Management perception of influence of service quality on customer satisfaction among Commercial Banks in Kenya: a case study of Equity Bank

Equity Bank was selected for the case study because, it continued to register significant growth in financial performance while the larger proportion of . For instance, the bank’s profit before tax improved from 17.4 Billion in 2012 to 24.9 billion in 2016. Equity Bank was resilient against banking sector downward trends and maintained an impressive banking performance. By seeking views from the bank staff and customers, the study gained the clear understanding behind the improving Equity Bank service quality. The study sought to establish the management perception of influence of service quality on customer satisfaction among commercial banks in Kenya, a case study of Equity Bank. The study specific objectives were; to investigate the influence of tangibility on customer satisfaction at Equity Bank; to determine the effect of reliability on customer satisfaction at Equity Bank; and to establish the influence of responsiveness on customer satisfaction at Equity Bank. The study adopted a descriptive research design. The target population of this study were the 150 managerial employees and 1,500 Equity Bank daily customers and while the study sample size was 100 managerial employees and 82 bank customers. The study used stratified random sampling to sample respondents. The primary data was collected by using a self-administered questionnaire while secondary data was obtained from the published annual reports spanning five years (2013 - 2017). In analyzing the quantitative data, descriptive statistics and t-test were used while qualitative data was analyzed using content analysis. The study revealed that Equity Bank customers expected the bank staff to be willing to help, offer prompt attention to their requests, resolve their problem promptly, be flexible and effectively handle customer complaint. They also expected them to be timely, consistent and accurate in handling their customer transactions. Similarly, they expected the bank to have updated physical facilities, use cutting edge equipment and technology while their employee appearance was expected to be classic. The study further concludes that for each of the three SERVQUAL dimensions studied, user expectations were higher than perceptions, resulting in a negative gap score (Perception – Expectation) for each one of them. The service quality at Equity Bank delivered falls short of customer expectations and therefore improvement is required in order to meet and possibly exceed customer expectations. The customer satisfaction in Equity Bank increased progressively for the five-year period (2013-2017). The increase in customer satisfaction in Equity Bank was attributed to banks investment in service quality to their customers. There was a positive effect was found on all the three SERVQUAL dimensions that is, reliability, responsiveness and tangibility. Reliability was the service quality dimension that contributed the most to customer satisfaction followed by responsiveness and tangibility respectively. The bank should continuously monitor reliability in their service quality to ensure it is enhanced in line with customer needs. The Equity Bank management should invest in building the capacity of the staff to enhance customer banking experience. The bank management should institutionalize high standard reliability in their customer service through improved processes and standards to enhance customer satisfaction.
Submitted in partial fulfillment of the requirements for the Master of Business Administration at Strathmore University
Management perception, Service quality, Customer satisfaction, Commercial Banks in Kenya, Equity Bank