Service Quality and Customer Loyalty in the State Banks in Sri Lanka

Abstract

Purpose- The purpose of this empirical research is to find the relationship between Service Quality and Customer Loyalty with special reference to State Banks in the Kaluthara District of Sri Lanka.

Design/ Methodology/ Approach- A self-developed theoretical framework is proposed by the author based on the relationship between five main independent variables and customer Loyalty in the state banks using: Service Reliability, Assurance, Tangibility, Empathy and Responsiveness. Self-developed structured questionnaires were distributed among 256 of customers in the Kaluthara District and collected data were analyzed using Pearson correlation analysis.

Findings-Results indicate that there is a positive significant impact of selected independent variables except the Service Tangibility dimension and the Customer Loyalty. The finding of the results indicated that Service Reliability dimension is the most effective relationship to customer loyalty in the State Banks in the Kaluthara District, Sri Lanka.

Research Implications- The study is limited to Service Quality. The scope of the study is narrowed to the State Banks in the Kaluthara District, Sri Lanka, who were selected through convening sampling method in this pandemic situation in Sri Lanka.

Practical Implications- The findings suggest recommendations to enhance the customer service qualities such as promote state banks through new technology in Sri Lanka, improve the innovation to satisfy the customer, improve effective customer data base, advisory banking online systems.

Originality/ Value- The study suggests that that the theories regarding service qualities adopted from western developed countries should carefully test and examined before them relating to developing Asian country like Sri Lanka.