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Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology

Authors:
  • UP Cesar E.A. Virata School of Business

Abstract and Figures

This paper determined the service quality dimensions considered by Filipino consumers important in describing an excellent bank. Development of the service quality dimensions utilized the Service Quality (SERVQUAL) framework espoused by Parasuraman, Zeithaml, and Berry (1988) which identified five SERVQUAL dimensions: (1) tangibles, (2) reliability, (3) responsiveness, (4) assurance, and (5) empathy. A total of 24-bank SERVQUAL attributes were developed from this SERVQUAL framework. A survey using a multi-stage systematic random sampling was conducted. A total of 242 Filipino consumers participated in this study. The respondents were asked to rate the degree of importance of each of the 24-bank SERVQUAL attributes using the Q-methodology. The internal consistency method using the Cronbach coefficient alpha was used to assess the instrument's reliability while Exploratory Factor Analysis using Principal Component Analysis was employed to determine the construct validity. Results indicate that out of the 24-bank SERVQUAL attributes, 16 are considered important by Filipino consumers, and these 16 attributes can be classified into four service quality dimensions: (1) reliability, (2) empathy, (3) responsiveness, and (4) tangibles. This is consistent with the SERVQUAL dimensions espoused by Parasuraman et al. (1988). Knowing the important SERVQUAL attributes that describe an excellent bank provides banks with the basic quality parameters that they can develop and strengthen to improve customer patronage, retention, loyalty, and satisfaction.
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36
Regulatory Issues on Tender Offers Leading to Delisting in the Philippine Stock Market
Appendix B
Criteria for Accrediting Valuation Providers (PSE, 2011)
1. The firm must be duly registered or licensed by the SEC. For accounting firms, its accreditation
with the SEC should be under the Group 'A' Category.
2. The firm, or its local or international affiliate, must have at least five (5) years of business
operations.
3. A majority of the members of the firm's top management and/or division heads must each have a
minimum of ten (10) years’ experience in the firm's business, including underwriting, investment
and financial advisory services.
4. The firm must demonstrate that its key personnel are qualified to prepare valuation reports and
issue fairness opinions. They must identify relevant industry experience in their list of individual
qualifications.
5. The firm must submit a description or summary of its General Engagement Operating Guidelines
or Risk Management Procedures. The firm must demonstrate that it has effective quality controls
and procedures to ensure the integrity of fairness opinions and valuation reports. The valuation
report and/or fairness opinion issued by the firm shall indicate that, in the preparation of such
report/opinion , the firm relied on available information and records, including but not limited to
the representation of the applicant company, audited financial statements, competent person's
reports, regulatory agency's reports and such other relevant supporting documents.
6. The firm must have a proven track record of valuing securities. The firm must show proof of a
steady client base and at least five (5) engagements to render financial valuation services to listed
companies in the Exchange and other reputable stock exchanges, commercial banks and insurance
companies for the past five (5) years.
7. The firm or its directors or its executive officers must not be subject to any act or case that will
pose a serious question on the firm's, directors', or executive officers' integrity or capability to
provide services to listed companies. A serious question exists relative to the above parties if,
during the past (5) years any of the following events occurred.
i. Any petition for insolvency was filed by or against the firm or its directors or its executive
officers.
ii. Any conviction by final judgment in a criminal proceeding for an offense involving moral
turpitude, domestic or foreign, including a nollo contendere case, or being subject to a pending
criminal proceeding for an offense involving moral turpitude, domestic or foreign, excluding
traffic violations and other minor offenses.
Philippine Management Review 2020, Vol. 27, 37-56.
Measuring Service Quality in Philippine Banks:
An Exploratory Study Using SERVQUAL and Q-Methodology
Ma. Gloria V. Talavera, Ph.D.*
University of the Philippines, Cesar E.A. Virata School of Business, Diliman, Quezon City 1101, Philippines
This paper determined the service quality dimensions considered by Filipino consumers
important in describing an excellent bank. Development of the service quality dimensions
utilized the Service Quality (SERVQUAL) framework espoused by Parasuraman, Zeithaml, and
Berry (1988) which identified five SERVQUAL dimensions: (1) tangibles, (2) reliability, (3)
responsiveness, (4) assurance, and (5) empathy. A total of 24-bank SERVQUAL attributes were
developed from this SERVQUAL framework. A survey using a multi-stage systematic random
sampling was conducted. A total of 242 Filipino consumers participated in this study. The
respondents were asked to rate the degree of importance of each of the 24-bank SERVQUAL
attributes using the Q-methodology. The internal consistency method using the Cronbach
coefficient alpha was used to assess the instrument’s reliability while Exploratory Factor
Analysis using Principal Component Analysis was employed to determine the construct
validity.
