CHAPTER ONE

INTRODUCTION

1.1 Introduction to the Organization

The Bank of Ceylon is the first and leading commercial bank in Sri Lanka owned by
the government of Sri Lanka. It established on 1st August 1939 by special statute,
namely the bank of Ceylon ordinance. Now a diversified financial services
organizations its business is to provide a broad range of banking and financial
services to consumers, corporate customers and the government of Sri Lanka.

The Bank of Ceylon provides diversified retail, wholesale, international, investment

banking, services credit cards, SLIPS, RTGS payments, safe deposits, pawn broking
services through a network of 303 local and 3 overseas branches(London, Male and
Chennai) and off shore banking unit. As well as the bank already acquired over 60
percent of the market share in the foreign currency remittances.

The Bank of Ceylon also played major role in encouraging and spreading the savings
and investment habits of the people and helps to development of the national
economy. Bank of Ceylon using on line banking operations was to complete
deployment of the ICBS by connecting all branches. In addition to provide the better
customer services Bank of Ceylon operates 117 extension offices and 253 ATMs
including the Northern areas.

1.2 Background of the Study

Any organization has customers and they cannot survive without customers. An
organizations success also depends on the how they retain and attracting customers
and how to treat them. Retain is most important than attracting because attracting is a
more costly than retaining. In traditional organizational chart, customers are at the
bottom level and management at the top level. Due to the globalization, increased the
competition and awareness of the customers have dramatics change to the
organizations behavior. Therefore the managers who thought that customer is the
company’s only profit center. According to the modern customer oriented
organizations inverted the traditional organizational chart and customers treat as the
top of the chart. Today’s customers have more choices for their needs than ever

1
before. So keep customer with the business is significant to the manufacturing as
well as service organizations.

While the buyer is satisfied after purchase depends on the offers performance in
relation to the buyers’ expectations. In similar satisfaction is a persons feeling of
pleasure or disappointment resulting from comparing a products perceived
performance for outcomes in relation to his or expectations. Customers that are
satisfied will increase the in number, by more as well as they pays bills promptly.
Usually, manufacturing and service organizations using customer satisfaction as the
measure of quality. Service providing organizations face so many problems when
going to satisfied customers because service organizations offer customize services
to customers. Today’s organizations not only pay their attention to the satisfied the
customers, organizations always try to delighted the customers mean that to exceed
the customer expectations. In service providing organizations quality of their
services is most critical factor.

Services are activities, benefits or satisfactions which are offered for sale are
provided in connections with the sale of goods which may be tangible or even
intangible. Services have some features such as intangibility, perishability,
inseparability, heterogeneity and so on. Service quality simply defines as it is a
combination of two wards, service and quality. First we consider the term quality is
an excellence product or service that fulfill or exceed the expectations. Dr Deming
added that quality also means anticipating the future needs of the customer. We
cannot find clear boundary for quality. Quality is subject to customer. Various
experts had been defined quality in different ways. Quality is the totality of features
and characteristics of a product or service that bears its ability to satisfy stated or
implied needs. That is customer oriented definition. We can divide quality in mainly
2 ways product quality and service quality. According to the view point of quality
founders the service quality is harder than product quality. The service quality
focuses on standards or specifications that a service generation organizations
promises. Service quality result from a comparison of what customers feel a service
provider should offer (customer expectations), with how the provider actually
performs. So we can say service quality is a function of the expectations-
performance gap and as the degree and directions of discrepancy between customer
service performance and expectations. Service quality is a measure of how well the

2
service level delivered matches customer expectations. Customer complaints played
vital role in service quality.

Through service providing organizations banks play significant role. It is connect

with the development of the national as well as international activities. The public
and private sector has been found owning, managing and controlling the banking
sector. It is right to mention that scientific inventions and innovations made ways for
the use of technologies in almost all the sectors and the developed countries activated
the process of promoting the technological - driven, user friendly services. As a
developing country In Sri Lankan economy banking sector is in a prominent place. In
Sri Lankan financial sector there is intensity of competition because there are 22
licensed commercial banks, 31 financial institutes, 14 licensed specialized banks. But
here 2 government owned operates in financial sector. In namely, Peoples Bank and
Bank of Ceylon. Those are the Sri Lankan first banks which are established in the
beginning of the 19 century. After establishing the privet owned commercial banks
then turn off the trend and Most Sri Lankan had negative perceptions regarding the
government banks and its performance. But government banks had been high
security for their deposits. Peoples Bank and Bank of Ceylon both are significant in
national development but Bank of Ceylon posses’ highest asset in financial sector in
Sri Lanka. BOC already adapted new technology for their services and turning their
resources to competitive edge. But most of peoples believe that there are no customer
base services in BOC. BOC used their valuable resources to provide better services
to customers. But most of peoples who are came to get services from BOC, they are
not totally satisfied.

1.3 Problem Statement

In a modern world customer have thousands of alternatives with regard of their needs
and wants. So customers are also tried to get the quality services than ever before.
There are so many factors in behind of the customer satisfaction. Service quality is
the one of the factor which is affect to the customer satisfaction. Here the research
problem has been address; does service quality affect the customer satisfaction?

3
1.4 Objectives of the Study

• To determine the relationship between the tangibles factor and customer

satisfaction.

• To determine the relationship between reliability factor and customer

satisfaction.

• To determine the relationship between responsiveness factor and customer

satisfaction.

• To determine the relationship between the courtesy factor and customer

satisfaction.

• To determine the relationship between the access and customer satisfaction.

• To identify which factor is the mostly affect the customer satisfaction.

• Make recommendations to enhance the service quality of Bank of Ceylon.

1.5 Research Questions

• Is there is a relationship between the tangibles factor and customer

satisfaction?

• Is there is a relationship between reliability factor and customer satisfaction?

• Is there is a relationship between responsiveness factor and customer

satisfaction?

• Is there is a relationship between the courtesy factor and customer

satisfaction?

• Is there is a relationship between the access and customer satisfaction?

