Determinants of customer satisfaction in Nepalese banking sector

Abstract

This study attempts to explore the factors impacting customer satisfaction in Nepal’s banking industry with a focus on the service quality that the banks offer. The respondent and the study area of the authors are 20 banks located in the Kathmandu Metropolis. Descriptive statistics, Pearson correlation analysis and regression analysis were employed to assess the subjects under study. The Pearson correlation results indicated a positive correlation between customer satisfaction and service quality characteristics. The ordinary Least Squares (OLS) regression model showed tangibility and empathy as key factors. The regression model, however demonstrates tangibility, responsiveness, and empathy as significant in influencing customer satisfaction. Study findings affirm the validity of hypothesis (H1) and highlight the importance of tangibility, responsiveness, and empathy in predicting customer satisfaction, suggests the enhancement of banks’ competitive advantage by improving their service quality.