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Impact of Service Innovation on Customer Satisfaction: An Evidence from Pakistani Banking Industry

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  • Rimsha Kanwal
  • Salman Yousaf

Abstract

The purpose of this study is to appraise the linkage between service innovation (SI), customer value creation (CVC), and customer satisfaction (CS) with a specific focus on the Pakistani banking sector. In addition, the study evaluates the moderating role of brand equity (BE) fit between SI and CS. A survey is conducted on 250 customers from commercial banks in Pakistan and scales were acquired from past literature. The study showed that CVC mediates the relationship between SI and CS. Therefore, SI must create value for their customers in order to enhance CS. Moreover, BE has a partial positive moderation effect on the relationship bewteen SI and CS. By relating to the findings, managers of firms should focus on SI that adds to or create holistic value for their customers, which ultimately increase the CS level. This study relies on two theories, which include signaling theory and expectation disconfirmation theory to explain how SI in Pakistani banking sector creates customer value which achieves CS. The other uniqueness of the study is that it will be helpful for researchers by giving baseline regarding BE effect as a moderator between SI and CS in Pakistani banking industry.

Suggested Citation

  • Rimsha Kanwal & Salman Yousaf, 2019. "Impact of Service Innovation on Customer Satisfaction: An Evidence from Pakistani Banking Industry," Emerging Economy Studies, International Management Institute, vol. 5(2), pages 125-140, November.
    • Handle: RePEc:sae:emecst:v:5:y:2019:i:2:p:125-140
    DOI: 10.1177/0976747919870876
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    References listed on IDEAS

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    1. repec:osf:osfxxx:nscq3_v1 is not listed on IDEAS
    2. Samuel Godadaw Ayinaddis, 2023. "The Relationship Between Service Innovation, Customer Satisfaction, and Loyalty Intention in Emerging Economies: An Evidence from Ethio Telecom," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4045-4063, December.
    3. Singh Rajesh & Sarangal Rajani Kumari, 2021. "Innovation in Quick Service Restaurants (QSRs): A Future Perspective," European Journal of Tourism, Hospitality and Recreation, Sciendo, vol. 11(2), pages 210-218, December.
    4. Wandia, Elizabeth & Muathe, Stephen Makau, 2024. "Leveraging Business Globalization to Accelerate Performance of Commercial Banks in Kenya," OSF Preprints nscq3, Center for Open Science.
    5. Ha Minh Nguyen & Trinh Kieu Thi Ho & Trung Thanh Ngo, 2024. "The impact of service innovation on customer satisfaction and customer loyalty: a case in Vietnamese retail banks," Future Business Journal, Springer, vol. 10(1), pages 1-15, December.
    6. Shashi Kant & Tafese Niguse, 2025. "Effect of entrepreneurship orientation on eco-hotels sustainability with mediation of customer loyalty in Ethiopia," International Journal of Corporate Social Responsibility, Springer, vol. 10(1), pages 1-13, December.

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