Service quality expectations and perceptions of home loan customers

M.Com. (Business Management)Over the years, the competitive banking market had forced banks to be innovative in their products. However, regardless of how innovative banking products were, ‘service’ remained the backbone of banking products. With increasing access to information and alternative products, banking customers had more choices as to where to do business, based on the level of service they receive. They expected an exceptional delivery of customer service and were less tolerant of bad service. Customers usually compared the service they 'experienced' to the service they 'expected' when walking into a bank. When the two did not match, a gap arose. This study was undertaken to determine whether customers of a ‘home loan’ division of a South African bank perceived the bank’s service quality to be different to what they expected. It also sought to establish if there was a difference in how customers, in different demographics, evaluate the bank’s service quality. An online survey was used to gather information from banking customers on their judgment of the bank’s service quality, after which statistical tests were done to analyze the data. The study revealed that a gap indeed exists between the service quality customers expected and the service quality they actually received from the bank. Customers reported a dissatisfaction of the bank’s service quality with regards to their provision of reliability, responsiveness, assurance and empathy in their service delivery. With regards to the evaluation of the bank’s service quality of customers in different demographics, it was discovered that the 40-59 customer age group received the most empathy in service encounters with the bank, customers using property insurance and repayment related services perceived the bank’s service quality across all dimensions to be positive. Lastly, a positive correlation between the number of years customers have been with the bank and their perceptions of the bank’s provision of empathy was established