An Empirical Analysis of Customer Satisfaction of Indian Public Sector Banks

Abstract

The banking landscape in India has become very competitive. In order to be successful in such a competitive setting, banks would have to differentiate themselves on various parameters, leverage on latest and updated technological advancements and deliver realistic, convenient and flawless services to customers. Banking industry is a service industry, hence the quality of service provided and the extent of customers satisfaction plays a pivotal role in retaining customers and thereby generating and enhancing the banks revenue. Customers requirement of providing them with better and improved customer services is on the rise, hence every bank should recognize the various dimensions of customer satisfaction as it is an important determinant of service quality. This paper identifies the various factors that lead to customer satisfaction in public sector banks in India. This is an exploratory study. The findings of the paper are based on a detailed analysis of data obtained by questionnaires, observation and interviews. Data was collected from 150 respondents who used the banking services of selected public sector banks in the city of Mumbai. The responses have been converted into SPSS convertible data for analysis. Tools such as frequency analysis, factor analysis were used to identify the most significant factors that contribute to enhanced customer satisfaction in Indian Public sector banks. An Opportunity Matrix developed by the professors at Harvard Business School, was drawn to reveal those services that customers consider important to enhance their level of satisfaction. The research highlights that customer satisfaction is dependent on five diverse factors. This research paper will assist the public sector bank management and banking regulators to perk up the overall level of satisfaction of customers and further strengthen the tie between the bank and its customers.

Keywords: Indian Public Sector Bank, Customer Satisfaction, Service Quality, Banking Sector

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