• What is the most affected factor in the service quality to customer

satisfaction?

• What are the recommendations to overcome the problems regarding to the

customer satisfaction?

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1.6 Significance of the Study

• This study will enhance the modern organizational behavior.

• This study could be use as the literature review of the future studies and
findings may be lays the foundation for further theories and developments of
existing theories.

• On the researchers’ perspective, it will enhance the academic carrier of the

researcher and could be gain the additional knowledge regarding the research.

• Further more this study will help to the BOC to identify the ways of
satisfying customers by enhancing their service quality.

• The findings will help to identify the attitudes regarding government banks
and its performance of the customers.

1.7 Conceptualization and Operationalization

1.7.1 Conceptual Framework

Customer Expectation Customer Satisfaction

Service
Quality

Tangible

Responsiveness
Reliability
Access

Courtesy

Figure 1.1: Conceptual framework for the study

Source:
Above figure represented thatResearcher’s Original
the framework for theConstruction
study that framework developed
by the researcher. The customer expectations are differ from customer to customer.

5
Through the various service quality factors, customer satisfied on the various factors.
Here the researcher selected the most influence service quality factors which are
related in the banking sector. Such as tangible, responsiveness, reliability, access
and courtesy. The customer satisfaction depends on the service quality factors. So
customer satisfaction is the dependent variable and service quality factors are
independent variables.

1.7.2 Operationlization

Variable Indicator Measurement

Dependent • Satisfy with the customer services of the BOC.
variable • Switching to other banks
(customer • Recommending of BOC to the others. Likert scale
satisfaction)
Independent variable (service quality factors)
• Online service of the BOC.
• ATM transactions
• Telephone banking
Tangible • Physical appeal of the materials and
documentation
• Physical appearance of the branch premises of
BOC
Responsiven • the time that provided the services
Likert scale
ess • Quick response of BOC
• Accuracy of the banking activities

Reliability • Security of the deposits and money

• Level of the services in all time of the day

• Politeness, friendliness of the employees

courtesy
• Required time for the services

access • Convenient locations

Table 1.1: Operationlization
Source: Researcher’s Original Construction

6
1.8 Limitations of the study

• The customer satisfaction is not only depends on the service quality. There
are various factors are affect to the customer satisfaction but in the research
concern only on the service quality.

• According to the Independent and depended variables could be generate

many questions. But customers are do not like to answer for long
questionnaires. So researcher had been to reduce the questions that are
included in the questionnaire.

• In this research only address to the government sector. But in the financial
activities of the country, government sector as well as private sectors is
played in equaling roll. Here not concern about the private sector banks.

• The population is very large. So concern of the whole population is not

economical as well as impossible.

• BOC has different types of customers. So when going to select a branch as a

sample it is restricted to get the better result. Because through the branch
select only 50 customers.

• There are no chance to check whether the question order is followed and also
no opportunity to discuss with business customers. Because they are come to
branch only for their financial (POD and TOD) needs. They are not like to
consume their time on this type of research activities.

• Time constraint is affect to the research and it is one of the major barriers of
the study.

• Unable to get the information, due to rules and regulations of the BOC.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

Here discussed the finding of the past researches, papers and books that are
published. This included the various models that are related to the customer
satisfaction.

2.2 Customer Satisfaction

Customer satisfaction is a board sense and it differs from customer to customer,

product to product and service to service. Previous studies have identified the
benefits that customer satisfaction and define customer satisfaction on various ways
which are delivers by an organizations. Most researchers agrees is that satisfaction is
an attitude or evaluation that is formed by a customer comparing pre purchase
expectations of what they would receive from the product to their subjective
perceptions of the performance they actually did receive (Oliver 1980). From
Wikipedia, the free encyclopedia point out that Customer satisfaction, a business
term, is a measure of how products and services supplied by a company meet or
surpass customer expectation. It is seen as a key performance indicator within
business and is part of the four perspectives of a Balanced Scorecard.

In a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element
of business strategy. Kotler (2000, p.36) said that in his marketing book “Satisfaction
is a person‘s feelings of pleasure or disappointments resulting from comparing a
product’s perceived performance (or outcome) in relation to his or her
expectations.”

2.3 Measuring Customer Satisfaction

There is a famous writer said that "If you cannot measure it, you cannot improve it."
- Lord William Thomson Kelvin (1824-1907). Organizations are increasingly
interested in retaining existing customers while targeting non-customers; measuring

8
customer satisfaction provides an indication of how successful the organization is at
providing products and/or services to the marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual

manifestation of the state of satisfaction will vary from person to person and
product/service to product/service. The state of satisfaction depends on a number of
both psychological and physical variables which correlate with satisfaction behaviors
such as return and recommend rate. The level of satisfaction can also vary depending
on other options the customer may have and other products against which the
customer can compare the organization's products.

Because satisfaction is basically a psychological state, care should be taken in the

effort of quantitative measurement, although a large quantity of research in this area
has recently been developed. Work done by Berry (Bart Allen) and Brodeur between
1990 and 1998 defined ten 'Quality Values' which influence satisfaction behavior,
further expanded by Berry in 2002 and known as the ten domains of satisfaction.
These ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency,
Ease of Access, Environment, Inter-departmental Teamwork, Front line Service
Behaviors, Commitment to the Customer and Innovation. These factors are
emphasized for continuous improvement and organizational change measurement
and are most often utilized to develop the architecture for satisfaction measurement
as an integrated model. Work done by Parasuraman, Zeithaml and Berry (Leonard
L)between 1985 and 1988 provides the basis for the measurement of customer
satisfaction with a service by using the gap between the customer's expectation of
performance and their perceived experience of performance. This provides the
measurer with a satisfaction "gap" which is objective and quantitative in nature.
Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory
of combining the "gap" described by Parasuraman, Zeithaml and Berry as two
different measures (perception and expectation of performance) into a single
measurement of performance according to expectation. According to Garbrand,
customer satisfaction equals perception of performance divided by expectation of
performance.

