Banks Customer Satisfaction in Kuwait

BANK'S CUSTOMER SATISFACTION IN KUWAIT: AN EXPLORATORY STUDY

BY

KHALED AL-HASHASH ABDULRASOUL HUSSAIN BAHZADI

Open University Malaysia

Bank's Customer Satisfaction in Kuwait An Exploratory Study

BY

KHALED AL-HASHASH ABDULRASOUL HUSSAIN BAHZADI

Project paper submitted in partial fulfillment of the requirement for the Degree of Master of Business Administration

Open University Malaysia

2008

II

ABSTRACT

Customer satisfaction is a significant subject for most marketers. Our proposal project

aimed to investigate customer satisfaction in the retail banking in state of Kuwait. A

total of 650 questionnaires have been randomly distributed to retail customers. Using

descriptive statistics methods and ANOVA test (to compare between different means),

the result of this study suggests the degree of customer satisfaction (Muslim and non-

Muslim customers) in term of services provided by retail banks in Kuwait. The

ANOVA test show slightly differences between Muslim and Non-Muslim customer in

their degree of satisfaction. Muslim customers are mostly satisfied with availability of

ATM in several locations, safety of funds, easy to use ATM and The quality of services

provided. While Non-Muslim customers are mostly satisfied with Availability of ATM

in several locations, Phone account access, safety of funds, ease of opening a current

account and bank image and reputation. The worse factor noted in this study is the

interest rate on loans, this indicate that most of customer in Kuwait give more intention

to loans

Key words: customer satisfaction, retail banking, Kuwait.

III

KHALED AL-HASHASH MBA 2008 OUM

ABDULRASOUL HUSSAIN BAHZADI MBA 2008 OUM

IV

DECLARATION

Name : KHALED AL-HASHASH Matric . Number : 51060485 Name : ABDULRASOUL HUSSAIN BAHZADI Matric . Number : 51060520

We hereby declare that this project paper is the result of my own work,

except for quotation and summaries which have been duly acknowledge.

Signature: Date: 19-10-2008

Signature: Date: 19-10-2008

V

ACKNOWLEDGEMENT

Thanks to Allah the Almighty, the most guidance, the most helpful that enabled us to

accomplish all these achievements. We would like to express our gratitude to Dr.

Shaaban M Islam Barwari without his senior recommendation and advices such work

could not have been accomplished. Finally, thank to all individuals who sacrificed their

time to speak to me during the interviews.

VI

APPLICATION TO CONDUCT RESEARCH PAPER

PART A: STUDENT'S PARTICULARS

Name of student : KHALED AL-HASHASH

Matric . Number : 51060485

Name of student : ABDULRASOUL HUSSAIN BAHZADI

Matric . Number : 51060520

PART B: PARTICULAR ABOUT THE PROJECT

1. Title of the project: "Bank's Customer Satisfaction in Kuwait (An Exploratory Study)"

2. Research Objectives: "The study aimed to use segmentation approach and

customers are significantly different in their perceptions of

the relative importance of many services offered by Kuwaiti

banks."

3. Proposed Research Method: "quantitative methodology."

PART C: FACULT"S INPUTS

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1. Topic Chosen: Acceptable / Not Acceptable

2. Suggested Supervisor for the student: Dr. Shaban M. Islam Barwari

RESEARCH PAPER SUBMSSION FORM

Project Paper Title: "Bank's Customer Satisfaction in Kuwait (An Exploratory Study)"

Director Open University of Malaysia (OUM) Bahrain Branch Dear Sir, Attached are the following documents of your evaluation and approval Chapter 1: Introduction Chapter 2: Literature Review Chapter 3: Research Method Chapter 4: Data and Analysis Chapter 5: Discussion Chapter6: Summary References Appendixes We have thoroughly checked my work and we are confident that it is free from major grammatical errors, weaknesses in sentence construction, spelling mistakes, referencing mistake and others. We have checked with OUM MBA program guideline for writing project paper and we are satisfied that the project paper proposal satisfies most of its requirements. Thank You,

Student Signature:

VIII

We have read the student's research proposal and We are satisfied that it is line with the OUM MBA program guideline for writing project proposal. It is also free from major grammatical errors, sentence construction weaknesses, citation and others. Supervisor's Signature:

IX

TABLE OF CONTENT

CHAPTER 1 1

INTRODUCTION 1

BACKGROUND OF THE STUDY 3

RESEARCH PROBLEMS 4

PURPOSE OF THE STUDY 5

THE SAGNIFICANTE OF THE STUDY 6

CHAPTER 2 7

LITERATURE AND THEORETICAL BACKGROUND 7

CHAPTER 3 18

RESEARCH METHODOLOGY 18

INSTRUMENTATION 18

STUDY POPULATION AND SAMPLING PROCEDURE 19

RESEARCH DESIGN 19

DATA COLLECTION PROCEDURES 20

TOOLS 21

CHAPTER 4 22

DATA ANALYSIS AND RESULTS 22

CHAPTER 5 32

DISCUSSION 32

CHAPTER 6 50

SYMMARY AND CONCLUSION 50

REFERENCES 52

APPENDIX 1 59

X

LIST OF TABLES

Table number Page number

Table1: Gender

24

Table 2: Income

24

Table 3: Age

24

Table 4: Nationality

24

Table 5: How your bank communicate

with you

24

Table 6: Total experience

25

Table 7: Education

25

Table 8: Sector

25

Table 9: Religion

25

Table 10 : Descriptive Statistics 26 Table 11: The most important and the lest

important factors

26

Table 12: Descriptive Statistics (a)

27

Table 13: The most important and the lest 27

XI

important factors for Muslim customers

Table 14: Descriptive Statistics (b)

28

Table 15: The most important and the lest

important factors for Non-Muslim

customers

28

Table 16: ANOVA test

29

Table 17: In general are you satisfied

with your bank services?

33

Table 18: In general are you satisfied

with your bank services

34

Table 19: The convenient of bank

location

34

Table 20: Fast and efficient service of

services provided.

35

Table 21: Friendliness of bank employees

36

Table 22: Bank image and reputation

36

Table 23: Availability of loans.

37

Table 24: Ease of obtaining loans (the

acceptability of loans terms)

38

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Table 25: Services prices

38

Table 26: Interest rate on saving account

39

Table 27: Interest rate on loans

39

Table 28: The quality of services

provided

40

Table 29: Bank monetary transactions

41

Table 30: Access to services.

41

Table 31: Safety of funds 42 Table 32: Availability of ATM in several

locations

42

Table 33: External appearance of bank.

43

Table 34: Varity of services offered.

44

Table 35: Convenient ATM locations

44

Table 36: Confidence in bank

management.

45

Table 37 Ease of opening a current

account.

46

Table 38: Available parking space

nearby.

46

XIII

Table 39: Easy to use ATM

47

Table 40: The quality service of E-

banking

48

Table 41: Phone account access

48

Table 42: Bank services expectation

49

Table 43: Efficacy Handing Problems

49

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LIST OF FIGURES

Page number Figure number 22 Figure1: bank names

22 Figure2: age

22 Figure 3: gender

23 Figure 4: Employment status

23 Figure 5: Income

23 Figure 6: Total experience

23 Figure 7: Job Type

23 Figure 8: Sector

33 Figure 9: Customers general satisfaction

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CHAPTER 1

INTRODUCTION

Customer satisfaction is an evaluation by the customer, after buying their goods and

services. The most popular view of customer satisfaction in academia is that customer

satisfaction is the judgment borne out of the comparison of pre–purchase expectations

with post purchase evaluation of the product or service experience (Oliver, 1997).

Customer satisfaction can result from any dimension (whether or not its quality related)

and its judgments may arise from non-quality issues (e.g. needs, equity, and perceptions

of `fairness’) and require experience with the service or provider (Taylor et al, 1994;

Howard and Sheth, 1969).

Strong linkages have been apparent between service quality dimensions (for example

fast responses to enquiries) and overall customer satisfaction (Anderson and Sullivan,

1993). But much debate arises from whether customer satisfaction is an antecedent of

service quality judgments (Bitner, 1990; Parasuraman, et al, 1985) or the other way

round (Anderson and Sullivan, 1993; Cronin and Taylor, 1992; Taylor et al, 1994).

Customer satisfaction is widely recognized as a key pressure in the formation of

consumers' future purchase intentions (Taylor and Baker, 1994). Satisfied customers are

also likely to tell others of their favorable experiences and thus engage in positive word

of mouth advertising (File and Prince, 1992; Richens, 1983). This positive word of

mouth advertising is particularly useful in collectivist Asian cultures like that of Kuwait

where social life is structured in a way to improve social relationships with others in the

society (see Hofstede, 1980; Hall and Hall, 1987). Dissatisfied customers, on the other

hand, are expected to switch brands and engage in negative word of mouth advertising.

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Banking can consider the business that really appreciates the value of building long-

term relationships with customers. With the range of services offered by banks –

brokerage, home equity, mortgage refinance, credit cards, and debit cards, among others

– successful banks want to serve customers by offering services and products that meet

both personal and business banking needs. In today’s highly competitive, increasingly

consolidated world, offering personalized and differentiating services can be critical to a

bank’s success. Milwaukee-based Marshall & Ilsley Corporation is a diversified

financial services company that faced and conquered that challenge.

