THE EFFECT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN ABAY BANK S.C

Abstract

The objective of this research was; to analyze the effect of service quality on customer satisfaction by using SYSTRA-SQ model. This study was conducted on customers of Abay Bank S.C in selected branches found in Addis Ababa. To achieve the study purpose, non-probability convenience sampling technique is applied and the researcher gathered the required data from customers of Abay bank S.C through questionnaire. Analysis and interpretation of the data was conducted by using descriptive and inferential statistical tools with the help of SPSS. Multiple regression model was used. After different diagnostic tests were tested the data analysis were performed using SPSS software. As result the study found out that variables Behavioural service quality, System service quality, Service transactional accuracy and Machine service quality have significant positive effect on customer satisfaction in Abay Bank Share Company at 5% level of significance. Also, the mean score result indicated that the respondents for all the customer satisfaction dimensions have a moderate agreement level. Moreover, the overall service quality as measured with customer satisfaction shows encouraging result, but with contexts that calls for further improvements. Furthermore, the result of the study identified issues that dissatisfy customers: such as less branch network in Addis Ababa as well as other regions, relatively less collateral estimation, a smaller number of ATM, and inadequate ATM machines. The researcher recommends that the Bank shall enhance the business research and product development department’s capabilities to respond to customer’s dissatisfaction areas and to design highly effective customer driven products/service as well as bringing unique features in the existing product/services. Besides, managements of the Bank shall work hard to increase the machine service quality, since it is one of the measures of service quality that scores very low.