THE EFFECT OF E-BANKING SERVICE QUALITY ON CUSTOMERS SATISFACTION AND LOYALTY

Abstract

The objective of this study was to examine the direct effect of e-banking service quality dimensions on both customer satisfaction and customer loyalty of Commercial Bank of Ethiopia (CBE) in Bahir Dar. Quantitative research approach with explanatory research design was employed. Using convenience sampling technique, the data was gathered through already tested questionnaire from 380 E-banking service users of Commercial Banks of Ethiopia as respondents, in Bahir Dar Town. Seven service quality dimensions; efficiency, reliability, responsiveness, easiness, product portfolio, privacy and cost, derived from the SERVQUAL model with support of literature review were selected as forecasters of customer satisfaction and loyalty in E-banking. Structural Equation Model (SEM) and Confirmatory Factor Analysis (CFA) were used to analyze data. Research findings indicated significant impact of efficiency, responsiveness, easiness, privacy and Commission on Satisfaction and the significant impact of Satisfaction on loyalty.