Service Quality in Commercial Banks. The Shkodra Case

Table of Contents

1. Introduction

1.1 Literature Review

1.2 Methodology

2. Banking System in Albania

2.1 Banking System Developments in Albania

2.2 Banking System in Terms of Definition

2.3 The Role of Banks in the Economy and Their Functions

2.4 General Features of the Banking System in 2016

2.5 Bank Notions and Services

2.6 The Services That Banks Offer to the Customers

2.7 Characteristics of Banking Services

2.7.1. Tangibles

2.7.2. Indivisibility

2.7.3. Variability

2.7.4. Non-inventory

2.7.5. Financial responsibility

2.7.6. Double information

2.8 What Do We Mean by Quality of Service?

2.9 SERVQUAL Model: Service Quality Dimensions

2.10 Information Technology

2.11 Commitment by Management in Implementing Quality Banking Services

2.11.1 Information Quality Systems Services

2.12 Importance of Quality in Financial Terms

2.12.1. Benefits from Quality Improvements

2.12.2 Quality Improvement Model and Profitability

2.12.3. Quality on Return (ROQ)

2.12.4 Customer Satisfaction and Quality of Service

2.13 Total Quality Perceived by Gronroos

2.14 Characteristics of the Quality of Banking Services Today

2.14.1 Changing Customer Needs and Expectations

2.14.2 Increasing Integration in Quality of Service

2.15 Competition, the Quality of Services and Their Role in Economic Development

3. Discussion: Banking Sector, Crediting to economy and Their Impact on Economic Development

3.1 The role of lending to the economy

3.2 Crediting to the economy during 2006 - 2016

4. Research Results

4.1 Empirical Analysis

4.2 General Information for Respondents

4.3 Characteristics of Service Quality Offered by Banks

4.4 What do Customers Expect from the Service Offered?

4.5 Improving the Quality of Services

4.6 What do Banks Expect in the Future from their Customers?

4.7 Conclusions of the Questionnaire

5. Conclusions and Recommendations

Research Objectives & Core Themes

This study examines the banking sector in Albania, specifically focusing on the city of Shkodra, to analyze the relationship between service quality and customer satisfaction. The central research objective is to confirm the theory that banks must prioritize understanding customer needs to enhance service quality, thereby driving profitability and economic development.

• Analysis of service quality standards in the Albanian banking system.
• Evaluation of customer satisfaction levels and expectations using the SERVQUAL model.
• Investigation into the impact of lending and banking sector activities on economic development.
• Identification of performance gaps between current bank offerings and customer requirements.
• Strategic recommendations for banks to improve customer retention and competitive positioning.

Excerpt from the Book

Summary of Chapters

Introduction: Provides an overview of the structural reforms in the Albanian banking sector and the growing importance of service quality in an increasingly competitive market.

Banking System in Albania: Details the development of the two-tier banking system in Albania, defines the role of banks, and explores the theoretical frameworks of service quality and the SERVQUAL model.

Discussion: Banking Sector, Crediting to economy and Their Impact on Economic Development: Discusses the function of bank credit in financing enterprises and its role as a channel for monetary policy transmission within the Albanian economy.

Research Results: Presents the empirical findings gathered from questionnaires distributed to bank clients in Shkodra regarding their perceptions of service quality and their banking expectations.

Conclusions and Recommendations: Synthesizes the study's findings, highlighting gaps in current banking services and providing recommendations for banks to enhance customer satisfaction through improved service standards and management practices.

Keywords

Quality, Customer Satisfaction, Banking System, Banking Services, Profitability, Economic Development, SERVQUAL Model, Service Quality Dimensions, Financial Performance, Customer Loyalty, Lending, Albania, Bank Management, Information Technology, Market Competition

Frequently Asked Questions

What is the core focus of this research?

The research focuses on the quality of banking services in Albania, specifically investigating how perceived service quality influences customer satisfaction and the overall competitive landscape in the banking industry.

What are the primary themes discussed in the book?

Key themes include the evolution of the Albanian banking system, the application of the SERVQUAL model, the financial impact of service quality (Return on Quality), and the role of banks in economic development through credit provision.

What is the main research question or objective?

The objective is to confirm that banks must prioritize the accurate identification and perception of customer needs to improve service quality, as this is essential for maintaining customer loyalty and achieving organizational profitability.

Which scientific methodology is employed?

The study uses a "bottom-up" approach, incorporating both secondary data analysis (reports from the Bank of Albania, IMF, World Bank) and primary research via structured questionnaires distributed to commercial bank clients.

What is covered in the main body of the work?

The main body covers the history and definitions of the Albanian banking system, deep dives into service quality measurement models, discussions on the impact of lending on the economy, and the presentation of empirical research results.

Which keywords characterize the study?

Key terms include Quality, Customer Satisfaction, Banking System, Banking Services, Profitability, Economic Development, SERVQUAL, and Customer Loyalty.

How does the SERVQUAL model function in this study?

The model is used as an instrument to measure the gap between customer expectations and their perceptions of the banking service provided, using five specific dimensions: Tangibles, Seriousness (Reliability), Readiness (Responsiveness), Security, and Knowing the Customer.

What is the "Return on Quality" (ROQ) concept mentioned?

ROQ is a financial metric used to measure the financial effects of quality improvement efforts, helping banks treat quality initiatives as measurable investments rather than just operational expenses.

What conclusions does the author draw regarding competition in Albania?

The author concludes that while the Albanian banking market is competitive, it remains relatively young, characterized by a high concentration of services and a need for further differentiation beyond basic offerings.

Why are customer complaints relevant to this research?

The study analyzes customer responses to dissatisfaction to demonstrate that ineffective service recovery results in loss of customer loyalty and negative word-of-mouth, which directly impacts a bank's market share and profitability.