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Impact of Service Quality on Customer Loyalty and Customer Satisfaction in Islamic Banks in the Sultanate of Oman

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  • Bashir Ahmad Fida
  • Umar Ahmed
  • Yousuf Al-Balushi
  • Dharmendra Singh

Abstract

This study attempts to examine the impact of service quality on customer loyalty and customer satisfaction using the SERVQUAL model for four main Islamic banks in the Sultanate of Oman. This is a quantitative nature of a study, which involved a structured, self-administered questionnaire based on a convenience sampling method gathering data from 120 customers of Islamic banks in Oman. The study data were analyzed using SPSS, and the reliability coefficient (Cronbach’s alpha) was established. The correlation analysis examined the significant relationships among the study variables. The impact of service quality dimensions on customer satisfaction was captured through regression analysis. The key findings of the study revealed that the respondents showed on average an “Agree†response in the five areas, namely, tangibles, responsiveness, reliability, assurance, and empathy. The correlation results depicted a significant relationship between the three variables: service quality, customer satisfaction, and customer loyalty. Similarly, regression results demonstrated that empathy and responsiveness dimensions have a significant positive impact on customer satisfaction. It is, therefore, recommended that banks should focus more on empathy and responsiveness considering the significant relationship of these two variables on customer satisfaction. However, banks should not neglect the importance of other variables such as reliability, assurance, and tangibles that are revealed as important by responses of the participants for the bank’s provisions.

Suggested Citation

  • Bashir Ahmad Fida & Umar Ahmed & Yousuf Al-Balushi & Dharmendra Singh, 2020. "Impact of Service Quality on Customer Loyalty and Customer Satisfaction in Islamic Banks in the Sultanate of Oman," SAGE Open, , vol. 10(2), pages 21582440209, May.
    • Handle: RePEc:sae:sagope:v:10:y:2020:i:2:p:2158244020919517
    DOI: 10.1177/2158244020919517
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    References listed on IDEAS

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    1. S. Ananda & Raghavendra Prasanna Kumar & Dharmendra Singh, 2023. "A mediation analysis of perceived service quality, customer satisfaction and customer engagement in the banking sector," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(3), pages 570-584, September.
    2. Muhammad Sohaib, 2022. "An Investigation of Repurchase Intentions in the Banking Industry: What Reason Do They Return?," SAGE Open, , vol. 12(1), pages 21582440211, January.
    3. Mohamed Albaity & Mahfuzur Rahman, 2021. "Customer Loyalty towards Islamic Banks: The Mediating Role of Trust and Attitude," Sustainability, MDPI, vol. 13(19), pages 1-19, September.
    4. Azian Fatin Umaira Muhamad & Tambi Noordeyana & Khair Nurhayati & Yoong Tum Choo & Ismail Suhana, 2023. "The Relationship Between Service Quality and Occupants’ Satisfaction: A Mixed-Use Building," Real Estate Management and Valuation, Sciendo, vol. 31(1), pages 78-87, March.
    5. Rizaldi Yusfiarto & Septy Setia Nugraha & Galuh Tri Pambekti & Annes Nisrina Khoirunnisa, 2023. "Building loyalty in Islamic banking relationship: a multiple mediation approach empirically in Indonesia," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 306-320, June.
    6. Nourhan Ah. Saad & Sara Elgazzar & Sonja Mlaker Kac, 2022. "Investigating the Impact of Resilience, Responsiveness, and Quality on Customer Loyalty of MSMEs: Empirical Evidence," Sustainability, MDPI, vol. 14(9), pages 1-20, April.
    7. Thowayeb H. Hassan & Amany E. Salem, 2021. "Impact of Service Quality of Low-Cost Carriers on Airline Image and Consumers’ Satisfaction and Loyalty during the COVID-19 Outbreak," IJERPH, MDPI, vol. 19(1), pages 1-16, December.
    8. Evan Nugraha & Rini Mulyani Sari & Arif Yunan, 2020. "Promotion Analysis and Information Systems on Service Quality and Implications on Work Productivity," Technium Social Sciences Journal, Technium Science, vol. 13(1), pages 278-285, November.
    9. Yihan Huang & Daehwan Kim, 2023. "How Does Service Quality Improve Consumer Loyalty in Sports Fitness Centers? The Moderating Role of Sport Involvement," Sustainability, MDPI, vol. 15(17), pages 1-24, August.
    10. Alzhara Humaid Alsulmani & Sheikha Saif Alkindi & Essia Ries Ahmed, 2021. "Customer Accounting Information and Omani Service Companies’ Performance," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 10(2), pages 79-88, April.
    11. Dhruba Kumar Gautam & Gunja Kumari Sah, 2023. "Online Banking Service Practices and Its Impact on E-Customer Satisfaction and E-Customer Loyalty in Developing Country of South Asia-Nepal," SAGE Open, , vol. 13(3), pages 21582440231, July.
    12. Zaher Abdel Fattah Al-Slehat, 2021. "Determining the Effect of Banking Service Quality on Customer Loyalty Using Customer Satisfaction as a Mediating Variable: An Applied Study on the Jordanian Commercial Banking Sector," International Business Research, Canadian Center of Science and Education, vol. 14(4), pages 1-58, April.
    13. repec:thr:techub:10013:y:2020:i:1:p:278-285 is not listed on IDEAS
    14. Felix & Prihanto Y. Johny Natu & Annas Mohammad, 2023. "Analysis of the Influence of E-Learning Service Quality Factors on Student Perceived Value and Student Satisfaction, With Implication to Student Loyalty," Marketing of Scientific and Research Organizations, Sciendo, vol. 28(2), pages 81-110, June.
    15. Johanna Pangeiko Nautwima & Asa Romeo Asa, 2022. "The Impact of Quality Service on Customer Satisfaction in the Banking Sector amidst Covid-19 Pandemic: A Literature Review for the State of Current Knowledge," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 8(3), pages 31-38, March.

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