Determinants of customer satisfaction in the Sri Lankan banking sector: A quantitative analysis of service quality dimensions

Abstract

Customer satisfaction is one of the critical factors to build a competitive advantage, particularly in emerging markets such as Sri Lanka. The study quantitatively examines the influence of vital service quality dimensions-staff friendliness, ease of use online or mobile banking, ATM functionality, fee transparency, and service speed-on customer satisfaction with public, private, and foreign banks. A structured questionnaire was administered to 96 banking customers, and data were analysed using descriptive statistics, Pearson’s correlation, one-way analysis of variance (ANOVA), and multiple linear regression. The descriptive statistics revealed ATM functionality as the most satisfactory attribute, whereas fee transparency was the least satisfactory. Pearson correlation reflected strong positive relations between overall customer satisfaction and the service speed (r = .83, p < .001), ease of digital banking (r = .77, p < .001), and staff friendliness (r = .74, p < .001). One-way ANOVA did not reveal a difference in satisfaction across banks (F(2, 93) = 1.26, p = .288). Yet, foreign banks again displayed higher mean satisfaction scores in small subsample tests. Multiple linear regression analyses revealed that service speed (β = .37), ease of online/mobile banking (β = .37), and staff friendliness (β = .22) predicted overall satisfaction (R = .82, p < .001)while ATM functioning and fee transparency could not predict average satisfaction after controlling for other independent variables. Results show the predictors to be fairly independent (VIF < 5). Qualitative thematic analysis further took into account concerns about fee transparency and digital usability. Hence, responsiveness of service, quality of digital platforms, and the engagement of staff seem to be vital factors influencing customer satisfaction in the growing banking sector of Sri Lanka. From a strategic point of view, more emphasis must be laid on the promotion of digital banking services, improvement of interactions between staff and customers, and transparency to carve out a sustainable competitive advantage. Future studies should present larger and more representative samples with sophisticated statistical modelling that can come up with complexities in service quality.