MEASURING AND MODELLING INTERNET BANKING SERVICE QUALITY IN SOUTH AFRICA

Year 2017, Volume: 9 Issue: 2, 137 - 157, 01.06.2017

Ephrem Habtemichael Redda Jhalukpreya Surujlal

Abstract

The purpose of this study was to develop a measuring and modelling instrument
of Internet banking service quality (IBSQ) for the South African banking sector.
Snowball and convenience sampling, both non-probability techniques were used
to recruit participants for the study. A total of 310 Internet banking customer
responses were utilised in the analysis. Using exploratory factor analysis (EFA),
eight determinant factors that explained IBSQ were extracted. Following this, the
study determined the causal relationship amongst IBSQ, customer value,
satisfaction and loyalty through correlation analysis and structural equation
modelling (SEM). The proposed model indicates that IBSQ, comprising eight
factors, positively influences customer value, satisfaction and loyalty. The model
found customer satisfaction to be a predictor of customer loyalty in an Internet
banking context. Contrary to the hypothesised model, the influence of customer
value was limited to customer satisfaction. The influence of customer value on
customer loyalty was found to be rather weak; it influenced customer loyalty only
indirectly through customer satisfaction. Understanding the intricate relationships
amongst service quality, customer value, satisfaction and loyalty will definitely
enhance banks’ understanding consumer behaviour and decision making in this
digital era. The model may assist bankers to measure, manage and improve IBSQ.
Banks could utilise this measurement model to design and improve their Internet
banking services.

Keywords

IBSQ, value, satisfaction, loyalty, consumer behaviour, SEM