Understandings of the SERVQUAL Model in Relation to the Banking and Finance Services - Case Study Example

Name: Professor: Institution: Course: Date: Table of Contents 1 Introduction……………………………………………………………………3 2 Scope and Objective……………………………………………………………4 3 Methodology……………………………………………………………………5 4 Major Findings of the Paper…………………………………………………6 4.1 Tangibility……………………………………………………………………7 4.2 Reliability…………………………………………………………………….7 4.3 Responsiveness………………………………………………………………8 4.4 Assurance……………………………………………………………………8 4.5 Empathy……………………………………………………………………..9 5 Implication for services marketing theories and practices…………………9 6 Conclusion……………………………………………………………………10 References……………………………………………………………………..11 1. Introduction Bank managers all over are concerned in delivering quality service to their clients. They know that this is the only way that you can grow the client base and retain it as well. Customer satisfaction creates loyalty amongst customers and strengthens the brand of reputable force in the market it is a very effective competition tool to use especially in a sector that offers homogeneous commodity that is being offered by others players in the industry. This review report attempts to bring out the various understandings of the SERVQUAL model in relation to the banking and finance services. The report has particularly interested in relating the various expectations and perceptions of both customers and management in the banking and finance sector to the five dimensions of focus; tangibility, reliability, responsiveness, empathy, and assurance. Creation of Customer centered philosophies created upon identification of gaps in service delivery, is the only way that managers in the banking sector can be able to balance between finance and other resources constraints in running the organizations and satisfying the expectations of the customers. SERVQUAL model has been used for various purposes in retail and pure service sectors. It is an effective tool especially for sectors such as banking and finance since measuring the quality of a service is quite complex than measuring the quality of goods (Nigel $ Alexander, 2006). 2. Scope and objectives This report is intended to review at least five relevant literary journals relating to utilization of SERVQUAL model in the banking and finance sectors. In particular the paper will put a lot of emphasis in identifying the major gaps in expectations and perceptions in the sector in regards to provision of quality service and customer satisfaction. This review of SERVQUAL models within the banking sector however does not include the implementation of SERVQUAL in other sectors in the service industry. It is worthy to note that service delivery concept are almost similar across the industry and can therefore be measured using the same dimensions. In light of this therefore this review might tend to be almost referring to the service industry in general but a lot of care has been taken to ensure the focus is in the banking and finance sector. The overall objective if this review is to identify the major issues in the following SERVQUAL dimensions which are particularly of a big impact in relation to service delivery and service improvement in the banking and finance sector; The tangibility dimension The reliability dimension The responsiveness dimension The empathy dimension The assurance dimension 3. Methodology This review report is actually a compilation of various main findings of five journal articles. Great consideration was taken in selecting the journal ar5ticles in order that relevant and up to date information was acquired for the purposes of compiling the most useful data that will give the real picture of SERVQUAL in the banking and finance sector. The articles have exhaustively expounded on the concept of SERVQUAL model implementation in the banking and finance sector. Although there is little or no consensus of opinions and agreements in the best way to measure service quality in this sector, the SERVQUAL model which was developed by Parasuraman, Valarie $ Leonard (1988) has been extensively utilized to measure service quality and provide a basis of improving service quality provision in the banking and finance sector. A high criterion has been strictly applied to ensure that only the most exhaustive and detailed research journals have been used for this review report. All the journals for this review report are the most recent and relevant on the topic of SERVQUAL in the banking and finance sector. The methodology has relied heavily on the design most prominent in all the journal articles .this paper has sought to identify the qualitative data acquired by the journals in the five generic dimensions of SERVQUAL stated as follows: Tangibility: physical facilities, equipment and appearance of personnel in the banks and finance services work places. Reliability: the ability of the institutions to deliver on the promises they promised their clients dependably and accurately as expected Responsiveness: how willing to help and provide prompt services are the employees of the banks and finance institutions Assurance: this is how knowledgeable the employees are and how courteous they are to inspire a sense of trust and confidence in their service from the customers. Empathy: how the employees identify personally with the situations of their clients while offering them service. The research findings addressed in the five reviewed journals have utilized questionnaires adapted from the SERVQUAL scale that consists of 22 original SERVQUAL items. Analysis of the general outcomes of the research covered by the journals was done using a table of analysis to identify the common findings of the research conducted. The data collected from critically analyzing the results of these findings to get a general consensus of findings by the various researchers in regard to the banking and financial sector quality provision and improvement. The data is however not presented as quantifiable information but as qualitative one to give the general report of findings in all dimensions of SERVQUAL covered. The results of the reviewed journal articles are discussed in an elaborate and exhaustive manner basing on the findings of the reviewed journal articles. To ensure objectivity of the data analyzed much care has been taken to reduce over reliance on one article by giving common view on all the data analyzed rather than delve much into a particular factor in any dimension. 