Gap Analysis of Bank's Service Quality (BankQual): Local Banks versus Foreign Banks

Ariffin, Ahmad Azmi M.; Aziz, Norzalita A.; Zakwan A. Rahman, Muhammad R.
May 2014
Australian Journal of Basic & Applied Sciences;May2014, Vol. 8 Issue 7, p417
Academic Journal
Background: Due to commoditization in financial products, banks are obliged to offer exceptional service quality to their customers in order to obtain sustainable competitive advantage. Objective: This paper aims to identify the underlying dimensions of service quality or BANKQUAL for the Malaysian banking services and subsequently to compare the zone of tolerances (ZOT) between the local and the foreign banks with regards to the BANKQUAL dimensions. Results: The factor analysis extracted four factors of BANKQUAL labeled as reliability, empathy, tangibility and special requirement. The gap analysis between service expectations and perceptions indicated that customers' expectations are significantly lower than their perception, signaling that there are a lot of service improvements efforts needed to enhance the quality of services offered by the banks in Malaysia. This findings of this study also showed that there are no significant differences between local banks and foreign banks with regard to their zone of tolerances for the four dimensions except for the tangible dimension. Conclusion: It can be concluded that customers of local bank are more tolerable with the tangibility elements of the bank services compared to the customers of foreign banks. The findings of this study would help provide some insights for bank managers or marketers on the areas that need substantial improvement in order to bring up the quality level of Malaysian banking services.


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