The usual measures of customer satisfaction involve a survey with a set of statements
using a Likert Technique or scale. The customer is asked to evaluate each statement

9
and in term of their perception and expectation of performance of the organization
being measured. True "customer satisfaction" is an organization's ability to attract &
retain customers and enhance the customer relationship over time. It is not simple
and the answer cannot be collapsed into a single "customer satisfaction index." Every
interaction a customer has with a company’s products & services is a reflection on
quality.

2.4 Customer Retention

Previous studies have identified the benefits that customer retention delivers to an
organization (see Colgate et al., 1996; Reichheld and Sasser, 1990; Storbacka et al.,
1994). For example, the longer a customer stays with an organization the more utility
the customer generates (Reichheld and Sasser, 1990). This is an outcome of a
number of factors relating to the time the customer spends with the organization.
These include the higher initial costs of introducing and attracting a new customer,
increases in both the value and number of purchases, the customer's better
understanding of the organization, and positive word-of-mouth promotion.

Apart from the benefits that the longevity of customers brings, research findings also
suggest that the costs of customer retention activities are less than the costs of
acquiring new customers. For example, Rust and Zahorik (1993) argue the financial
implications of Attracting new customers may be five times as costly as keeping
existing customers. However, maintaining high levels of satisfaction will not, by
itself, ensure customer loyalty. Banks lose satisfied customers who have moved,
retired, or no longer need certain services. As a consequence, retaining customers
becomes a priority. Previous research shows, however, that longevity does not
automatically leads to profitability (Colgate, Stewart, and Kinsella, 1996).

2.5 Customer Perceptions of Value

Today, customers are more value oriented in their consumption of services because
they have alternative choices (Slater, 1997; Woodruff, 1997). For example, Gale and
Wood (1994) explained how customers make purchase decisions between competing
providers. The author argued that customers buy on value; they do not simply buy
products. Interestingly, it was observed that customers learn to think objectively

10
about value in the form of preferred attributes, attribute performance, and
consequences from using a product in a use situation (Woodruff, 1997).

2.6 Customer Loyalty

Customer retention improves profitability principally by reducing costs incurred in

acquiring new customers. A prime objective of retention strategies must therefore be
“zero defections of profitable customers” (Reichheld, 1996a). There is, however, a
distinction between customers who are simply retained and those who are loyal. The
concept of consumer inertia implies that some customers are only being retained,
rather than expressing loyalty. Truly loyal customers are usually portrayed as being
less price-sensitive and more inclined to increase the number and/or frequency of
purchases. They may become advocates of the organization concerned and play a
role in the decision making of their peers or family.

2.7 Customer Satisfaction Model (Teboul Model)

Company offer

Customer needs

Figure 2.1: Teboul Model

In the Bester field’s total quality management book, Teboul model discussed as the
customer’s needs are represented by the circle and the squire depicts the product or
service offered by the organizations. Total satisfaction is achieved when the offer
matches the needs. The part of the squire that lies within the circle is perceived by
the customers as satisfying and the part of the squire outside the circle is perceived as
unnecessary. It is important that the organizations listen to the “voice of the
customer” and ensure that it’s marketing, design, production, and distribution
processes truly meets the expectations of the customer.

2.8 Kano Model

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Kano Model of customer satisfaction is a very useful tool to help you understand and
classify user requirement for designing your service. Noritaki Kano is the originator
behind the Kano model concept and he recognized that the degree of customer
satisfaction varies depending on the fulfillment or non – fulfillment of certain
customer requirements. Here customer requirement s classifies them into three
categories. Such as basic requirements, performance requirements and excitement
requirements. Important thing is the evolution of customer satisfaction will lead to
the delighter. So service provider has to continually evolve the study and analysis of
customer requirements and plot in to the Kano model to see how new and better
ways to satisfy customers can be created.

Unlike a product where the customer satisfaction comes from usage, in services, the
customer satisfaction is derived from the experience of dealing with the service
provider. Also service experiences are much more repeat and the cost of switching is
low, so achieving high customer satisfaction is very critical.

2.9 Feedback and Complaints

Feed back is Program to identify errors and to take corrective actions. Feedback and
Its Five Uses

• To discover customers’ satisfaction

• To discover relative priorities of quality;

• To discover opportunities for improvement;

• To identify customers’

• To compare performance.

Recently, many organizations have implemented feedback loops that allow them to
capture feedback at the point of experience. For example, National Express, one of
the UK's leading travel companies invites passengers to send text messages whilst
riding the bus. This has been shown to be useful as it allows companies to improve
their customer service before the customer defects, thus making it far more likely
that the customer will return next time.

12
In the Dale H. Bester field, Carol Bester field-Michna,Glen H. Bester field and Mary
Besterfield- Sacre, 3rd edition 2004, Total quality management book,pointed out that
the information on feed back is proactive, although complaints are reactive they are
very vital ingathering data on customer perception. A dissatisfied customer can
easily become a lost customer. Complaints can be seen as opportunities to obtain
information and it can be seen as a measurement to Asses Company’s process
improvement team. Each complaint should be accepted, analyzed and acted up on.
When handling complaints, front- line employees played vital role.

2.10 Service Quality

In the various researches had been defining the service quality in many term,
following table present the service quality definitions,

Definition Author
Service quality can be defined as “the difference between Asubonteng et.al( 1996)
customer expectations for service performance prior to the
service encounter and their perceptions of the service
received”.
Service quality as the subjective comparison that Gefan(2002)
customers make between the quality of the service that
they want to receive and what they actually get.

Service quality is determined by the differences between Parasuraman et.al,

customer’s expectations of service provider’s performance (198,1988)
and their evaluation of the service they received.

Table 2.1: Service quality

2.11 Relationship Between Satisfaction and Service Quality

Service quality is the key to measure user satisfaction (Pitt et.al.1995). On the more
widely used instrument for assessing customer satisfaction is SERVQUAL
developed by Zeithaml et.al. ( 1998). Researchers have paid much attention to the
close relationship between service quality and customer satisfaction (Bitner
et.al.1990; Parasuraman et.al.1985; Parasuraman et.al., 1988).SERVQUAL is widely

13
recognized and used, and it is regarded as applicable to a number of industries,
including banking industry ( Yavas, Bilgin& Shemuell,1997).

