Automated Banking Services, Service Quality And Customer Loyalty In Kenya

Abstract

Banks have changed on how they deliver their products and services to their customers. Physical delivery of banking services has been replaced by virtual delivery. This has been enhance by a number of factors such as low cost of communications, rapid internet technological evolution, globalization, deregulation, consolidation of financial markets and change in both competitive and regulatory forces. This research focused on finding out the effects of automated banking services to service quality and customer loyalty. To satisfy the objectives of the study, a descriptive cross sectional survey was used as the research methodology. The SERVQUAL and the SERVPERF models were used in determining the service quality dimensions within automated banking services to help in explaining the relationship of automated banking services, service quality and customer loyalty. The data collection method used was administration of questionnaires to a sample of four hundred customers. Data was analyzed and summarized through descriptive statistics which included calculation of mean and percentages. Explorative data analysis techniques, confirmatory data analysis technique and regression analysis were the main analysis techniques used to explain the relationship between the three constructs. The findings revealed that automation of banking services leads to automated service quality which in turn results to customer loyalty. Security dimension as a measure of service quality greatly influences customer loyalty while personalization had the least influence. Personalization, accessibility and efficiency had a positive effect on customer loyalty while security, ease of use and reliability had a negative effect on customer loyalty. The study recommends that, personalization, accessibility and efficiency be improved and allocated more resources since they positively affect customer loyalty. In addition to this, more emphasis should be placed on the service quality dimensions that were more important to the customers, they included, security, efficiency, accessibility and ease of use.