Determinants and Consequences of Customer Satisfaction in Indian Retail Banks: Moderation of Bank Reputation

Abstract

The entry of private sector banks in the Indian market has compelled all the banks to determine the drivers of customer satisfaction (CS). This research aims to assess the drivers of CS and its implications in the Indian retail banking (IRB) sector. The top six Indian private sector banks were chosen according to market capitalization. A standardized questionnaire was used to gather responses from IRB customers and then evaluated using structural equation modelling (SEM). Five factors of CS are identified in the study, viz. effective complaint handling (ECH), service convenience (SC), perceived fairness (PF), perceived market performance (PMP) and relationship commitment (RC). The results unveil that SC and RC have a strong positive influence on CS, which further augments customer word of mouth (WoM) and repurchase intention (RI). In addition, bank reputation (BR) moderates the model’s relationship between CS and its consequences. Considering only private sector banks may limit the generalization of findings to a certain extent. The study presents vital enablers that escalate CS and might help bank professionals to identify thrust areas. There is a shortage of research on ‘BR’ and ‘RC’ in India’s context of the banking sector. Therefore, the research adds to the current literature by including the components mentioned above and other essential determinants and consequences. Furthermore, the study accentuates the complexities of relationships among the determinants and consequences of CS through a meticulous conceptual model of an IRB sector.