2.12 Service Quality Dimensions

Pioneering work by Parasuraman etal.(1985)led to a list of ten determinants

(reliability,responsiveness,competence,access,courtesy,communication,credibility,se
curity,understing the customer, and tangibles)

Reliability involves consistency of performece and dependability. It means that the

firm performs the service right the first time. It all means the firms honor its
promises. Especially it involves accuracy in billing, keeping records correctly,
performing the service at the designated time

Responsiveness concerns the willingness or redines of employees to provide service.

It involves timeliness of services that means –mailing transactions slips immediately,
calling the customer back quickly and giving prompt service.

Competence means possession of the required skills and knowledge to perform the
services. It involves; knowledge and skills of the contact personal, knowledge and
skill of operational support persons, research capability of the organization.

Access involves approach, ability and ease of contact. it means the service is easily
accessible by telephone, waiting time to receive service is not extensive, hours of
operations are convenient and locations of service facility is convenient.

Courtesy involves politeness, respect, consideration and friendliness of contact

personal. It includes consideration for the consumer’s property, clean and neat
appearance of public contact.

Creditability involves trusts worthiness, believability, honesty. It involves having the

customer’s best interest at heart. Contributing to creditability are; company name,
company reputation, personal characteristics of the contact personal, the degree of
hard sell involved in interaction with the customer.

Security is the freedom from danger, risk or doubt. It involves safety, financial
security and confidentially.

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Tangibles include the physical evidence of the service; physical facilities, appearance
of personal, tools or equipment used to provide the service, physical representation
of the service.

CHAPTER THREE

METHODOLOGY

3.1 Introduction

Here the researcher describe that the types of data, data collection methods,
population, sample size, data presentation and data analysis tools.

3.2 Types of Data

The data collection sources could be divided in primary data and secondary data.

3.2.1 Primary Data

Primary data collect mainly by the distributing the questionnaire through the
customers and interviewing customers and internal staff members of the branch. As
well as observing customer reactions when arising problems and customer
complaints. Questionnaires were mainly included two parts which focused major
reasons such as demographic (personal) and attitudes.

3.2.2 Secondary Data

Secondary data collect by the Banks Annual Reports, news paper articles, and library
articles and via internet.

3.3 Data Collection Methods

3.3.1 Questionnaire

Questionnaires developed basically on the statements and according to the Likert

scale. (Strongly agreed, agreed, neutral, disagreed and strongly disagreed) when
preparing the questionnaires using sinhala for the clarity and understandings of the
customers. (See appendix VI)

3.3.2 Observations

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As a Management Trainee of the BOC a researcher was able to carry out a number of
observations like customer complaints and how customer behave when there is a
dissatisfied, and how to staff members act to satisfied customers and staff members
attitudes regarding the complaints.

3.4 Population

Through the 305 branches of the BOC, for the efficiency of the research, select the
Colombo district Homagama branch. Homagama is a semi urban area and it
represents

The all level of income holders who are connect with the BOC.

3.5 Sampling

Here select convenience sampling method. Further select only 100 customers and
they are selected base on their account types. (Current A/C, Normal Savings, NRFC
A/C, Fixed Deposit A/C, And 18+ A/C). To collect the data for the study, a total of
100 individualized questionnaires were distributed by handover to a systematic
random sample of customers.

3.6 Data Presentation Tools

This research study used chart, graph, table and other related data represent tool
for represent data make conclusion, finding and explore the final outcome.

3.7 Data Analysis Tools

There are two types of researches, Such as quantitative and qualitative methods. Both
of those were applied to the study. That was used Likert five scale analysis. (Strongly
agreed, agreed, neutral, disagreed and strongly disagreed)

Percentage analysis was used to analyze employees’ demographic factors and

attitudes regarding the service quality factors.

As well as used the mean and weighted average mean to analyze the data. Further
analysis of the mutual exclusive events by used the sets.

16
 CHAPTER FOUR

DATA PRESENTATION, DISSCUSSION AND ANALYSIS

4.1 Introduction

Here represented the data which were gathered by the questionnaires and observation
of the researcher. Further in this chapter included the data presentation; discussion
and analysis by used various methods.

4.2 Demographic Information

4.2.1 Distribution of Gender

Customer attitudes are differing from gender to gender. As a percentage 52% of

customers are female and 48% of customers are male who are included in the
sample.

Gender composition of Respondents

Male Female
52 48
Table 4.1: Distribution of Gender
Source: Survey Data, 2009

Figure 4.1: Distribution of gender

4.2.2 Customers Age Composition

Gender as well as age class towards the differencing of the feelings, attitudes and
beliefs of the people. So customer’s age composition is important to take the
actions. There are 5 age classes were concerned in the research. years 15-25,years
26-35, years 36-45, years 46-55 and onward 56. Here began with the year 15,
because the research designed to the accounts basis. Normally 18+ accounts were
opened to the more than 15 years old younger’s.

17
Age composition of Respondents
15- 26- 36- 46- 56
25 35 45 55 <

32 18 24 16 10

Table 4.2: Customers age

Figure 4.2: Customers age composition
composition
Source: Survey Data, 2009

4.2.3 Occupation
The occupation that a person engaging is, a turning point of his or her social status
and habits. According to the occupation determine the needs and wants of a person.
Following data had represented the occupations of the persons with having the
banking habits. Following table show the occupations and percentages.

Occupation
state service Business Privet sector self non employee Student

15 20 15 16 14 20

Table 4.3: Occupation

Source: Survey Data, 2009

18
 Figure 4.3: Occupation

4.2.4 Age of Banking practices

Here discussed the time period that a person connected with the banking and with the
banking habits. It represented the history of the banking activities.

