Predictors of Bank

Customer Satisfaction

Introduction
Through liberalization and globalization, Malaysian banking sector has
undergone a lot of structural changes where banks were required to go
through a series of merging exercises.
As a result of that exercise, number of banks has reduced to 22 where nine
are Malaysian-controlled commercial banks and 13 are foreign-controlled
commercial banks in Malaysia (Bank Negara Malaysia, 2009; MIDA,
2009).
Competition between banks became even more intense as all anchor banks
are big enough to afford offering matched range of products or services
(Allred and Addams, 2000). This makes maintaining customer satisfaction
as single most important factor to remain relevant in financial service
institutions, as pointed out by many researchers (e.g. Rust and Zahorik,
1993; Trubik and Smith, 2000).
Thus, conducting customer satisfaction research within Bank context is
timely and relevant

Problem Statement
As a result of merging exercise, number of banks has reduced to 22
(Bank Negara Malaysia, 2009). Competition between banks became
even more intense as all anchor banks are big enough to afford
offering matched range of products or services (Allred and Addams,
2000). Maintaining customer satisfaction therefore become an
important agenda for banks.
Customer satisfaction has been a major goal of business organizations,
since it has been proven to affect customer retention and companies
market share (Hansemark and Albinsson, 2004), especially in markets
that are highly competitive and saturated, like financial services (Rust
and Zahorik, 1993 and Trubik and Smith, 2000).
However, not many researches have been done in Malaysia to
understand customer satisfaction level in banking industry. Similar
research reported so far in Malaysia were conducted before merging
exercises (e.g. Adilah, 1999; Chin, 2001). Thus, this study adds value
to the literature by understanding customer satisfaction level after
merging exercises based on Malaysian context.

Research Questions
General RQ:
What are the factors that drive revisit intention to bank?
Specific RQ:
1. Are there differences in customer satisfaction by gender,
ethnicity and academic qualification?
2. What are the aspects of customer satisfaction that influence
revisit intention?

Research Objectives
1. To assess satisfaction difference between
male and female customers

2. To assess satisfaction difference across ethnic

groups
3. To analyze if more educated customers
experiencing lesser level of satisfaction
4. To evaluate the relationships between
customer satisfaction aspects and revisit
intention to the bank

Significance of the study

Practical significance
Knowing who are less satisfied (male/female; high/low education;
Malay/Chinese/India), help bank designs extended research in
understanding areas weakly performed by the bank and improve
accordingly.
Theoretical Significance
This study adds value to the literature in two ways. First, it extends
customer satisfaction work conducted by Hallowell (1996) to Malaysia
context to assess if the scale is relevant in explaining customer
satisfaction phenomenon in Malaysia. Second, this study extends
Boshoff and Grays (2004) framework by adding revisit intention as the
outcome variable of customer satisfaction. In other words, the study is
able to provide evidence on the applicability of TPB (Theory of Planned
Behavior) in Banking Context.

Conceptual Framework
H1

H2

H3

H4

Definition: Customer
Satisfaction
Satisfaction in services can be conceptualized as
facet (attribute-specific) or as overall
(aggregate);
and it can be viewed as transaction-specific
(encounter satisfaction) or as cumulative
(satisfaction over time) (Host and Knie-Andersen,
2004).
In this study, satisfaction is conceptualized as
customers satisfaction towards a service
providers performance in various aspects of bank
services basing on attitude-specific dimension.

Expectancy Disconfirmation
Theory (EDT)
Developed by Helson (1964)
Proposed that customer has an expectation of a
service/product. Expectation become a standard. Once
used, performance is compared against expectation. If
performance of the service/product meets expectation,
customers are satisfied.
According to EDT, the primary determinant of
satisfaction is the predictive expectations created by
manufacturers, company reports, or unspecified sources
(Yi, 1990). Managing expectations of customers is key
component in achieving the outcome of customer
satisfaction.

