Academic journal article Business: Theory and Practice

Impact of Service Quality on Customer Satisfaction of Automated Teller Machine Service: Case Study of a Private Commercial Joint Stock Bank in Vietnam

Academic journal article Business: Theory and Practice

Impact of Service Quality on Customer Satisfaction of Automated Teller Machine Service: Case Study of a Private Commercial Joint Stock Bank in Vietnam

Article excerpt

Introduction

The fact that Vietnam became an official member of WTO in 2007 has opened a new page for the Vietnamese banking sector. Vietnamese commercial banks now must improve their competitiveness and exploit opportunities which are brought back from the opened market. The biggest challenge is the increasingly competitive pressure on the domestic market when Vietnam becomes more integrated, and demands of customers are changeable. In that sense, one of the most essential things Vietnamese commercial banks have to do is to improve service quality and diversify product line to meet various needs of customers and thus helping the banking sector become more and more integrated positively into the development of the banking sector in the region and in the world.

By applying modern banking technologies, Vietnamese commercial banks have launched a new product and service such as Automated Teller Machine (ATM). The appearance of ATM service has changed the basic transaction method in Vietnam's economy. Previously, almost all transactions and transfers on the market were primarily carried out by cash. But now, there is a significant change when Vietnamese have altered their habit from cash payment to using bank transfers and ATM services.

Therefore, developing ATM service is one of methods to increase the competitive position of a bank in the market today in Vietnam. Indeed, ATM service is becoming a mean of transaction which is essential for banks to increase their competitiveness in the market. Together with the race of providing diversified services of transaction, Vietnamese commercial banks also find out how to improve the quality of ATM service and satisfy customers. Thus, assessing the quality of ATM service and researching the relationship between service quality and customer satisfaction for ATM service are meaningful to improve the quality of ATM services of banks in the future.

Although researches on the impact of service quality on customer's satisfaction have been numerous (Chinh, Anh 2008; Amoa-Mensha 2011; Vijay, Selvaraj 2012; Hasan et al. 2013; Rao et al. 2013; Mwatsika 2014; Jha et al. 2014), those in Vietnam, especially on ATM service of banks, are still rare. There are even fewer researches that have applied the SERVPERF model to measure service quality in the banking sector in Vietnam. Traditionally, SERVQUAL model is used to measure service quality, thus applying the SERVPERF model is quite new in service quality measurement in Vietnam. The objective of this research is to provide more empirical evidence for academics and practitioners by investigating the impact of service quality on customer's satisfaction for ATM service in Vietnam's commercial joint stock banks through using SERVPERF model. This research focuses on analyzing a case study of a private commercial joint stock bank (the Bank), to suggest solutions for itself and thus may generalize new findings for other commercial banks in Vietnam. The research uses quantitative method through questionnaire survey. Data collected from this survey was analyzed by SPSS 16.0 in order to find out the impact of service quality on customer's satisfaction for ATM service in the Bank.

This paper is divided into 7 main parts. Beside this introduction part, Section 2 provides literature review for the study. Research methodology is given in Section 3. Section 4 and 5 present research analysis and discussion. Recommendations for practitionners are given in Section 6. Finally, the paper provides a conclusion in Section 7.

1. Literature review and hypothesis development

1.1. Service quality and customer satisfaction

There may be numerous definitions of service quality. Service quality is a customer's overall impression of the relative inferiority or superiority of the organization and its services (Bitner, Hubbert 1994). Edvardsson, Thomsson and Ovretveit (1994) suggested that service quality is a service that fulfills the expectations of customers and satisfies their needs. …

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