Measuring the effect of internet banking service quality on customer retention: the mediating role of customer satisfaction

Abstract

The study's purpose is to evaluate the impact of internet banking service quality on retaining customers. Furthermore, the study investigates the role of customer satisfaction in defining the connection between five service quality attributes (reliability, responsiveness, assurance, tangibles, and empathy) and retention. The study employs self-administered questionnaires with a convenience sampling technique. The 360 usable data has been collected from voluntary participants who have experience with internet banking services. Subsequently, the study analyzed data using Smart PLS 3.3.3 in measurement and structural model. The study results revealed that four service quality dimensions such as reliability, assurance, tangibles, and Empathy have a substantial impact on customer retention while the effect of Responsiveness remains insignificant. The results for deciding the customer satisfaction suggest that responsiveness, assurance, tangibles, and empathy generate significant influence even though satisfaction partly mediates the link between four service quality aspects (Responsiveness, Assurance, Tangibles, and Empathy) and customer retention despite not influencing the association between reliability and retention. The study has improved the internet banking service literature towards retaining customers.