Results indicate that out of the 24-bank SERVQUAL attributes, 16 are considered important by
Filipino consumers, and these 16 attributes can be classified into four service quality
dimensions: (1) reliability, (2) empathy, (3) responsiveness, and (4) tangibles. This is
consistent with the SERVQUAL dimensions espoused by Parasuraman et al. (1988). Knowing
the important SERVQUAL attributes that describe an excellent bank provides banks with the
basic quality parameters that they can develop and strengthen to improve customer patronage,
retention, loyalty, and satisfaction.
Keywords: Service quality attributes, service quality dimensions, tangibles, reliability,
responsiveness, empathy, assurance, bank service quality, Q-methodology, Q-sort
1 Introduction
Service quality is a key differentiating factor for organizations in the service industry as it is
associated with customer retention, corporate image and reputation, and improved profitability
(Ladhari, Ladhari, & Morales, 2011; Zeithaml, 2000). Measuring service quality, however, is more
challenging for services because of its inherent characteristics, i.e., intangibility, heterogeneity,
perishability, and inseparability (Ladhari et al., 2011; Parasuraman, Zeithaml, & Berry, 1985).
The intangibility of service makes quality assessment difficult before service delivery and
customer experience. Given the heterogeneity of service, customer experience may vary
depending on various circumstances (i.e., the day and time the service was delivered, the service
personnel assigned, the consistency by which service was rendered, and the customer’s
expectation of how services should be rendered) (Parasuraman, et al., 1985). Since services
cannot be stored (perishability), and in most cases, the production and consumption of services
happen simultaneously (inseparability), customer experiences of service play an important role
in their service quality evaluation (Gronroos, 1984).
One industry where service quality is very important is banking. Bank transactions are
repetitive; thus, banks need to establish a long-term relationship with its clients, requiring
transparency and regularity in communication. With the fast pace of development in the banking
industry, customers need to be regularly informed about new products, services, and bank
* Correspondence: mvtalavera@up.edu.ph
The author expresses her gratitude to the BA 174 (Marketing Research) class of Professor Agnes G. Tayao of the
UP Cesar E.A. Virata School of Business, University of the Philippines, Diliman, for their assistance in data gathering
during the Second Semester of Academic Year 2016-2017. The author also extends her appreciation to Professor
Tayao for her guidance in the conduct of the Q-methodology, and to this paper’s Reviewer and Editor for their
valuable comments that improved the content and form of this paper.
38
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
technologies. Since bank customers come from different socio-demographic backgrounds, their
understanding and appreciation of how to use and avail of bank products and services need to be
attended properly with empathy, compassion, and attention (Shelton, 1995).
Aside from the fact that consumers value a favorable customer experience every single time
that they transact with their banks, it is equally important that their bank transactions and
finances remain secure. There are several situations where customers interact with the bank.
Examples of such service encounters include, among others, when customers deal face-to-face
with tellers for different bank transactions; when customers interface with the bank’s automated
and online facilities; and when customers communicate with customer service officers in the
branch or through the telephone or emails. There are various instances, therefore, wherein
customers can judge the service quality of a bank.
From a client’s perspective, he/she views a good customer experience if the automated teller-
machines (ATMs) and/or the online banking system is working; if the teller is courteous and is
responsive to his/her needs; and if the customer service unit is sympathetic to any complaints.
Therefore, customer satisfaction about a banking experience heavily relies on the customer’s
service encounter with the bank. Thus, given the personal and experiential nature of service
encounters in banks, not to mention the intangibility of service, determining and measuring
service quality becomes a challenge, both theoretically and methodically.
1.1 Importance of Service Quality in Banks
Why should banks give importance to service quality? Kantar-TNS, in its 2018 Corporate
Reputation Study, evaluated the 2008-2018 performance of Philippine banks based on two
parameters “business performance (stability and leadership in the industry) and good customer
relations” (“Kantar TNS reveals,” 2019, p. 3). The study asked 800 respondents about their bank’s
products and services, and their overall attitudes towards banking in their respective banks and
on financial technology. The respondents were also asked about several service quality
dimensions that related to the bank’s reputation: (1) overall reputation/renown, (2) favorability,
(3) trust, (4) success, and (5) product and service quality. BDO ranked first in the Philippines and
in the Greater Manila area, followed by the Bank of the Philippine Islands (BPI) (including BPI
Family Bank). Other government-owned banks, such as the Philippine National Bank and the Land
Bank of the Philippines, also landed in the top five banks.
