Comparative evaluation of critical factors to close the service quality gaps in the commercial banks of Nepal

Abstract

The study aims to find out the critical factors that are creating agap in service quality in the commercial bank of Nepal using the SERVQUAL model. In order to make the even comparison and proper investigation, the study selects one private commercial bank and one government-owned bank basing on their paid-up capital, nature of the business, profitability, customer base, brand image and so onwhich is proper representative for the research. With the application of the dominance analysis, the most criticaldimensions of the service quality are identified. Furthermore, the study evaluates and emphasize the critical factors that should be focused to increase the service quality of the banks. The research is based on 223 samples collected by using the questionnaire,whereby 22 statements each for perception and expectation of customers, founded by Parasuraman. The result of the study suggests that there is service quality gap in both private commercial bank and government-owned bank, however, the gap is higher in the government-owned bank.Moreover, with the implementation of dominance analysis helped to underline “responsiveness” and “assurance” as animportant dimension to be considered to close the service gap by 73%. However, in the case of the government-owned bank, considering “assurance” and “competence” dimensions can close the service gap by 86%. The study suggests investing more inupdating the recent technology, the human factor (like soft skills training and communication training), customer relationship management and effective information system to close the gap that is evident in the commercial banks of Nepal.