Service Quality and Financial Performance of Banks (A Meta-Analysis)

Abstract

This study reviews previous studies conducted on the relationship between service quality and financial performance in banking industry. Accordingly 40 studies were selected from several journals and websites using convenient selection method. The selected studies were coded, summarized and analyzed using descriptive statistics. The study result shows that service quality directly and indirectly (through mediation of customer satisfaction and customer loyalty) has positive and significant effect on the financial performance of the banks. Service quality has also positive and significant effect on the mediators' customer satisfaction and customer loyalty. This means improvement in service directly drives increase in profitability and also increases customer satisfaction and customer loyalty, then indirectly drives increase in profitability of the banks. Customer satisfaction and customer loyalty positively and significantly affects financial performance of the banks. In general the result depicts positive relationship between service quality, customer satisfaction and financial performance of the banks.