Table of Contents Chapter 1: ........................................................................................................................................ 5 Introduction ..................................................................................................................................... 5 1.1. 1.1.1. 1.1.2. 1.1.3. 1.1.4. 1.2. 1.3. 1.4. 1.5.

Background of the study ........................................................................................... 5 Banking service ......................................................................................................... 5 Customer satisfaction ................................................................................................ 6 Service quality .......................................................................................................... 7 Problem discussion ................................................................................................... 8 Aim of the study........................................................................................................ 8 Objectives of the Study ............................................................................................. 9 Organizational Framework of the Research Report.................................................. 9 Limitations of the Study............................................................................................ 9

Chapter 2: ...................................................................................................................................... 11 Literature Review.......................................................................................................................... 11 2.1. 2.1.1. 2.1.2. 2.1.3. 2.2. 2.2.1. 2.2.2. 2.3. Customer Satisfaction ............................................................................................. 11 Drivers of customer satisfaction ............................................................................. 14 Drivers of customer satisfaction for financial services ........................................... 16 Techniques to measure customer satisfaction ......................................................... 17 Service Quality........................................................................................................ 18 Service Quality dimensions and SERVQUAL model ............................................ 18 Service quality gaps ................................................................................................ 22 Necessity of service quality for customer satisfaction ............................................ 24

Chapter 3: ...................................................................................................................................... 28 Research methodology .................................................................................................................. 28 3.1. 3.2. 3.2.1. 3.2.2. 3.3. 3.4. Research purpose .................................................................................................... 28 Research approach .................................................................................................. 29 Quantitative approach ............................................................................................. 30 Qualitative approach ............................................................................................... 30 Research Strategy.................................................................................................... 31 Sample selection ..................................................................................................... 31

3.4.1. 3.4.2. 3.4.3. 3.4.4. 3.5. 3.5.1. 3.5.2. 3.6. 3.7. 3.7.1. 3.7.2.

Selecting the sampling method ............................................................................... 32 Convenience sampling ............................................................................................ 32 Judgment sampling ................................................................................................. 33 Quota sampling ....................................................................................................... 33 Sources of Information & data collection ............................................................... 33 Primary data ............................................................................................................ 34 Secondary data ........................................................................................................ 34 Data analysis ........................................................................................................... 35 Validity and Reliability ........................................................................................... 35 Validity ................................................................................................................... 35 Reliability................................................................................................................ 36

Chapter 4: ...................................................................................................................................... 37 HSBC: Organization overview ..................................................................................................... 37 4.1. 4.2. 4.3. 4.4. 4.5. 4.5.1. 4.5.2. 4.5.3. 4.5.4. 4.6. 4.7. 4.8. Foundation & growth of HSBC .............................................................................. 37 History of Hong Kong and Shanghai Banking Corporation ................................... 38 HSBC international network ................................................................................... 41 HSBC's business principle and values .................................................................... 41 Services of HSBC ................................................................................................... 42 Personal Financial Services .................................................................................... 42 Commercial Banking .............................................................................................. 43 Global Banking and Markets .................................................................................. 44 Private Banking ....................................................................................................... 45 Global operation of HSBC ...................................................................................... 45 HSBC in Bangladesh .............................................................................................. 47 HSBC in United Kingdom ...................................................................................... 49

Chapter 5: ...................................................................................................................................... 50 Research Findings: Bangladesh .................................................................................................... 50 6.1. 6.2. 6.3. 6.4. Tangibles ................................................................................................................. 51 RELIABILITY ........................................................................................................ 53 Responsiveness ....................................................................................................... 55 Assurance ................................................................................................................ 56

6.5. 6.6.

Empathy .................................................................................................................. 58 Overall Gap ............................................................................................................. 60

Chapter 6 ....................................................................................................................................... 64 Research Findings: United Kingdom ............................................................................................ 64 6.1. 6.2. 6.3. 6.4. 6.5. 6.6. Tangibles ................................................................................................................. 64 Reliability................................................................................................................ 65 Responsiveness ....................................................................................................... 67 Assurance ................................................................................................................ 69 Empathy .................................................................................................................. 71 Overall Gap ............................................................................................................. 73

Chapter 07 ..................................................................................................................................... 77 Conclusion .................................................................................................................................... 77 Chapter 08 ..................................................................................................................................... 80 Recommendation .......................................................................................................................... 80 8.1. 8.2. Recommendation for Bangladesh ........................................................................... 80 Recommendations for United Kingdom ................................................................. 81

Appended parts ............................................................................................................................. 82 A: Bibliography ............................................................................................................................ 82 B: Questionnaire ........................................................................................................................... 90 C: Sample list ................................................................................................................................ 95 D: Response OF United Kingdom .............................................................................................. 100 E: Organizational structure ......................................................................................................... 102

LIST OF FIGURES Figure 1: Correlation between customers expectation and customer satisfaction ........................ 7 Figure 2: Customer satisfaction. .................................................................................................. 11 Figure 3: Continuous Improvement in Customer Satisfaction .................................................... 14 Figure 7: findings from Tangibles ................................................................................................ 53 Figure 8: Reliability findings ........................................................................................................ 54 Figure 9: findings from Responsiveness ....................................................................................... 56 Figure 10: finding of Assurance ................................................................................................... 58 Figure 11: Empathy....................................................................................................................... 60 Figure 12: Summary of findings among Dimensions ................................................................... 61 Figure 13: Summary of findings among Statements..................................................................... 63

LIST OF TABLES

Table 1: Dimensions of service quality ........................................................................................ 20 Table 2: Research strategies.......................................................................................................... 31 Table 3: HSBC international network........................................................................................... 41 Table 4: HSBC at a glance ............................................................................................................ 48

Chapter 1: Introduction

n the era of globalization, management of the Companies is more concerned about Customer Satisfaction, which leads to profitability. Through satisfying their customers the companies are trying to build up their stable position in the competitive industry

and increase their share in the market. Consumer satisfaction is a very tricky thing. Satisfaction depends on different independent factors. These independent factors have made satisfaction so depending, that even slightest disposition of these factors can make the consumer dissatisfied. This is why the marketers want to enlighten themselves thorough researches.

1.1. Background of the study In this section, some areas are discussed from which the background of the study can be understood. The topics include the global banking service, customer satisfaction and service quality. In the end of this section, problem discussion which is arising from the earlier discussed issues are given from where the motive of this research will be founded. 1.1.1. Banking service Among the different service sectors, banking sector is one of the most important service sectors. In our country there are a lot of national, private and multinational banks those are operating successfully. Service is always different from the product. That is why the importance of service sector is sensitive and crucial. The Hong kong and Shanghai Banking Corporation Limited (HSBC) have a unique position in the world. After facing the wave of recent recession it achieved the first position among all the banks those are operating worldwide. The most important part of a bank is its service quality on which customers are highly dependent. For that reason it has been chosen to work on customer satisfaction. In this report it is tried to determine the satisfaction level of the customers of HSBC and to identify the impotency of the different service attributes that the customers hold in their mind.

1.1.2. Customer satisfaction Lets consider some facts to understand the importance of customer satisfaction, customers with problems usually do not react, and a very tiny portion of them complain. Moreover, a person with a problem tells many people than that of a satisfied customer. The implication of the introductory statement is customer satisfaction is important, as a satisfied customer will give better prospects for a banking institution. Moreover, cost of keeping a current customer is lower than the cost of acquiring a new customer. These facts highlights the crucial role of satisfying customers which brings employee satisfaction, hence the profit maximization of the company. Because retaining a current employee costs less than cost of hiring and training a new one.

Therefore, a commercial organization such as a banking organization need to know the extent of customer satisfaction, or to what length the service need to be designed to satisfy their customer. There is certain meaning of customer satisfaction in marketing context. Anders Gustafsson, Michael D. Johnson, & Inger Roos (2005) brought customer satisfaction definition as customers overall evaluation of the date. This satisfaction has positive influences on retaining customers among different variety of services and products. In service based enterprises: service directly affects customer satisfaction.

Ingrid FeclikovaA, (2004) interpreted satisfaction as a feeling which results from a process of evaluating what was received against that expected, the purchase decision itself and /or the fulfillment of needs /want.

There are correlation between customer expectation and customer satisfaction as shown in the following figure. Satisfaction refers to achieving the things we want derived from our expectation. If satisfaction interprets as not going wrong the firm decrease complaint which by its services and products. Customer with less expectations are more satisfied: companies by adding innovative features would easily increase customer satisfaction. In contrast, when customer is unaware of improvements but critical of losses in existing quality are less satisfied and expect more.

New features

Potential for increased CS. Requires creativity and innovation backed by market research.

Customer Satisfaction

Available features
These include optional features added in product generations, i.e. normal product development.

Required features
Customers are generally unaware of improvements but critical of losses in existing quality.

Customer Expectations
Figure 1: Correlation between customers expectation and customer satisfaction (Ingrid FeclikovaA, 2004)

To be successful in the market, both in local market and global market, the main ingredients of success is customer satisfaction. Jochen Wirtz (2003) found some results of customer satisfaction in his study. The outcomes of customer satisfaction are repeat purchase, loyalty, positive word of mouth and increased long term profitability. Therefore companies should measure their customers satisfaction to fortify their strength and improve their weaknesses.

1.1.3. Service quality Service quality is the result of the comparison that customers make between their expectations about a service and their perception of the way the service has been performed (Gronroos, 1984; Parasuraman et al., 1985, 1988). A number of experts define service quality differently. Parasuraman et al. (1985) define it as the differences between customers, expectation of services and their perceived service. If the expectation is greater than the service performance, perceived quality is less than satisfactory and hence, customer dissatisfaction occurs. Lewis and Mitchell

(1990), Dotchin and Oakland (1994), and Asubonteng et al. (1996) define service quality as the extent to which a service meets customers, need and expectation.

1.1.4. Problem discussion In a competitive market place, understanding customers needs become crucial. This trend forces the companies to move from a product centric to customer centric position. In addition, customer retention is influenced by customer satisfaction. Retention is an important issue in banking industry, as customer has lots of alternatives to choose, so they can switch to another bank. Considering the high cost of acquiring new customer and sometimes high customer turn over of many banking services, it is important to study determinants of customer satisfaction.

Customer satisfaction is the key factor in determining how successful the organization will be in customer relationship (Reichheld, 1996), for this reason, it is very important to measure it. The achievement of true customer satisfaction involves: customer oriented culture, an organization that centers on the customer, employee empowerment, process ownership, team building and partnering with customer and suppliers.

To keep the customer of HSBC bank, retaining customers will be a most important aim. Customer satisfaction will be used as the main tools for retaining customer. And as discussed earlier, service quality is the dominating factor for satisfying customer.

1.2. Aim of the study The aim of the research is to measure the level of service of quality customers expect to get from HSBC and also the level of service the customers perceive that they are getting. Then the results of both are compared and a gap between the expectation and perception of the level of quality of services are measured to find out where HSBC stands in the perception of the customers and thus an implied insight on the overall customer satisfaction.

1.3. Objectives of the Study The objectives of the research based on the problem discussion are written below To identify the expectation on the dimensions of quality of service To identify the perceived quality of service on the dimensions of quality of service To find out the gap between the expected and perceived quality by the customers towards the service provided. To suggest ways of improving the current standard that accommodates a rapidly growing customer volume.

1.4. Organizational Framework of the Research Report This research paper is divided in to chapters for better presentation and understanding also. There are total eight chapters, which are covering all the required aspects of this dissertation. In the first chapter, some general overview of research problem and objectives of the research are discussed. In the second chapter, a detailed review of literature of several topics which are related and relevant to research problem, are given. That chapter will give the reader the theoretical foundation or historical base of the research problem. In the following chapter, research methodology of the research is elaborated, which includes research strategy, sample design and data collection etc. in the fourth chapter, a overview of HSBC in two targeted country, United Kingdom and Bangladesh both given for the understanding of a reader of this research paper about the operation and performance of the famous banking organization. After the four initial chapters, the subsequent chapters are mainly of research findings. Chapter five and six will give the research analysis and finding from UK and Bangladesh in two different chapter. Final two chapters will conclude the paper with specific recommendation.

1.5. Limitations of the Study In conducting the research, the researcher has to face some restrictions and limitations, which may influence the researh or cause deprivation from the desired outcome or satisfaction. These

limitations are sourced from uncontrollable research environmental elements where the research nothing to do. The limitations of this researh are

The survey for the study is limited by the size of the sample. So there exists the chance of occurring error. The information gathering or the survey method is concentrated on a specific branch of HSBC that doesnt ensure the total scenario of United Kingdom and Bangladesh both operation.

As the sample size is very small, geographical or regional differences could not be made. Due to time constraint it was really difficult to ensure for my part to include more branches and customers.

Chapter 2: Literature Review

n this part of the dissertation, a wide range of literature that relevant to the dissertation topic and influence, guide the methodology of the research as well. Here the literature chosen on various factors. Such as customer satisfaction, service quality in banking in

different countries around the world, SERVQUAL model, dimensions of SERVQUAL etc.

2.1. Customer Satisfaction Satisfaction is an emotional or feeling reaction (Westbrook, Newman, Taylor, 1978). It is the result of a complex process that requires understanding the psychology of customers. The range of emotion is wide with, for example, contentment, surprise, pleasure, or relief. Satisfaction is influenced, in the end, by expectations and the gap between perceived quality and expected quality, called "expectancy disconfirmation" (Rossat, J., Larsen, J., Ruta, D., Wawrzynosek, M. 1998). The figure below shows the predominant linkage of this process.

Figure 2: Customer satisfaction. Source: Rust, Zahorik, Keiningham, 1996

Customer satisfaction has been a popular topic in marketing practice and academic research since Cardozo's (1965) initial study of customer effort, expectations and satisfaction. Despite many attempts to measure and explain customer satisfaction, there still does not appear to be a consensus regarding its definition (Giese and Cote, 2000). Customer satisfaction is typically defined as a post consumption evaluative judgement concerning a specific product or service (Gundersen, Heide and Olsson, 1996). It is the result of an evaluative process that contrasts prepurchase expectations with perceptions of performance during and after the consumption experience (Oliver, 1980). In the following table some definitions of customer satisfaction are tabulized. Authors Gundersen, Heide and Olsson, 1996 Definitions Customer satisfaction is typically defined as a post consumption evaluative judgement concerning a specific product or service CS is the result of an evaluative process that contrasts pre-purchase expectations with perceptions of performance during and after the consumption experience Customer Satisfaction is considered a post choice evaluative judgment concerning a specific purchase selection The concept of customer satisfaction describes the emotional reaction to the degree in which a product meets a buyers expectations Customer satisfaction is a collective outcome of perception, evaluation and psychological reactions to the consumption experience with a product/service.

Oliver, 1980

Soscia 2002

Swan & Trawick 1981

Yi ,1990

The most widely accepted conceptualization of the customer satisfaction concept is the expectancy disconfirmation theory (McQuitty, Finn and Wiley, 2000). The theory was developed by Oliver, who proposed that satisfaction level is a result of the difference between expected and perceived performance. Satisfaction (positive disconfirmation) occures when product or service is better than expected. On the other hand, a performance worse than expected results is dissatisfaction (negative disconfirmation)

Early concepts of satisfaction research have typically defined satisfaction as a post choice evaluative judgment concerning a specific purchase decision The most widely accepted model,

in which satisfaction is a function of disconfirmation, which in turn is a function of both expectations and performance. The disconfirmation paradigm in process theory provides the grounding for the vast majority of satisfaction studies and encompasses four constructs expectations, performance, disconfirmation and satisfaction. This model suggests that the effects of expectations are primarily through disconfirmation, but they also have an effect through perceived performance, as many studies have found a direct effect of perceived performance on satisfaction. Swan and Combs (1976) were among the first to argue that satisfaction is

associated with performance that fulfils expectations, while dissatisfaction occurs when performance falls below expectations. In addition, satisfaction as a discrepancy between the observed and the desired. This is consistent with value-percept disparity theory which was developed in response to the problem that consumers could be satisfied by aspects for which expectations never existed . The value-percept theory views satisfaction as an emotional response triggered by a cognitive-evaluative process. In other words, it is the comparison of the object to ones values rather than an expectation.