In the state of Kuwait customer satisfaction is the key to the profitability of retail

banking, it implies the retention of customers for the long term, which is cheaper than

attracting new customers. In the current circumstances of retail banking in the Kuwait

particularly with banks becoming larger, the closure of branches and the advent of

internet banking, the question arises whether the customers are satisfied or otherwise

and what are the elements of retail banking which lead to the satisfaction or

dissatisfaction of customers. The knowledge of current levels of satisfaction and, in

particular, the key determinants of satisfaction benefit those in the industry allowing

them to focus and build upon key areas that lead to highly satisfied customers. Results

highlight that in-branch factors particularly staff; branch location and convenience are

the most significant factors influencing customer satisfaction in retail banking.

BACKGROUND OF THE STUDY

In Kuwait, there are tenth commercial and specialized banks, with 107 branch offices,

serving some 1.8 million people who are Muslim and non-Muslim (Institute of Banking

2

Studies, 1994; Ministry of Planning, 1994). The banking sectors in Kuwait play a main

role in improving economic growth. It comprises fifteen banks including six local

conventional banks, two specialized banks, two Shariah compliant banks and five

branches of foreign banks. The banking sectors consolidated grew at a Compound

Annual Growth Rate (CAGR) of 12% during the period 2001-2006 with total assets

reaching KD 26.9 bn (USD 934 bn) at the end of 2006. (Institute of Banking Studies,

2007).

However, the benefits of effective and active customer involvement would suggest that

there are gains to be made from attempting to address such management problems. One

particular issue concerns the motivation of customers to accept the role of partial

employees and to recognize the value of active participation in service delivery.

This brief review of the literature on customer participation suggests that there is or

must be an association between service quality, relationship satisfaction and customer

participation. The issue of causality is undoubtedly complex; participation should result

in an improved quality of service and this may be seen as an antecedent of satisfaction.

At the same time, greater participation may only occur if preceded by the assurance of

better service. While it may be difficult to identify uniquely the direction of cause and

effect, there are good grounds for expecting a greater degree of customer participation

to be at least associated with better quality of service and greater levels of customer

satisfaction.

Economic of Kuwait is depending on oil. This considered the principle mover of

Kuwait economy, and Kuwaiti market. Tenth is the number of Kuwaiti banking

retailers, Kuwait Finance House, Al Ahli Bank of Kuwait, Commercial Bank of Kuwait,

Industrial Bank of Kuwait, international bank, National Bank Of Kuwait (NBK), Gulf

Bank, Boubyan Bank, Burgan Bank and Bank of Kuwait & the Middle East (BKME).

3

Kuwait has seven conventional banks and one Islamic bank. Kuwait's conventional and

Islamic banks offer a vast range of services including current and saving accounts, with

various terms and interest rates, including on-line enquiries and cash withdrawals 24

hours a day from ATM's at various locations and commercially active areas in the

country.

RESEACH PROBLEM

The studies which related to the subject of the degree of customer satisfaction of the

services that provided by banks in Kuwait are few, and significance of customer

satisfaction about the banks in Kuwait are differ from other countries because of

demographic, social, economic, political, and technological environment factors. Some

factors that related to customer satisfaction are important in some countries and less

important in others, in issues that related to services that offered by Kuwaiti banks.

Areas which were found to be particularly problematic included knowledge and

understanding of the degree of customer satisfactions.

Yet, in the current environment of increased competition with rapid market entry of new

service concepts and formats, the customer satisfaction also presents a challenge of a

more in-depth understanding of the complex relationship between the degree of services

that provided by banks and customer satisfaction of these banks. Although the range

and variety of products available to customers have expanded, the management of the

banking relationship continues to be problematic. In part this may reflect failures on the

part of the banks. In addition, we argue that such problems may also arise as a

consequence of the reluctance of some customers to participate in the banking

relationship.

In short, there is shortage and lack in published study has used a measure of satisfaction

that captures the degree of satisfaction with banks service customers in Kuwait. This

4

limitation hampers our understanding of the impact of diverse bank service options or

strategies on outcomes such as loyalty, trust and word-of-mouth. In addition, the

continued use of diverse, non-standardized instruments to measure what is essentially

the same construct continues to place a question mark on the general of the empirical

studies that have attempted to measure satisfaction with bank services.

THE PURPOSE OF THE STUDY

Customer satisfaction is a key issue for marketing managers, particularly those in

services industries. However, it appears that achieving customer satisfaction is often the

end target, as evidenced by the stress on customer satisfaction surveys. This research

will report the findings from a recently conducted study, which looked into the

significance and importance of various determinants of customer satisfaction in retail

banking in Kuwait.

The study aimed to segment the sample due to different religion. Muslim and Non-

Muslim, customers are significantly different in their perceptions of the relative

importance of many services offered by Kuwaiti banks.

THE SIGNIFICANT OF THE STUDY

Customer satisfaction is a main theoretical as well as practical issue for most marketers

and consumer researchers (Churchill and Suprenant, 1982; Moutinho and Goode, 1995;

Naser et al., 1999; Piercy, 1994). Customer satisfaction is a key outcome of marketing

activity whereby it serves as a link with various stages of consumer buying behavior.

For example, if customers are satisfied with a particular service offering after its use,

5

which they likely engage the customers in repeat purchase and attempt line extensions

(East, 1997).

Customer satisfaction can be considered as the essence of success in today's highly

competitive world of business. Customer satisfaction is increasingly becoming a

corporate target as more and more firms strive for quality in their products and services

(Bitner and Hubbert, 1994). In this context, an understanding of 'determinant of

customer satisfaction' (Churchill and Suprenant, 1982; Levesque and McDougall, 1996)

is of great significance to marketers.

The theoretical part of the research is focused on literature review. While in the second

part an empirical research will be done on the basis of structured questionnaires, which

will be gathered from 605 responses of bank customers. This research will present a

very useful source of solutions and information for managers and researchers in the

field of quality system and customer satisfaction. The research will contribute by

providing new evidence on the practicality and usefulness of customer satisfaction for

the banks’ marketing strategies, as well as the important of Islamic products as a motive

for customer satisfaction.

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CHAPTER 2

In this chapter, the author presents previous studies to be the framework to understand

and systematically analyze Bank customer's satisfaction.

LITERATURE REVIEW

Anderson et al. (1976) and Laroche (1988), researchers of customer satisfaction

underlying position are the customer benefits of convenience and accessibility which

are enabling factors that make it easy for the customer to do business with the bank. The

bank’s ability to deliver these benefits on a continuing basis to its existing customers

will probably impact on customer satisfaction.

Earlier research by Brownlie, (1989) has recommended that some consumers have

positive attitudes towards ATMs based on dominant perceptions of

convenience/accessibility/ease of use. In addition, Leonard and Spencer (1991) argue

that consumers perceive that ATMs are indicative of achievement and contribute

towards a positive organizational image. On the other hand, an amount of negative

attitudes towards ATMs have been recognized.

Figures of surveys have also shown that the costs of acquiring a new customer are more

expensive than retaining accessible ones. (Reichheld et al, 1990; Reichheld, 1996).

Investments in customer satisfaction, customer relationships and service quality leads to

profitability and market share (Rust and Zahorik, 1993). Customer satisfaction and

High quality service often outcome in more repeat purchases and market share

improvements (Buzzel and Gale, 1997). Customer satisfaction leads to customer loyalty

and this leads to profitability ( Hallowell, 1996). The costs of customer acquisition are

much higher than the costs of retention (Reichheld and Sasser, 1990). Service quality is

7

accepted as one of the basics of customer satisfaction (Parasuraman, Zeithaml and

Berry, 1994).

The service management literature discuss that customer satisfaction is the outcome of a

customer’s perception of the value received in a transaction or relationship – where

value equals perceived service quality relative to price and customer acquisition costs

(see: Blanchard and Galloway, 1994; Heskett et al., 1990) – relative to the value

expected from transactions or relationships with competing vendors (Zeithaml et al.,

1990).

Similarly, research literature has measured trust as a feature with a great influence on

the degree of satisfaction at the level of the relationship between producers and

consumers through distribution channels (Anderson and Narus, 1990).

Given that the customer complains, the bank’s response can guide to customer states

ranging from dissatisfaction to satisfaction. In reality, anecdotal evidence suggests that

when the service provider accepts responsibility and resolves the trouble, the customer

becomes “bonded” to the business (Hart et al., 1990).

Reichheld and Sasser (1990) have recognized the benefits that customer retention

delivers to a bank. For instance, the longer a customer stays with a bank the more utility

the customer generates. This is a result of a number of factors relating to the time the

customer spends with a bank. These comprise the higher initial costs of introducing and

attracting a new customer, increases in both the value and amount of purchases, the

customer's better understanding of the bank, and positive word-of-mouth promotion.

Howcroft (1991) has argued that some consumers have positive attitudes towards ATMs

based on dominant perceptions of convenience/ accessibility/ease of use. There is

substantial study within the financial service literature (see, for instance, McKechnie,

8

1992; Thwaites and Vere, 1995, to maintain the view that access/convenience is a

dominant criterion both for subsequent satisfaction and selection of institution.

The survey by Leeds (1992), who documented that approximately 40 percent of clients,

switched banks because of what they measured to be poor service. Leeds further argued

that nearly three-quarters of the banking customers mentioned teller courtesy as a key

consideration in selecting a bank. The survey also showed that increased use of service

quality/sales and professional behaviors (such as formal greetings) enhanced customer

satisfaction and reduced customer attrition.

Fornell (1992), in his research of Swedish consumers, observations that although

customer satisfaction and quality become visible to be important for all companies,

satisfaction is more important for loyalty in industries such as, insurance, , automobiles,

mail order and banks.

