Internet Braking Service Quality And Customer Loyalty: The Mediating Role Of Customer Satisfaction

ABSTRACT Competition in the Ghanaian banking industry is at an all-time high for various reasons. Chief amongst these reasons is the deregulation and reforms the industry witnessed at the tail end of the 20th century. This has resulted in the influx of foreign banks which are mostly multinational, and who possess a financial clout that cannot be rivaled by most local banks. The heightened competition has paved the way for the introduction of many innovations such as electronic banking. Even though the introduction of internet banking by banks in Ghana has resulted in flexibility of banking operations, it still remains unclear how the application of Internet banking service quality impact customer loyalty. There has also been a general observations that quality service lead to customer loyalty. On this premise, the current study therefore explores the relationship between internet banking service quality and customer loyalty, and further assess the mediating role of customer satisfaction on the relationship. A positivist research paradigm was adopted together with a survey strategy. A quantitative approach was also adopted and questionnaires were utilized as the data collection instrument in this study. Items used in the questionnaire were developed from existing scales. Data was conveniently gathered from 420 bank customers in Accra who are actively using internet banking service. Out of this, the process of data screening and cleaning yielded 368 usable questionnaires which were coded using the Statistical Package for Social Sciences (SPSS). The data was analysed using Structural Equation Modelling (SEM), where the two-stage approach was used in assessing the measurement model and structural model. The study conceptualized Internet banking service quality as a construct consisting of six dimensions namely Efficient and Reliable Service, Fulfillment, Security/Trust, Site Aesthetics, Responsiveness/Contact and Ease of Use (Zavareh et at., 2012). The results of the analysis indicated that there is a direct and positive relationship between Internet banking service quality and customer loyalty. However the analysis revealed that customer satisfaction partially mediates the relations between Internet banking service quality and customer loyalty. Thus Internet banking service quality does result in customer loyalty via customer satisfaction, implying that when banks direct their Internet banking service efforts towards the creation of customer satisfaction, the outcome of customer loyalty can be achieved. As a result of the findings of this study, it is recommended that managers of banks in trying to have loyal customers should design the internet banking service to enhance customer‘s satisfaction taking into consideration all the dimensions of IBSQ.