Customers want a meeting between their values (needs and wants) and the object of their evaluations. More recently, renewed attention has been focused on the nature of satisfaction emotion, fulfillment and state (Parker and Mathews, 2001). Consequently, recent literature adds to this perspective in two ways. First, although traditional models implicitly assume that customer satisfaction is essentially the result of cognitive processes, new conceptual developments suggest that affective processes may also contribute substantially to the explanation and prediction of consumer satisfaction (Fornell and Wernerfelt, 1987; Westbrook, 1987; Westbrook and Oliver, 1991). Second, satisfaction should be viewed as a judgment based on the cumulative experience made with a certain product or service rather than a transactionspecific phenomenon (Wilton and Nicosia, 1986). There is general agreement that: Satisfaction is a persons feelings of pleasure or disappointment resulting from comparing a products perceived performance (or outcome) in relation to his or her expectations (Kotler, 2003). Based on this review, customer satisfaction is defined as the result of a cognitive and affective evaluation, where some comparison standard is compared to the actually perceived performance. If the perceived performance is less than expected,

customers will be dissatisfied. On the other hand, if the perceived performance exceeds expectations, customers will be satisfied. Otherwise, if the perceived expectations are met with performance, customers are in an indifferent or neutral stage. Customer satisfaction is defined as a customers overall evaluation of the performance of an offering to date. This overall satisfaction has a strong positive effect on customer loyalty intentions across a wide range of product and service categories.

The satisfaction judgment is related to all the experiences made with a certain business concerning its given products, the sales process, and the after- sale service. Whether the customer is satisfied after purchase also depends on the offers performance in relation to the customers expectation. Customers form their expectation from past buying experience, friends and associates advice, and marketers and competitors information and promises (Kotler, 2000).

Figure 3: Continuous Improvement in Customer Satisfaction (Zairi, 2000) 2.1.1. Drivers of customer satisfaction

Based on the customer feedback on various products and services offered in financial service sector, Krishnan, Ramashawamy, Meyer and Damien (1998) identified four factors that affect

customer satisfaction in their study. These four factors are branch service satisfaction, automated telephone service satisfaction, product line satisfaction and financial report satisfaction. There was a overall satisfaction factors also existed which estimated from the combination of all four factors. Customer satisfaction may also affected by firm specific factors such as advertising and corporate reputation.

Service offering is the primary driver of customer satisfaction. The above four factors are somewhat related to service offering, so it has important role in driving customer satisfaction. After the service offering, its turn to service delivery as source of customer retention by driving their satisfaction and make them delighted. Four quality attributes found by Krishnan, Ramashawamy, Meyer and Damien (1998) in their study as being critical to determine customer satisfaction with service offering and service delivery. These four attributes are easiness of account opening and closing, product variety, competitive interest rate and fees and lucid information rate on all product and services. A firm needs to channel it resources to improve product offerings and secondly, a firm can target a specific customer segments to reap the full benefits of the satisfaction through service delivery. In particular, improving the quality of service offering and automated telephone service both offer considerable growth potential of a firm (Krishnan, Ramashawamy, Meyer and Damien 1998).

Quality of customer interface is a key driver of customer satisfaction (Ruth and Jackson, 1995). The above four factors are directly affected by multiple operational quality attributes. Firms need identify and understand the relative effects of these operational quality attributes on the customer rating of four factors (Soteriuo and Zenios, 1998; Armstrong and Harker, 1995).

Advances in IT open the door of innovation by financial firms. Using state of art, innovation in product service offering and delivery is possible. The number of customer who engage in electronic commerce for financial transaction has increased considerably over the years (Businessweek may 25, 1998). In this towenty first century, use of information technology is enormous in innovating and faster and comfortable service to customer of financial product and services. So usage of IT is also an important driver of customer satisfaction.

2.1.2. Drivers of customer satisfaction for financial services Financial services companies produce products such as checking and saving accounts, mutual funds and brokerage accounts, cash and margin accounts, and in some cases may also offer insurance policies. An interesting aspect of financial services companies is that they do not fully fit into the mold of full service industries such as hotel and travel agencies. They some where in between manufacturing industries, which offer tangible products, and full service industries (Soteriuo and Zenios, 1998).

The notion of quality in financial services firms is quite different from that in manufacturing companies. The nature of the financial services industry is such that its products are mostly intangible. For example, in an investment company, the product delivered is not the stock certificate but the investment it represents, as well as the peripheral services such as online account services and accurate periodic reports. Further, one of the unique features of the financial services industry is that many customers seldom use some of the products produced by the firms on a daily basis. Often, once a product is sold, it is never used again until it expires or matures. Since customer do not view the actual product as a full product, the service accompanying the product is very important in determining the overall satisfaction with the firm. As a consequence, in modeling overall customer satisfaction for financial services companies, it is important to include both product and service attributes (Roth and Jackson, 1995).

Prior research has identified specific attributes of quality that are linked to customer satisfaction in both manufacturing and service industries (Garvin, 1988; Zeithaml, Parasuraman, and Berry, 1990). While research on service quality has generally investigated the quality attributes of certain service encounters (Zeithaml, Parasuraman, and Berry, 1990). There is a paucity of research and guidance in understanding the drivers of overall customer satisfaction at the firm level. This is true especially for multi-chanel firms that are increasingly becoming the norm in the financial services sector (Frei et. Al., 1997). Roth and Jackson, (1995) in one of the few rigorous empirical studies on financial services industry identify the determinants of service quality in the banking industry. Their analysis indicates that the quality of the customer interface positively influences service quality. However, they use a composite measure for the quality of

customer interface that include various factors such as responsiveness to customer inquiries, accuracy of account statements, timelines of mailing accounts statements, customer complaints and processing errors.

In the financial services businesses, the notion of customer interface is multifaceted and may vary depending upon the channel of service delivery, while all service encounters mostly involve the customer in one way or the other, the nature of personal interactions with customers at branches differs from that of IT enabled automated delivery channels. There is a need for a deeper understanding of this distinction for firms to leverage overall customer satisfaction. Different components of the customer interface may have varying impacts on satisfaction across the customer population (Peterson & Wilson, 1996).

2.1.3.

Techniques to measure customer satisfaction

There are a number of techniques to measure customer satisfaction. These techniques include customer satisfaction survey methodologies, focus groups to study customer satisfaction issues, standardized packages for monitoring customer satisfaction, and various computer softwares (Soteriuo and Zenios, 1998).

Among the techniques, some are somewhat problematic when it is implemented. So there are some problem associated with typical customer satisfaction measurement techniques such as focus groups, survey methodologies and customer satisfaction software (Ingrid Feelikova, 2004). These include: Analytical concerned with techniques, formal procedure, systems, and so on Behavioral concerned with te attitudes, beliefs, perceptions, motivation, commitment and resulting behavior of the people involved in the process Organizational concerned with the organizational structure, information flows, management style and corporate culture, i.e. the context in which the process is conducted (Piercy, 1996). (Ingrid Feelikova, 2004).

2.2. Service Quality Providing excellent service quality is widely recognised as a critical business requirement (Voss et al, 2004; Vilares & Coehlo, 2003; Van der Weile et al, 2002). It is not just a corporate offering, but a competitive weapon (Rosen et al, 2003) which is essential to corporate profitability and survival (Newman & Cowling, 1996). However, service quality, particularly within the Services sector, remains a complex concept and there is little consensus as to the drivers for effective delivery (Voss et al, 2004; Johnston, 1995). Some prominent definitions of service quality are summarized in the following table.

Authors Parasuraman, Zeithaml, and Berry, (1985) Gronroos (1991)

Lehtinen (1982)

Definitions Service quality as the ability of an organization to meet or exceed customer expectations Service quality is made up of three dimensions: the technical quality of the outcome, the functional quality of the encounter, and the company corporate image. Service quality in three dimensions: the physical quality (of products and/or services), the corporate quality (the company image) and interactive quality (interaction between the consumer and the service organization). Service quality is the overall evaluation of a specific service firm that results from comparing that firms performance with the customers general expectations of how firms in that industry should perform. Definitions of service quality hold that this is the result of the comparison that customers make between their expectations about a service and their perception of the way the service has been performed.

Parasuraman, Zeithaml, and Berry, (1988)

Lewis & Booms, 1983

2.2.1.

Service Quality dimensions and SERVQUAL model

Much of the initial work in developing a model to define and assess service quality has been conducted by Parasuraman, Zeithaml, and Berry (1985) (otherwise referred to as PZB). In conceptualizing the basic service quality model PZB (1985) identified ten key determinants of service quality as perceived by the company and: the consumer reliability, responsiveness,

competence, access, courtesy, communication, credibility, security, understanding/knowing the customer and tangibility.

They noted that discrepancies existed between the firm's and the customer's perceptions of the service quality delivered. In investigating these discrepancies, PZB (1985) assert that service quality can be assessed by measuring the discrepancies or "gaps" between what the customer expects and what the consumer perceives he receives. service quality delivered. In investigating these discrepancies, PZB (1985) assert that service quality can be assessed by measuring the discrepancies or "gaps" between what the customer expects and what the consumer perceives he receives.

Based on their review of the literature, PZB (1985) developed the SERVQUAL scale. The scale was designed to uncover broad areas of good or bad service quality and can be used to show service quality trends over time, especially when used with other service quality techniques. The SERVQUAL scale is based on a difference score between customer expectations of service and their perceptions after receiving the service. Initially PZB (1985) focused on the ten determinants of service quality.

However, after two stages of scale purification, they reduced the ten determinants to five dimensions of service quality: Tangibles, Reliability, Responsiveness, Assurance, And Empathy (PZB 1988).

The Five Key Service Dimensions TANGIBLES - the appearance of physical facilities, equipment, personnel and information materials RELIABILITY - the ability to perform the service accurately and dependably RESPONSIVENESS - the willingness to help customers and provide a prompt service ASSURANCE - a combination of the following Competence - having the requisite skills and knowledge

Courtesy - politeness, respect, consideration and friendliness of contact staff Credibility - trustworthiness, believability and honesty of staff Security - freedom from danger, risk or doubt

EMPATHY - a combination of the following: Access (physical and social) - approachability and ease of contact Communication - keeping customers informed in a language they understand and really listening to them Understanding the customer - making the effort to get to know customers and their specific needs
Table 1: Dimensions of service quality

Dimensions Tangibles

Particulars Appearance of physical facilities, equipments, personel and written materials.

Reliability Responsiveness Assurance

Ability to perform the promised service dependably and accurately. Willingness to help customers and provide prompt service Employees knowledge and courtesy and their ability to inspire trust and confidence.

empathy

Caring, easy access, good communication, customer understanding and individualized attention given to customers.

Source: Adapted from Zeithaml et al. (1990)

The SERVQUAL model is a widely accepted model of determining and expressing the customer satisfaction. As it is easy to understand and to identify the customer satisfaction level this model is selected to use in the report. There are five major dimensions which entirely represent the service quality which are described earlier as it is discussed by PZB (1985). Now at this stage,

we provide another description by Brysland, A. and Curry, A. (2001) about the five dimensions. These will help to generate the actual quality of the delivered service. These are explained below: Reliability Reliability is defined as the ability to perform the promised service dependably and accurately. In its broadest sense reliability means that the company delivers on its promises, promises about delivery, service provision, problem resolution and pricing. (Brysland, A. and Curry, A. 2001)

Attributes such as keeping service promises, sincere attention, and reasonable service charges were categorized in this dimension of service quality. Some educated respondents were giving good service examples while asking question regarding optimum service. This dimension was the most uniform among the respondents. Responsiveness Based on the same authors responsiveness is the willingness to help customers and to provide prompt service. This dimension emphasizes attentiveness and promptness in dealing with customer requests, questions, complaints and problems.

Prompt services, willingness to help the customers are the attributes that related to the responsiveness dimension of service quality. Customers put extra attention on this attribute.

Assurance Assurance is defined as employees knowledge and courtesy and the ability of the ability of the firm and its employees to inspire trust and confidence. This dimension is likely to be particularly important for services that customers perceive as high risk or for services of which they feel uncertain about their ability to evaluate outcomes for example, banking, insurance, brokerage, medical and legal services. (Brysland, A. and Curry, A. 2001). Since banking is financial service, which is very much sensitive to any person so, this service assurance is very much essential than any other attributes. It provides financial safety to the customer. The respondents also mentioned friendliness & professionalism of the employees and feeling of safety with them while describing the service attributes. These aspects were close to

the assurance dimension and thus were categorized in this section. Courtesy behavior and knowledge of the employees are the major attributes of this dimension. Care and Empathy

Empathy is defined as the caring individualized attention that the firm provides its customers. The essence of empathy is conveying through personalized or customized service that customers are unique and special and that their needs are understood. (Brysland, A. and Curry, A. 2001) This attribute demands customization service process. Aspects like Individual attention, understanding customers needs and interests were categorized in this section. Tangibles

Tangibles are defined as the appearance of physical facilities, equipments, personnel and communication materials. Tangibles provide physical representations or images of the services that customers, particularly new customers will use to evaluate quality. (Brysland, A. and Curry, A. 2001). Though service is an intangible product and it consume simultaneously, respondents (customers) want to make it tangible by physical evidences, facilities, technologies, neatness of the premises, etc. All these information was grouped in the tangibles dimension of service quality. Apart from these general attributes discussed above, respondents also mentioned the vital role of location advantages and the features of products & services in forming overall customer satisfaction.

2.2.2.

Service quality gaps

There are seven major gaps in the service quality concept, which are shown in Figure 2.2. The model is an extention of Parasuraman et al. (1985). According to the following explanation (ASI Quality Systems, 1992; Curry, 1999; Luk and Layton, 2002), the three important gaps, which are more associated with the external customers, are Gap1, Gap5 and Gap6; since they have a direct relationship with customers. Gap1: Customers expectations versus management perceptions: as a result of the lack of a marketing research orientation, inadequate upward communication and too many layers of management.

Gap2: Management perceptions versus service specifications: as a result of inadequate commitment to service quality, a perception of unfeasibility, inadequate task standardization and an absence of goal setting.

Gap3: Service specifications versus service delivery: as a result of role ambiguity and conflict, poor employee-job fit and poor technology-job fit, inappropriate supervisory control systems, lack of perceived control and lack of teamwork.

Gap4: Service delivery versus external communication: as a result of inadequate horizontal communications and propensity to over-promise.

Gap5: The discrepancy between customer expectations and their perceptions of the service delivered: as a result of the influences exerted from the customer side and the shortfalls (gaps) on the part of the service provider. In this case, customer expectations are influenced by the extent of personal needs, word of mouth recommendation and past service experiences. Gap6: The discrepancy between customer expectations and employees perceptions: as a result of the differences in the understanding of customer expectations by front-line service providers. Gap7: The discrepancy between employees perceptions and management perceptions: as a result of the differences in the understanding of customer expectations between managers and service providers.