Cronin and Taylor (1992) undertook an empirical test of the reciprocity between

satisfaction and quality through a number of service industries. A favorable image is

viewed as a critical aspect of a company’s ability to maintain its market place, as image

has been related to center aspects of organizational success such as customer patronage.

It is generally accepted that customer satisfaction often depends on the quality of

product or service contribution (Anderson and Sullivan, 1993). Oliver’s (1993) review

of the issues suggests that service quality is antecedent to satisfaction and is non-

experiential in nature (i.e. like to attitude which can be formed from other sources such

as word of mouth communications).

Overall consumer satisfaction thus reveals the general evaluation of the events carried

out by a given business in relation to expectations accumulated behind different contact

between the consumer and business (Bitner and Hubber, 1994). Customer satisfaction is

9

an important theoretical as well as practical issue for most marketers and consumer

researchers (Piercy, 1994).

Parasuraman et al (1994), match the point that service satisfaction and satisfaction with

price were essentials in the overall satisfaction measurement. The measurements used in

Hallowell’s survey were fairly comprehensive; concluding that all the basics measured

had an impact on overall satisfaction. But the service features of branch, staff and

information were established to be more significant.

Reidenbach (1995) argued that customer value is a more viable factor than customer

satisfaction because it includes not only the usual benefits that most banks focus on but

also a consideration of the price that the customer pays. Customer value is a dynamic

that must be managed. Customer satisfaction is merely a response to the value

proposition offered in specific products/markets (Reidenbach, 1995).

Levesque and McDougall (1996) indicate that customer satisfaction and retention are

critical for retail banks. They study the major determinants of customer satisfaction

(situational factors, service quality, service features, and customer complaint handling),

and future intentions in the retail bank sector. Bloemer (1998) study how satisfaction,

image, and perceived service quality determine loyalty in a retail bank.

Banks lose satisfied clients who have moved, retired, or no longer need certain services.

As a result, retaining customers becomes a priority. Earlier research shows, however,

that longevity does not automatically leads to profitability (Colgate, Stewart, and

Kinsella, 1996).

Factors related to service offerings are furthermore related to customer satisfaction

(Levesque and McDougall, 1996). As said by Levesque and McDougall (1996),

convenience and competitiveness of the bank are two main factors which are likely to

influence the overall satisfaction levels of a customer.

10

Study by Hallowell (1996), moreover examined customer satisfaction but in relation to

loyalty. Conversely, Levesque and McDougall (1996) comprehensively analyzed the

effects of service quality, service features and customer complaint handling on customer

satisfaction in the Canadian retail banking sector. Their result proposes that satisfaction

determinants in retail banking are driven by an amount of factors including service

quality dimensions.

Reichheld (1996) suggests that unsatisfied customers may select not to defect, because

they do not expect to receive better service in a different place. Furthermore, satisfied

customers may search for other providers because they believe they might receive better

service in another place. Conversely, keeping customers is also dependent on a number

of other factors.

Levesque and McDougall (1996) comprehensively analyzed the effects of customer

complaint handling, service quality, and service features on customer satisfaction in the

Canadian retail banking sector. Their result recommends that satisfaction determinants

in retail banking are driven by an amount of factors including service quality

dimensions. Key variables explain customer satisfaction in the service quality domain

were – core and relational performance, problem encountered and satisfaction with

problem recovery. The provider’s contribution can also be expected to affect customer

satisfaction (overall) and continuing patronage. Levesque’s and his colleagues (1996)

survey indicated that the bank’s features (e.g. location), the competitiveness of the

banks interest rates, the customers’ judgments about the bank employees’ skills and

whether the customer was a borrower were all factors that drove customer satisfaction,

while bank features and competitive interest rates were important contributors.

conversely, this study did not categorically point out which had more influence; rather

11

both core and relational issues were categorized as one for retail banks to consider when

satisfying customers.

Johnston (1997) forwarded the idea that banks in general were in effect `barking up the

wrong tree’ by improving service quality efforts that had small or no effect on

improving customer satisfaction. The study was one of the few examining customer

satisfaction in the UK retail banking setting, which focused on quality issues. Johnston

(1997) suggests that satisfaction /dissatisfaction with retail banking does not stem from

the similar elements. Rather, some elements of service quality if enhanced, improve

customer satisfaction however other elements may not develop satisfaction but merely

act to keep dissatisfaction at bay or at best, reduced dissatisfaction alone. This trend of

idea emanates from the hygiene factors of Herzberg’s motivation theory. Johnston

recognized 18 determinants of service quality suggesting that certain actions such as

raising the speed of processing information and customers, delighted customers whilst

improving the reliability of equipment lessened dissatisfaction.

Press and his colleagues (1997) noted that the issues most highly linked to overall

satisfaction involve complaint management. Efficiently handling problems, being

attentive to concerns, and being capable to resolve troubles over the telephone emerged

as critically vital to bank customer satisfaction.

Tax and his colleagues(1998) used a four-item tool to measure satisfaction with

“complaint handling”. In their experimental studies Smith and Bolton (1998) used a

four-item (restaurants) and a one-item instrument (hotels) to determine “cumulative

satisfaction”.

Relational benefits can then be considered as an essential factor for satisfaction with

financial businesses. for that reason, relational benefits meaning special treatment,

confidence and social benefits, which were identified by Gwinner and his colleagues

12

(1998), would have a great power on customer satisfaction with their habitual

establishments.

In a further study by Krishnan, Ramaswamy and Venkatram (1999), satisfaction with

perceived product quality was suggested as a main driver of overall customer

satisfaction.

Beckett et al. (2000) illustrate tentative conclusions as to why consumers emerge to stay

loyal to the similar financial provider, even though in many instances they hold less

favorable views toward these service providers. For instance, many consumers emerge

to perceive small differentiation between financial providers, making any change

essentially worthless.

A number of researchers as well as Parasuraman, Zeithaml, Berry, Bitner, Bolton, and

Drew maintain the idea that customer satisfaction leads to service quality (Lee et al.,

2000). This group of researchers sees service quality as a long-run overall evaluation

while the customer satisfaction is a transaction-specific evaluation. Other researchers

such as Cronin, Taylor, Spreng, Mackoy, and Oliver suggested that service quality is an

antecedent of customer satisfaction (Lee et al., 2000).

In the year 2000, the Cruickshank Report was unveiled (Cruikshank, 2000). The Report

categorically acknowledged that service quality was low in retail banking in the UK,

implying low customer satisfaction. Arising partly from the conclusion of the

Cruickshank Report and the fact that a large-scale study on customer satisfaction in the

retail banking sector in UK is scant and examined.

Wong and Kanji (2001) discussed and experienced an extended customer satisfaction

model in the retail-banking industry in Hong Kong. They built the extended model on

the thought that evaluation of customer satisfaction in the retail banking industry is a

function of overall customer expectation , perceived value and quality perception,

13

whereas customer loyalty is a function of both perceived value and customer

satisfaction.

Duborvski (2001) described a multi-phases model of consumer’s buying decision and

the task of customer satisfaction in achieving business excellence. The writer indicated

that existing studies confirm important connection between satisfaction levels, on one

side, and repeated buying, greater brand loyalty and spreading a positive view of the

product, on the other side.

Kristensen, Juhl and Ostergaard (2001) calculated the relationship between customer

satisfaction and customer loyalty in Danish retailing business using the European

Customer Satisfaction Index (ECSI). The model links customer satisfaction to its

drivers (e.g., customer expectation, perceived company’s image, perceived quality and

perceived value) and, in turn, to its consequences, specifically customer loyalty.

Not like in the USA, Latin America, and South Africa, Othman and Owen (2001)

establish that responsiveness, compliance, and assurance, were the dimensions that were

most greatly connected with customer satisfaction in the Kuwaiti banking area.

Jamal and Naser (2002) propose that customer satisfaction is based not only on the

decision of customers towards the reliability of the delivered service, but also on

customers’ experiences with the service delivery method.

While Henning-Thurau et al. (2002) explore a non-significant relationship between

particular treatment and satisfaction, it is logical to expect that the benefit of particular

treatment will have a huge influence on satisfaction within retail banking. This is due to

the information that special treatment provided by a financial service provider can be

perceived as a part of the overall service, so that this benefit will raise customer

satisfaction.

14

Al Zaabi (2002) studied customer satisfaction with bill payment actions at Emirates

Telecommunications Corporation, which is identified as Etisalat. The study sample

consisted of individual customers and business customers. The author recognized a set

of eleven satisfaction attributes that were considered vital to Etisalat’s customers with

respect to service bill payment and related actions.

Ioanna (2002) additional proposed that product differentiation is impossible in a

competitive environment like the banking industry. Banks all over the place are

delivering the identical products. Bank prices are fixed and driven by the marketplace.

Therefore, bank management tends to distinguish its company from competitors

through service quality. Service quality is an imperative factor impacting customers’

satisfaction level in the banking industry. In banking, quality is a multi-variable idea,

which includes differing types of convenience, reliability, services portfolio, and

critically, the staff delivering the service.

Deemas (2002) studied the satisfaction levels of a sample of customers of the Sharjah

Co-operative Society (SCS). The primary part asked the respondents to provide

universal background information (e.g., gender, age category, nationality and so on).

The next part listed the 21 attributes and asked respondents to specify their satisfactions

with each attribute using a 5-point Likert-type scale. The outcomes indicate that UAE

nationals and Arabs are the most predominant in their contributions to overall

satisfaction whereas non- Arabs are the lowest. In addition, the outcomes show no

difference in the levels of customer satisfaction between men and women respondents.

