A comparative study of customer satisfaction in public vs private banks using SERVQUAL model

Abstract

In  this study, customer satisfaction was evaluated in Indian public, private sector banks using SERVQUAL model, which evaluate service quality on 5 dimensions — Tangibles, Reliability, Responsiveness, Assurance and Empathy. A structured survey was conducted with 400 participants, ensuring equal representation for both bank types; the data were then analysed using reliability testing, gap analyses, and regression techniques. Therefore, the study concludes that private banks outperform their public sector counterparts in responsiveness, tangibles, and empathy, mostly due to superior technology and a stronger customer-oriented approach. Conversely, public banks continue to excel in dependability and trust, especially in rural markets, although they still face significant gaps in assurance. Based on regression results, responsiveness and tangibility are the best predictors of customer satisfaction in private-sector banks, while public-sector banks demonstrate assurance, reliability. The importance of ensuring service delivery continues to meet evolving customer expectations is drawn from the public demand, while public banks must focus on assurance building to remain competitive. Bank managers and policymakers, in emerging markets, are provided with practical steps through this research to convert targeted service improvements into greater satisfaction for customers, contributing to the literature of service quality.