Figure 2.2: Model of service quality gaps (Parasuraman et al., 1985; Curry, 1999; Luk and Layton, 2002)

According to Brown and Bond (1995), "the gap model is one of the best received and most heuristically valuable contributions to the services literature". The model identifies seven key discrepancies or gaps relating to managerial perceptions of service quality, and tasks associated with service delivery to customers. The first six gaps (Gap 1, Gap 2, Gap 3, Gap 4, Gap 6 and Gap 7) are identified as functions of the way in which service is delivered, whereas Gap 5 pertains to the customer and as such is considered to be the true measure of service quality. The Gap on which the SERVQUAL methodology has influence is Gap 5.

2.3. Necessity of service quality for customer satisfaction Spathis,Charalambos; Eugenia, Petridou and Glaveli, Niki (2004), in their study on Managing Service Quality in banks: Customers gender effects discussed the service quality of Greek banks on the basis of their customers perceptions, and analyses how gender differences affect customers perceptions of service quality dimensions such as effectiveness and assurance, access, price, tangibles, service portfolio, and reliability. The study supported the hypothesis that

gender affects service quality perceptions and the relative importance attached to various banking service quality dimensions.

Yavas,Ugur., Benkenstein,Martin., & Stuhldreier,Uwe (2004) , examined the nature of relationships between service quality, background characteristics, and satisfaction and selected behavioral outcomes by using retail banking in Germany as its setting. Study results shown that service quality is at the root of customer satisfaction and is linked to such behavioral outcomes such as word of mouth, complaint, recommending and switching. The results indicate that tangible elements of service quality and being a female are more closely associated with positive word of mouth and commitment. On the other hand, timeliness aspects of service delivery are more closely related to customer satisfaction, and complaint and switching behaviors.

Alka Sharma and Versha Mehta (2004-05) found that public sector banks enjoy a better quality perception among their customers as for public sector banks, three out of five dimensions have scored higher than average, however, in case of private banks, only two dimensions have higher than average values.

Joshua, A.J. & Koshi, Moli.P. (2005), observed that recognition of service quality as a competitive weapon is relatively a recent phenomenon in the Indian Banking sector. Prior to the liberalization era the banking sector in India was operating in a protected environment and was dominated by nationalized banks. Banks at that time did not feel the need to pay attention to service quality issues and they assigned very low priority to identification and satisfaction of customer needs.

Nalini Prava Tripathy (2006) highlighted the facts of customer preferences towards the bank. It is the need of the hour for PSBs to inculcate marketing orientation in their work culture. The bankers should educate their front-end staff about the need to meet the customer expectations which alone can build the reputation and image of the bank.

Ashutosh K.Singh and Shiv K.Tripathi (2007) found in their study, that the rating of executives and customers of the Private Bank differs with each other on dimensions like responsiveness,

competence, product range and security and agree on dimensions like reliability, accessibility, courtesy and tangibles. Therefore, they suggested that private banks should improve responsiveness, competence, product range and security features in their services.

Purohit, H.C. & Pathardikar, Avinash, D. (2007) covered the issues in their study which related with the measurement of service quality and recorded responses of the bank customers about the services of the Nationalized Banks in India. They identified key elements of strategies seen to be adopted by leading Indian banks include building a strong presence in India and international markets, customer-focused product innovation, financial resilience and a strong operating environment. They stressed the need that the policy decision makers should make multi-cornered efforts to have a new perception of quality.

Vijayakumar T. & Velu.R (2007) collected data from 325 customers of various retail banks in their study to identify the determinants of customer satisfaction in terms of service quality, service feature, service problems, service recovery and product used and the intention of switch over to other banks. He found that in retail banking, core and relational features ought to be equally weighted when managers are interested in improving customer satisfaction. In contrast, when the focus is on reducing switching intentions, considerable emphasis should fall on core items, ensuring successful problem recovery. In this case, the influence of relational features is far less important.

Seema Girdhar (2008) conducted a study regarding banking on relationship which is related to service quality of three co-operative banks in Surat found that the perceived performance of Prime Bank (one of the bank) is relatively close to expectations in comparison to other two banks. They also studied the variations in service quality across demographic variables and income of customers.

R K Mohanty (2008) observed that there are wide gaps exist between the expectations and views of customers on one hand and products and service delivery by banks on the other hand. Also, there exist many socio-cultural aspects quite specific and relevant from the viewpoint of customers as well as banks. Many of these issues are either not addressed so far or to a little

extent. Customer satisfaction is not only applicable to external customers; but also equally applicable to internal customers (i.e. employees).

Chapter 3: Research methodology

T
3.1.

his chapter will describe the detailed nature and structure of the research planning of this dissertation. The description will covers purpose of the research conducted, its approach to research planning, research strategy, sample selection procedure, data

collection method and nature of data analysis.

Research purpose

Early in any research study, one faces the task of selecting the specific design to use. A number of different design approaches exist but, unfortunately, no simple classification system defines all the various that must be considered (Cooper & Schindler, 2003) Research can be used for different purposes and various uses. Based on their types and nature, research can be classified in different categories. Sauders, Lewis & Thornhil (2003) mentioned that they are most often classified exploratory, descriptive or explanatory while Cooper and Schindler (2003) divide research into two types descriptive and causal.

Exploratory Research Exploratory research is a type of research design, which objective is to clarifying and defines the nature of the problem. It helps to clarify the ambiguous nature of a problem, to gain better understanding to aid analysis. Exploratory study is useful when the research question are vague or when there is little theory available to guide prediction. Developing a better understanding is the main reason of using exploratory research (Hair, Babin, Money and Samoel 2003).it is also useful when formulating a basic statement of research problem is impossible. Exploratory studies are a valuable means of finding oout what is happening, to seek new insight, to ask questions and to assess phenomena in a new light. It is particularly useful if researcher wish to clarify the understanding of a problem.

Descriptive research This type of research is more formal than exploratory research. One reason is that it is structured with clearly defined hypothesis or investigative questions. following characteristics Descriptions of phenomenon or characteristics associated with subject population Estimates of the proportions of a population that have these characteristics Decovery of associations among different variables (Cooper and Schindler 2003) Formal studies may have the

Explanatory research The aim of this type of research is to find a causal relationship between/among the variables. Explanatory studies emphasis on investigating a situation or a problem in order to explain the relationship between dependent and independent variable (Sauders, Lewis & Thornhil 2003). Explanatory studies designed to test whether one event causes another (Hair, Babin, Money and Samoel 2003).

The main purpose of this research study is to measure the level of service of quality customers expect to get from HSBC and also the level of service the customers perceive that they are getting leading towards identifying the gap between the expectation and perception of the level of quality of services.

In this study, descriptive research will be conducted to find out and understanding of the overall banking of HSBC and also to determine some of the attributes of service quality in this Bank.

3.2.

Research approach

Research approach consists of the method, strategies and knowledge claims that is/are used in a research paper or dissertation. In the world of research approach, you will find two very common types of research approach. Namely these two approaches are qualitative approach and quantitative approach. There also a mixed approach also existed.

3.2.1. Quantitative approach Quantitative research is very well known as hypothesis testing research. In this type of research, initially a theory of statement is selected for deriving a hypothesis. Then an experimental design will choose for measuring the effect of variable in question by the selected independent variable. To get rid of bias and to reduce the error, subject selected randomly in the study.here sample of subjects will represent the whole population of that subject (Newman and Benz 1998). Apart from the hypothesis testing, quantitative approach also includes cause and effect thinking, use of instrument and observation, and the test of theories. Quantitative approach is one which the investigator primarily uses post positivist claims for developing knowledge , employs strategies of inquiry such as experiments and surveys and collects data on predetermined instruments that yield statistical data (Creswell 2003)

3.2.2. Qualitative approach Qualitative research is multi method in focus, involving an interpretive, naturalistic approach to its subject matter. This means that qualitative researchers study things in their natural setting, attempting to make sense of, or interpret, phenomena in terms of the meaning people bring to them (Newman and Benz 1998) Qualitative approach is one in which the inquirer often makes knowledge claims based primarily on constructivists perspectives (i.e., the multiple meaning of individual experiences, meaning socially and historically constructed, with an intent of developing a theory or pattern) or advocacy/participatory perspectives ( i.e., political, issue-oriented, collaborative or change oriented) or both. It also uses strategies of inquiry such as narratives, phenomenology, ethnography, grounded theory studies or case studies. The researcher collects open-minded, emerging data with the primary intent of developing themes from the data (Creswell 2003). Since the purpose is to understand the most important dimensions of service quality from the customer perceived and expected value of service quality of HSBC bank, quantitative research is found to be more appropriate for this study.

3.3.

Research Strategy

Five types of research strategy are there which are based on three basic properties. These properties are form of research question, requirement of control over behavioral events and necessary focuses on contemporary events. These strategies are experiments, surveys, archival analysis, histories and case studies (see table 1).

Table 2: Research strategies

Strategy Form of Research Question Experiment Survey How, Why Who, what, where, how many , how much Archival analysis Who, what , where, how many, how much History Case Study How, why How , why No No No Yes no Yes/No Requires control over behavioral events? Yes No Focuses on contemporary events? Yes yes

Source: Yin, 1994, p.6 The research problem question in the study is based on what question and this what question is actually form a how many and investigator has no control over the actual behavioral events, Survey is found to be a more appropriate approach in order to gain a better understanding of the research area. Survey is more appropriate for the quantitative study.

3.4.

Sample selection

The basic idea of sampling is that by selecting some of the elements in a population, researcher may draw conclusions about the entire population. There are several compelling reasons for sampling, including: lower cost, greater accuracy of result, greater speed of data collection and availability of population selection (Cooper & Schindler 2003).

3.4.1. Selecting the sampling method There are a number of issues both theoretical and practical, to select a sampling method to use in a study. These issues include considering the nature of the study, the objectives of study and the time and budget available. Traditional sampling method can be categorized into two broad categories: probability and non-probability sampling (Samuel et. Al, 2003).

In survey based research, probability sampling is most commonly used. Here the researcher find answer of the research questions or meet research objectives by making inferences from the sample about a population(Samuel et. Al, 2003). The procedure of sampling selection of

probability sampling is different from other sampling method. Here the sample selected randomly and the the probability of being selected is determined ahead of time by the researcher. The representation of the sample for the whole population will be ensured if it is done properly (Hair et. Al., 2003).

Non-probability sampling provides a range of alternative techniques based on researchers subjective judgment (Samuel et. Al, 2003). In non-probability sampling the selection of elements for the sample is not necessarily made with the aim of being statistically representative of the population. Rather the researcher uses the subjective methods such as personal experience, convenience, expert judgement and so on to select the elements in the sample. As a result the probability of any element of the population being chosen is not known (Samuel et. Al, 2003).

There are different types of non-probability sampling methods. Such as convenience sampling, jugdgement sampling, quota sampling etc (Samuel et. Al, 2003).

3.4.2. Convenience sampling Convenience sampling involves select member who can provide required information and who are more available to participate in the study. Convenience samples enable the researcher to complete a large number of interviews cost effectively and quickly but they suffer from selection bias because of difference of target population (Hair et. Al., 2003).

3.4.3. Judgment sampling Here the sample is selected by judgment of the researcher and it involves a specific purpose. Group of people who have knowledge about particular problem they can be selected as sample element. Sometimes it referred as a purposive sample because it involves a specific purpose. Judgement sampling is more convenient and low cost involvement.

3.4.4. Quota sampling Objective of quota sampling is to have proportional representation of the strata of the target population for the total sample and the certain characteristics describe the dirmensions of the population. In quota sampling the researcher defines the strata of the target population, determines the total size and set a quota for the sample elements form the each stratum. The findings from the sampling can not be generalized because of the choice of elements is not done using a probability sampling methods (Samuel et. Al, 2003).

The purpose of this research is to classify the service quality dimensions of the customers of banking service of HSBC and other banks. For the study, the sampling method used is convenience sampling.

3.5.

Sources of Information & data collection

There are two major approaches to gathering information about a situation, person, problem or phenomenon. Sometimes, information required is already available and only need to be extracted. However there are times when the information must be collected. Based upon these broad approaches to information gathering data are categorized as: secondary data and primary data. Information of this dissertation will be collected from both primary and secondary sources. The details of the sources are given in the following section.

3.5.1. Primary data Primary data can be collected by variety of ways, first of all by interviewing employees of HSBC and directly communicating with the customers. Primary data will be derived from the discussion with the employees & through surveys on customers of the organization. Primary information is under consideration in the following manner: Face to face conversation with the employees.

By interviewing customers of HSBC.

3.5.2. Secondary data Different types of secondary data will be elaborated in the research. Sources of secondary information can be defined as follows: Internal Sources

Prior research report Group Business Principal manual Group Instruction Manual & Business Instruction Manual Bank's Annual Report.

External Sources

Different books and periodicals related to the banking sector. Internet. Newspapers.

In this study, quantitative survey is used as a data collection method. Since the aim of the study is to classify service quality dimensions in banking service from the customers point of view, the main focus thus is customer. A questionnaire was prepared to get idea about the customers experiences in getting banking services. A survey is a procedure used to collect primary data from individuals. The data sought can range from beliefs, opinions, attitudes and lifestyles to general background information on individuals such as gender, age, education and income as

well as company characteristics like revenue and number of employees. Survey are used when the research involves collecting information from a large sample of individuals (Samuel et. Al., 2003).

The questionnaire was developed based on research objectives. The logical structure of questionnaire followed the order of service quality dimension. For understanding the importance and satisfaction of each service quality dimensions a 7-scale was used (1= not very essential or strongly disagree, 7= very essential or strongly agree).

Once came up with the first draft of questionnaire, ten questionnaire were handed out to the students of LSC and to the supervisor of the study especially. They were asked whether the questions made sense to them and were they easy to understand. After refining questions, the well-improved questionnaire was developed.

3.6.

Data analysis

After collecting all the data the process of analysis begins. To summarize and rearrange the data several interrelated procedure are performed during the data analysis stage (Zikmund 2000).

For quantitative data analysis, a tool of Microsoft Excel is used for data input and analysis. The results were presented by graphical form with detail description.

3.7.

Validity and Reliability

It is very important to ensure the validity and reliability of the data used in the research and their findings also. By assuring the presence of validity and reliability, the chances of wrong answer or findings is reduced and resulted a successful research.

3.7.1. Validity

Validity is concerned with whether the findings are really about what they appear to be about (Saunders et. Al. 2003). Validity defined as the extent to which data collection method or methods accurately measure what they were intended to measure (Saunders et. Al. 2003). Cooper & Schindler (2003) believe that validity refers to the extent to which a test measures what we actually wish to measure. There are two major forms: external and internal validity. The external validity or research finding refers to the datas ability to be generalized across persons, settings, and times. Internal validity is the ability of a research instrument to measure what is purposed to measure (Cooper & Schindler, 2003).

Numbers of different steps were taken to ensure the validity of the study: Data was collected from the reliable sources Survey questions were made based on literature review to ensure the validity of the research Questionnaire has been pre-tested by the responded before starting the survey and questionnaire was tested by a expert also. Data has been collected through two weeks, within this short time no major event has been changed with the related topic.

3.7.2. Reliability According to Saunders et. Al. , 2003, reliability refers to the degree to which data collection method or methods will yield consistent findings, similar observations would be made or conclusions reached by other researchers or there is transparency in how sense was made from the raw data. Cooper & Schindler, (2003) have defined reliability as many things to many people, but in most contexts the notion of consistency emerges. A measure is reliable to the degree that it supplies consistent results. Reliability is a necessary contributor to validity but is not a sufficient condition for validity. In this study, the researcher takes necessary care to ensure the consistency of the information and the findings and reliability of data.