Dove and Robinson’s (2002) study indicated that banking customers have much

superior satisfaction levels when they believe their troubles with the bank have been

resolved.

15

Even though studies have associated demographic variables with customer satisfaction

with services in general (Howcroft et al., 2002) ,only some studies have linked

consumer evaluations of service recovery to gender, age, or tenure with the service. On

the other hand, Lewis and Spyrakopoulos (2002) discovered that customers with

stretched relationships are more demanding of the service recovery; this may also mean

that it takes more to satisfy them.

Equally, Hess et al. (2003) used three things to measure “satisfaction with service

performance after recovery” and McCollough et al. 2000 used a three-item instrument

to measure “final satisfaction/post recovery satisfaction”.

Another research (Chien et al. 2003) is also paying attention on measuring customer

satisfaction. Measuring factors are: perceived quality and value, customer expectation,

satisfaction and loyalty. etc., and they all influence customer satisfaction. Spathis and

Constantinides (2003) also shore up the relationship between quality and customer

satisfaction based on preliminary enterprise resource planning.

In the investigate from Pan (2003) between four Far Eastern countries the benefits of

Iso 9001 certification are: enhanced competitive edge since it is composed of ‘improved

productivity’, ‘quality improvements’, ‘better customer satisfaction’, ‘increased profit

margin’, and ‘cost reduction’; and enhanced public relations.

In a further study of banking customers, Boshoff and Staude (2003) found that

satisfaction was impacted positively by communication, explanation, and atonement in

that order while loyalty was just associated with communication and atonement through

the service recovery.

In their investigation, Stauss and Schoeler (2004) have establish that effective service

recovery is very profitable. Alternatively, not a success to ensure customer satisfaction

through service recovery could lead to a decline in customer confidence, lost customers,

16

negative word-of-mouth, possible negative publicity, and the direct cost of re-

performing the service.

Ho et al. (2005) similarly confirm that quality is the key factor and synonymous with

the consumer’s ability to select from a wide array of products and features that provide

a closer match to person needs and desires. The introductions of quality standards into

the Dutch firmss enhanced competitive advantage plus customer and employee

satisfaction (De Vries and De Jong 2002).

17

CHAPTER 3

METHODOLOGY

Customer satisfaction is an important issue for most marketers. Earlier study has

identified different factors that determine customer satisfaction in retail banking sector

in Western countries. The current paper reports findings from a survey, which looked

into determinants of customer satisfaction in the retail banking in Kuwait. A total of 605

questionnaires were randomly distributed to customers of a particular bank in Kuwait.

Outcomes indicate that there was a strong relationship between service quality and

customer satisfaction. There was, however, no relationship between customer

satisfaction and tangible aspects of the service environment. The paper discusses

implications for bank management.

INSTRUMENTATION

The questionnaire consisted of two sections. The first part of the questionnaire asked

respondents to rate the relative their satisfaction of 25 potential factors, on their banks

services, using a five-point Likert type importance scale ranging from “very important”

to “not important at all”. The Second part elicited sample's personal, demographic and

economic characteristics information from the respondents that was deemed necessary

to achieve the objectives of the study. Most of these factors have been adapted from

previous banking patronage studies; Anderson et al. (1976), Kaynak (1986), Laroche et

al. (1986) and Erol and El Bdour (1989).

18

STUDY POPULATION AND SAMPLING PROCEDURE

From a total of 700 questionnaires distributed, 605 were returned, out of which 95 were

un-usable (invalid and/ or incomplete). This relatively high response rate was attributed

to the self-administered approach undertaken in distributing questionnaires and

approaching respondents at the various branches.

The sample for this study was selected from Al Jahra citiy, Al farwaniah city, Al

Jabriah, Jaber al Ali and Kuwait city bank customers. The population for each town is

about 100,000 and almost all of the population in each town is Muslims. These cities

were chosen because they represented a competitive banking environment compared

with other towns in the Kuwait. Customers had a wide range of banks and other non-

bank financial institutions from which to select.

As mentioned earlier, this study is concerned with the behavior of individuals in

selecting a commercial bank. To be representative, the sample was drawn from all

Kuwait banks.

RESEARCH DESIGN

Survey forms were developed, and selected five main cities to distribute the survey.

Respondents were randomly selected from bank customers who visited the sampling

locations during the chosen time intervals, in order to eliminate the sampling frame

errors and to ensure the representation of the population under study in the sample units.

Following the data collection procedures outlined by similar banking studies the

questionnaires were distributed during various working hours of the same day (morning

and evenings), as well as various days of the week, to reduce any potential bias owing

to high concentration of bank customers during certain hours of the day, or certain days

of the week or month.

19

A total of 700 forms were distributed in equal numbers, commencing at 8.00 am, 1 pm

and 5 pm on a particular Sunday, Thursday using trained undergraduates. Distribution

took place in a two week period in the early part of August September 2008. People

were approached, explaining the nature of the study and asked if they would be

prepared to fill in the questionnaire. Thirty-eight filled the form in there and then. Those

offering to return the form at a later date were provided with an addressed and phone

number Card.

The survey was designed to obtain information about the determinants of customer's

bank selection criteria. The full survey of 605 bank customers living in Al jahra city, A;

Farwania, Al Jabriah, Salim Al Ali and Kuwait City was undertaken in the August

2008.

The survey took approximately 15-20 minutes to complete. The eligibility criteria were

to be a commercial bank customer and to reside in one of the selected city. It can also be

stated that these five cities are truly representative of Kuwait bank customers. A total of

605 surveys were available for statistical analysis.

Controls were set up to ensure, as best as possible, that forms were distributed in

accordance with the ratio of Kuwait banks customers. This was a relatively hard control

to set up, Thus, by reviewing the filled forms twice a week, the distribution of survey

forms could be controlled.

DATA COLLECTION PROCEDURE

Two days, especially Sunday and Thursday, are known as peek-days in commercial

banking sector. Therefore, these two days were not used for data collection so that high

reliability of responses could be maintained. Thirty-five structured questionnaires were

administered for 5 each main and city branch of the sample banks. The automate

20

parking and exit gate were used for the data collection place. Orientation on how to

administer the questionnaire was given to data collectors before hand. During the data

collection process, the data collectors first explained the respondents about the

questions in the questionnaire and requested to provide with factual information. The

questionnaire was prepared in Arabic as well as in the English language to enhance the

reliability of the study.

TOOLS

SPSS version 15 was used to tabulate and analyze the valid responses. At the beginning,

a comprehensive data file was created. Then, variables and their labels were defined.

Few statistical tools such as Mean, Standard Deviation, Person's Correlation, ANOVA,

Chi Squire, Kruskal-Wallis ANOVA, were used for the analysis.

Mean and standard deviation are measure of dispersion or variation (Fallik & Brown,

1983). ANOVA is a statistical technique that is used to compare two or more groups to

determine whether there are any mean differences among them. The comparison of

group differences is made by computing a statistic called an F-ratio.

The ratio is calculated by dividing the 'between treatment variance' by 'within treatment

variance' (Gravetter & Wallnau, 1987). The Kruskal-Wallis test is a non-parametric

version of one-way- ANOVA for independent samples, calculation based on the sum of

ranks of the combined groups. This test calculates Chi-square statistic to show the

variance between groups (SPSS, 1999).

1- Statistical method to compare the means of different group and categories.

21

CHAPTER 4

DATA ANALYSIS AND RESULT

The sample of 605 was roughly split between Muslim and Non-Muslim, 254 which

approximates the Kuwaiti working population, Three-quarters of the sample were

working, and the average age was 35. The following figures and Table 2 and Table 3

represent the demographic factors.

Figure1: bank names

age

have no account

bkmeGulf BankKuwait real Estate Bank

Commercial Bank of Kuwait

Kuwait Finance House

Freq

uenc

y

120

100

80

60

40

20

0

bank name

Figure2: age Figure 3: gender

22

Figure 4: Employment status Figure 5: Income

More that 2000 K.D

Less that 2000 K.D

Less that 1500 K.D

Less that 1000 K.D

Less that 500 K.D

income

Figure 6: Total experience Figure 7: Job Type

Figur8: Sector

23

Table1: Gender

Frequency Percent Valid Percent Cumulative

Percent Female 241 39.8 40.8 40.8 Male 349 57.7 59.2 100.0

Valid

Total 590 97.5 100.0 Missing 99 15 2.5

Total 605 100.0

Table 2: Income


Percent More that 2000 K.D 37 6.1 6.1 6.1 Less that 2000 K.D 72 11.9 11.9 18.0 Less that 1500 K.D 105 17.4 17.4 35.4 Less that 500 K.D 183 30.2 30.2 65.6 Less that 1000 K.D 208 34.4 34.4 100.0

Valid

Total 605 100.0 100.0

Table 3: Age


Percent Less than 20 28 4.6 4.7 4.7

Between 40 to 49 37 6.1 6.3 11.0 Above 50 102 16.9 17.3 28.3

Between 30 to 39 160 26.4 27.1 55.3 Between 20 to 29 264 43.6 44.7 100.0

Valid

Total 591 97.7 100.0 Missing 99 14 2.3

Total 605 100.0

Table 4: Nationality


Percent Non-Muslim 168 27.8 28.4 28.4

Muslim 423 69.9 71.6 100.0

Valid

Total 591 97.7 100.0 Missing 99 14 2.3

Total 605 100.0

Table 5: How your bank communicate with you


Percent Phone 132 21.8 21.8 21.8 E-mail 224 37.0 37.0 58.8 Postal 249 41.2 41.2 100.0

