Abstract:
This study examines the relationship between service quality, customer satisfaction and
bank performance by conducting a comparative analysis of Islamic banks and
conventional banks in Pakistan. Inception of Islamic banking in Pakistan has created
multiple challenges for banking industry. Pakistani banking industry consists upon
Islamic and conventional banks that are competing for more and more customers by
delivery of quality services to have satisfied customers for better performance. On the
basis of theoretical background, a model is proposed and tested in Pakistani environment.
A structured questionnaire has been developed for the study in the light of the existing
literature. Data were collected from 1440 respondents by self-administrated questionnaire
by using stratified sampling. A number of tools e.g. SPSS and VPLS etc. are used for
data analysis. A set of statistical techniques e.g. T-test, Regression analysis, Correlation
and Structural Equation Modeling are applied by the researcher to test the hypotheses of
the study. The results indicate a strong positive relationship between service quality and
customer satisfaction in the banking sector of Pakistan. Findings shows that service
quality and customer satisfaction have weak influence on performance of banks. The
study has a number of implications for bankers, policy makers and academicians.
Key Words: Islamic Bank, Conventional Bank, Riba, Service Quality, Customer
Satisfaction, Bank Performance, Pakistan, Banking Sector.