Chapter 4: HSBC: Organization overview

SBC Holdings plc (HSBC), incorporated on January 1, 1959, is a global banking and financial services company. Through its subsidiaries and associates, HSBC provides a range of banking and related financial services. The products and

services of the Company include personal financial services, commercial banking, global banking and markets, and private banking. In February 2009, it sold its stake in Modern Asia Environmental Holdings Inc. to Japans Dowa Eco-system Co. In May 2009, the Company completed the acquisition of 88.89% of PT Bank Ekonomi Raharja Tbk in Indonesia.

Headquartered in London, HSBC Holdings plc is one of the largest banking and financial services organizations in the world. It began operations in Hong Kong more than 130 years ago. The HSBC Group's international network comprises some 10,000 offices in 82 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.

With listings on the London, Hong Kong, New York and Paris stock exchanges, around 200000 shareholders in some 100 countries and territories hold shares in HSBC Holdings plc. The shares are traded on the New York Stock Exchange in the form of American Depository Receipts. Through a global network linked by advanced technology, including a rapidly growing ecommerce capability, HSBC provides a comprehensive range of financial services: personal, commercial, corporate, investment and private banking; trade services; cash management; treasury and capital markets services; insurance; consumer and business finance; pension and investment fund management; trustee services; and securities and custody services.

4.1.

Foundation & growth of HSBC

The HSBC Group is named after its founding member, The Hong Kong and Shanghai Banking Corporation Limited (HSBC), which was established in 1865 in Hong Kong and Shanghai to finance the growing trade between China and Europe. The inspiration behind the founding of the

bank was Mr. Thomas Sutherland, a Scot who was then working as the Hong Kong Superintendent of the Peninsular and Oriental Steam Navigation Company. He realized that there was considerable demand for local banking facilities both in Hong Kong and along the China coast and he helped to establish the bank in March 1865. Then, as now, the bank's headquarters were at 1 Queen's Road Central in Hong Kong and a branch was opened one month later in Shanghai.

Throughout the late nineteenth and the early twentieth centuries, the bank established a network of agencies and branches based mainly in China and South East Asia but also with representation in the Indian sub-continent, Japan, Europe and North America. In many of its branches the bank was the pioneer of modern banking practices. From the outset, trade finance was a strong feature of the bank's business with bullion, exchange and merchant banking also playing an important part. Additionally, the bank issued notes in many countries throughout the Far East.

During the Second World War the bank was forced to close many branches and its head office was temporarily moved to London. However, after the war the bank played a key role in the reconstruction of the Hong Kong economy and began to further diversify the geographical spread of the bank. The group expanded primarily through offices established in the banks name until the mid 1950s when it began to create or acquire subsidiaries. This strategy culminated in 1992 with one of the largest bank acquisitions in history when HSBC holdings acquired Midland Bank plc, which was founded in UK in 1836. The following are some key developments in the group since 1955:

4.2.

History of Hong Kong and Shanghai Banking Corporation

1955 The Hong Kong and Shanghai Banking Corporation of California was founded. 1959 The Hong Kong and Shanghai Banking Corporation acquires The British Bank of the Middle East (formerly the Imperial Bank of Persia, now called HSBC Bank Middle East) and The Mercantile Bank (originally the Chartered Mercantile Bank of India, London & China). 1960 Wayfoong Finance Limited, a Hong Kong hire purchase and personal finance subsidiary, is established.

1965 The Hong Kong and Shanghai Banking Corporation acquires a majority shareholding in Hang Seng Bank Limited, now the second-largest bank incorporated in Hong Kong. 1967 Midland Bank purchases a one-third share in the parent of London Merchant bank Samuel Montagu & Co. Limited (soon to be renamed HSBC Republic Bank (UK) Limited). 1971 The Cyprus Popular Bank Limited (now Laiki Bank) becomes an associated company of the Group. 1972 The Hong Kong and Shanghai Banking Corporation forms merchant-banking subsidiary, Wardley Limited (now called HSBC Investment Bank Asia Limited). Midland Bank acquires a shareholding in UBAF Bank Limited (now known as British Arab Commercial Bank Limitd). 1974 Samuel Montagu becomes a wholly owned subsidiary of Midland. 1978 The Saudi British Bank is established under local control to take over The British Bank of the Middle East's branches in Saudi Arabia. 1980 The Hongkong and Shanghai Banking Corporation acquires 51% of New York State's Marine Midland Bank, N.A. (now called HSBC Bank USA), with a controlling interest in Concord Leasing. UK-based merchant bank Antony Gibbs becomes a wholly owned subsidiary. Midland acquires a controlling interest in leading German private bank Trinkaus & Burkhardt KgaA (now HSBC Trinkaus & Burkhardt KgaA).

1981 Hongkong Bank of Canada (Now HSBC Bank Canada) is established in Vancouver. The Group acquires a controlling interest in Equator Holdings Limited. 1982 Egyptian British Bank S.A.E. is formed, with the Group holding a 40% interest. 1983 Marine Midland Bank acquires Carroll McEntee & McGinley (now HSBC Securities (USA) Inc.), a New York based primary dealer in US government securities. 1985 New Head office building opened at Hong Kong. 1986 The Hong Kong and Shanghai Banking Corporation establishes Hong Kong Bank of Australia Limited (now HSBC Bank Australia Limited) and acquires James Capel & Co. Limited, a leading London-based international securities company. 1987 The Hong Kong and Shanghai Banking Corporation acquires the remaining shares of Marine Midland and a 14.9% equity interest in Midland Bank.

1989 A strategic alliance is entered into between The Hong Kong and Shanghai Banking Corporation and California-based Wells Fargo Bank. Midland Bank Launches First Direct, the UK's first 24-hour telephone banking service. 1991 HSBC Holdings is established; its shares are traded on the London and Hong Kong stock exchanges. 1992 HSBC Holdings purchases the remaining equity in Midland Bank. HSBC Investment Bank plc is formed. 1993 The HSBC Group's Head Office moves to London. Forward Trust Group Limited (now HSBC Asset Finance (UK) Limited), a Midland subsidiary, acquires Swan National Leasing, establishing the UK's third largest vehicle contract hire company. 1994 The Hong Kong and Shanghai Banking Corporation is the first foreign bank to incorporate locally in Malaysia, forming Hong Kong Bank Malaysia Berhad (now HSBC Bank Malaysia Berhad). 1995 Wells Fargo & Co. and HSBC Holdings establish Wells Fargo HSBC Trade Bank, N.A. in California to provide customers of both companies with trade finance and international banking services. 1997 HSBC Holdings and Wachovia Corporation of the United States form a non-equity alliance to market corporate financial services worldwide. Forward Trust acquires Eversholt (now HSBC Rail (UK) Limited), a rail rolling-stock leasing company and the largest owner of electric trains operating on the UK mainline network. Marine Midland Bank acquires First Federal Savings and Loan Association of Rochester in New York. In Latin America, the Group establishes a new subsidiary in Brazil, Banco HSBC Bamerindus S.A. and completes the acquisition of Roberts 01S.A. de Inversiones in Argentina (now HSBC Argentina Holdings S.A.). 1999 Shares in HSBC Holdings begin trading on a third stock exchange, New York. HSBC Holdings acquires Republic New York Corporation (now integreted with HSBC USA Inc.) and its sister company Safra Republic Holdings S.A. (now HSBC Republic Holdings (Luxembourg) S.A.). Midland Bank acquires a 70.03% interest in Mid-Med Bank p.l.c. (Now called HSBC Bank Malta p.l.c.), Malta's largest commercial bank. 2000 HSBC and Merrill Lynch form a joint venture to launch the first international online banking and investment services company. HSBC reaches an agreement in principle to acquire

75% of the issued shares of Bangkok Metropolitan Bank, the eighth largest bank in Thailand. HSBC acquires Credit Commercial de France (CCF), a major French banking group. Shares in HSBC Holdings are listed on a fourth stock exchange, in Paris. 2001 Agreement is reached for HSBC to acquire Barclays Banks branches and fund Management Company in Greece. New 44-floor Headquarter building at Londons Canary Wharf is due to be ready for occupation.

4.3.

HSBC international network

The HSBC Group's international network comprises of some 9,500 offices in 79 countries and territories. A brief list is presented below: Table 3: HSBC international network
Region Americas Asia-Pacific Europe Middle East & Africa Number of offices 5,708 693 2,897 172

4.4.

HSBC's business principle and values

The HSBC Group is committed to five Business Principles: Outstanding customer service; Effective and efficient operations; Strong capital liquidity; Conservative lending policy; Strict expense discipline;

HSBC also operates according to certain Key Business Values:

The highest personal standards of integrity at all levels; Commitment to truth and fair dealing; Hand-on management at all levels; Openly esteemed commitment to quality and competence; A minimum of bureaucracy; Fast decisions and implementation; Putting the Group's interests ahead of the individual's; The appropriate delegation of authority with accountability; Fair and objective employer; A merit approach to recruitment/selection/promotion; A commitment to complying with the spirit and letter of all laws and regulations;

The promotion of good environmental practice and sustainable development and commitment to the welfare and development of each local community.

4.5.

Services of HSBC

It is already explored that, HSBC has global operations over the continents of the worlds. Its services are varying based on the geographical structure, economic condition and market conditions etc. in this section, some generalized services of HSBC are elaborated. 4.5.1. Personal Financial Services Personal Financial Services provides 98 million individual and self-employed customers with financial services in over 60 markets globally. The offerings include personal banking products (current and savings accounts, mortgages and personal loans, credit cards, and local and international payment services) and wealth management services (insurance and investment products and financial planning services). HSBC Premier (Premier) provides banking services to its customers, including personalized relationship management, a single online view of all international accounts, free international funds transfer between HSBC accounts, 24-hour priority telephone access, global travel assistance and wealth management services. HSBC Advance offers a range of services including

preferential day-to-day and international banking while allowing solutions to be customized to meet local requirements. Insurance products distributed by HSBC through its direct channels and branch networks include life, property and health insurance, as well as pensions and credit protection. HSBC also makes available a range of investment products. HSBC is a global credit card issuer with over 100 million credit cards in force in over 50 markets. 4.5.2. Commercial Banking HSBC is an international bank with over three million commercial banking customers in 63 countries and territories. HSBC divides its commercial banking business into corporate, midmarket, business banking upper and business banking mass segments, allowing the development of tailored customer propositions while adopting a view of the entire commercial banking sector. HSBC provides a range of short and longer-term financing options for commercial banking customers, both domestically and cross-border, including overdrafts, receivables finance, term loans and property finance. It offers forms of asset finance in selected sites and has established specialized divisions providing leasing and installment finance for vehicles, plant and equipment. HSBC is a provider of domestic and cross-border payments, collections, liquidity management and account services globally. Deposits are attracted through current accounts and savings products, in local and foreign currencies. HSBC finances and facilitates significant volumes of international trade, under both open account terms and traditional trade finance instruments. HSBC also provides international factoring, commodity and insured export finance, and forfaiting services. The Company utilizes its international network to build customer relationships at both ends of trade flows, and through knowledge in document checking and processing, and highly automated systems. Commercial Banking customers are volume users of the Companys foreign exchange, derivatives and structured product capabilities, including sophisticated currency and interest rate options. HSBC offers commercial card issuing and acquiring services. Commercial card issuing helps customers enhance cash management, improve cost control and streamline purchasing processes. HSBCs card acquiring services enable merchants to accept credit and debit card payments either

in person or when the cardholder is not present. HSBC offers a range of commercial insurance products and services to enable customers and company owners to trade and grow safely. Products include key person and life insurance, employee benefits and a range of commercial risks, such as property, liability, and cargo and trade credit insurance. The wealth management services include advice and products related to savings and investments provided to commercial banking customers and their employees through HSBCs global network, with clients being referred to premier and private banking where appropriate. The Company also provides finance and advisory support for the customers. HSBC deploys a range of delivery channels, including specific online and direct banking offerings, such as HSBCnet and Business Internet Banking. 4.5.3. Global Banking and Markets Global Banking and Markets provides tailored financial solutions to the government, corporate and institutional clients globally. Global Banking and Markets is managed as four principal business lines: Global Markets, Global Banking, Global Asset Management and Principal Investments. HSBCs operations in Global Markets consist of treasury and capital markets services for supranational, central banks, corporations, institutional and private investors, financial institutions and other market participants. The products include foreign exchange; currency, interest rate, bond, credit, equity and other derivatives; government and non-government fixed income and money market instruments; precious metals and exchange traded futures; equity services, including research, sales and trading for institutional, corporate and private clients and asset management services; distribution of capital markets instruments, including debt, equity and structured products, utilizing HSBCs global network, and securities services. HSBCs operations in Global Banking consist of financing, advisory and transaction services for corporations, institutional and private investors, financial institutions, and governments and their agencies. The products include financing and capital markets, which comprises capital raising, including debt and equity capital, corporate finance and advisory services, bilateral and syndicated lending, leveraged and acquisition finance, structured and project finance, lease

finance, and non-retail deposit-taking; international, regional and domestic payments and cash management services, and other transaction services, including trade services, factoring and banknotes. HSBCs operations in asset management consist of products and services for institutional investors, intermediaries and individual investors and their advisers. The private investments include private equity, which comprises HSBCs captive private equity funds, strategic relationships with third-party private equity managers and other investments. 4.5.4. Private Banking The products and services offered by the Company include private banking services, private wealth management and private wealth solutions. Private banking services comprise multicurrency deposit accounts and fiduciary deposits, credit and specialist lending, treasury trading services, cash management, securities custody and clearing. In addition, HSBC Private Bank works to ensure that its clients have full access to other products and services available throughout HSBC, such as credit cards, Internet banking, corporate banking, and investment banking. Private wealth management includes both advisory and discretionary investment services. A range of investment vehicles is covered, including bonds, equities, derivatives, options, futures, structured products, mutual funds and alternatives (hedge funds, private equity and real estate). Corporate finance solutions help provides clients with cross-border solutions for their companies, working in conjunction with Global Banking & Markets. Private wealth solutions comprise inheritance planning, trustee and other fiduciary services designed to protect wealth and preserve it for future generations through structures tailored to meet the individual needs of each family. Areas of expertise include trusts, foundation and company administration, charitable trusts and foundations, insurance, family office advisory and philanthropy. 4.6. Global operation of HSBC

HSBCs principal banking operations in Europe are HSBC Bank plc (HSBC Bank) in the United Kingdom, HSBC France, HSBC Bank A.S. in Turkey, HSBC Bank Malta p.l.c., HSBC Private Bank (Suisse) S.A. (HSBC Private Bank (Suisse)) and HSBC Trinkaus & Burkhardt AG. Through these operations HSBC provides a range of banking, treasury and financial services to personal, commercial and corporate customers across Europe. HSBCs principal banking subsidiaries in Hong Kong are The Hongkong and Shanghai Banking Corporation Limited (The Hongkong and Shanghai Banking Corporation) and Hang Seng Bank Limited (Hang Seng Bank). HSBC offers personal, commercial, global banking and markets services in the Peoples Republic of China, through its local subsidiary, HSBC Bank (China) Company Limited (HSBC Bank China). HSBC also participates indirectly in mainland China through its four associates, Bank of Communications (19.01 %owned), Ping An Insurance (16.78%), Industrial Bank (12.78%) and Yantai City Commercial Bank (20%) and has a further interest of 8% in Bank of Shanghai. Outside Hong Kong and the Peoples Republic of China, HSBC conducts business in 20 countries in the Asia-Pacific region, primarily through branches and subsidiaries of The Hongkong and Shanghai Banking Corporation, with coverage in Australia, India, Indonesia, Malaysia, South Korea, Singapore and Taiwan. HSBCs presence in Australia is led by HSBC Bank Australia Limited and in Malaysia by HSBC Bank Malaysia Berhad (HSBC Bank Malaysia). In the Middle East, the network of branches of HSBC Bank Middle East Limited (HSBC Bank Middle East), together with HSBCs subsidiaries and associates, gives coverage in the region. HSBCs North American businesses are located in the United States, Canada and Bermuda. Operations in the United States are primarily conducted through HSBC Bank USA, N.A. (HSBC Bank USA), which is concentrated in New York State, and HSBC Finance, a national consumer finance company based in the Chicago metropolitan area. HSBC Markets (USA) Inc. is the intermediate holding company of, inter alia, HSBC Securities (USA) Inc., a registered broker and dealer of securities and a registered futures commission merchant. HSBC Bank Canada and The Bank of Bermuda Limited (Bank of Bermuda) operate in their respective countries.