Valid

Total 605 100.0 100.0

24

Table 6: Total experience


Percent Between 10-14 years 49 8.1 8.7 8.7 Between 15-20 years 105 17.4 18.7 27.5

Less than 5 years 127 21.0 22.6 50.1 More than 20 years 135 22.3 24.1 74.2 Between 5-9 years 145 24.0 25.8 100.0

Valid

Total 561 92.7 100.0 System 1 .2

99 43 7.1

Missing

Total 44 7.3 Total 605 100.0

Table 7: Education


Percent Postgraduate Qualification

(Master\PhD) 59 9.8 10.0 10.0

Less primary school 72 11.9 12.2 22.1 Two year college (Diploma) 108 17.9 18.2 40.4

High school 129 21.3 21.8 62.2 Undergraduate Degree

(Bachelors) 224 37.0 37.8 100.0

Valid

Total 592 97.9 100.0 Missing 99 13 2.1

Total 605 100.0

Table 8: Sector


Percent Private sector 122 20.2 22.3 22.3 Self-employed 166 27.4 30.3 52.7 Public sector 259 42.8 47.3 100.0

Valid

Total 547 90.4 100.0 Missing 99 58 9.6

Total 605 100.0

Table 9: Religion


Percent Non-Muslim 67 11.1 11.1 11.1

Muslim 538 88.9 88.9 100.0

Valid

Total 605 100.0 100.0

25

Table 10: Descriptive Statistics

N Mean Std. Deviation Availability of ATM in several locations. 604 4.48 .708 Safety of funds. 604 4.44 .673 Phone account access 605 4.40 .948 efficacy Handing Problems 604 4.36 .605 Convenient ATM locations. 604 4.35 .710 Fast and efficient service of services provided. 605 4.35 .960 The quality of services provided 604 4.34 .757 Easy to use ATM 605 4.34 .796 Confidence in bank management. 605 4.32 .970 Bank image and reputation 605 4.31 .875 Ease of opening a current account. 604 4.30 .790 Friendliness of bank employees 605 4.29 .819 Access to services. 604 4.28 .737 The convenient of bank location 605 4.25 .934 bank communication channel 604 4.24 .845 External appearance of bank. 604 4.22 1.237 Available parking space nearby. 604 4.18 .874 Bank services expectation 605 4.16 .748 Varity of services offered. 604 4.13 .726 Bank monetary transactions. 605 3.97 1.034 Availability of loans. 605 3.93 1.148 The quality service of E-banking 605 3.90 .918 Ease of obtaining loans (the acceptability of loans terms). 605 3.85 1.179 Services prices 605 3.76 .748 Interest rate on saving account 604 3.73 1.904 Interest rate on loans. 602 3.69 1.296 Valid N (listwise) 601

Table 11: The most important and the lest important factors The most factors customers are satisfy with. Mean Std. Deviation Availability of ATM in several locations. 4.48 0.708 Safety of funds. 4.44 0.673 Phone account access 4.4 0.948 efficacy Handing Problems 4.36 0.605 Convenient ATM locations. 4.35 0.71 The most factors customers are unsatisfied with. Mean Std. Deviation Interest rate on loans. 3.69 1.296 Interest rate on saving account 3.73 1.904 Services prices 3.76 0.748 Ease of obtaining loans (the acceptability of loans terms). 3.85 1.179 The quality service of E-banking 3.9 0.918

26

Table 12: Descriptive Statistics (a)

Mean Std. Deviation Analysis N The convenient of bank location 4.26 .969 420 Fast and efficient service of services provided. 4.30 1.018 420 Friendliness of bank employees 4.24 .829 420 Bank image and reputation 4.25 .895 420 Availability of loans. 3.94 1.165 420 Ease of obtaining loans (the acceptability of loans terms). 3.85 1.260 420 Services prices 3.69 .815 420 Interest rate on saving account 3.72 2.218 420 Interest rate on loans. 3.85 1.258 420 The quality of services provided 4.31 .756 420 Bank monetary transactions. 4.12 .892 420 Access to services. 4.19 .800 420 Safety of funds. 4.38 .726 420 Availability of ATM in several locations. 4.42 .698 420 External appearance of bank. 4.20 1.324 420 Varity of services offered. 4.18 .716 420 Convenient ATM locations. 4.28 .764 420 Confidence in bank management. 4.25 1.006 420 Ease of opening a current account. 4.21 .850 420 Available parking space nearby. 4.13 .885 420 Easy to use ATM 4.34 .826 420 The quality service of E-banking 3.86 .961 420 Phone account access 4.28 1.037 420 Bank services expectation 4.09 .781 420 efficacy Handing Problems 4.31 .623 420 bank communication channel 4.19 .873 420

• An Only cases for which Religion = Muslim are used in the analysis phase.

Table 13: The most important and the lest important factors for Muslim customers

The most factors Muslim customers are satisfy with. Mean

Std. Deviation

Availability of ATM in several locations. 4.42 0.698

Safety of funds. 4.38 0.726

Easy to use ATM 4.34 0.826

The quality of services provided 4.31 0.756

efficacy Handing Problems 4.31 0.623 The most factors Muslim customers are unsatisfied with. Mean

Std. Deviation

Services prices 3.69 0.815

Interest rate on saving account 3.72 2.218

Interest rate on loans. 3.85 1.258 Ease of obtaining loans (the acceptability of loans terms). 3.85 1.26

The quality service of E-banking 3.86 0.961

27

Table 14: Descriptive Statistics(b)

Mean Std. Deviation Analysis N The convenient of bank location 4.33 .780 167 Fast and efficient service of services provided. 4.43 .764 167 Friendliness of bank employees 4.38 .757 167 Bank image and reputation 4.50 .759 167 Availability of loans. 3.89 1.159 167

Ease of obtaining loans (the acceptability of loans terms). 3.84 1.012 167

Services prices 3.91 .547 167 Interest rate on saving account 3.72 .862 167 Interest rate on loans. 3.22 1.281 167 The quality of services provided 4.36 .770 167 Bank monetary transactions. 3.50 1.217 167 Access to services. 4.44 .509 167 Safety of funds. 4.61 .501 167 Availability of ATM in several locations. 4.74 .559 167 External appearance of bank. 4.23 1.006 167 Varity of services offered. 4.10 .700 167 Convenient ATM locations. 4.50 .536 167 Confidence in bank management. 4.46 .834 167 Ease of opening a current account. 4.51 .513 167 Available parking space nearby. 4.23 .850 167 Easy to use ATM 4.34 .751 167 The quality service of E-banking 3.99 .840 167 Phone account access 4.63 .643 167 Bank services expectation 4.34 .664 167 efficacy Handing Problems 4.49 .558 167 bank communication channel 4.40 .791 167

• Only cases for which religion = Non-Muslim are used in the analysis phase.

Table 15: The most important and the lest important factors for Non-Muslim customers The most factors Non-Muslim customers are satisfy with. Mean Std. Deviation

Availability of ATM in several locations. 4.74 0.559

Phone account access 4.63 0.643

Safety of funds. 4.61 0.501

Ease of opening a current account. 4.51 0.513

Bank image and reputation 4.5 0.759 The most factors Non-Muslim customers are unsatisfied with. Mean Std. Deviation

Interest rate on loans. 3.22 1.281

Bank monetary transactions. 3.5 1.217

Interest rate on saving account 3.72 0.862 Ease of obtaining loans (the acceptability of loans terms). 3.84 1.012

Availability of loans. 3.89 1.159

28

Table 16: ANOVA test

ANOVA Test

Factors Groups N Mean Std. Deviation

Std. Error

Mean Square F Sig.

Muslim 423 4.26 0.97 0.05 0.47 0.56 0.45 Non-Muslim 168 4.33 0.78 0.06 0.84

The convenient of bank location

Total 591 4.28 0.92 0.04

Muslim 423 4.30 1.02 0.05 2.02 2.23 0.14

Non-Muslim 168 4.43 0.76 0.06 0.90

Fast and efficient service of services provided.

Total 591 4.34 0.95 0.04 Muslim 423 4.24 0.83 0.04 2.27 3.47 0.06 Non-Muslim 168 4.38 0.76 0.06 0.65

Friendliness of bank employees


Bank image and reputation


Availability of loans.

Total 591 3.93 1.16 0.05

Muslim 423 3.85 1.26 0.06 0.00 0.00 1.00

Non-Muslim 168 3.85 1.01 0.08 1.42

Ease of obtaining loans (the acceptability of loans terms).


Services prices


Interest rate on saving account


Interest rate on loans.


The quality of services provided


Bank monetary transactions.

Total 591 3.94 1.03 0.04

29


Std. Error

Mean Square F Sig.


Access to services.


Safety of funds.

Total 590 4.45 0.68 0.03

Muslim 422 4.42 0.70 0.03 12.66 28.77 0.00

Non-Muslim 168 4.74 0.56 0.04 0.44

Availability of ATM in several locations.


External appearance of bank.


Varity of services offered.


Convenient ATM locations.


Confidence in bank management.

Total 591 4.31 0.97 0.04

Muslim 422 4.21 0.85 0.04 11.06 18.71 0.00

Non-Muslim 168 4.51 0.51 0.04 0.59

Ease of opening a current account.


Available parking space nearby.


Easy to use ATM


The quality service of E-banking

Total 591 3.90 0.93 0.04

30


Std. Error

Mean Square F Sig.


