Segmented Service Quality Audit (SSQA) for Banks : An Empirical Analysis

Since 1990, the Indian economy has moved towards greater openness and less controls. Many of the regulations which restricted entry, expansion of capacity and competition have been removed. This has increased the number of choices for the Indian consumer as well as competition among firms. The banking sector in India has seen several regulatory changes which have led to increased level of competition. At the same time the banks have had to meet the prudential norms set by the Reserve Bank of India (RBI). This period has also seen a gradual de-regulation of interest rates for products offered by banks and lowering of reserve requirements. More importantly, the reforms in the banking sector, following the recommendations of the Narasimhan Committee, permitted the entry of private banks, increasing the choice available to the consumer. The Indian consumer has been exposed to greater number of options and better service in almost all areas thus increasing their expectations from products and service providers. The innovations in information technology and its applications in financial services have helped in improving customer service but have also raised customer expectations regarding better technology enabled service.In this changing context it is important for banks to be aware of the various requirements and expectations amongst the different customers. This issue is gaining importance due to the fact that new age customers such as Double Income No Kids (DINK) groups have very different expectations and saving habits compared to retired-rich groups or the rural farmer. Also, rapid industrialization and blurring of geographical boundaries has brought in new challenges to banks regarding the levels of services to be offered. This study presents empirical evidence that suggests the value of conducting segmented service quality audits (SSQA)