Service quality, customer involvement and customer satisfaction: A case study of retail banking in Bangladesh

While the linkage between service quality and customer satisfaction has been well researched in the industrially developed Western economies, it remains a rather neglected area in the traditional developing nations. This paper explores this linkage in the fast growing and highly competitive retail banking sector of Bangladesh. It empirically tests whether the relationships between service quality, customer involvement and customer satisfaction found in the context of long term continuing services in the West also hold in a similar context in a developing society. The research, conducted in Dhaka in late 2010, involved a survey of 212 bank customers. Data was analyzed using Structural Equation Modeling (SEM) by AMOS. Findings confirm that service quality and customer involvement do impact customer satisfaction in retail banking sector of Bangladesh as they do in the West; customer involvement playing a mediating role in the quality– satisfaction link. The findings have significant implications for bank managers as they can use these in developing future banking strategies.