Age of banking practices

1- 2- 5- 11- 20<
2 4 10 20
16 8 16 44 16
Table 4..4: Age of banking
practices
Source: Survey Data, 2009

Figure 4.4: Age of banking habits

19
4.2.5 Usage of Banks
In Sri Lanka
mainly
operate state
owned
banks and
Government 4
Bank 56 0 Private Bank
private
4
owned
banks.
Figure 4.5: Usage of banks
People
deposit their
money at
the state banks, private and or both. This is the mutually exclusive events.

4.2.6 Other Banks and Customer

Some customers have their deposits than one bank. This represented by the following
graph excluding the BOC. Here concluded the as government bank, peoples bank get
the highest rank.

Figure 4.6: Other banks and customer

Source: Survey Data, 2009

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4.2.6 Account Type
A bank offers various types of products to their customers. All banks
differentiate their service by using the accounts like savings accounts, current
accounts,
Saving
Account fixed
deposits
and society
30
accounts
8 5 etc.
20

7 20
10
Fixed Current
Account Account

Figure 4.7: Account type

Source: Survey Data, 2009

4.3 Service Quality Factors

4.3.1 Usage of the BOC

Customers used banks for their financial needs and requirements. Most of current
account holders used the bank in daily. Some customers used bank in daily basis,
twice per month, once a month and once a two month.

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 Usage of the BOC
Per
Twice
Per Per two
a
week month mont
month
h
25 28 20 27
Table 4.5: Usage of the BOC
Source: Survey Data, 2009
Figure 4.8: Usage of the BOC

4.3.2 Awareness about the BOC Services

Neighbors / friend are changing their friend’s attitudes and influence them in to their
patterns and behaviors. Here discussed the most influence factors to the connect with
the BOC. Positive ward of mouth is a strongest media to the influence people. As a
marketing strategy advertising is a most popular way to attract and to give the
information regarding the product or services to customers. Here 72% percent of
customers get information regarding the services of BOC by their friends and
neighbors and 28% percent of customers by the advertising.

Awareness about the BOC

services.
By Nabors or By
Friends Advertising
72 28
Table 4.6: Awareness about the
BOC services.
Source: Survey Data, 2009

Figure 4.9: Awareness about the BOC

services.

4.3.3 Obtained Services

Earlier in the banking sector defends only on the employees and customers are come
to the bank and get the services in personally. Due to incensement of technology add
more value to service by telephone, internet and mobile services. Also BOC used this
strategy to provide the better service to the customers.While BOC used the

22
technological assistances to their services but most of the customers like to get the
services in personally.

Obtained services
By By By
Other
Personally Internet Telephone

100 0 0 0

Table 4.7: Obtained services

Source: Survey Data, 2009

Figure 4.10: Obtained services

4.3.4 Important Factors of the Quality of Service the BOC. (In Customers
View Point)

According to the customers view point the customers were thought that service
quality, low cost and high interest rates and product differentiations. Most of
customer are preferred to the above all factors and they are highly concern about

Low Cost

2
3
1
2 7
5
1 0 1
5 8 2
Service Quality Product differentiations

Figure 4.11: important factors of the service quality of the BOC

Source: Survey23Data, 2009
those factors when select a bank for their requirements. Following set represented the
mutually exclusively of those events.

Following discussed the customer satisfaction originators as that customer how much
accepts the service quality of the BOC by using the statements. Following tables and
graphs are representing the information regarding the factors that are directly related
with the service quality.

%Strongly disagreed
Strongly agreed %

Disagreed%
Neutral %
Agreed %

Tangible factors

I well known about the online system of

24 28 20 20 8
BOC
I wide used of the ATM transactions 52 24 12 4 8

I satisfied with the wide range of telephone

25 24 31 12 8
transactions

I satisfied with the visual appeal of the

48 48 4 0 0
materials and documents of the BOC.
I satisfied with the physical appearance and
9 36 45 10 0
arrangement of the inside premises of BOC.

24
 Table 4.8: Tangible factors
Source: Survey Data, 2009
4.3.5 Awareness about the On Line System

Now a day all the banks are turning in to the automated systems. It ignore the time of
the consumed with the banking transactions. Now BOC used fully automated system
to provide to the better service to their customers. But most of customers are not well
aware about the on line system of the BOC. Following table represented the
percentage of the awareness of the on line system of the BOC.

Figure 4.12: On Line system

Source: Survey Data, 2009
4.3.6 Use of ATM Transactions
In BOC there are 302 ATM machines were established in the inland wide to provide
the better service to their customers. Also they are connected with the merchandises
and shop with to the provided the customer services to their customers. It is ignored
the delays of the ques. 52% customers are widely used ATM transaction and 24% are
agreed shows that they are used the ATM transactions.

Figure 4.13: ATM Transaction

Source: Survey Data, 2009

4.3.7 Use of Telephone Transactions

25
Here discussed the of customers deal with the BOC by using the telephone. The
BOC facilitates the telephone transactions for their customers. Most of current
account holders used telephone to inquire the balances and O/D information.

Figure 4.14: Telephone Banking

Source: Survey Data, 2009

4.3.8 Physical Appeal of the Documents

Here discussed the physical appeal of the documents which are used in the BOC.
Such as applications, vouchers etc. as a government bank BOC required more
documents than other banks. (When apply for the loan, opening the account,)

Figure 4.15: Material & Documents

Source: Survey Data, 2009

4.3.9 Physical Appearances and Arrangement of the Premise

Physical appearances are the one of the attracting factor. With compared to the other
banks BOC has less interior decorations and physical appearance. According to the
customers perspectives they are neutral with the physical appearance of the BOC.
Following tables and graphs are shows the customer attitudes regarding the
decorations of the BOC.

26
 Figure 4.16: Physical Appearance of the branch premise
Source: Survey Data, 2009

4.3.10 The Time Factor

Here concentrate the minimum time that required by service providers to provide
service to the customers. Most of the transactions are required the less than 30
minutes and some transactions required more than 30 minutes. As a percentage 42%
request less than 30 minutes and rest of the sample required the 58%. These time
differentiations arise from the many reasons. Such as no book withdrawals of the
other branch, no signature capturing in the system (current accounts), not included
the operating instruction to the systems so on.

