Searching for the Value of Quality in Financial Services

In this paper we report results from a study, which explores the impact of quality on performance in the financial services industry. Although some disagreement exists, the operations management, economics and marketing literatures advocate a positive relationship between quality and financial performance. Recent strong evidence suggests that in order to be meaningful, such studies must focus on individual industries. Our study focuses on the financial services industry and provides new insights on the relationship between quality and financial performance in this important service sector. Stock performance information is used to further explore this relationship. Through the results reported here, we also identify the weaknesses inherent in existing stock-performance studies on the impact of quality, and identify the methodological approaches that should be pursued in order to avoid such weaknessses.