Phone account access


Bank services expectation


efficacy Handing Problems


bank communication channel

Total 590 4.25 0.85 0.04

31

CHAPTER 5

DISCUSSION

This chapter will discus in details all the measured factors and will explore the degree of

retail banking satisfaction and tested any differences between Muslim and non-Muslim

group toward their satisfaction level.

The result of this research suggests that in general customers in Kuwait (Muslim and

Non-Muslim) are satisfied with services provided by retail banks. The ANOVA test

show slightly differences between Muslim and non-Muslim customer in their degree of

satisfaction. Muslim customers are mostly satisfied with: Availability of ATM in

several locations, Safety of funds, Easy to use ATM and The quality of services

provided. while Non-Muslim customers are mostly satisfied with: Availability of ATM

in several locations, Phone account access, Safety of funds, Ease of opening a current

account and Bank image and reputation.

The lest factor that Muslim customers are satisfied with squinty are: Services prices,

Interest rate on saving account, Interest rate on loans and Ease of obtaining loans. while

Non-Muslim lest ranking of their satisfied with squinty are; Interest rate on loans, Bank

monetary transactions, Interest rate on saving account and Ease of obtaining loans (the

acceptability of loans terms).

In general, the study show satisfactory level of retail customer of bank services

provided

(Mean=4.17). Figure 10 show diagram presentation for customer's level of satisfaction.

32

Figure 9: Customers general satisfaction

In general are you satisfied with your bank services

Very satisfied

SatisfiedNeutralDissatisfyVery Dissatisfy

Freq

uenc

y

500

400

300

200

100

0

In general are you satisfied with your bank services

Around 136 customers are very satisfied with service provided by banks (22.5%), and

445 are satisfied (73.6%). Unsatisfied customers in Kuwait are very slightly (Only .3%).

The following table shows the distribution of customer's satisfaction for this factor.

Table 17: In general are you satisfied with your bank services


Percent Valid Very Dissatisfy 3 .5 .5 .5 Dissatisfy 2 .3 .3 .8 Neutral 19 3.1 3.1 4.0 Satisfied 445 73.6 73.6 77.5 Very satisfied 136 22.5 22.5 100.0 Total 605 100.0 100.0

In studying the significance differences between Muslim and Non-Muslim customer to

this factor, ANOVA test show no significant differences between Muslim and Non-

Muslim in this factor (sig=.268) as the following table show.

33

Table 18: In general are you satisfied with your bank services

Sum of Squares df Mean Square F Sig.

Between Groups .358 1 .358 1.232 .268 Within Groups 171.341 589 .291 Total 171.699 590

The rest of this chapter will explore in details all the factors measured in this study.

Descriptive analysis and ANOVA test are the main tetchiness used in this study.

BANK LOCATION

Whoever retails bank in Kuwait have many branches in different locations, the present

study reveals medium satisfaction level for this factor (mean=4.23). 117 customers are

neutral in measuring their satisfaction of banks location. Table show the distribution of

customers satisfaction for location factor. In studying the significance differences

between Muslim and Non-Muslim customer to this factor, ANOVA test show no

significant differences between Muslim and Non-Muslim in this factor (sig=0.45), this

can be explain as most of Non-Muslim customer are from GCC countries.

Table 19: The convenient of bank location


Percent Very satisfied 322 53.2 53.2 53.2

Satisfied 142 23.5 23.5 76.7 Neutral 117 19.3 19.3 96.0

Dissatisfy 18 3.0 3.0 99.0 Very Dissatisfy 6 1.0 1.0 100.0

Valid

Total 605 100.0 100.0

34

FAST AND EFFICIENT SERVICES PROVIDED

Most of Muslim and Non-Muslim customer are very satisfy with the fast and efficient

services provided by their retail banks. The present study who high satisfaction level for

this factor (mean=4.35). 331 customers are very satisfied and 217 are satisfied from fast

and efficient of services provided. Table show the distribution of customers satisfaction

for this factor. In studying the significance differences between Muslim and Non-

Muslim customer to this factor, ANOVA test show no significant differences between

Muslim and Non-Muslim in this factor (sig=0.14), this can be explain as most of Non-

Muslim customer are from GCC countries.

Table 20: Fast and efficient service of services provided.



Satisfied 217 35.9 35.9 90.6 Very Dissatisfy 23 3.8 3.8 94.4

Dissatisfy 19 3.1 3.1 97.5 Neutral 15 2.5 2.5 100.0

Valid

Total 605 100.0 100.0

FREINDLINESS OF BANK EMPLOYEE

The present study show medium satisfaction level for this factor (mean=4.29). 290

customers are very satisfied and 225 are satisfied from fast and efficient of services

provided. Only 15 are not satisfied from friendliness of bank employee. Table 20 shows

the distribution of customer's satisfaction for this factor. In studying the significance

differences between Muslim and Non-Muslim customer to this factor, ANOVA test

show no significant differences between Muslim and Non-Muslim in this factor

(sig=.06).

35

Table 21: Friendliness of bank employees




Dissatisfy 15 2.5 2.5 99.3 Very Dissatisfy 4 .7 .7 100.0

Valid

Total 605 100.0 100.0

BANK IMAGE ABD REPUTATION

Image and reputation is important factor for customers to patronize a bank. When

asking retail customer about the degree of their satisfaction of their bank image, 301

customer are very satisfy and 225 are satisfy from fast and efficient of services

provided. Only 4 are not satisfied from friendliness of bank employee. The present

study show a good satisfaction level for this factor (mean=4.31). Table 21 shows the

distribution of customer's satisfaction for this factor. In studying the significance

differences between Muslim and Non-Muslim customer to this factor, ANOVA test

show significant differences between Muslim and Non-Muslim in this factor (sig=.00).

The Muslim customers are satisfied with bank image less than Non-Muslim. Muslim

customers considered long-term relationship with their bank more thank Non-Muslim;

they expect good image and reputation of their bank more than Non-Muslim.

Table 22: Bank image and reputation




Very Dissatisfy 16 2.6 2.6 99.3 Dissatisfy 4 .7 .7 100.0

Valid

Total 605 100.0 100.0

36

AVAILABILITY OF LOANS

Customer of retails bank are not satisfied with availability of loans and credit (mean=

3.93). 201 customers are very unsatisfied, 41 customers are very unsatisfied and 9 are

neutral. Table 22 shows the distribution of customer's satisfaction for this factor. In

studying the significance differences between Muslim and Non-Muslim customer to this

factor, ANOVA test show no significant differences between Muslim and Non-Muslim

in this factor (sig=.063). Both Muslim and Non-Muslim customers are not satisfied with

the availability of loans of their banks.

Table 23: Availability of loans.


Percent Satisfied 299 49.4 49.4 49.4

Very satisfied 201 33.2 33.2 82.6 Dissatisfy 55 9.1 9.1 91.7

Very Dissatisfy 41 6.8 6.8 98.5 Neutral 9 1.5 1.5 100.0

Valid

Total 605 100.0 100.0

EASE OF OBTAINING LOANS

Customer of retails bank are not satisfied with availability of loans and credit (mean=

3.85). 29 customers are very unsatisfied, 73 customers are unsatisfied and 77 are

neutral. Table 23 shows the distribution of customer's satisfaction for this factor. In


factor, ANOVA test show no significant differences between Muslim and Non-Muslim

in this factor (sig=.1.0). Both Muslim and Non-Muslim customers in the same degree

are not satisfied with the availability of loans of their banks.

37

Table 24: Ease of obtaining loans (the acceptability of loans terms)





Valid

Total 605 100.0 100.0

SERVICE PRICES

Service prices are the third worse factor that customer of retails bank are unsatisfied

with. Customer in Kuwait feel high degree of unjustified prices for bank services

(mean= 3.76). 15 customers are very unsatisfied, 15 customers are unsatisfied and 124

are neutral. Table 24 shows the distribution of customer's satisfaction for this factor. In


factor, ANOVA test show significant differences between Muslim and Non-Muslim in

this factor (sig=.00). Muslim customer are less satisfied from services price than Non-

Muslim (Muslim =3.69, Non-Muslim =3.91).

Table 25: Services prices


Percent Satisfied 397 65.6 65.6 65.6 Neutral 124 20.5 20.5 86.1

Very satisfied 54 8.9 8.9 95.0 Very Dissatisfy 15 2.5 2.5 97.5

Dissatisfy 15 2.5 2.5 100.0

Valid

Total 605 100.0 100.0

INTREST RATE ON SAVING ACCOUNT

Retails customer in general are not very satisfied with the interest rate on saving

account, this factor is the second least factor that customer in Muslim (mean=3.73). 57

customers are very unsatisfied, and 34 are neutral. The study noted that no customer is

very satisfied with this factor. Table 25 shows the distribution of customer's satisfaction

38

for this factor. In studying the significance differences between Muslim and Non-

Muslim customer to this factor, ANOVA test determine no significant differences

between Muslim and Non-Muslim in this factor.

Table 26: Interest rate on saving account




Dissatisfy 1 .2 .2 99.8 Total 604 99.8 100.0

Valid

99 1 .2 Missing 605 100.0

INTREST RATE ON LOANS

The worse factor noted in this study is the interest rate on loans (mean=3.60), this

indicate that most of customer in Kuwait give more intention to loans. Around 58

customers are very unsatisfied, 61 customers are unsatisfied and 94 are neutral. Table

26 shows the distribution of customer's satisfaction for this factor. In studying the

significance differences between Muslim and Non-Muslim customer to this factor,

ANOVA test show significant differences between Muslim and Non-Muslim in this

factor (sig=.00). Muslim customer are less satisfied from services price than Non-

Muslim (Muslim =3.84, Non-Muslim =3.22).