BPI, despite ranking second in terms of business performance and customer relations (“Kantar
TNS reveals,” 2019), experienced technical glitches in its internal systems in 2017. This led to a
two-day downtime in its online facilities and ATMs, and 1.5 million accounts showing different
balances. BPI’s management apologized to its clients, and reported that the 2017 glitch was an
internal data processing error. Such an error led to the mistaken withdrawal amounting to PHP
42 million. The error was corrected after 37 hours (“Operational lapses,” 2017).
In April 2019, BPI anew advised its clients of the temporary unavailability of its services
(online, mobile application, ATM, cash accept machines, debit, and prepaid card services) due to
a system upgrade from April 7 to 9. The system upgrade, however, took longer than planned and
inconvenienced BPI customers. BPI executives explained that these system upgrades were
necessary given that the systems of the 168-year-old bank needed a major upgrade. BPI’s
management assured its clients of its continuing efforts to improve bank technology, facilities,
and systems for better customer experience (“BSP assessing BPI glitch,” 2019). Banks, therefore,
need to improve systems and processes and employ service quality strategies to address service
failures, to achieve continued customer patronage and loyalty (Felix, 2017; Johnston, 1997).
An important aspect of service quality is service recovery, which usually involves resolving the
problems raised by dissatisfied customers. Service recovery is significantly associated with
customer satisfaction and performance (Gronroos, 1984) and customer retention (Lewis &
Spyrakopoulos, 2001). Allred and Adams (2000) reported that 50% of the 143 bank and credit
union respondents of its study stopped using a financial service due to poor service performance.
Customer defection or exit was found to be significantly related to service quality and customer
Ma. Gloria V. Talavera
39
satisfaction (Zeithaml, 2000). Decline or even discontinuation of service patronage was also found
to be associated with failures during service encounters and service recovery (Keaveney, 1995).
Thus, to prevent customer defection, customers need to perceive that banks are taking
concrete efforts to address whatever problems they may encounter inside their bank or in using
any of their products or services. The frontline personnel in banks, therefore, play a critical part
in addressing any breakdown in service quality (Lewis & Spyrakopoulos, 2001). In the context of
e-banking, customers generally experience service quality failures in the use of ATMs and online
banking brought about by interrupted connectivity. The timely ability to address these service
quality failures lead to faster service recovery and greater customer confidence in their banks
(Rejikumar, 2015).
1.2 Service Quality in Banks as a Basis for Competition
Danisman (2018) pointed out that the liberalization and deregulation of the banking industry
globally led banks to expand its products and service offerings to its clients, beyond deposits,
withdrawals, and loan transactions. Services now include investment management, asset
management, insurance, and financial advising, among others. Banks also started investing in
information technology to improve processes and communication, and the banks also started to
invest in human capital. The liberalization and globalization of the banking industry, likewise,
allowed the entry of new players in the industry to include non-bank financial intermediaries and
financial technology firms, introducing to the customers diversified sets of products and services,
thereby, giving customers more choices. The global financial crisis and deregulation resulted in
geographical expansions as well as bank consolidations all over the world (Duke & Cejnar, 2013).
Similarly, the Philippine banking industry instituted several reforms to improve the sector
(Manlagñit & Lamberte, 2004). These reforms included: (1) in the 1980s, expansion in the
commercial banking system with more functions and a wider variety of bank services, as well as
the removal of interest rate ceilings enabling banks to price competitively; (2) in the 1990s,
relaxation of the moratorium on foreign banks through RA 7721 (Foreign Bank Liberalization Act
of 1994) allowing the entry of foreign banks and thus creating a more competitive environment;
and (3) in the 2000s, the passage of the General Banking Law to strengthen the domestic banking
system, so it can be ready to meet globalization. Some significant mergers and acquisitions
enabled the rehabilitation of some Philippine banks affected by the East Asian financial crisis. The
liberalization of the Philippine banking sector helped foster a competitive banking environment;
allowed the entry of foreign banks; strengthened the domestic banking industry to meet
globalization; and enabled the Philippine banks to offer diversified banking services (Manlagñit
& Lamberte, 2004).