Time factor
Grater then 30
Less than 30 minutes
minutes
42 58

Table 4.9: Time factor

Source: Survey Data, 2009

Figure 4.17: Time factor

Following table represent that the responsiveness of the BOC to the needs and
requirements of the customer.

Strongly Strongly
Agreed Neutral Disagree
Responsiveness factor agreed disagree
% % %
% %
I satisfied with the time 24 40 24 12 0
(from 8.30 am to 3.00 pm)
that service provides by the

27
BOC.

I satisfied with the quick

response of the BOC to the 26 39 35 0 0
needs.

Table 4.10: Responsiveness factor

Source: Survey Data, 2009
4.3.11 Operating Hours

Most of banks are worked from 8.30 am to 3.00 pm. But customers are like to get the
extra time for their services. Now a day’s some private banks provide their service at
to the after the 3.00 pm as well as private banks are open their branches in the
weekend and holidays. That is dramatic effect on the BOC.

Figure 4.18: Time of the Service Provider

Source: Survey Data, 2009

4.3.12 Quick Response

Here discussed the speed of the services that are provided by the BOC. Customers
are always tried to get the quick services for their needs and requirements. As well as
here pay attention on the willingness of employees to help customers and employees
interesting to responding to customer requesting.

28
 Figure 4.19: Quick response
Source: Survey Data, 2009

Following table shows that the reliability of the services which provided by the BOC.

Disagreed %
Strongly

Agreed %

Neutral %

Strongly disagreed %
Reliability

Agreed %

I satisfied with the accuracy of the banking 54 38 8 0 0

activities of the BOC.
I satisfied with the security of the deposits
and money on the BOC with compared to 83 17 0 0 0
the other banks.

I believed that the level of services at same

of the all time of the day and all staff 23 38 32 7 0
members.

Table 4.11: Reliability

Source: Survey Data, 2009

4.3.13 Accuracy of the Transaction

That included the accuracy of the reports, documents and money transactions of the
BOC. Most of customers thought about the accuracy of the banking activities of the
bank. It is the most important reliability factor when a customer going to select a
bank.

29
 Figure 4.20: Accuracy
Source: Survey Data, 2009

4.3.14 Security of the Deposits

Other important factor in the reliability is the security of the customers’ deposits.
Due to the early incidents and cases that were arises in the Sri Lanka (sakvithis’
incident and Ceylinco Golden key incident) positively affected to the State banks
trustworthiness. Because of the customers believed that there has high security of the
deposits on the state banks. Due to that reasons most if customers come to the state
banks for their banking activities.

Figure 4.21: Security of the deposit

Source: Survey Data, 2009

4.3.15 Level of the Services

Sometimes service levels are differing from the times of the day and all members of
saff. Beginning of the day and evening (end of the day). That concern about the
weather providing the service at the time policy and performing the service right at
the first time, keeping promised. Time concrete is considered as the one of the
effected factor in the reliability.

30
 Figure 4.22: Level of services
Source: Survey Data, 2009

Following table included the attitudes of the customers regarding the courtesy and
politeness of the BOC.

Agreed %Strongly

Agreed %

Neutral %

Disagreed %
%Strongly disagreed
courtesy

I satisfied with the politeness and pleasant 25 36 39 0 0

demeanor of the staff members
I believed that the other banks required more
0 24 54 22 0
time than BOC of providing transactions.

Table 4.12: courtesy

Source: Survey Data, 2009

4.3.16 Politeness And Friendliness

Here concentrate the politeness of the employees and consideration of the customer
as value to the bank. Courtesy included the respect of the all customers and
friendliness of the contact personal. Some countries concern the teller courtesy of the
main factor to the select a bank. As service providing organization a bank used the
customize their services. Courtesy is the first insight of the customer to measure the
service quality of bank.

31
 Figure 4.23: Politeness & friendliness
Source: Survey Data, 2009

4.3.17 Time that Required with Camper to Other Bank

When compare with the other government and private sector banks, the BOC how
much required to going do a transaction. There is a social accepted argument that
private banks provide services on the less timing than state owned banks. Here
discussed the customer attitudes regarding the time with compared to the other
banks.

Figure 4.24: Time that required with camper to other bank

Source: Survey Data, 2009

In here shows the approachability and ease of contact.

Access Strongly Agreed Neutral Strongly Disagreed
Agreed % % disagreed %
% %
I satisfied with the
locations that are 33 36 25 6 0

established of the BOC.

Table 4.13: Access
Source: Survey Data, 2009

4.3.18 Easy of Access

32
According to the access factor concern about the services branches are conveniently
located to the customers. In BOC there are 307 branches, 117 extension offices and
302 ATM machines are located at the island wide.

Figure 4.25: Easy to Access

Source: Survey Data, 2009

4.4 Customer satisfaction factors

Here customer satisfaction discussed under the 3 main categories.

• Satisfaction as an attitude

• Behavioral intention

• Behavioral response

Customer Strongly Agreed Neutral % Strongly Disagreed

satisfaction factors Agreed % disagreed %
% %
Satisfaction as an 35 48 17 0 0
attitude
Behavioral intention 25 43 23 9 0

Behavioral response 53 35 12 0 0

Table 4.14: Customer satisfaction factors

Source: Survey Data, 2009

4.4.1 Satisfaction as an Attitude

33
This refers to the customers overall satisfaction. Measure How extend customers are
satisfied regarding the overall and key aspect of the service.

Figure 4.26: Satisfaction as an Attitude

Source: Survey Data, 2009

4.4.2 Behavior Intention

This refers to the how the customers intends to behave in terms of switching the
banks. Also Switching cost and the benefits are influence to the retain customers
with the banks as well as the lack of the alternatives are affect to the customers
behavioral intention.