Table 27: Interest rate on loans





Valid

Total 602 99.5 100.0 Missing Missing Value 3 .5

Total 605 100.0

39

THE QUALITY OF SERVICES PROVIDED

The study reveals good satisfaction of retail customers on their services quality

(mean=4.34). Around 300 customers are very satisfied, 214 customers are satisfied and

87 are neutral. Table 27 shows the distribution of customer's satisfaction for this factor.

In studying the significance differences between Muslim and Non-Muslim customer to

this factor, ANOVA test confirmed no significant differences between Muslim and

Non-Muslim in this factor.

Table 28: The quality of services provided




Very Dissatisfy 3 .5 .5 100.0

Valid


Total 605 100.0

BANK MONETARY TRANSACTION

The study reveals low satisfaction level of retail customers on their monetary

transaction (mean=3.97). Around 222 customers are satisfied, 102 customers are neutral

and 45 are un satisfied. Table 28 shows the distribution of customers satisfaction for this

factor. In studying the significance differences between Muslim and Non-Muslim

customer to this factor, ANOVA test show significant differences between Muslim and

Non-Muslim in this factor (sig=.00). Muslim customer are more satisfied with bank

transaction than Non-Muslim (Muslim =4.12, Non-Muslim =3.49)

40

Table 29: Bank monetary transactions



Very satisfied 220 36.4 36.4 73.1 Neutral 102 16.9 16.9 89.9


Valid

Total 605 100.0 100.0

ACCESS TO SERIVICES

The study reveals medium satisfaction level of retail customers on their monetary

transaction (mean=4.28). Around 270 customers are very satisfied, 233 customers are

satisfied and 100 customers are neutral. Table 29 shows the distribution of customer's

satisfaction for this factor. In studying the significance differences between Muslim and

Non-Muslim customer to this factor, ANOVA test show significant differences between

Muslim and Non-Muslim in this factor (sig=.00). Non-Muslim customer are more

satisfied with bank transaction than Muslim (Muslim =4.19, Non-Muslim =4.44)

Table 30: Access to services.




Dissatisfy 1 .2 .2 100.0

Valid


Total 605 100.0

SAFETY OF FUNDS

The study reveals medium satisfaction level of retail customers on their monetary

transaction (mean=4.28). Around 318 customers are very satisfied, 239 customers are

satisfied and 44 customers are neutral. Table 30 shows the distribution of customers



41


satisfied with monetary transaction than Muslim (Muslim =4.19, Non-Muslim =4.44) .

Table 31: Safety of funds





Valid


Total 605 100.0

AVILABILITY OF ATM

ATM machines are available in Kuwait in all supermarkets, malls and in gas station.

This study found that the Muslim and Non-Muslim customer are mostly satisfied with

the availability of ATM (mean=4.48). Around 357 customers are very satisfied and 183

customers are satisfied. Table below shows the distribution of customers satisfaction for

this factor. In studying the significance differences between Muslim and Non-Muslim

customer to this factor, ANOVA test show significant differences between Muslim and

Non-Muslim in this factor (sig=.00). Non-Muslim customer are more satisfied ATM

than Muslim (Muslim =4.42, Non-Muslim =4.74)

Table 32: Availability of ATM in several locations




Very Dissatisfy 2 .3 .3 99.8 Dissatisfy 1 .2 .2 100.0

Valid


Total 605 100.0

42

EXTERNAL APPEARANCE OF BANK

The finding of this study suggest that the Muslim and Non-Muslim customer are

satisfied with the external appearance of bank (mean=4.22). Around 411 customers are

very satisfied and 14 customers are satisfied. Table show the distribution of customers


Non-Muslim customer to this factor, ANOVA test show no significant differences

between Muslim and Non-Muslim in this factor (sig=.73).

Table 33: External appearance of bank.



Neutral 115 19.0 19.0 87.1 Dissatisfy 30 5.0 5.0 97.7 Satisfied 14 2.3 2.3 100.0

Total 604 99.8 100.0

Valid

Missing Value 1 .2 Total 605 100.0

VARITY OF SERVICES OFFERED

The finding of this study suggest that the Muslim and Non-Muslim customer are

satisfied with the external appearance of bank (mean=4.13). Around 181 customers are

very satisfied and 343 customers are satisfied. Table below shows the distribution of

customers' satisfaction for this factor. In studying the significance differences between

Muslim `and non-Muslim customer to this factor, ANOVA test show no significant

differences between Muslim and Non-Muslim in this factor (sig=.26).

43

Table 34: Varity of services offered.





Valid


Total 605 100.0

CONVENIENT ATM LOCATIONS

The finding of this study suggests that the Muslim and Non-Muslim customer are very

satisfied with ATM locations. (Mean=4.35). Around 279 customers are very satisfied

and 277customers are satisfied. Table below shows the distribution of customer's




satisfied with ATM than Muslim (Muslim =4.28, Non-Muslim =4.49)

Table 35: Convenient ATM locations





Valid


Total 605 100.0

44

CONFIDENCE IN BANK MANAGEMENT


satisfied with bank management confidence. (Mean=4.32). Around 53.1% customers

are very satisfied and 37% customers are satisfied. Table 35 shows the distribution of

customer's satisfaction for this factor. In studying the significance differences between

Muslim and Non-Muslim customer to this factor, ANOVA test show significant

differences between Muslim and Non-Muslim in this factor (sig=.02). Non-Muslim

customer are more satisfied with confidence in bank management than Muslim (Muslim

=4.25, Non-Muslim =4.46)

Table 36: Confidence in bank management.



Satisfied 224 37.0 37.0 90.1 Very Dissatisfy 24 4.0 4.0 94.0

Dissatisfy 19 3.1 3.1 97.2 Neutral 17 2.8 2.8 100.0

Valid

Total 605 100.0 100.0

EASE OF OPENING A CURRENT ACCOUNT The finding of this study suggests that the Muslim and Non-Muslim customer are very

satisfied with easy of opening a current account. (Mean=4.3). Around 43.5% customers

are very satisfied and 48.3% customers are satisfied. Table 36 shows the distribution of



differences between Muslim and Non-Muslim in this factor (sig=0.00). Non-Muslim

customer are more satisfied with easy of opening a current account than Muslim

(Muslim =4.21, Non-Muslim =4.51).

45

Table 37: Ease of opening a current account.




Very Dissatisfy 15 2.5 2.5 100.0

Valid


Total 605 100.0

AVAILABILITY OF PARKING SPACE NEARBY


satisfied with available parking space nearby. (Mean=4.18). Around 43, 4% customers

are very satisfied and 36, 3% customers are satisfied. Table 37 shows the distribution of


Muslim and Non-Muslim customer to this factor, ANOVA test show no significant

differences between Muslim and Non-Muslim in this factor (sig=0.17). Both Muslim

and Non-Muslim customers in the same degree are not satisfied with the available

parking space nearby.

Table 38: Available parking space nearby.





Valid


Total 605 100.0

46

EASY OF USING ATM

The finding of this study suggests that the Muslim and Non-Muslim customer are

satisfied with easy to use ATM. (mean=4.34). Around 46, 1% customers are very

satisfied and 47, 6% customers are satisfied. Table 38 shows the distribution of



differences between Muslim and Non-Muslim in this factor (sig=.95). Both Muslim and

Non-Muslim customers in the same degree are not satisfied with the easy to use ATM.

Table 39: Easy to use ATM



Very satisfied 279 46.1 46.1 93.7 Dissatisfy 18 3.0 3.0 96.7


Valid

Total 605 100.0 100.0

THE QUALITY SERVICE OF E-BANKING


satisfied with the quality service of E-banking. (Mean=3, 9). Around 24, 3% customers

are very satisfied and 54, 5% customers are satisfied. Table 39 shows the distribution of



differences between Muslim and Non-Muslim in this factor (sig=0.10). Both Muslim

and Non-Muslim customers in the same degree are not satisfied with the service quality

of E-banking.

47

Table 40: The quality service of E-banking



Very satisfied 147 24.3 24.3 78.8 Dissatisfy 72 11.9 11.9 90.7 Neutral 53 8.8 8.8 99.5


Valid

Total 605 100.0 100.0

PHONE ACCOUNT ACCESS


satisfied with phone account access. (Mean=4.4). Around 66, 9% customers are very

satisfied and 10, 9% customers are satisfied. Table 40 shows the distribution of




customer are more satisfied with phone account access than Muslim (Muslim =4.28,

Non-Muslim =4.64)

Table 41: Phone account access



Neutral 103 17.0 17.0 84.0 Satisfied 66 10.9 10.9 94.9


Valid

Total 605 100.0 100.0

BANK SERVICES EXPECTATION

The finding of this study suggests that the Muslim and Non-Muslim customer are

satisfied with bank services expectation. (Mean=4.16). Around 34, 5% customers are

very satisfied and 49, 8% customers are satisfied. Table 41 shows the distribution of



48


customer are more satisfied with bank services expectation than Muslim (Muslim =4.10,

Non-Muslim =4.49)

Table 42: Bank services expectation





Valid

Total 605 100.0 100.0

EFFICACY HANDING PROBLEMS


satisfied with efficacy handing problems. (Mean=4.35). Around 41, 9% customers are

very satisfied and 52, 5% customers are satisfied. Table 42 shows the distribution of




customer are more satisfied with efficacy handing problems than Muslim (Muslim

=4.32, Non-Muslim =4.49)

Table 43: Efficacy Handing Problems




Very Dissatisfy 1 .2 .2 99.8 Dissatisfy 1 .2 .2 100.0

Valid

Total 604 99.8 100.0 Missing System 1 .2

Total 605 100.0

49

CHAPTER 6

SUMMARY AND CONCLUSION

This chapter summaries the main finding and recommendation for further studies. In the

present competitive environment, companies need to retain existing high-value

customers to remain competitive. The research results proved that there is some factors

influence customer in Kuwait is not satisfied. Marketing manager should seek to

improve the area where customer is not satisfied to improve customer retention.

