The relationship between the efficiency, service quality and customer satisfaction for state-owned commercial Banks in China

Meehyang Chang, Han Byeol Jang, Yi Mei Li, Daecheol Kim

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

In 2006, China fully opened up its financial markets. This means that the banking industry is facing a more severe competitive environment, which requires not only the operational efficiency of the bank but also customer satisfaction for the quality of service. As the reform and opening up policy started from the eastern costal areas in China, there are differences in economic development levels by the region, and so are the levels of financial development. Therefore, it is necessary to study the effect of regional differences on bank efficiency. Prior studies also showed a lot of limitations about using data envelopment analysis, in that the efficiencies of the bank are only measured without consideration of other managerial aspects of the service and customer satisfaction. Thus, this study aims to analyze the efficiencies of twenty state-owned commercial banks in five provinces of China. The relationships between bank efficiency, service quality, and customer satisfaction are analyzed. The data used for the analysis was obtained from the 2015 Chinese Banking Statistics. As a result, the average technical efficiency of twenty state-owned banks is as high as 81.9%. It is also found that the bank's service quality has a positive impact on efficiency and customer satisfaction. In the case of banks that are located in areas with high economic levels, customer satisfaction is lower than that of banks in lower regions. This is because customers in high economic level regions have higher expectations for service quality and it leads to lower customer satisfaction.

Original languageEnglish
Article number2163
JournalSustainability (Switzerland)
Volume9
Issue number12
DOIs
StatePublished - 2017 Nov 23

Fingerprint

Customer satisfaction
bank
customer
banking
efficiency
China
development level
technical efficiency
data envelopment analysis
financial market
economics
economic development
Economics
industry
Data envelopment analysis
service quality
Quality of service
regional difference
Statistics
services

Keywords

  • Bank efficiency
  • Customer satisfaction
  • DEA
  • Service quality
  • State-owned commercial banks

Cite this

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title = "The relationship between the efficiency, service quality and customer satisfaction for state-owned commercial Banks in China",
abstract = "In 2006, China fully opened up its financial markets. This means that the banking industry is facing a more severe competitive environment, which requires not only the operational efficiency of the bank but also customer satisfaction for the quality of service. As the reform and opening up policy started from the eastern costal areas in China, there are differences in economic development levels by the region, and so are the levels of financial development. Therefore, it is necessary to study the effect of regional differences on bank efficiency. Prior studies also showed a lot of limitations about using data envelopment analysis, in that the efficiencies of the bank are only measured without consideration of other managerial aspects of the service and customer satisfaction. Thus, this study aims to analyze the efficiencies of twenty state-owned commercial banks in five provinces of China. The relationships between bank efficiency, service quality, and customer satisfaction are analyzed. The data used for the analysis was obtained from the 2015 Chinese Banking Statistics. As a result, the average technical efficiency of twenty state-owned banks is as high as 81.9{\%}. It is also found that the bank's service quality has a positive impact on efficiency and customer satisfaction. In the case of banks that are located in areas with high economic levels, customer satisfaction is lower than that of banks in lower regions. This is because customers in high economic level regions have higher expectations for service quality and it leads to lower customer satisfaction.",
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The relationship between the efficiency, service quality and customer satisfaction for state-owned commercial Banks in China. / Chang, Meehyang; Jang, Han Byeol; Li, Yi Mei; Kim, Daecheol.

In: Sustainability (Switzerland), Vol. 9, No. 12, 2163, 23.11.2017.

Research output: Contribution to journalArticle

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