With these developments in the external environment, bank customers now face more choices.
Products and services have become generally standardized and commoditized. Since customers
have wider choices in terms of bank providers, they can be more discriminating, more analytical
in their buying behavior, and consequently more demanding (Shelton, 1995; Talib & Rahman
2012).
To ensure customer retention and loyalty in the banking sector, service quality should include
strategies to improve service encounters and address service quality failures. Through service
quality, banks can differentiate themselves from their competitors, thereby giving them a
competitive advantage (Avkiran, 1999; Felix, 2017; Talib & Rahman, 2012).
38
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
technologies. Since bank customers come from different socio-demographic backgrounds, their
understanding and appreciation of how to use and avail of bank products and services need to be
attended properly with empathy, compassion, and attention (Shelton, 1995).
Aside from the fact that consumers value a favorable customer experience every single time
that they transact with their banks, it is equally important that their bank transactions and
finances remain secure. There are several situations where customers interact with the bank.
Examples of such service encounters include, among others, when customers deal face-to-face
with tellers for different bank transactions; when customers interface with the bank’s automated
and online facilities; and when customers communicate with customer service officers in the
branch or through the telephone or emails. There are various instances, therefore, wherein
customers can judge the service quality of a bank.
From a client’s perspective, he/she views a good customer experience if the automated teller-
machines (ATMs) and/or the online banking system is working; if the teller is courteous and is
responsive to his/her needs; and if the customer service unit is sympathetic to any complaints.
Therefore, customer satisfaction about a banking experience heavily relies on the customer’s
service encounter with the bank. Thus, given the personal and experiential nature of service
encounters in banks, not to mention the intangibility of service, determining and measuring
service quality becomes a challenge, both theoretically and methodically.
1.1 Importance of Service Quality in Banks
Why should banks give importance to service quality? Kantar-TNS, in its 2018 Corporate
Reputation Study, evaluated the 2008-2018 performance of Philippine banks based on two
parameters “business performance (stability and leadership in the industry) and good customer
relations” (“Kantar TNS reveals,” 2019, p. 3). The study asked 800 respondents about their bank’s
products and services, and their overall attitudes towards banking in their respective banks and
on financial technology. The respondents were also asked about several service quality
dimensions that related to the bank’s reputation: (1) overall reputation/renown, (2) favorability,
(3) trust, (4) success, and (5) product and service quality. BDO ranked first in the Philippines and
in the Greater Manila area, followed by the Bank of the Philippine Islands (BPI) (including BPI
Family Bank). Other government-owned banks, such as the Philippine National Bank and the Land
Bank of the Philippines, also landed in the top five banks.
BPI, despite ranking second in terms of business performance and customer relations (“Kantar
TNS reveals,” 2019), experienced technical glitches in its internal systems in 2017. This led to a
two-day downtime in its online facilities and ATMs, and 1.5 million accounts showing different
balances. BPI’s management apologized to its clients, and reported that the 2017 glitch was an
internal data processing error. Such an error led to the mistaken withdrawal amounting to PHP
42 million. The error was corrected after 37 hours (“Operational lapses,” 2017).
In April 2019, BPI anew advised its clients of the temporary unavailability of its services
(online, mobile application, ATM, cash accept machines, debit, and prepaid card services) due to
a system upgrade from April 7 to 9. The system upgrade, however, took longer than planned and
inconvenienced BPI customers. BPI executives explained that these system upgrades were
necessary given that the systems of the 168-year-old bank needed a major upgrade. BPI’s
management assured its clients of its continuing efforts to improve bank technology, facilities,
and systems for better customer experience (“BSP assessing BPI glitch,” 2019). Banks, therefore,
need to improve systems and processes and employ service quality strategies to address service
failures, to achieve continued customer patronage and loyalty (Felix, 2017; Johnston, 1997).
An important aspect of service quality is service recovery, which usually involves resolving the
problems raised by dissatisfied customers. Service recovery is significantly associated with
customer satisfaction and performance (Gronroos, 1984) and customer retention (Lewis &
Spyrakopoulos, 2001). Allred and Adams (2000) reported that 50% of the 143 bank and credit
union respondents of its study stopped using a financial service due to poor service performance.