4. Major findings of the papers After critically analyzing the general findings of all the journal articles, a general observation was drawn. From the general observation which was is also noted by Arash (2006) it was evident that the mean perceptions in all items of consideration in the SERVQUAL exercise were significantly in disagreement with the expectations in the corresponding items. In many cases, the perceived service quality to the customers did not meet their expectations. Most of the customers interviewed showed dissatisfaction with their banks and finance providers in many areas covered by the research. The results of the general findings from the reviewed journals are as follows: 4.1 Tangibility A lot of respondents expressed much concern on this dimension. They expected a modern bank that is geared to offering quality service to its clients should have modern looking state of the art technology to cater for its clients. They also expect that the banks and finance institutions should be visually appealing and above all should be conveniently located such that they are accessible to its clients without them having to travel a long distance to access the services. According to Rakesh (2012), customers expect to see neat and presentable employees at the banks and see visually appealing information materials from the institutions. But in all this questions the expectations of the customers differed with the perceptions they had after experiencing the service. This tells that customers in many banks are not satisfied with the services they receive in relation to the tangible aspects of the service. 4.2 Reliability The customers were interviewed using several questions to show how reliable is the service offered by the banks. This as was particularly the case with Krishna, Swapna $ Gantasala (2010) the dimension that most respondents expressed much concern as it had the worst gap in the question where the respondents where queried about how banks show willingness in solving a particular problem they had. The customers felt that the banks should honour they promise to act on problems in time to help their clients enjoy banking services without any limitation. The customers also expressed great concern about how banks maintain their records to reduce errors as many could not much the perception to expectations they had particularly on this matter. 4.3 Responsiveness From the results obtained in the research works. This is one area that banks need to address with much emphasis as many of the respondents expressed uncharacteristically bad gap in their perception of the service received compared to their expectation a view that is also held by Lianxi, Ye $ Jia (2002). The worst gap in this section that was evidenced across all papers is the ability of the staff members not to appear so busy such that they cannot respond to client’s requests. The customers however did not expect a quantified period in which they should expect services as some could be complex in nature than they had expected. 4.4 Assurance Respondents did expect to be attended by competent and knowledgeable staff in the banks to respond to their queries adequately. This dimension did not however have alarming disparity between the expectations and finding of the customers. However, it should not be disregarded as. Assurance gives a sense of confidence in the services offered to the customers (Iwaarden, Wiele, Millen, 2003). 4.5 Empathy Customers did expect that a staff member is adequately trained to deal with all situations in the bank and as such did not expect to get too much empathy from the banking and finance institutions staff. Although this should be of so much importance to the as Sahney, Banwet, Karunes, (2004) insisted. 5. Implication for services marketing theories and practices The results obtained from this report will go a long way in influencing the discussion on implementation of SERVQUAL in the banking sector. The banking sector is a pure service industry getting to now the quality of the product they sell. Banks have to use the SERVQUAL tool to understand how their clients perceive the services they are being offered by the banks. The only way they can get to know about this is by applying the 22 SERVQUAL elements to get from their clients what they are dissatisfied about concerning the service quality they get a view I share with (Kang, James $ Alexandris 2002; Ravichandaran & Arun, 2010) . Bank and financial services institutions management stand to gain a lot from using the SERVQUAL method to solve the problems of responsiveness in their institutions. The managers are at a position to know the how their staff members handle their clients. From this they can therefore act to encourage beneficial practices like empathy by rewarding performing staff and retraining those discovered to offer below per services to clients. By reviewing the pertinent issues expressed by customers in relation to tangibility issue. This report hopes to bring the issues to the attention of banking management so that they can take care of the small details such as modernity of their equipment and preventability of their staff. This report will indeed promote to the understanding of the customers’ expectations and how they can be handled in a proper way by the banking and finance sector so as not to communicate one thing and go ahead to offer the exact opposite or something not near to what they had promised. In essence therefore the report hopes to further validate the effectiveness of the SERVQUAL tool to address quality and improve it in the services sector and in particular the banking and finance sector. 6. Conclusion SERVQUAL has been widely used as tool to understand service quality and improve on it. The findings from the articles journals reviewed in this report have stressed why it is important for banks and financial institutions management to take give a lot of attention to the perceptions with the clients they serve. Service is quite different from goods in the sense that you can easily get the quality of a good by analyzing durability and effectiveness but quality is a bit different as it is only through the institutional structures and competence that you can get the quality of service. 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