Factors Influencing Service Quality and its Impact on Customer Satisfaction and Loyalty: A case Study of the Somali Private Banking Sector

Abstract

Purpose – This study aims to explore the key factors influencing customer satisfaction in Somalia’s private banking sector. Specifically, it focuses on critical aspects such as reliability, responsiveness, visibility, employee commitment, and access to service, all of which play a pivotal role in shaping customer experiences and perceptions. The study also investigates the relationship between customer satisfaction and loyalty.
Design/methodology/approach The study population specifically focused on customers receiving Somalian Private Banking services. In this study, 200 respondents were targeted who are the customers of the private banks in Somalia. Out of 200 distributed questionnaires, we received 160 responses that gave a response rate of 80%. The research data were analyzed using descriptive and structural equation modelling (SEM) approaches.
Findings – According to the findings customer satisfaction was significantly influenced by the variables of responsiveness, visibility, reliability, and staff commitment. The hypothesis was accepted
indicating a significant positive influence of responsiveness on customer satisfaction (path coefficient= 0.261, T-value = 2.543, and p-value = 0.011). Similarly, visibility yielded a strong positive path coefficient of 0.534 which was also significant, leading to the acceptance of H3. Consequently,
consumer satisfaction greatly enhanced their loyalty. A further study of variance revealed considerable differences in customer satisfaction based on gender, age, and education level.
Research limitations/implications – Since the research was conducted on the private banking market in Somalia, the findings may not be applicable to other service sectors.
Originality/value – This research explores how customers evaluate the services offered by private banks, considering broader service quality standards, customer satisfaction, and loyalty. The findings aim to help Somalia and other nations improve customer satisfaction and loyalty in their private banking sectors.