Degree of Service Quality, Customer Satisfaction and Loyalty, A Comparison of Foreign vs Local Banks in Ghana

Daniel Kasser Tee, Alexander Preko, Evans Tee


High service quality leads to competitive advantage as customers feel satisfied and thus are more probable to further buy the company’s services, to recommend them to others and to ignore competitors’ offerings. The focus of this study was to empirically determine the degree of service quality, customer satisfaction and loyalty among retail banking customers and to compare the individual levels of these constructs between foreign and local banks in Ghana.  This study employed a set of survey questionnaire to collect raw data from 1,020 bank customers for analysis. The GAP analysis was used to identify the levels of service quality, customer satisfaction and customer loyalty. Comparisons were then made between foreign banks and their local counterparts. Comparatively, service quality and customer loyalty are higher in foreign banks than in local banks. On the other hand, the local banks performed better than their foreign counterparts on customer satisfaction. But for two banks, the levels of service quality and customer satisfaction are higher across the banking industry of Ghana with respective mean scores of 5.42 and 5.51, against a scale mean of 5.0. The same cannot be said of customer loyalty, which recorded very poor results with overall mean score of 4.62. Banks are generally advised to work at improving the levels of service quality, customer satisfaction and customer loyalty, as these remain key ingredients for bank performance.

Keywords: Service Quality, Customer Satisfaction, Customer Loyalty, Retail Banking

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