HSBCs operations in Latin America comprises HSBC Mxico, S.A. (HSBC Mexico), HSBC Bank Brasil S.A.-Banco Mltiplo (HSBC Bank Brazil), HSBC Bank Argentina S.A. (HSBC Bank Argentina) and HSBC Bank (Panama) S.A. (HSBC Bank Panama), which owns subsidiaries in Costa Rica, Honduras, Colombia and El Salvador. HSBC is also represented by subsidiaries in Chile, the Bahamas, Peru, Paraguay and Uruguay. In addition to banking services, HSBC operates insurance businesses in Mexico, Argentina, Brazil, Panama, Honduras and El Salvador. In Brazil, HSBC offers consumer finance products through its subsidiary, Losango Promocoes e Vendas Ltda.

4.7.

HSBC in Bangladesh

HSBC obtained license from BANGLADESH BANK on The HSBC Asia Pacific group 1 April 1996 to conduct banking business in the country and commenced formal banking operations on 3 December 1996 through opening a branch at Dhaka .In Bangladesh , the HSBC Group is represented by Hong Kong bank , which has its head office in Hong Kong and a holding company, HSBC holding plc, which is incorporated in England .on 41 December 2000 , total capital and reserve of HSBC in Bangladesh were BDT 535.7 million , which comprised capital BDT. 441.6 million and supplementary capital BDT. 94.2 million.

Realizing the huge potential and growth in personal banking industry in Bangladesh, HSBC extended its operation to the personal banking sector in Bangladesh and within a very short span of time it was able to build up a huge client base. Extending its operation further, HSBC opened a branch at Chittagong, seven branch offices at Dhaka (Gulshan, Mothijheel , Dhanmondi, Uttara and Banani) and Sylhet the number of employees of this bank in Bangladesh was 257. At Present number of employee is around 835.

In 2002, paid-up capital of this bank was BDT 380 million. Deposit of this bank was BDT 4,980 million. Among this deposit, called deposit was BDT 487 million and fixed deposit was BDT 1,323 million. The amount of advance and investment was BDT 1,180 million and BDT 100 million respectively. In 2002, this bank operated foreign exchange business of BDT 8,234 million.

HSBC Bangladesh is under strict supervision of HSBC Asia Pacific Group, Hong Kong. The Chief Executive Officer of HSBC Bangladesh manages the whole banking operation of HSBC in Bangladesh. Under the CEO there are heads of departments who manage specific banking functions e.g. Personal banking, corporate banking, etc.

Currently HSBC Bangladesh is providing a wide range of services both two individual and corporate level customers. In the year 2000, the bank launched a wide array of personal banking products designed for all kinds of (middle and higher-middle income) individual customers. Some such products were Personal loans, car loans, etc. Recently the bank launched three of its personal banking products Tax loan, Personal secured loan & Automated Tele Banking (ATB) service. These products are designed to meet the diverse customer needs more completely.

HSBC in Bangladesh also specializes in self-service banking through providing 24-hour ATM services. Recently it has introduced Day & Night banking by installing Easy-pay machines in Banani, Uttara and Dhanmondi to better satisfy the needs of both customers and non-customers. In total HSBC currently has 22 ATMs of Dhaka & Chittagong.

Table 4: HSBC at a glance HSBC in Bangladesh at a glance The Hong Kong Shanghai Banking Corporation BD. Name of the Organization Ltd. 1996 Year of Establishment Multinational Company with subsidiary group in Nature of the Organization BD. Paid up capital: BDT. 4380 million Deposit BDT. 4,980 million Capital Advance BDT. 3,255 million HSBC group shareholders Shareholders Anchor Tower, 1/1-B Sonargaon Road, Dhaka 1205, Head Office Bangladesh. 8 Number of Offices 27 Number of ATMs 835 Number of employees Offers Phone Banking Services and full online Technology

Service Coverage & Customers

banking from branch to branch. Serves individuals and corporate customers within Dhaka, Chittagong and Sylhet

4.8.

HSBC in United Kingdom

Chapter 5: Research Findings: Bangladesh

easuring the quality of a service can be a very difficult exercise. Unlike product where there are specific specifications such as length, depth, width, weight, and colour etc. a service can have numerous intangible or qualitative specifications.

In addition there is there expectation of the customer with regards the service, which can vary considerably based on a range of factors such as prior experience, personal needs and what other people may have told them. As a way of trying to measure service quality, researchers have developed a methodology known as SERVQUAL a perceived service quality questionnaire survey methodology. SERVQUAL examines five dimensions of service quality: Tangible (e.g. appearance of physical facilities, equipment, etc.) Reliability Responsiveness Assurance; Empathy

For each dimension of service quality above, SERVQUAL measures both the expectation and perception of the service on a scale of 1 to 7, 22 questions in total. Then, each of the five dimensions is weighted according to customer importance, and the score for each dimension multiplied by the weighting. Following this, the Gap Score for each dimension is calculated by subtracting the Expectation score from the Perception score. A negative Gap score indicates that the actual service (the Perceived score) was less than what was expected (the Expectation score).

The Gap score is a reliable indication of each of the five dimensions of service quality. Using SERVQUAL, service providers can obtain an indication of the level of quality of their service provision, and highlight areas requiring improvement.

Outlined below are the instructions for carrying out a SERVQUAL survey and a sample of the questions used in the questionnaire. In this sample, a bank is surveyed however; any service organisation can be surveyed using this questionnaire. All that needs to be done is to substitute the word "bank" with the particular organisation or industry being surveyed. 1. Select the bank whose service quality you want to assess. Using the questionnaire (see Appendix A below), obtain the score for each of the 22 Expectation statements, then obtain the score for each of the 22 Perception statements. Calculate the Gap Score for each of the statements where the Gap Score = Perception Expectation (see Table 1 below). 2. Obtain an average Gap Score for each dimension of service quality by assessing the Gap Scores for each of the statements that constitute the dimension and dividing the sum by the number of statements making up the dimension (see Table 1 below). 3. Sum the averages calculated in step 2 above and divide by 5 to obtain an average SERVQUAL score. This core is the unweighted measure of service quality for the area being measured. 4. If you want to have a weighted score, calculate the importance weights for each of the five dimensions of service quality constituting the SERVQUAL scale. The sum of the weights should add up to 100 (see Table 2 below). 5. Calculate the weighted average SERVQUAL score for each of the five dimensions of service quality multiplying the averages calculated in step 2 above by the weighted scores calculate in step 4 above (see Table 3 below).

Sum the scores calculated in step 5 above to obtain the weighted SERVQUAL score of service quality for the area being measured.The five dimensions of service quality were measured using the SERVQUAL Model. The findings are described in the following section.

6.1.

Tangibles

The tangible part of the service quality dimension is the appearance of physical facilities, equipment, personnel and information materials. This part had four statements. They are

1. Excellent banking companies will have modern looking equipment. 2. The physical facilities at excellent banks will be visually appealing. 3. Employees at excellent banks will be neat in their appearance. 4. Materials associated with the service (pamphlets or statements) will be visually appealing at an excellent bank.

The Findings are as follow

Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 6.18125 5.23125 -0.95 16.875 -0.16313

The gap for the Tangible dimension is -0.95. This shows that the average gap for this dimension is small and it can be said that HSBC closely matches the customers expectation. Though there are still provisions for doing more to match the expectation. Statement Wise findings are as follows:
Statement 1 2 3 4 Average Perception 5.425 5.325 5.35 4.825 Average Expectation 6.575 5.525 6.35 6.275 Average Gap -1.15 -0.2 -1 -1.45

From the data above it is clear that the largest gap that the customers perceive is the statement 4, which also got the least perception score, which is Materials associated with the service (such as pamphlets or statements) are not as much visually appealing at the bank as they expect it to be. The smallest gap is the statement 2 which means the physical features are visually appealing as

per their expectation. Customers highest expectation was that the bank should have modern looking equipment.
6.575 8 6 4 2 0 -2 1 -1.15 -0.2 2 5.425 5.525 5.325

6.35 5.35

6.275 4.825

3 -1

4 -1.45 Average Expectation

Average Gap

Average Perception

Figure 4: findings from Tangibles 6.2. RELIABILITY

Reliability in the service quality dimensions means the ability to perform the service accurately and dependably. This part has 5 statements on which customer opinion is measured. 5. When excellent banks promise to do something by a certain time, they do. 6. When a customer has a problem, excellent banks will show a sincere interest in solving it. 7. Excellent banks will perform the service right the first time. 8. Excellent banks will provide the service at the time they promise to do so. 9. Excellent banks will insist on error free records.

The Findings for reliability are as follows:

Items Average Expectation Value 6.165

Average Perception Average Gap Average Weight Weighted average Gap

4.285 -1.88 22.75 -0.42875

This table indicates that the average expectation for reliability dimension is 6.165 and the average perception is 4.285. This shows that the gap which is -1.88 is quite large and means that the customer is not getting the service accurately and dependably enough to match their expectation. The service provided is far below their expectation and thus making them much dissatisfied. The statement wise breakdown for Reliability dimension is given below:
Statement 5 6 7 8 9 Average Perception 4.85 4.2 4.475 3.4 4.5 Average Expectation 6.525 6.325 5.325 6.675 5.975 Average Gap -1.675 -2.125 -0.85 -3.275 -1.475

6.525 8 6 4 2 0 -2 -4 5 -1.675 6 -2.125 4.85 4.2

6.325 5.325 4.475

6.675

5.975 4.5

3.4

7 -0.85

8 -3.275

9 -1.475

Average Gap

Average Perception

Average Expectation

Figure 5: Reliability findings

The statement 8 which states that the bank provides its service at the time it promises to do so was the most expected aspect of the reliability dimension. But unfortunately this got the lowest mark. So the resulting gap is huge and it shows that the bank is not being able to provide the even industry standard service. Another aspect of the dimension, statement 6, that is when the bank promises to do something by a certain time, it does not do so and also resulting in a huge gap. 6.3. Responsiveness

The role of responsiveness is that of the willingness to help customers and provide a prompt service. It contains 4 statements. These statements are 10. Employees of excellent banks will tell customers exactly when services will be performed. 11. Employees of excellent banks will give prompt service to customers. 12. Employees of excellent banks will always be willing to help customers. 13. Employees of excellent banks will never be too busy to respond to customers' requests.

The Findings for responsiveness are as follows:

Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 5.2625 4.2125 -1.44375 23.5 -0.33875

The table above shows that responsiveness dimension got a fairly large weight compared to others. The average gap is also mentionable large. The bank has a fair lot to do to improve the service provided in these dimensional aspects to meet the customers expectation and satisfy their customers.

The statement wise breakdown for responsiveness dimension is given below:

Statement 10 11 12 13 Average Perception 3.625 4 3.65 3.325 Average Expectation 4.975 5.825 5.325 4.925 Average Gap -1.35 -1.825 -1.675 -1.6

The statement 11 of Employees in the bank tell you exactly when the services will be performed has the largest expectation and the largest gap as well. It has a fairly large gap of 1.825 that means that the perception is quite low in this aspect. But the lowest score for the perception was for statement 13 which means the employees are evidently often too busy to respond their request promptly.
4.975 6 4 2 0 -2 10 -1.35 11 -1.825 12 -1.675 3.625 4 5.825 5.325 3.65

4.925 3.325

13 -1.6 Average Expectation

Average Gap

Average Perception

Figure 6: findings from Responsiveness

6.4.

Assurance

Assurance is a combination of the following concepts that sums up the dimension. Competence - having the requisite skills and knowledge

Courtesy - politeness, respect, consideration and friendliness of contact staff Credibility - trustworthiness, believability and honesty of staff Security - freedom from danger, risk or doubt

It is made up of 4 statements which are as follows 14. The behavior of employees in excellent banks will instill confidence in customers 15. Customers of excellent banks will feel safe in transactions. 16. Employees of excellent banks will be consistently courteous with customers. 17. Employees of excellent banks will have the knowledge to answer customers' questions.

The Findings for assurance are as follows:

Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 5.65625 4.2125 -1.44375 23.5 -0.33875

The Assurance dimension has also received quite large weight and again it got a large gap. This implies that the knowledge and courtesy of the bank's employees and their ability to convey trust and confidence are not quite up to the mark. The customers do not feel adequately confident and trust the bank to provide service to their expectation. The statement wise breakdown for assurance dimension is given below:
Statement 14 15 16 17 Average Perception 3.325 4.425 4.525 4.575 Average Expectation 5.275 6.525 5.175 5.65 Average Gap -1.95 -2.1 -0.65 -1.075

The highest expected aspect of assurance is that they need to feel secure while transacting with the bank. But sadly the bank still can not instill that confidence in the customers heart leaving a huge gap of -2.1. But at least the bank has not scored lowest in that part. It has scored the least on statement 14 by gettong a mere 3.325, which says that the behavior of employees in the bank does not instill confidence to the customer.
6.525 5.175 4.425 4.525 5.65 4.575

5.275 8 6 4 2 0 -2 -4 14 -1.95 15 -2.1 3.325

-0.65 16

-1.075 17

Average Gap

Average Perception

Average Expectation

Figure 7: finding of Assurance

6.5.

Empathy

Empathy contains the following issues Access (physical and social) - approachability and ease of contact Communication - keeping customers informed in a language they understand and really listening to them Understanding the customer - making the effort to get to know customers and their specific needs

This dimension has 5 statements which measure the customers expectation and perception

18. Excellent banks will give customers individual attention. 19. Excellent banks will have operating hours convenient to all their customers. 20. Excellent banks will have employees who give customers personal service. 21. Excellent banks will have their customers' best interest at heart. 22. The employees of excellent banks will understand the specific needs of their customers.

The Findings for empathy are as follows:

Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 5.615 4.11 -1.505 13.375 -0.19925

Though the empathy dimension got the lowest weight among the dimensions, it still is an important one. But the average expectation and the average perception of this dimension are both average. The gap though is still large with a gap of -1.505. So the caring individual attention given is quite not meeting even the lowly expectation. The statement wise breakdown for empathy dimension is given below:
Statement 18 19 20 21 22 Average Perception 3.375 4.45 4.925 4.175 3.625 Average Expectation 5.075 5.75 5.275 6.3 5.675 Average Gap -1.7 -1.3 -0.35 -2.125 -2.05

The largest gap seen in the empathy dimension is statement 21 which is that the bank should have the best interest of the customers at heart. It also got the highest expectation. But

unfortunately HSBC failed to meet expectation. But still they did not score the lowest in this segment. The lowest score obtainer is statement 18 with 3.375. It implies that HSBC miserably failed to give individual attention to many customers.

