The proliferation of and rapid advances in technology based systems, especially those related to the internet, are leading to fundamental changes in how companies interact with customers (parasuraman and Zinkhan, 2002; Bauer et al; 2005). This trend is well established in the service industry, where service providers are increasingly urged to invest in technology to better secure their future in the electronic age (Zhang and Prybutok, 2005; Bauer et al; 2005).
Today’s winners are those who
overcome consumer cynicism by exceeding expectation and going beyond the point
of encounter. These firms are successful because they have invested for the
long term through recognizing that service fulfillment not only promotes growth
of their customer base but retains customer loyalty (lake and Hickey, 2002).
The challenging business environment
in the financial service market has also resulted in more pressure on banks to
develop and utilize alternative delivery channels, with a view to attracting
more customers, improving customer’s perceptions, and encouraging loyalty (Bauer
et al; 2005; Lee and Lin, 2005,
parasuraman et al;). Among the more
recent delivery channels introduced is electronic banking. In its simplest form,
electronic banking means the provision of information about the bank and its
products via a page on the internet.
Davis et al; (1989) however, defines the term as the provision of
information and or services by a bank to its customers via computer, telephone
or television. A more developed service, in Daniel’s (1999) view, is one that
provides the customers with the opportunity to gain access to their accounts,
execute transactions or buy products online or via other electronic means such
as TV, telephone or Automated Teller Machines (ATM).
The installation of customer
friendly technology (such as menu driven automated teller machines, telephone
and internet banking services) as a means of delivering traditional banking
services has become common in recent years as a way of maintaining customer loyalty
and increasing market share.
Traditional brick and mortar banks
are using technology to meet the competitive challenge posed by online banks,
as well as a method of reducing the cost of providing services that were once
delivered exclusively by bank personnel (Joseph et al; 2003). Managers in virtually all industries understand that
providing quality customer service is a key strategic component in firm
profitability. The importance of service delivery and its impact on improving
satisfaction and retention of customers, improving sales and market share, and
improving corporate image cannot be overstated (Lewis et al; 1994).
As with most other service
providers, banks have moved quickly to invest in technology as a way of
controlling costs, attracting new customers, and meeting with convenience and
technical innovation expectations of their existing customers (Pun et al; 2002).
Numerous model have been developed
to measure customer perceptions of service quality. Most of these mode is
utilized face-to-face interaction between customers and the employees of
service providers to conceptualize service quality measurement models.
However, developments in information
and communications technology have provided a platform by which companies can
design, develop and deliver services that can perceived by customers as
superior (Srjadjaja et al; 2003).
There are several competitive advantages associated with the adoption of
technology in service organizations some of which include the creation of entry
barriers, enhancement of productivity, and increase of revenue generation from
new services (Fitzsimmons & Fitzsimmons 1997). Service quality is one of
the main factors that determines the success or failure of electronic commerce
(Santos 2003).
Automated service quality has tended
to lag behind because practitioners have focused mainly on issues of usability
and measurement of use, with little or no consideration to the issues of
service quality (Buckley 2003). It has been proposed that customer perceptions
and preferences of service quality have a significant impact on a bank’s
success (Mouawad & Kleiner 1996).
Recently, technology has had a
remarkable influence on the growth of service delivery options (Dabhoikar &
Bagozzi 2002) and a profound effect on service marketing (Bitner et al; 2002).
In order to remain competitive,
banks are increasing their technology based service options (Fitzsimmons &
Fitzsimmons 1997). More and more banks have adopted technology to deliver their
services and this has resulted in: reduced costs, the creation of value added
services for customers (Zhu et al;
2002), the facilitation of their employee’s jobs and ultimately, the provision
of self – service options for customers (Dabholkar & Bagozzi 2002).
In today’s intensely competitive economy,
providing excellent customer service plays a vital role in a company’s success
and failure (Mouawad & Kleiner 1996). An increasing number of banks are
using technology to deliver their regular service to customer.
Investigations of quality issues of
bank’s automated services are necessary because of their potential influence
on: attractiveness, customer retention, positive word-of-mouth, and maximizing
competitive advantages (Santo 2003). To embrace this new technology-oriented
context, it is necessary for banks to realize how quality issues of automated
services distinguish their customer services from others. This research will
assist bank administrators to ascertain a better understanding of customer perceptions
of automated services now integrated into the bank’s product offering.