation in services as new or improved service products, innovation in service processes as new or improved ways in designing and producing services and finally innovation in service firms, organization and industries. Customer satisfaction is used as a measure of how products and services supplied by a company meet or surpass customer expectation and it is seen as a key performance indicator within businesses. This paper sought to determine service innovative practices in the Commercial Banking Sector and to establish the relationship that exists between service innovative practices and customer satisfaction in the commercial banking sector. Primary data was collected using a semi structured questionnaire, designed to be completed by respondents who are customers of the various commercial banks in Kenya. The data was then checked for completeness and analyzed using descriptive statistics. The study reveals that indeed commercial banks in Kenya engage in service innovation practices. Respondents of the study were able to outline the service innovations available in their banks and the level of engagements their banks undertake to be involved in service innovation practices. Secondly the study revealed that there is a correlation between service innovation practices and customer satisfaction. The more the banks undertook service innovations, the higher the level of customer satisfaction. The paper concludes by a confirmation that service innovation practices have an influence on the levels of customer satisfaction.