8 6 4 2 0 -2 -4 18 -1.7

5.075 3.375 4.45

5.75

5.275 4.925

6.3 4.175

5.675 3.625

19 -1.3

20 -0.35

21 -2.125

22 -2.05

Average Gap

Average Perception

Average Expectation

Figure 8: Empathy 6.6. Overall Gap

The overall summary of the findings can be stated as below

Dimensions Average Perception Tangible Reliability Responsiveness Assurance Empathy 5.23125 4.285 3.65 4.2125 4.11 Average Expectation 6.18125 6.165 5.2625 5.65625 5.615 -0.95 -1.88 -1.6125 -1.44375 -1.505 Average Gap Average Weight 16.875 22.75 23.5 23.5 13.375 Weighted average Gap -0.16313 -0.42875 -0.37688 -0.33875 -0.19925

From the summary it can be seen that the highest normal average Gap belongs to Reliability with a gap of -1.88. It implies that the customers are not getting the dependable and accurate level of

service that they expect. Reliability also got the second highest weight of 22.75. So the resulting weighted average Gap is -0.42875 which is the highest. The highest expected dimension is the Tangible which is also perceived to be closely matched with the least gap. The most weighted dimension is Responsiveness and Assurance with the same weight of 23.5. So it is evident that customers value these two dimensions more than any other. Empathy got the least weight of 13.375 and also the second least gap of -0.19925. From above summary we can see that HSBC is consistently failing to meet customer expectation in every dimension. As a result people are getting dissatisfied with the service of HSBC. More so the two most important dimensions according to the customers, Responsiveness and Assurance have obtained the 2nd and 3rd largest gap. The lowest perceived service dimension is Responsiveness with 3.65 score. Where as Empathy had the lowest expectation in both expectation and weight.

25 20 15 10 5 0 -5 Tangible Reliability Responsiveness Assurance Empathy

Figure 9: Summary of findings among Dimensions Statement wise summary of the findings:

Statements

Average Perception

Average Expectation

Gap

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

5.425 5.325 5.35 4.825 4.85 4.2 4.475 3.4 4.5 3.625 4 3.65 3.325 3.325 4.425 4.525 4.575 3.375 4.45 4.925 4.175 3.625

6.575 5.525 6.35 6.275 6.525 6.325 5.325 6.675 5.975 4.975 5.825 5.325 4.925 5.275 6.525 5.175 5.65 5.075 5.75 5.275 6.3 5.675

-1.15 -0.2 -1 -1.45 -1.675 -2.125 -0.85 -3.275 -1.475 -1.35 -1.825 -1.675 -1.6 -1.95 -2.1 -0.65 -1.075 -1.7 -1.3 -0.35 -2.125 -2.05

From the summary, Highest expectation is that the bank should have modern looking equipment and it also matched by highest perceived service provided by HSBC. The lowest expectation was that employees in the bank are never too busy to respond to customers request. But customers also said that HSBC provides them the least in this aspect. The lowest gap was for that the bank's physical features are visually appealing. While the highest gap was for the bank provides its service at the time it promises to do so. Meaning HSBC often misses the time to perform services that it says it will be done.

8 6 4 2 0 -2 -4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21

22

Gap

Average Perception

Average Expectation

Figure 10: Summary of findings among Statements

Chapter 6
Research Findings: United Kingdom

M
6.1.

easuring the quality of a service can be a very difficult exercise. Unlike product where there are specific specifications such as length, depth, width, weight, and colour etc. a service can have numerous intangible or qualitative specifications.

In addition there is there expectation of the customer with regards the service, which can vary considerably based on a range of factors such as prior experience, personal needs and what other people may have told them. The five dimensions of service quality were measured using the SERVQUAL Model. The findings are described below.

Tangibles

The tangible part of the service quality dimension is the appearance of physical facilities, equipment, personnel and information materials. This part had four statements. They are 23. Excellent banking companies will have modern looking equipment. 24. The physical facilities at excellent banks will be visually appealing. 25. Employees at excellent banks will be neat in their appearance. 26. Materials associated with the service (pamphlets or statements) will be visually appealing at an excellent bank. The Findings are as follow
Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 6.18125 5.23125 -0.95 16.875 -0.16313

The gap for the Tangible dimension is -0.95. This shows that the average gap for this dimension is small and it can be said that HSBC closely matches the customers expectation. Though there are still provision for doing more to match the expectation. Statement Wise findings are as follows:
Statement 1 2 3 4 Average Perception 5.425 5.325 5.35 4.825 Average Expectation 6.575 5.525 6.35 6.275 Average Gap -1.15 -0.2 -1 -1.45

From the data above it is clear that the largest gap that the customers perceive is the statement 4, which also got the least perception score, which is Materials associated with the service (such as pamphlets or statements) are not as much visually appealing at the bank as they expect it to be. The smallest gap is the statement 2 which means the physical features are visually appealing as per their expectation. Customers highest expectation was that the bank should have modern looking equipment.
6.575 8 6 4 2 0 -2 1 -1.15 -0.2 2 5.425 5.525 5.325

6.35 5.35

6.275 4.825

3 -1

4 -1.45 Average Expectation

Average Gap

Average Perception

Illustration 7: Tangibles 6.2. Reliability

Reliability in the service quality dimensions means the ability to perform the service accurately and dependably. This part has 5 statements on which customer opinion is measured. 27. When excellent banks promise to do something by a certain time, they do. 28. When a customer has a problem, excellent banks will show a sincere interest in solving it. 29. Excellent banks will perform the service right the first time. 30. Excellent banks will provide the service at the time they promise to do so. 31. Excellent banks will insist on error free records.

The Findings for reliability are as follows:

Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 6.165 4.285 -1.88 22.75 -0.42875

This table indicates that the average expectation for reliability dimension is 6.165 and the average perception is 4.285. This shows that the gap which is -1.88 is quite large and means that the customer is not getting the service accurately and dependably enough to match their expectation. The service provided is far below their expectation and thus making them much dissatisfied. The statement wise breakdown for Reliability dimension is given below:
Statement 5 6 7 8 Average Perception 4.85 4.2 4.475 3.4 Average Expectation 6.525 6.325 5.325 6.675 Average Gap -1.675 -2.125 -0.85 -3.275

4.5

5.975

-1.475

6.525 8 6 4 2 0 -2 -4 5 -1.675 6 -2.125 4.85 4.2

6.325 5.325 4.475

6.675

5.975 4.5

3.4

7 -0.85

8 -3.275

9 -1.475

Average Gap

Average Perception

Average Expectation

Illustration 8: Reliability The statement 8 which states that the bank provides its service at the time it promises to do so was the most expected aspect of the reliability dimension. But unfortunately this got the lowest mark. So the resulting gap is huge and it shows that the bank is not being able to provide the even industry standard service. Another aspect of the dimension, statement 6, that is when the bank promises to do something by a certain time, it does not do so and also resulting in a huge gap. 6.3. Responsiveness

The role of responsiveness is that of the willingness to help customers and provide a prompt service. It contains 4 statements. These statements are 32. Employees of excellent banks will tell customers exactly when services will be performed. 33. Employees of excellent banks will give prompt service to customers. 34. Employees of excellent banks will always be willing to help customers.

35. Employees of excellent banks will never be too busy to respond to customers' requests.

The Findings for responsiveness are as follows:

Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 5.2625 4.2125 -1.44375 23.5 -0.33875

The table above shows that responsiveness dimension got a fairly large weight compared to others. The average gap is also mentionable large. The bank has a fair lot to do to improve the service provided in these dimensional aspects to meet the customers expectation and satisfy their customers.

The statement wise breakdown for responsiveness dimension is given below:

Statement 10 11 12 13 Average Perception 3.625 4 3.65 3.325 Average Expectation 4.975 5.825 5.325 4.925 Average Gap -1.35 -1.825 -1.675 -1.6

The statement 11 of Employees in the bank tell you exactly when the services will be performed has the largest expectation and the largest gap as well. It has a fairly large gap of 1.825 that means that the perception is quite low in this aspect. But the lowest score for the perception was for statement 13 which means the employees are evidently often too busy to respond their request promptly.

4.975 6 4 2 0 -2 10 -1.35 11 -1.825 3.625 4

5.825

5.325 3.65

4.925 3.325

12 -1.675

13 -1.6 Average Expectation

Average Gap

Average Perception

Illustration 9: Responsiveness

6.4.

Assurance

Assurance is a combination of the following concepts that sums up the dimension. Competence - having the requisite skills and knowledge Courtesy - politeness, respect, consideration and friendliness of contact staff Credibility - trustworthiness, believability and honesty of staff Security - freedom from danger, risk or doubt

It is made up of 4 statements which are as follows 36. The behavior of employees in excellent banks will instill confidence in customers 37. Customers of excellent banks will feel safe in transactions. 38. Employees of excellent banks will be consistently courteous with customers. 39. Employees of excellent banks will have the knowledge to answer customers' questions.

The Findings for assurance are as follows:

Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 5.65625 4.2125 -1.44375 23.5 -0.33875

The Assurance dimension has also received quite large weight and again it got a large gap. This implies that the knowledge and courtesy of the bank's employees and their ability to convey trust and confidence are not quite up to the mark. The customers do not feel adequately confident and trust the bank to provide service to their expectation. The statement wise breakdown for assurance dimension is given below:
Statement 14 15 16 17 Average Perception 3.325 4.425 4.525 4.575 Average Expectation 5.275 6.525 5.175 5.65 Average Gap -1.95 -2.1 -0.65 -1.075

The highest expected aspect of assurance is that they need to feel secure while transacting with the bank. But sadly the bank still can not instill that confidence in the customers heart leaving a huge gap of -2.1. But at least the bank has not scored lowest in that part. It has scored the least on statement 14 by gettong a mere 3.325, which says that the behavior of employees in the bank does not instill confidence to the customer.

5.275 8 6 4 2 0 -2 -4 14 -1.95 15 -2.1 3.325

6.525 5.175 4.425 4.525 5.65 4.575

-0.65 16

-1.075 17

Average Gap

Average Perception

Average Expectation

Illustration 10: Assurance 6.5. Empathy

Empathy contains the following issues Access (physical and social) - approachability and ease of contact Communication - keeping customers informed in a language they understand and really listening to them Understanding the customer - making the effort to get to know customers and their specific needs

This dimension has 5 statements which measure the customers expectation and perception 40. Excellent banks will give customers individual attention. 41. Excellent banks will have operating hours convenient to all their customers. 42. Excellent banks will have employees who give customers personal service. 43. Excellent banks will have their customers' best interest at heart.

44. The employees of excellent banks will understand the specific needs of their customers.

The Findings for empathy are as follows:

Items Average Expectation Average Perception Average Gap Average Weight Weighted average Gap Value 5.615 4.11 -1.505 13.375 -0.19925

Though the empathy dimension got the lowest weight among the dimensions, it still is an important one. But the average expectation and the average perception of this dimension are both average. The gap though is still large with a gap of -1.505. So the caring individual attention given is quite not meeting even the lowly expectation. The statement wise breakdown for empathy dimension is given below:
Statement 18 19 20 21 22 Average Perception 3.375 4.45 4.925 4.175 3.625 Average Expectation 5.075 5.75 5.275 6.3 5.675 Average Gap -1.7 -1.3 -0.35 -2.125 -2.05

The largest gap seen in the empathy dimension is statement 21 which is that the bank should have the best interest of the customers at heart. It also got the highest expectation. But unfortunately HSBC failed to meet expectation. But still they did not score the lowest in this segment. The lowest score obtainer is statement 18 with 3.375. It implies that HSBC miserably failed to give individual attention to many customers.

8 6 4 2 0 -2 -4 18 -1.7

5.075 3.375 4.45

5.75

5.275 4.925

6.3 4.175

5.675 3.625

19 -1.3

20 -0.35

21 -2.125

22 -2.05

Average Gap

Average Perception

Average Expectation

Illustration 11: Empathy 6.6. Overall Gap

The overall summary of the findings can be stated as below Dimensions Average Perception Tangible Reliability Responsiveness Assurance Empathy 5.23125 4.285 3.65 4.2125 4.11 Average Expectation 6.18125 6.165 5.2625 5.65625 5.615 Average Gap -0.95 -1.88 -1.6125 -1.44375 -1.505 Average Weight 16.875 22.75 23.5 23.5 13.375 Weighted average Gap -0.16313 -0.42875 -0.37688 -0.33875 -0.19925

From the summary it can be seen that the highest normal average Gap belongs to Reliability with a gap of -1.88. It implies that the customers are not getting the dependable and accurate level of service that they expect. Reliability also got the second highest weight of 22.75. So the resulting weighted average Gap is -0.42875 which is the highest.

The highest expected dimension is the Tangible which is also perceived to be closely matched with the least gap. The most weighted dimension is Responsiveness and Assurance with the same weight of 23.5. So it is evident that customers value these two dimensions more than any other. Empathy got the least weight of 13.375 and also the second least gap of -0.19925. From above summary we can see that HSBC is consistently failing to meet customer expectation in every dimension. As a result people are getting dissatisfied with the service of HSBC. More so the two most important dimensions according to the customers, Responsiveness and Assurance have obtained the 2nd and 3rd largest gap. The lowest perceived service dimension is Responsiveness with 3.65 score. Where as Empathy had the lowest expectation in both expectation and weight.

25 20 15 10 5 0 -5 Tangible Reliability Responsiveness Assurance Empathy

Illustration 11: Summary of findings among Dimensions Statement wise summary of the findings:

Statements 1 2

Average Perception 5.425 5.325

Average Expectation 6.575 5.525

Gap -1.15 -0.2

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

5.35 4.825 4.85 4.2 4.475 3.4 4.5 3.625 4 3.65 3.325 3.325 4.425 4.525 4.575 3.375 4.45 4.925 4.175 3.625

6.35 6.275 6.525 6.325 5.325 6.675 5.975 4.975 5.825 5.325 4.925 5.275 6.525 5.175 5.65 5.075 5.75 5.275 6.3 5.675

-1 -1.45 -1.675 -2.125 -0.85 -3.275 -1.475 -1.35 -1.825 -1.675 -1.6 -1.95 -2.1 -0.65 -1.075 -1.7 -1.3 -0.35 -2.125 -2.05

From the summary, Highest expectation is that the bank should have modern looking equipment and it also matched by highest perceived service provided by HSBC. The lowest expectation was that employees in the bank are never too busy to respond to customers request. But customers also said that HSBC provides them the least in this aspect. The lowest gap was for that the bank's physical features are visually appealing. While the highest gap was for the bank provides its service at the time it promises to do so. Meaning HSBC often misses the time to perform services that it says it will be done.

8 6 4 2 0 -2 -4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21

22

Gap

Average Perception

Average Expectation

Illustration 12: Summary of findings among Statements

Chapter 07

Conclusion

H
Bangladesh.