Customer defection or exit was found to be significantly related to service quality and customer
Ma. Gloria V. Talavera
satisfaction (Zeithaml, 2000). Decline or even discontinuation of service patronage was also found
to be associated with failures during service encounters and service recovery (Keaveney, 1995).
Thus, to prevent customer defection, customers need to perceive that banks are taking
concrete efforts to address whatever problems they may encounter inside their bank or in using
any of their products or services. The frontline personnel in banks, therefore, play a critical part
in addressing any breakdown in service quality (Lewis & Spyrakopoulos, 2001). In the context of
e-banking, customers generally experience service quality failures in the use of ATMs and online
banking brought about by interrupted connectivity. The timely ability to address these service
quality failures lead to faster service recovery and greater customer confidence in their banks
(Rejikumar, 2015).
1.2 Service Quality in Banks as a Basis for Competition
Danisman (2018) pointed out that the liberalization and deregulation of the banking industry
globally led banks to expand its products and service offerings to its clients, beyond deposits,
withdrawals, and loan transactions. Services now include investment management, asset
management, insurance, and financial advising, among others. Banks also started investing in
information technology to improve processes and communication, and the banks also started to
invest in human capital. The liberalization and globalization of the banking industry, likewise,
allowed the entry of new players in the industry to include non-bank financial intermediaries and
financial technology firms, introducing to the customers diversified sets of products and services,
thereby, giving customers more choices. The global financial crisis and deregulation resulted in
geographical expansions as well as bank consolidations all over the world (Duke & Cejnar, 2013).
Similarly, the Philippine banking industry instituted several reforms to improve the sector
(Manlagñit & Lamberte, 2004). These reforms included: (1) in the 1980s, expansion in the
commercial banking system with more functions and a wider variety of bank services, as well as
the removal of interest rate ceilings enabling banks to price competitively; (2) in the 1990s,
relaxation of the moratorium on foreign banks through RA 7721 (Foreign Bank Liberalization Act
of 1994) allowing the entry of foreign banks and thus creating a more competitive environment;
and (3) in the 2000s, the passage of the General Banking Law to strengthen the domestic banking
system, so it can be ready to meet globalization. Some significant mergers and acquisitions
enabled the rehabilitation of some Philippine banks affected by the East Asian financial crisis. The
liberalization of the Philippine banking sector helped foster a competitive banking environment;
allowed the entry of foreign banks; strengthened the domestic banking industry to meet
globalization; and enabled the Philippine banks to offer diversified banking services (Manlagñit
& Lamberte, 2004).
With these developments in the external environment, bank customers now face more choices.
Products and services have become generally standardized and commoditized. Since customers
have wider choices in terms of bank providers, they can be more discriminating, more analytical
in their buying behavior, and consequently more demanding (Shelton, 1995; Talib & Rahman
2012).
To ensure customer retention and loyalty in the banking sector, service quality should include
strategies to improve service encounters and address service quality failures. Through service
quality, banks can differentiate themselves from their competitors, thereby giving them a
competitive advantage (Avkiran, 1999; Felix, 2017; Talib & Rahman, 2012).
40
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
1.3 Research Objectives
Given the importance of service quality in the banking sector and its strong association with
customer patronage, retention, and loyalty, there is a need to understand the attributes that
define service quality in banks. The objectives of this research are as follows:
1. To identify the service quality dimensions considered by Filipino consumers important
in describing an excellent bank; and
2. To classify service quality attributes into these service quality dimensions, and to validate
them vis-à-vis the SERVQUAL framework.
Understanding the service quality dimensions important to customers can guide banks on how
to retain existing customers, attract new ones, and attain customer satisfaction, patronage, and
loyalty. However, given the intangibility of service quality, its measurement poses challenges for
both theorists and practitioners (Allred & Adams, 2000; Felix, 2017; Zeithaml, 1988). According
to Zeithaml (1988), service quality involves a comparison of the customer’s service expectations
and his/her perception as to how the service was performed. Since customer expectations vary
and are subjective, service quality measurement also becomes difficult because of this
subjectivity. To capture these subjective dimensions of service quality, this study employs the Q-
methodology, a qualitative data-gathering methodology.
Section 2 presents a literature review on service quality principles, the related studies on bank
service quality, and the Q-methodology. Section 3 and 4 discuss the research methods and data
analysis, respectively, while Section 5 discusses the research findings. The last part shows the
conclusion, the implications of this study, research limitations, and areas for further study.