Figure 4.27: Behavior intention

Source: Survey Data, 2009

4.4.3 Behavior Responses

Behavioral response refers to how the customers have behaved in the past
experiences in terms of word of mouth communicate about the bank. On other hand
Recommendations of the customers about the services of the BOC to potential and
new customers.

34
 Figure 4.28: Behavior responses
Source: Survey Data, 2009

4.4.4 Customer Ranking of the Service Quality Dimensions

This included the 5 factors which are the most important in the service quality of the
BOC. Other way could be identifying the reasons that why the customers are connect
with the BOC and retain with the BOC. This ranked According to the customers
view point but this may be confused because of the customer’s knowledge, attitudes
and education.( see appendix VII)
When apply the weighted mean,

∑ X w/ ∑X

Tangible Reliability Courtesy Access Responsiveness

Weighted
17.6 29.6 20.2 18.1 14.6
mean
Table 4.15: Weighted mean average
Source: Survey Data, 2009
Here highest rank obtained by the reliability that means most of customers comes to
the BOC for their assurances of the deposits and the accuracy of the BOC. Then high
ranked the courtesy. That shows customers are like to politeness friendliness and
respect of the staff members. Customers are weighted the courtesy as the second one.
Also ease of the located comes to the third rank. When customers going to get the
services, they consider the convince of activities. Further tangible get the 17.6 weight
and fourth place of the rank shows the customers are not concern about the physical
appearance and the technological usage of the BOC. Responsiveness get the 14.6
weight and it tells customers are ignor the customer delay and they retained with the
BOC whether they are not having good responding from the BOC.

4.4.5 Customer Complaints

35
In here summarize the customer complaints in the last two month (July and August)

July August
Complaint 33 38

No of days per month ( opening days) 22 20

Mean = ∑ f× / ∑f

Mean of the July = 33/22 Mean of the August= 38/20

=1.5 = 1.9
Table 4.16: Customer Complaints
Source: Survey Data, 2009

4.5 Data Disscussion And Analysis

Here disscussed the reletionships of the data which were gatherd and then analysis
the data. ( see appendix VII -summary table)

4.5.1 Determine the Relationship between the Tangibles and Customer

Satisfaction.

According to the gathered data related in the tangible factor could be summarized as
follows,

Through the tangible factor the researcher find out that Customers were satisfied
with the visual appeal of the documents and materials like applications, vouchers etc
(Ques :04)of the BOC. So as summarize could be said that customers are 96%
satisfied with the BOCs’ documents and materials than the ATM transactions,
online system, telephone banking and physical appearance of the BOC.

When considered about the negative relationships between the tangible factor and
customer satisfaction, could be identified that there were weak relationship (28%)
between the awareness about the on line system of the BOC. (Ques: 01) So the
customer awareness of the online system must be improved. Cohen et al ,2006 said
that due to use of the latest technology the respondent cannot directly contact their
local branch. The consumers would prefer to speak their bank representatives
directly. As an Asian country also Sri Lankan peoples have the less attention about
the technology that is used in the banks.

36
4.5.2 Determine the Relationship between Responsiveness and Customer
Satisfaction.

When considered the relationship between the responsiveness and the customer
satisfaction, customers were satisfied with the quick response of the BOC (Ques:
07). As percentage 65% but that is not a strong relationship.

On other hand there was 12 % and negative relationship between the operating
hours of the BOC (Ques: 06). Normally BOCs’ provide their services from 8.30 am
to 3.00 pm. but some other banks are provide their services than 3.00 pm. so the
BOCs’ operating hours must be extend with the requirements of the customers.

4.5.2.1 Determine the Relationship between Reliability and Customer

Satisfaction.

As a financial institute the BOC always pay their attention to assure their reliability.
Here discussed the relationship between the reliability and the customer satisfaction.
In case of reliability customers were 100% satisfied with the security of their
deposits and money that they made in the BOC. (Ques: 08). That is the most
affected factor in the reliability and there were strong relationship between the
security and customer satisfaction.

When consider the negative relationship of the reliability and the customer
satisfaction, the customer’s are 7% not satisfied with the level of services at same of
the all time of the day and efficiency of the staff members. (Ques: 10). There were
negative relationship and that must be improved.

4.5.3 Determine the Relationship between the Courtesy and Customer

Satisfaction.

Here discussed the relationship between the courtesy and the satisfaction 0f the
customers. So 61% customers were satisfied with the staff members’ politeness and
pleasant behavior while customers deal with the customers. (Ques: 11). The
customers are believed that the Staff members are redness to provide the services in
any time. There is a positive relationship between the courtesy of employees and the
customer satisfaction.

37
Leeds (1992) argued that nearly three-quarters of the banking customers mentioned
teller courtesy as a prime consideration in choosing a bank.
In the side of the negative the researcher identified that there 22% of customers
thought that there is negative relationship between the times that required of the
BOC than other commercial banks. (Ques: 12). Here could be identified the
customer are not satisfied with the time that are required in banking activities of the
BOC.
4.5.4 Determine the Relationship between the Access and Customer
Satisfaction.
In case of here discussed the customer attitudes regarding the ease of the access to
the BOC. (Ques: 13). 69% of customers were satisfied with the access factor of the
BOC. Mean that the BOC branches are located at the convenient places to the reach
the customers. In a study of Canadian customers in Montreal, Laroche and Taylor
(1988) found that convenience is the principal reason for bank selection, followed
by parental influence with respect to the status of the bank. In contrast, Kaynak and
Kucukemiroglu's (1992) study of the Hong Kong banking market discovered that
customers choose their banks because of convenience, long association,
recommendations of friends and relatives, and accessibility to credit.
4.5.5 Identify Which Factor is the Mostly Affected to the Customer
Satisfaction.
Through the factors of the services quality that is affected in the customer
satisfaction, (tangible, responsiveness, reliability, courtesy and access) reliability is
the strongest factor in the service quality of the BOC. All the customers are 100
satisfied with the security of the deposits that they made in the BOC. Major reason
that cause is to the security is the customers’ trustworthiness about the BOC. As a
government owned bank BOC has the government assure the security.
So the researcher found out that the customer retain with the customers because of
the reliability of the BOC. Other service quality factors are equal to the service
quality factors of the other government and private banks. Reliability is the most
affected service quality factor in the customer satisfaction.