SBC is a prestigious and one of the leading banks of Bangladesh. Many customers avail their service for the expectation that they carry about the performance of the bank. But as HSBC Bangladesh is consistently failing to meet the expectation on

every dimension and every statement, soon the customers of the personal financial services will eventually get annoyed if this trend is continued. This continued failure to meet demand will lead to customer dissatisfaction and eventually customers will leave for better alternative. Already HSBC is behind Standard Chartered bank on performance basis as well as customer number. They are facing quite strong competition from the local banks too. So it must be made sure that they take appropriate actions to correct these mistakes and lacking so that they can not only survive but can thrive and prosper and become the leading bank in

HSBC has various types of tangibles. In the survey, its modern equipment, appealing physical facilities and materials including pamphlets and statements, neat appearance are the main elements of tangibles. As it is discussed in the literature review, service is an intangible product and it consume simultaneously, respondents (customers) want to make it tangible by physical evidences, facilities, technologies, neatness of the premises, etc. All these information was grouped in the tangibles dimension of service quality. In the several studies covered in the literature review chapter, respondents also mentioned the vital role of location advantages and the features of products & services in forming overall customer satisfaction. In the findings of the research, the physical facilities in Bangladesh are marked as good by the responders of that region. This is why there the customer satisfaction is a bit high than other developed countries.

The reliability elements of service quality derived from the timeliness of the bank, fulfillment of promise, solving problem with sincere interest etc. these elements will added to the customer satisfaction eventually. In Bangladesh, a developing nation of the South Asia, there the reliability of HSBCs operation is not that high, as the gap of perception and expectation suggest. In this service quality dimension, the late fulfillment of promise is mostly highlighted to take care and to give extra attention. This dimension is ranked second in terms of priority also.

Responsive is vital element of service quality related to reliability. It is the practice of a bank to give prompt service to customer, be willing to help the customer, reply to customer query as early as possible. In the review of literature, it is found in this particular dimension of service quality, banking organization of South Asia are improving. In our research findings, the Bangladesh chapter shows that HSBC has a healthy gap between customer perception and expectation which should be minimized. Especially some specific areas of banking operation such as, prompt service offering, showing adequate willingness to help customer etc are important in this dimension for HSBCs operation in Bangladesh.

Along with the above three elements of service quality, assurance is another important element which covered the behavior of employees to instill confidence in customers, safe feelings of customer in making transactions, having sufficient knowledge to answer the customer questions and always courteous with customers. In the review of literature, it is found that, in banking service, which is very much sensitive to any person so, this service assurance is very much essential than any other attributes. It provides financial safety to the customer. In the research findings, In the Bangladesh survey, this dimension is ranked one of the highest priorities along with responsiveness. So it goes with the historical findings and proved that still the customer of banking services prioritize the assurance very importantly. It is also found in the review that friendliness & professionalism of the employees and feeling of safety with them while describing the service attributes. And courtesy behavior and knowledge of the employees are the major attributes of this dimension. In these elements HSBC has good scores in gap analysis compare to other which might be the reason why HSBC do well and make profit from its global business.

Lastly, empathy of HSBCs service quality covers the individualized attention to the customer, operating hours convenient to customer, personal service to customer, keeping the interest of customer from heart, and understanding the specific need of customers. In the literature review it is realized that, This attribute demands customization service process. Aspects like Individual attention, understanding customers needs and interests. In Bangladesh, empathy is seen as fifth ranked dimension in the priority scale to estimate the weights. It is evident by reviewing the literature and the research findings that this dimension not that developed in this South Asian region. But the authorities of HSBC need to give attention for the long term assessment of the dimension, not now.

This research has provided some interesting insight into what kind of service the customers give importance to and what quality service they get from HSBC. It is quite obvious from the research that the customer requirements are not fully met and they are very dissatisfied with some of the aspects of the bank (saving rates, credit services, investment services, etc.). Again the research revealed that only one third of customers were more of less satisfied with the services of the bank and more than half of the respondents were on the neutral side of satisfaction line. HSBC should attract this half and bring them to the positive side of the road so that strong relationship with the customers can be maintained. Finally, customers are vital for every business. It is not possible to make a profitable business without concerning the customers benefits. HSBC bank has a great potential in the country as a leading global brand. To achieve the desired position in the market, timely improvement in services is essential. The efficiency and effectiveness in services only in customer service department is not that bank have to be concern. Its a collective responsibility of all the departments. So, all the concern departments should be more prompt and efficient to compete with the challenging opportunities of the future. The executive management also should be enthusiastic in to the development of administration and operational system as per demand of the age.

Chapter 08

Recommendation

A
8.1.

s this research paper is based on two countries, in which HSBC has its business, so the recommendation will be given separately for two countries. The two countries are different in terms of economic condition and other indicators of economics like GDP

growth rate, standard of living etc. for these reason and based on the research finding, the recommendations are given in the following sections.

Recommendation for Bangladesh

Following steps should be taken to improve the situation of HSBC so that the gap between Expected quality of service and the perceived quality can be minimized or overcome 1. The brochures and pamphlets are often confusing and not much attractive as mentioned by the customers. These should be redesigned and special care must be taken so that they do not have too many unnecessary contents but also do not miss any vital information. Aesthetic aspect should be changed too as many have expressed that the brochures are quite monotonous. 2. Due to lack of adequate number of staff, and also the lack of system flexibility, many customers perceive that the time taken to provide a service is too long and often can not meet the promised time. So adequate number of staff in proper post and an evaluation of the system to remove bottleneck is must. More staff should be appointed and the system needs to be reanalyzed and upgraded. 3. Bank personnel need to be trained so that they can instill the confidence in the customer that they can confidently do their transaction with HSBC. 4. Some employees are often indifferent to some customers. This must be avoided and training program is to be run to make sure that customers feel that HSBC has the customers best interest at heart.

8.2.

Recommendations for United Kingdom

Appended parts

A: Bibliography
ASI Quality Systems (1992), Quality function deployment Practitioner workshop , American Supplier Institute Inc., USA.
Brown, S.W. and Bond, E.U. III (1995), "The internal/external framework and

service quality: Toward theory in services marketing", Journal of Marketing

Management , February, pp. 25-39.

Brysland, A. and Curry, A. (2001), "Service improvements in public services using SERVQUAL", Managing Service Quality, Vol.11, No.6, pp. 389-401. Cardozo, R.N (1965). An experimental study of customer effort, expectation and satisfaction. Journal of Marketing Research, 1965:2: 244-249. Curry, A. (1999), "Innovation in public service management", Managing Service
Quality, Vol.9, No.3, pp. 180-190.

Giese, J.L. & Cote, J. A.(2000) Defining Customer Satisfaction. Academy of Marketing Science Review,2000. Girdhar, Seema (2008), Banking on Relationships, Indian Management, April, pp.76- 83. Joshua, A.J. & Koshi,Moli.P.(2005), Expectations and perceptions of service quality in old and new generation banks-A study of select banks in the South Canara regions, Indian Journal of Marketing, Volume XXXV, Number 9, September.

 Gundersen, M. G., Heide, M. & Olsson, U. H. (1996) Hotel Guest satisfaction among Business Travellers: What Are the Important Factors? The Cornell Hotel and Restaurant Administration Quarterly, 1996:37(2): 72-81. Kotler Philip, (2003), Marketing Management, Pearson Education, Inc. Fifth edition. McQuitty, S., Finn, A. & Wiley, J. B. (2000) Systematically Varying Customer Satisfaction and its Implications for Product Choice. Academy of Marketing Science Review, 2000. Luk, Sh.T.K. and Layton, R. (2002), "Perception Gaps in customer expectations: Managers versus service providers and customers", The Service Industries Journal , Vol.22, No.2, April, pp. 109-128. Mohanty, R.K.(2008), Hunting Customer Satisfaction in Banks, Gurukul Business Review, Vol.4 (Spring 2008) pp.47-52. Oliver, R.L.(1980) A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions. Journal of Marketing Research, 1980:17: 460-469. Parasuraman, A. Zeithaml, Valarie A. Malhotra, and Arvind, (2005); E-S-QUAL: A Multiple-Item Scale for Assessing Electronic Service Quality; Journal of Service Research, Vol. 7, No. 3, pp. 213-233 Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1985), "A conceptual model of service quality and its implication", Journal of Marketing , Vol. 49, Fall, pp. 41-50.

 Parker, C. and Mathews, B.P (2001). Customer Satisfaction: Contrasting Academic and Consumers Interpretations, Marketing Intelligence & Planning, 19 (1): 38-46. Sharma,Alka & Mehta,Versha (2004-05), Service Quality Perceptions in Financial Services- A Case study of Banking Services, Journal of Services Research. Singh, Ashotosh K., & Tripathi, Shiv K.(2007), Perceptual Difference of Quality in Banking Services: A Study on Indian Private Sector Banks, Indian Management Studies Journal 11 (2007)1-14. Spathis,Charalambos, Eugenia, Petridou and Glaveli, Niki (2004),Managing Service Quality in banks:Customers gender effects, Managing Service Quality, Vol.14, No.1, 2004, pp.90-102. Swan J. E.

and Combs L. J.

(1976) Product Performance and Consumer

Satisfaction: A New Concept The Journal of Marketing Vol. 40, No. 2 (Apr., 1976), pp. 25-33 (article consists of 9 pages) Published by: American Marketing

Association Stable URL: http://www.jstor.org/stable/1251003 Tripathy, Nalini Prava (2006), A Service Quality Model for Customers in Public Sector banks, The ICFAI Journal of Bank Management, May 2006, pp, 77-82. Vijayakumar T. & Velu, R.(2007), Critical Determinants of Customer Satisfaction in Retail Banking in India, Global Management Review, Vol.2,

Issue1,November,2007,pp.5-14. Westbrook, K.W. (1995). Business-to-business Service

Encounters: An

Empirical Assessment of the Underlying Determinants for Industrial Service

Quality, in Enhancing Knowledge Development in Marketing, Stern, B.B. and Zinkhan, G.M. (Eds), Chicago: American Marketing Association, p.10-11. Westbrook, R. A. and Oliver, R. L. 1991. The Dimensionality of consumption emotion patterns and Consumer Satisfaction. Journal of Consumer Research, 18, 84-91. Yavas,Ugur., Benkenstein,Martin., & Stuhldreier,Uwe (2004), Relationships between service quality and behavioural outcomes: A study of private bank customers in Germany, Internatonal Journal of Bank Marketing, Vol.22, No.2, 2004, pp. 144-157. Zairi Mohamed (2000); Managing customer satisfaction: a best practice perspective; The TQM Magazine; Vol. 12, No. 6, pp. 389-394. WESTBROOK,

R.A.,

NEWMAN

J.

W.,

TAYLOR

J.R.

(1978)

"Satisfaction/Dissatisfaction in the purchase decision process", Journal of Marketing 42 (October), pp. 54-60, 1978 Rust, R. T., Zahorik A. J., Keiningham T. L.(1994) "Return on quality", IRWIN Professional Publishing, Chicago, 1994 Rossat, J., Larsen, J., Ruta, D., Wawrzynosek, M. (1998) Customer loyalty, a literature review& analysis. UNIPEDE/EURELECTRIC Documentation, Brussels, BELGIUM Armstrong, P.A. and Harker, P.T. (1995) Design of incentive system for service quality improvements, working paper, school of business, Georgetown University, Washington D.C,

 Krishnan, Ramashawamy, Meyer and Damien (1998) Customer Satisfaction for Financial Services: The Role of Products, Services, and Information Technology, Ross School of Business Working Paper Series , Working Paper No. 99-004, June 1998 Soteriuo, A. and Zenios, S.A. (1998) operations, quality and profitability in the provision of banking service, working paper, Wharton school, University of pensilvania, philadelphia. Van der Wiele, T. Boselie, P. Hesselink, M. (2002), Empirical evidence for the relationship between customer satisfaction and business performance,

Managing Service Quality, Vol. 12, No. 3 pp.184-193 Johnston, R. (1995), The determinants of service quality: satisfiers and dissatisfiers, International Journal of Service Industry Management, Vol. 6, No. 5, pp. 53-71 Newman, K. and Cowling, A. (1996), Service quality in retail banking: the experience of two British clearing banks, International Journal of Bank Marketing, Vol. 14, No. 6 pp. 3-11 Vilares, M.J. and Coehlo, P.S. (2003), The employee-customer satisfaction chain in the ESCI model, European Journal of Marketing, Vol. 37, No. 11/12, pp. 1703-1722 Voss, C. Roth, A.V. Rosenzweig, E.D. Blackmon, K. Chase, R.B. (2004), A Tale of Two Countries Conservatism, Service Quality, and Feedback on Customer Satisfaction, Journal of Service Research, Vol 6, No 3 pp. 212-23 Cooper, D.R. & Schindler, P.S (2003) Business Research Methods; 8 th ed. ISBN: 0-07-249870-6; McGraw Hill higher Education.

 Sauders, Lewis & Thornhil (2003) organizational justice, trust and the management of change An exploration, Personel review Vol. 32, No. 3, pp. 360375 Frei, F. X. , P. T. Harker, and Hunter, L. W. (1995) Performance in consumer financial services organizations: framework and results from the pilot study, working draft , Wharton school, University of Pennsylvania, Philadelphia, Frei, F. X. , Harker, P. T. (1997) Measuring the efficiency of service delivery process: with application to retail banking , Working Paper, University of Rochester, Rochester, NY. Frei, F. X., Kalakota, R., and Marx, L.M. (1997) Performance variation as a determinant of service quality and bank performance : evidence from the retail banking industry, Working Paper , William E. Simon School of Business, University of Rochester, Rochester, NY. Garvin, D. A. (1988) The strategic and competitive ege, The Free Press , NY. Peterson, R. A. and Wilson, W.R. (1992) Measuring customer satisfaction: Fact and Artifact, Journal of the Academy of Marketing Science, volume-20, issue- 1, pp-61-71. Gundersen, M. G., Heide, M. & Olsson, U. H. Hotel Guest satisfaction among Business Travellers: What Are the Important Factors? The Cornell Hotel and Restaurant Administration Quarterly, 1996:37(2): 72-81.

Oliver, R. Satisfaction: A Behavioral Perspective on the Consumer. Boston: McGraw-Hill, 1997. Oliver, R.L. A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions. Journal of Marketing Research, 1980:17: 460-469.

 Lewis, R.C., and Booms, B.H. (1983). The marketing aspects of service quality. Emerging Perspectives in Service Marketing, in Berry, L.L., Shostack, G. and Upah, G. (Eds) American Marketing Association, Chicago,IL 99-107. Lehtinen, U., and Lehtinen, J.R. (1982). Service quality- a study of dimensions. unpublished working paper, Service Management Institute, Helsinki, 439-460. Caruana, A. (2002). Service loyalty. The effects of service quality and the mediating role of customer satisfaction. European Journal of Marketing, 36(7/8), 811-828. Caruana, A., Money, A.H. and Berthon, P.R. (2000). Service quality and satisfaction- the moderating role of value. European Journal of Marketing, 34(11/12), 1338-1352. Oliver, Richard L., 1980. A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions. In Journal of Marketing Research, Vol. 17, N 4 (November), pp 460-469. Helm, Roland and Hser, Hans, 1995. The need for economic and pre-economic marketing controlling. In Marketing Intelligence & Planning, Vol. 13, N 4, pp 1015. Soscia, Isabella, 2002. The influence of the emotion of surprise on consumers satisfaction: a pilot experiment. Proceedings of 31st EMAC Conference. Braga, Portugal. Swan, John E. and Trawick, I. Frederick, 1981. Disconfirmation of Expectations and Satisfaction with a Retail Service. In Journal of Retailing, Vol. 57, N 3 (Fall), pp 49-67.

