The Effect of Virtual Banking Service Quality on Customer Satisfaction: The Case of Bank of Abyssinia
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Date
2025-06-24
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Publisher
AAU
Abstract
In the highly competitive service industry, the quality of service is a fundamental source of
competitive advantage, playing a crucial role in differentiating offerings and enhancing
customer value. This study investigates the impact of virtual banking service quality on customer
satisfaction at the Bank of Abyssinia. The objective is to understand how specific dimensions of
service quality functionality, enjoyment, privacy and security, convenience, design, assurance,
and customization affect customer satisfaction in a digital banking context. Utilizing a
quantitative research approach, the study employs Multiple Linear Regression (MLR) to analyze
data collected from 384 active virtual banking users, achieving a high response rate of 90% with
345 completed surveys. Major findings reveal that functionality (β = 0.160, p < 0.001) and
enjoyment (β = 0.261, p < 0.001) significantly enhance customer satisfaction. Convenience (β =
0.127, p = 0.022) and assurance (β = 0.349, p < 0.001) also positively influence satisfaction,
while design (β = -0.176, p = 0.001) negatively affects customer perceptions. Unusually Privacy
and security issues has not showed significant impact on customer (β = 0.012, p = 0.790). In
conclusion, the study emphasizes the need for the Bank of Abyssinia to improve its digital
services by enhancing functionality and user experience. Future research should explore
customer satisfaction across different demographic segments and investigate the impact of
emerging technologies, such as artificial intelligence and machine learning, on customer
experiences in banking