38
 CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1 Introduction

This chapter describes the conclusion of the research and recommendations that were
made against to the problems.

5.2 Conclusion

The researcher found out that the following things regarding the customer
satisfaction. When consider about the factors of the service quality, Customers were
satisfied on the tangible factor. Most of customers were satisfied about the facilities
of BOC, efficiency of the equipments. Through these facilities the customers were
have low satisfaction regarding the online system of the BOC. Now a day the
banking sector has greater competition and banks strives to the over their
competitors. The BOC also offer the same facilities with compared to the other
banks. There were no excitements.

Other factor was the responsiveness that impact to the customer satisfaction. Here
the customers pay their attention regarding the quick response of the BOC to the
customers need and requirements. The customers were averagely satisfied with the
responsiveness of the BOC. As a government owned institute the customers had been
the negative attitudes regarding the services and the responding of the services. This
attitude was deeply connected with the society. Therefore couldn’t be assuring the
customers satisfaction whether the BOCs’ provided better services.

When consider the reliability factor, the customers were fully satisfied with the
reliability of the services. Other hand could be expressed the idea of the customer
satisfaction on basis of the reliability, the customers are delighted regarding the
services that are provided by the BOC. To that mostly affected reason was that BOC
is a government owned bank. Therefore customers have greater assurance of their
deposits and money.

Courtesy is the other one of the affected factor to the increase the customer
satisfaction. This directly related with the human resource of the BOC. The
customers believed that the employees who are employed in the BOC are respecting

39
their customers’ friendliness as well as polite with the customers. But the customers
are not satisfied with the time required by the BOC to provide some services.
Because of the other banking institutes are required less time to the banking
activities.

The researcher considered above factors as well as the ease of access and customer
satisfaction. Here the researcher could be identified the most of customers were
satisfied with the BOC branches that are located at the island wide. As a government
owned bank the BOC has the responsibility of the increase the banking habits of the
peoples. So the BOC were established in the urban, Semi urban, rural areas as well as
in the northern areas. So the customers are satisfied with the service quality factors
of the BOC.

Ultimately the researcher concluded the findings as the customers are very satisfied
of the reliability. Reliability is the one of the most important factor on selecting of
the bank for the deposit. The BOC gives best service regarding the reliability but
other factor such as tangible, responsiveness, courtesy and access had few impact of
the customer satisfaction.

5.3 Recommendations

Here shows that the recommendations were developed by the researcher to overcome
the problems and the negative factors to increase the customer satisfaction.

• One of the suggestions of the researcher is include the signature scanning for
the online system. In the BOC on line system included the signature scanning
only for the current accounts. Now most of customers are tend to use the no book
withdrawals. In the no book withdrawals customers faced so many problems and
they have to fax the signatures to the branch and confirm the signature.
Sometimes this required more than 1 hour. So this is due to customer delays. If
the savings account further more holders’ signatures included to the system, the
customers have to get the quick services from the BOC.

• Furthermore should be using the new equipments in the day today operations.
Most of branches still used outdated equipments. So they cannot provide the
better service to the customers due to the failures of the equipments. So the
management of the BOC must allow the new equipments to the all branches.

40
 • All the branches of the BOC open the services for the customers at the 8.30
am. That time changed in to the 8.00 am that will useful to customers. Because
most of customers are engaged in the job and them works commence up at the
same time of the bank. So the customers have to face so many difficulties with
the banking activities. If the time changed, that will increase the customer
satisfaction.

• With compared to the other commercial and developments banks, the BOC
provided the few amount of the advances (loans) for the customers. The
management of the BOC believed that they will have too faced difficulties in the
loan recoveries. If BOC provide the advanced to the government servants they
cannot faced any problem with the recoveries because the government servants
obtained permanent salary for the month.

• Most of BOC branches are not arranged as according to the model branch
concept. At least “A” grade branches must be arranging in to the model branch
concept. Through the model branch concept could be close-up with the customers
and will help to provide the better customer service.

• All the branches must be adapted in to the 5’S or kaizen methods. Because to
the well maintained of the documentations. Some branches handle the
documentations and materials in improper manner. Due to this most of the
mandates and vouchers were destroyed. Mandates are the most important
documentation of the account and that must be securing the entire life of the
account. Still there is no method to handle the documentations in the branches.
So must be improving the methods like 5’S inside the branches.

Employees are the major source of the service quality because they are the live
factors which deal with the customers directly. The employees could use as the tool
of the way to improve the customer satisfaction. Before going to satisfy the external
customers must be satisfied the internal customers also.

• To provide the better service and quick respond to the customers, in the BOC
must improve the permanent employees in the BOC. Due to lack of employees
there may cause to the customer delays and customer ques. So implement the

41
human resource plan for each branch and must assign the relevant number of
employees.

• As well as the employees must be rotate the within their working

environment. When engaged in a same work the employees are dissatisfied about
their work and reduce the efficiency of the work. So job rotation may improve
the employee’s satisfaction and it will help to increase the customer satisfaction.

• Furthermore the employees who are working in the BOC have the number of
remunerations and fringe benefits. So most of employees are satisfied about the
recognition and reward that they received. Also as government institute
employees have the rights of the government employee. So banking sector
employees retires age is year 60. According to the annual report of the 2008, 56%
of employees age limit is more than the 55 years. In the bankers employees that
the time limit of the retirements must be minimize and the must apply the young
employees for the works on the PBO, CSM and the teller positions.

• Also the BOC operated as the traditional bank. They provided the services
which are equal to the other banks. There are no many excitements. As a
government bank, the BOC have the opportunity to provide the better services to
their customers. But problem was the BOC not get these opportunities in the
proper way. If the BOC implement the excitements to their services it will help to
the increase the customer satisfaction.

42
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