 Yi, Y. (1990). A critical review of consumer satisfaction. Review of Marketing 1990, American Marketing Association, Chicago, IL. Gronroos, C. (1982). Strategic Management and Marketing in the Service Sector. Swedish School of Economics and Business Administration, Helsingfors. Asubonteng, P. Mccleary, K.J., & Swan, J.E. (1996). SERVQUAL revisited: a critical review of service quality, The Journal of Services Marketing 10 (6), 62-81. Kotler, P. (2003). Marketing Management. (11th ed.) NJ: Prentice Hall, Inc.

Appended parts

B: Questionnaire
Questionnaire on QUALITY OF SERVICE
The questionnaire below is in two sections. The first section asks you to rank all banks according to your expectations i.e. what you expect all banks to provide. The second section asks you to rank the Hongkong Shanghai Banking Corporation, for the survey according to your experiences and perceptions. There is no right or wrong answers - all we are interested in is the number that truly reflects your feelings regarding the quality of service.

Section 1: Expectation Please show the extent to which you think banks should posses the following features. What we are interested in here is a number that best shows you expectations about institutions offering banking services. If you feel a feature is not at all essential for excellent banks such as the one you have in mind, circle the number 1. If you feel a feature is absolutely essential for excellent banks, circle 7.

Statement 1. Excellent banking companies will have modern looking equipment. 2. The physical facilities at excellent banks will be visually appealing. 3. Employees at excellent banks will be neat in their appearance. 4. Materials associated with the service (pamphlets or statements) will be visually appealing at an excellent bank. 5. When excellent banks promise to do something by a certain time, they do. 6. When a customer has a problem, excellent banks will show a sincere interest in solving it. 1 1 2 2 3 3

Score
4 4 5 5 6 6 7 7

1 1

2 2

3 3

4 4

5 5

6 6

7 7

Statement 7. Excellent banks will perform the service right the first time. 8. Excellent banks will provide the service at the time they promise to do so. 9. Excellent banks will insist on error free records. 10. Employees of excellent banks will tell customers exactly when services will be performed. 11. Employees of excellent banks will give prompt service to customers. 12. Employees of excellent banks will always be willing to help customers. 13. Employees of excellent banks will never be too busy to respond to customers' requests. 14. The behavior of employees in excellent banks will instill confidence in customers 15. Customers of excellent banks will feel safe in transactions. 16. Employees of excellent banks will be consistently courteous with customers. 17. Employees of excellent banks will have the knowledge to answer customers' questions. 18. Excellent banks will give customers individual attention. 19. Excellent banks will have operating hours convenient to all their customers. 20. Excellent banks will have employees who give customers personal service. 21. Excellent banks will have their customers' best interest at heart. 22. The employees of excellent banks will understand the specific needs of their 1 2 3

Score
4 5 6 7

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

6 6 6

7 7 7

1 1

2 2

3 3

4 4

5 5

6 6

7 7

1 1

2 2

3 3

4 4

5 5

6 6

7 7

1 1 1

2 2 2

3 3 3

4 4 4

5 5 5

6 6 6

7 7 7

1 1

2 2

3 3

4 4

5 5

6 6

7 7

Statement customers.

Score

Section 2: Perception The following statements relate to your feelings about the particular bank you have chosen. Please show the extent to which you believe this bank has the feature described in the statement. Once again, circling 1 means that you strongly disagree that HSBC Bangladesh has this feature and circling 7 means that you strongly agree

Statement 1. The bank has modern looking equipment. 2. The bank's physical features are visually appealing. 3. The bank's reception desk employees are neat appearing. 4. Materials associated with the service (such as pamphlets or statements) are visually appealing at the bank. 5. When the bank promises to do something by a certain time, it does so. 6. When you have a problem, the bank shows a sincere interest in solving it. 7. The bank performs the service right the first time. 8. The bank provides its service at the time it promises to do so. 9. The bank insists on error free records. 10. Employees in the bank tell you exactly when the services will be performed.
1 2 3

Score
4 5 6 7

1 1

2 2

3 3

4 4

5 5

6 6

7 7

11. Employees in the bank give you prompt service. 12. Employees in the bank are always willing to help you. 13. Employees in the bank are never too busy to respond to your request. 14. The behavior of employees in the bank instills confidence in you. 15. You feel safe in your transactions with the bank. 16. Employees in the bank are consistently courteous with you. 17. Employees in the bank have the knowledge to answer your questions. 18. The bank gives you individual attention. 19. The bank has operating hours convenient to all its customers. 20. The bank has employees who give you personal attention. 21. The bank has your best interests at heart. 22. The employees of the bank understand your specific needs.

1 1

2 2

3 3

4 4

5 5

6 6

7 7

Listed below are the five sets of features pertaining to banks and the services they offer. We would like to know how much each of these sets of features is important to the customer. Please allocate 100 points among the five sets of features according to how important it is to you. Make sure the points add up to 100.

Features 1. The appearance of the banks physical facilities, equipment, personnel and communication materials. 2. The bank's ability to perform the promised service dependably and accurately 3. The banks willingness to help customers and provide prompt service. 4. The knowledge and courtesy of the bank's employees and their ability to convey trust and confidence. 5. The caring individual attention the bank provides its customers. Total:

Points

100

Appended parts

C: Sample list
Sl No
1

Name
Sabrina Shormin

Place
Bangladesh

Address
33/a east kazipara, mirpur , Dhaka.

Mousumi Haider

Bangladesh

21, road no, 06, Dhanmondi dhaka

Sarmin Mostary

Bangladesh

112 pilkhana road, azimpur, dhaka.

Tahira Farzana

Bangladesh

11, dilkhusa c/a, motijeel , dhaka

Sonia mahbub

Bangladesh

29, dilkhusa c/a, motijeel, dhaka

Taslima Akbar

Bangladesh

South keranigong, lalbagh , dhaka

Asmin Akter

Bangladesh

House no 218, road no.12, gulshan 1, Dhaka. 1129, Khaleda zia hall, Jahangirnagar University, savar, dhaka. 12, shah ali bagh, mirpur 10, Dhaka. South kenanigong, kamrangir char, dhaka. amin_ju@gmail.com Vill: magipara, P.O: alamnagar, Dist. Faridpur.

Shahina Begum

Bangladesh

Md Anwarul Kaiser

Bangladesh

10

M H Shakir Al Amin

Bangladesh

11

Palash Saha Mohammad Khaled Bin Ashraf Md Jony Hasan Md Kabir Hossen

Bangladesh

12

Bangladesh

29, dilkhusa c/a, motijeel, dhaka

13

Bangladesh

Vill: Morapara, P.o: borobazer, demra, dhaka.

14

Bangladesh

331, savar radio coloni, savar, dhaka.

Sl No
15

Name
Moin Uddin

Place
Bangladesh

Address
1218, SSB Hall, Jahangirnagar University, savar, Dhaka. 88 01814 932966 House no. 1, university housing society, savar, Dhaka. 15/3 north shaheb bagh, lalbagh, dhaka. 1219, SSB Hall, Jahangirnagar University, savar, Dhaka. 88 01715 663 550. 65, urdo road, old dhaka, naya bazaar, dhaka. House no 56, dhanmondi, Dhaka. ftiprince@gmail.com 1109, BBH hall, Jahangirnagar University, savar, dhaka. 29, dilkhusa c/a, motijeel, dhaka

16

Manzur Ahmed Shamim

Bangladesh

17

Md Tanvir Islam

Bangladesh

18

Fakir Tajul Islam

Bangladesh

19

Shaikh Azam Ali

Bangladesh

20

Manna Khan

Bangladesh

21

Md Naime Bin Kashem

Bangladesh

22

Tasnin Islam

Bangladesh

23

Md Yousuf Ali

Bangladesh

15, Bangladesh bank colony, basabo, dhaka. 1311, SSB Hall, Jahangirnagar University, savar, Dhaka. 88 0167 7104424 1229, BBH hall, Jahangirnagar University, savar, dhaka. 55, dilkhusa c/a, motijeel, dhaka

24

Khandokar M Tahajut Ali

Bangladesh

25

Md Julker Nyne

Bangladesh

26

Md Abir Hossain

Bangladesh

27

Sk Rokib Hussein

Bangladesh

29, dilkhusa c/a, motijeel, dhaka

28

Md Kayum Hossain

Bangladesh

House no. 18, road no. 15, dhanmondi, dhaka.

29

Manik Hossain

Bangladesh

House no. 15, road no. 7/a, dhanmondi, dhaka

30

A B M Arifiz Zaman

Bangladesh

232, namabazar, savar, dhaka.

Appended parts D: Response OF BANGLADDESH

Dimension Statement 1 2 Tangibles 3 4 5 6 Reliability 7 8 9 10 11 Responsiveness 12 13 14 15 Assurance 16 17 18 19 Empathy 20 21 22 5 6 5 5 5 6 5 6 5 6 6 5 7 6 5 5 5 6 6 5 5 5 6 5 6 5 7 6 5 6 5 6 5 6 6 5 6 4 5 6 7 6 6 5 6 6 5 7 6 5 5 5 6 6 5 5 5 6 5 6 5 7 6 5 6 5 6 5 6 6 6 5 5 7 5 5 6 7 6 4 5 6 5 5 5 6 5 6 5 7 5 4 6 6 5 5 6 7 6 4 5 6 5 5 5 6 5 6 5 7 7 6 7 7 6 6 7 6 6 6 7 6 6 5 7 6 5 6 6 6 7 7 6 6 5 4 5 7 6 6 6 5 7 6 5 6 6 6 7 6 5 7 6 5 6 6 7 6 6 5 7 6 5 6 6 7 6 6 5 7 6 5 6 6 6 7 7 6 6 5 4 5 7 6 6 6 5 7 6 5 6 6 6 7 6 5 7 6 5 6 SPL-1 6 6 SPL-2 7 6 SPL-3 6 5 SPL-4 7 6 SPL-5 7 5 SPL-6 6 5 SPL-7 7 6 SPL-8 6 5 SPL-9 7 6 SPL-10 7 5

Dimension

Statement
1 2

SPL11

SPL12

SPL13

SPL14

SPL15

SPL16

SPL17

SPL18

SPL19

SPL20

6 6 7 6 7 7 6 6 7 6 6 6 5 5 7 5 6 5 5 5 6 5

7 6 6 7 6 6 5 7 6 5 6 5 5 6 7 6 5 6 6 5 7 6

6 5 6 6 7 7 6 6 5 4 5 6 4 5 6 5 5 5 6 6 5 5

7 6 7 6 6 6 5 7 6 5 6 5 5 5 6 5 6 5 6 5 7 6

7 5 6 6 7 6 5 7 6 5 6 5 6 5 7 5 6 5 6 5 6 6

6 5 6 7 6 6 5 7 6 5 6 5 4 6 6 5 6 4 5 6 7 6

7 5 6 6 7 6 5 7 6 5 6 5 6 5 7 5 6 5 6 5 6 6

6 6 7 6 7 7 6 6 7 6 6 6 5 5 7 5 6 5 5 5 6 5

7 6 6 7 6 6 5 7 6 5 6 5 5 6 7 6 5 6 6 5 7 6

6 5 6 6 7 7 6 6 5 4 5 6 4 5 6 5 5 5 6 6 5 5

Tangibles 3 4 5 6 Reliability 7 8 9 10 11 Responsiveness 12 13 14 15 Assurance 16 17 18 19 Empathy 20 21 22

Dimension

Statement
1 2

SPL21

SPL22

SPL23

SPL24

SPL25

SPL26

SPL27

SPL28

SPL29

SPL30

7 6 7 6 6 6 5 7 6 5 6 5 5 5 6 5 6 5 6 5 7 6

7 6 7 6 6 6 5 7 6 5 6 5 5 5 6 5 6 5 6 5 7 6

7 5 6 6 7 6 5 7 6 5 6 5 6 5 7 5 6 5 6 5 6 6

6 6 7 6 7 7 6 6 7 6 6 6 5 5 7 5 6 5 5 5 6 5

7 6 6 7 6 6 5 7 6 5 6 5 5 6 7 6 5 6 6 5 7 6

6 5 6 6 7 7 6 6 5 4 5 6 4 5 6 5 5 5 6 6 5 5

7 6 7 6 6 6 5 7 6 5 6 5 5 5 6 5 6 5 6 5 7 6

7 5 6 6 7 6 5 7 6 5 6 5 6 5 7 5 6 5 6 5 6 6

6 5 6 7 6 6 5 7 6 5 6 5 4 6 6 5 6 4 5 6 7 6

7 5 6 6 7 6 5 7 6 5 6 5 6 5 7 5 6 5 6 5 6 6

Tangibles 3 4 5 6 Reliability 7 8 9 10 11 Responsiveness 12 13 14 15 Assurance 16 17 18 19 Empathy 20 21 22

Appended parts
D: Response OF United Kingdom
Dimension Statement 1 2 Tangibles 3 4 5 6 Reliability 7 8 9 10 11 Responsiveness 12 13 14 15 Assurance 16 17 18 19 Empathy 20 21 22 5 6 5 5 5 6 5 6 5 6 6 5 7 6 5 5 5 6 6 5 5 5 6 5 6 5 7 6 5 6 5 6 5 6 6 5 6 4 5 6 7 6 6 5 6 6 5 7 6 5 5 5 6 6 5 5 5 6 5 6 5 7 6 5 6 5 6 5 6 6 6 5 5 7 5 5 6 7 6 4 5 6 5 5 5 6 5 6 5 7 5 4 6 6 5 5 6 7 6 4 5 6 5 5 5 6 5 6 5 7 7 6 7 7 6 6 7 6 6 6 7 6 6 5 7 6 5 6 6 6 7 7 6 6 5 4 5 7 6 6 6 5 7 6 5 6 6 6 7 6 5 7 6 5 6 6 7 6 6 5 7 6 5 6 6 7 6 6 5 7 6 5 6 6 6 7 7 6 6 5 4 5 7 6 6 6 5 7 6 5 6 6 6 7 6 5 7 6 5 6 SPL-1 6 6 SPL-2 7 6 SPL-3 6 5 SPL-4 7 6 SPL-5 7 5 SPL-6 6 5 SPL-7 7 6 SPL-8 6 5 SPL-9 7 6 SPL-10 7 5

Dimension

Statement
1 2

SPL11

SPL12

SPL13

SPL14

SPL15

SPL16

SPL17

SPL18

SPL19

SPL20

6 6 7 6 7 7 6 6 7 6 6 6 5 5 7 5 6 5 5 5 6 5

7 6 6 7 6 6 5 7 6 5 6 5 5 6 7 6 5 6 6 5 7 6

6 5 6 6 7 7 6 6 5 4 5 6 4 5 6 5 5 5 6 6 5 5

7 6 7 6 6 6 5 7 6 5 6 5 5 5 6 5 6 5 6 5 7 6

7 5 6 6 7 6 5 7 6 5 6 5 6 5 7 5 6 5 6 5 6 6

6 5 6 7 6 6 5 7 6 5 6 5 4 6 6 5 6 4 5 6 7 6

7 5 6 6 7 6 5 7 6 5 6 5 6 5 7 5 6 5 6 5 6 6

6 6 7 6 7 7 6 6 7 6 6 6 5 5 7 5 6 5 5 5 6 5

7 6 6 7 6 6 5 7 6 5 6 5 5 6 7 6 5 6 6 5 7 6

6 5 6 6 7 7 6 6 5 4 5 6 4 5 6 5 5 5 6 6 5 5

Tangibles 3 4 5 6 Reliability 7 8 9 10 11 Responsiveness 12 13 14 15 Assurance 16 17 18 19 Empathy 20 21 22

Appended parts E: Organizational structure

SOURCE: