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Barking Up the Wrong Tree – Factors Influencing Customer Satisfaction in Retail Banking in the UK - Page 5

CUSTOMER SATISFACTION

The majority of respondents indicate a very high satisfaction level with retail banking services in the UK as shown in Table 2. From the total responses for this section, 5453 or 53.6%, of the respondents indicated that they were very satisfied with retail banking. The second largest category of respondents, 3807 or 37.4%, of the respondents indicated that they were fairly satisfied with retail banking in the UK . The mean value of the responses was slightly below 2 (1.60), which means most respondents were very satisfied or fairly satisfied with their retail banks. The standard deviation of the responses is 0.80, which means a very small variation existed among respondents in their satisfaction levels towards retail banking. In summary, the data suggests that most respondents have a positive attitude and are satisfied with the service providers, the retail banks.

Table 2: Overall Satisfaction

Satisfaction levels

Frequency

Valid Percentage

Very satisfied (1)

5453

53.6

Fairly satisfied (2)

3807

37.4

Neither (3)

510

5.0

Fairly dissatisfied (4)

276

2.7

Very dissatisfied (5)

122

1.2

Total

10168

100.0

Missing

2190

-

The satisfaction levels of the respondents’ leads to the next research question to be answered which is “what are the determinants or elements that contribute to the satisfaction levels of the respondents in retail banking?” Results of the factor analysis are shown in Table 3 below. Bartlett’s test of spherecity was significant at the 0.001 level and that implies the presence of nonzero correlation. The overall measure of sampling adequacy (MSA) was 0.701 which exceeds the recommended cut-off level of 0.5 and individual measures were all well above this cut-off level.

Table 3: Rotated Factor Loadings for Main Scale

Scale item

In-branch satisfaction

(factor 1)

ATM satisfaction (factor 2)

Economic satisfaction

(factor 3)

Remote Service satisfaction

(factor 4)

Speed of service in the branch

0.720

0.054

0.042

-0.012

Helpfulness of branch staff

0.706

0.081

0.103

0.194

Degree of privacy in-branch

0.659

0.079

-0.019

0.155

Branch opening hours

0.624

0.098

0.204

-0.023

ATM availability

0.126

0.894

0.052

0.054

ATM reliability

0.120

0.888

0.074

0.089

Level of overdraft interest rates

0.063

0.077

0.853

0.126

Level of charges (bank)

0.172

0.045

0.847

0.094

Degree of responsiveness to remote enquiries

0.078

0.050

0.125

0.827

Efficiency of dealing with remote enquiries

0.133

0.085

0.085

0.822

(factor loadings greater than 0.4 are highlighted)

Overall, the set of data provided meets the fundamental requirements of factor analysis satisfactorily (Hair et al, 1998). In analysing the data given, the 10 response items were subjected to a factor analysis using the principal component method. Using the criteria of an eigenvalue greater than 1, four clear factors emerged accounting for 65.46% of the total variance. As in common practice, a varimax rotation was performed to achieve a simpler and theoretically more meaningful factor solution. The Cronbach’s alphas for the four factors were 0.6280 for factor one, 0.7783 for factor two, 0.6730 for factor 3 and 0.5931 for factor four.

It is clear from the factor loadings as highlighted in Table 4 that four factors emerge. These four factors represent different elements of retail banking which form the underlying factors from the original 10 scale response items given. Referring to the Table 4 above, factor 1 represents elements of the services in the branch; it is therefore labelled `in-branch satisfaction’. These elements are speed of service in the branch, helpfulness of branch staff, degree of privacy in the branch and branch opening hours. Factor 2 represents satisfaction relating to ATMs encompassing the availability and reliability of the ATM, it is therefore labelled ATM satisfaction. Factor 3 represents economic factors, specifically the charges in relation to general bank services and overdraft interest rates and is labelled `economic satisfaction’. The final factor, factor 4 represents satisfaction with remote enquiries meaning out of branch services, which encompasses degree of responsiveness and efficiency of dealing with remote enquiries, it is labelled `remote service satisfaction’. The factor loadings were derived using a cut off point of 0.4 and in fact the data reflects a high degree of separation in that all factor loadings were above 0.6 with no cross loadings evident. Hence, the factor solution was judged to exhibit sufficient reliability and validity for use in further analysis. In order to complete the analysis into the determinants of satisfaction in retail banking, the factor scores were derived and used as independent variables in standard regression analysis.

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