The research findings clearly suggest that the drive towards ease of banking and

convenience is favored by the customer and, therefore, banks should find alternative

strategic routes designed to improve service delivery (either human-based or

technology-based). Bank customers’ attitudes towards the human provision of services

and subsequent level of satisfaction will impact on bank switching more than when the

same service delivery is made through automation.

The link between service delivery and customer satisfaction is patently visible in the

study results and financial institutions should continue to find effective ways to

systematically measure and manage customer sustainable satisfaction and retention.

Customer care and customer retention programms should take into consideration that

the increased “push” towards the provision of convenient, easy and fast banking

services is closely associated with the human and technology based delivery processes.

More importantly, they are greatly linked with the customers’ perceptions of how these

bank services are delivered to them. These perceptual outcomes will, in turn, affect the

level of bank customer satisfaction ratings, retention and switching rates.

In summary, the current study suggests that in general customers in Kuwait (Muslim

and Non-Muslim) are satisfied with services provided by retail banks. The ANOVA test

show slightly differences between Muslim and non-Muslim customer in their degree of

50

satisfaction. Muslim customers are mostly satisfied with: Availability of ATM in

several locations, Safety of funds, Easy to use ATM and The quality of services

provided. while Non-Muslim customers are mostly satisfied with: Availability of ATM

in several locations, Phone account access, Safety of funds, Ease of opening a current

account and Bank image and reputation.

The lest factor that Muslim customers are satisfied with squinty are: Services prices,

Interest rate on saving account, Interest rate on loans and Ease of obtaining loans. while

Non-Muslim lest ranking of their satisfied with squinty are; Interest rate on loans, Bank

monetary transactions, Interest rate on saving account and Ease of obtaining loans (the

acceptability of loans terms).

51

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58

Appendix 1 CUSTOMER SATISFACTION SURVEY

استبانه حول مدى رضاء العمالء خدمات البنوكSECTION ONE

Are you satisfy about your Finical provider services? The following items are designed your responses towards the degree of satisfaction with your bank. Please respond to each item and indicate the extent of your important or unimportant when you select a bank by using the following scale:

ما هو مدى رضاء العمالء عن الخدمات البنكية؟ل الرجاء تحديد . حول مدى رضاء العمالء عن الخدمات البنكية لقد تم اختيار العناصر التالية بدقة لتعطينا مفهوم أفضل ة آ الرقم الذي يمثل أهمي

.عنصر عند اختيارك للبنك

Very satisfied 1راضي جدًا Satisfied 2 راضي

Neutral 3 محايد Dissatisfy 4 غير راضي Very Dissatisfy 5قا غير راضي إطال

راضي جدًا غير راضي إطالقًا Very Dissatisfy Very satisfied

1 2 3 4 5 1. Bank provides fast and efficient service.

.معامالت البنك بسرعة وبكفاءة عاليةتتم

2. Friendliness of bank personal. .في البنك ودودين ويحسنون المعاملةموظ

3. Bank has a strong reputation and image in the community.

.قوة سمعه البنك في المجتمع

4. Ease of obtaining loans (the acceptability of loans terms). . سهولة الحصول على قروض وبشروط مقبولة

6. Services charge. .رسوم الخدمات التي يقدمها البنك

7. Interest rate on saving account . الوديعةعلىفائدة المعدل

59


Neutral 3 محايد Dissatisfy 4 غير راضي Very Dissatisfy 5 غير راضي إطالقا

غير راضي إطالقًا راضي جدًا Very Dissatisfy Very satisfied

1 2 3 4 5 8. Interest rate on loans.

. القروضلىمعدل الفائدة ع

9. Services quality .جودة الخدمات التي يقدمها البنك

10. Ease of transactions. .سهولة عمل التحويالت المالية

11. Access to services. .سهولة الحصول على الخدمات التي يقدمها البنك

12. Safety of funds. .البنك يضمن السالمة واألمان لألموال

13. Availability of ATM in several locations. آللي وتوفره في أماآن عديدةاجهاز السحب أماآن

14. External appearance of bank. .المظهر الخارجي للبنك

15. Varity of services offered. .تنوع الخدمات التي يقدمها البنك

60


Neutral 3 محايد Dissatisfy 4 غير راضي Very Dissatisfy 5 غير راضي إطالقا

راضي جدًا غير راضي إطالقًا Very Dissatisfy Very satisfied

1 2 3 4 5 16. Convenient ATM locations. .مكان جهاز السحب اآللي مناسب ومالئم

17. Easy to use ATM. .سهولة استخدام جهاز السحب اآللي

18. Confidence in bank management. .إدارة البنكالثقة في

19. Ease of opening a current account. .سهولة فتح الحساب فيه

20. Available parking space nearby. .مواقف للسيارات بجوار البنك

21.The quality service of e-banking. جودة خدمة البنك اإللكترونية

22. Phone account access. .سهولة دخول الحساب عن طريق التلفون

23. Bank services expectation اتك عن الخدمات التي يقدم البنكتوقع

24. efficacy Handing Problems التعامل مع الشكاوي ءةآفا

25. bank communication channel طرق تواصل البنك معك

61

SECTION TWO

Please provide the following information for classification purposes. Your responses will be held in the strictest confidence and will only be summarized along with other respondents.

الرجاء اإلجابة على األسئلة التالية وذلك لدواعي التصنيف في البحث، سوف يتم الحفاظ على السرية التامة لهذه المعلومات .وتستخدم فقط ألغراض البحث

What is your bank name? ما هو اسم البنك الذي تتعامل معه؟

Kuwait Finance House بنك بيت التمويل Al Ahli Bank of Kuwait بنك الكويت األهلي Commercial Bank of Kuwait بنك الكويت التجاري Industrial Bank of Kuwait بنك الكويت الصناعي Kuwait real Estate Bank بنك الكويت العقاري

NBK البنك الكويت الوطني Al Ahli United Bank بنك األهلي المتحد Gulf Bank بنك الخليج Boubyan Bank بنك بوبيان bkme ويت والشرق األوسط بنك الك

Burgan Bank بنك برقان

Have no account ليــس لــــدي حسـاب مصـــرفي

What is your age? آم عمرك؟

Your employment status? الوظيفي الحالي ؟كعما هو وض

Your Income? تقريبا، آم يبلغ دخلك الشهري؟

Less than 20 20أقل من سنة Between 20 to 29 سنة 29 -20 بين Between 30 to 39 سن 39-30 بين Between 40 to 49 سن49-40 بين Above 50 سنة50 أآبر من

Work أعمل

Don't work ال أعمل

Less that 500K.D دينار500أقل من Less that 1000 K.D دينار1000أقل من

Less that 1500 K.D دينار1500 أقل من Less that 2000 K.D دينار2000 أقل من More that 2000 K.D دينار2000 أآثر من

How many years that you deal with your bank?

آم سنة تقريبا وأنت تتعامل مع البنك؟

How the bank communicate with you?

آيف يتواصل البنك معك؟

If work, how many years of total experience do you have?

إذا آنت تعمل، ما هي عدد سنوات الخبرة لديك؟Phone عن طريق التلفون E-mail عن طريق البريد اإللكتروني Postal عن طريق البريد

Your Nationality? ما هي جنسيتك؟

Less than 2 year أقل من سنتين Between 2 to 5 سنوات 5 -2 بين Between 6 to 10 سنوات 10-6 بين Between 11 to15 سنة 15-11 بين

Above 15 year سنة15أآثر من Kuwaiti آويتي

Non-Kuwaiti غير آويتي

Less than 5 years سنوات5أقل من Between 5-9 years سنوات 9 إلى 5 من Between 10-14 years سنة14 إلى 10 من Between 15-20 years سنة20 إلى 15 من More than 20 years سنة 20أآثر من

Which one of the following best describes your formal education? (please tick one box): ما هو مؤهلك العلمي؟

If work, what is your job type? إذا آنت تعمل، ما هي طبيعة عملك؟

Less primary school أقل من الثانوية العامة High school الثانوية العامة

Two year college (Diploma) سنتين بعد الثانوية العامة(الدبلوم ( Undergraduate Degree (Bachelors) البكالوريوس Postgraduate Qualification (Master\PhD) دراسات عليا

White-collar موظفي المراآز العليا Professional عمل احترافي

Management عمل إداري Blue-Collar موظفي المراآز الوسطى

Own Business أعمالي الخاصة

In which sector you work? في أي قطاع تعمل؟

Your gender? ما هو جنسك؟

You religion ما هي ديانتك؟

Private sector القطاع الخاص Public sector القطاع العام

Self-employed أعمل لحسابي الخاص

Male آرذ Female أنثى

Muslim مسلم Non-Muslim غير مسلم

Thank you for your assistance

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Banks Customer Satisfaction in Kuwait

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