Theory of planned behavior

(TPB)
Introduced by Ajzen (1988), it proposes that
attitude explains intention of a person.
Attitude refers to the evaluative and affective
evaluation of performing the intended behavior
(Verbeke & Vackier, 2005).
The evaluative view is perceived as the risk and
benefit outcomes of performing the behavior while
the affective view is related to the positive or
negative feeling resulting from that behavior.

H1
Expectation Disconfirmation Theory proposes that customer has an
expectation of a service/product. Expectation becomes a standard. Once
used, performance is compared against expectation. If performance of
the service/product meets expectation, customers are satisfied.
Empirical evidences show expectation differences between gender on
quality ranking where men ranked effectiveness and reliability highest
while women ranked price highest in banking sector (Spathis et al.,
2004).
In a different study investigating genders effect on perceptions of
satisfaction in a public service environment, men were reported to enjoy
higher level of service satisfaction compared to women (Dimitriades and
Maroudas, 2007).
Similarly, female and male customers likely have different expectations
on bank services, thus resulting in different satisfaction level.Therefore,
the following hypothesis is developed:

H1: There are mean satisfaction differences between female and

male customers

H2
Lopez, Hart and Rampersed (2007) examined the
association between ethnicity and customer satisfaction
level in the financial service sector and revealed that
respondents from the three largest regional ethnic groups
(African-American, Latinos and Non-Latino Caucasians)
weighted the importance of several of the ten service
quality dimensions quite differently.
Consistent with Expectation Disconfirmation Theory
that expectation determines satisfaction, ethnic groups in
Malaysia who have very different values are likely to have
different expectations on bank services, thus resulting in
satisfaction differences. Hence, H2 is proposed:
H2: There are significant mean differences in various
aspects of satisfaction across ethnic groups

H3

Mittal and Kamakura (2001) investigated the moderating effect of

customer characteristics between customer satisfactions, repurchase
intent and repurchase behavior. They found consumers with some
college or higher educational level recorded lower satisfaction level
than those with only a high school education or less (Mittal and
Kamakura, 2001).
The finding was further validated by Cloud (2003) who also found a
negative relationship between education level and customer
satisfaction in a community health centers.
Consistent with Expectation Disconfirmation Theory that
expectation determines satisfaction, customers with higher education
may have better knowledge on services provided by international
banks, therefore have higher expectations which some may be
difficult to meet, and result in lower satisfaction. Thus, H3 is
proposed:
H3: There is a negative relationship between academic
qualification and satisfaction level

H4
Revisit Intention refers to the tendency the customer desire to engage
a bank in future (Boshoff and Gray, 2004).
Level of satisfaction with the bank forms attitude evaluation of the
behavior of revisiting the bank. If the customers are satisfied, they
will have positive attitudes towards the bank. According to theory
of Planned Behavior (Ajzen, 1988), positive attitudes leads to
intention, thus satisfaction leads to revisit intention.
Empirically, Boshoff and Gray (2004) confirmed a positive relationship
between satisfaction level and revisit intention. Similar results were
reported by Lee and Hwan (2005) and Pont and McKuilken (2005) in
Taiwanese and Australian banking context respectively
Thus, the more satisfied the customers are, the more likely they are
to revisit the bank in future. Hence, H4 is proposed as below.
H4: There is a positive relationship between satisfaction level
and revisit intention

DATA COLLECTION
Data will be collected from academic and non-academic
staff in a public university in Malaysia.
There are 1500 academics and 3000 non-academics. Based
on sample size calculation (Hair, 1998) with 95%
confidence level and 7% confidence interval, 188 samples
are needed.
Stratified sampling strategy will be used, first, population is
divided into two strata (academics versus non-academics),
than samples are picked randomly from each strata. A total
of 188 completed questionnaires must be collected from 63
academics (1500*188/4500) and 125 (3000*188/4500)
non-academics.

MEASURES

DATA ANALYSIS
H1
H2
H3
H4

- Independent sample t-test

ANOVA
- Spearman Rank Correlation
Pearson Correlation Analyses

Thank you