2 Literature review
2.1 Service Quality
In 1984, Gronroos described the dimensions of service quality in terms of: (1) technical quality
(what the customer received as an outcome from services provided to him/her); (2) functional
quality (how the outcome was received by the customer); and (3) image (an important attribute
that was developed through word-of-mouth advertising, tradition, and public relations).
Parasuraman, et al., (1985) expanded the definition of service quality to mean the difference
between the expectation of customers about quality vis-à-vis the performance or actual outcome.
In their analysis of four service industries (retail banking, credit card, securities brokerage, and
product repair and maintenance), they were able to identify ten determinants of service quality.
They also introduced a Service Quality Model which tackles five possible gap areas in service
quality, as follows (Parasuraman et al., 1985, p. 4).
Gap 1 Difference between customer expectations and management’s perceptions of
those expectations;
Gap 2 Difference between management’s perceptions of customer expectations and
service quality specifications;
Gap 3 Difference between service quality specifications and actual service delivery;
Gap 4 Difference between actual service delivery and what was externally
communicated to consumers; and
Gap 5 Difference between a consumer’s expectation and perceived service performance.
Ma. Gloria V. Talavera
41
In 1988, Haywood-Farmer further defined service quality as being achieved when customer
expectations and preferences were met consistently. Three dimensions of service quality were
proposed: (1) professional judgment (competence, confidentiality, knowledge); (2) physical
facilities and processes (location, layout, process flow, timeliness, and speed); and (3) behavioral
aspects (communication, courtesy, attitude, and problem-solving).
Following their exploratory study in 1985, Parasuraman et al. (1988) introduced the Service
Quality (SERVQUAL) framework to measure service quality. The validated service quality
dimensions included “Tangibles, Reliability, Responsiveness, Assurance, and Empathy”
(Parasuraman, et al., 1988, p. 1212). The 22-item service quality instrument was tested for
reliability and content validity, and was found to be applicable in various service settings. The
SERVQUAL framework is useful in understanding the expectations of customers for the services
provided to them, and consequently how such services can be improved.
Service quality is an important source of competitive advantage (Gounaris et al., 2003;
Petridou, Spathis, Glaveli, & Liassides, 2007). A firm that can respond well to the customer’s needs
and queries, and address their concerns empathically results in an improvement in the perception
of quality, customer attraction, customer satisfaction, purchase intention, and consequently in
profitability (Anderson, Fornell, & Lehmann, 1994; Lee & Ing, 2005). Service quality perceived
more consistently by customers leads to better customer acquisition and retention, as well as
higher job satisfaction for staff (Galloway & Ho, 1996).
2.2 Service Quality Studies
Several studies were conducted on service quality following the SERVQUAL frameworks of
Parasuraman et al. (1988). (Refer to Table 1). Reliability was found to be a common significant
dimension of several quality studies (Choudhury, 2013; Guo, Duff, & Hair, 2008; Jabnoun &
Khalifa, 2005; Ladhari et al., 2011). Other studies pointed out empathy, assurance, and
responsiveness as other critical service quality dimensions (Culiberg & Rojsek, 2010; Ladhari et
al., 2011).
Jabnoun and Khalifa (2005) suggested the need for a customized measure of service quality in
different countries considering their unique national culture(s). In their survey of customers of
United Arab Emirates (UAE) conventional and Islamic banks, results indicated four dimensions:
(1) personal skills, (2) reliability, (3) values, and (4) image. The four dimensions were
significantly associated with service quality for conventional banks and while only personal skills
and values were significant determinants of service quality for Islamic banks.
40
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
1.3 Research Objectives
Given the importance of service quality in the banking sector and its strong association with
customer patronage, retention, and loyalty, there is a need to understand the attributes that
define service quality in banks. The objectives of this research are as follows:
1. To identify the service quality dimensions considered by Filipino consumers important
in describing an excellent bank; and
2. To classify service quality attributes into these service quality dimensions, and to validate
them vis-à-vis the SERVQUAL framework.
Understanding the service quality dimensions important to customers can guide banks on how
to retain existing customers, attract new ones, and attain customer satisfaction, patronage, and
loyalty. However, given the intangibility of service quality, its measurement poses challenges for
both theorists and practitioners (Allred & Adams, 2000; Felix, 2017; Zeithaml, 1988). According
to Zeithaml (1988), service quality involves a comparison of the customer’s service expectations
and his/her perception as to how the service was performed. Since customer expectations vary
and are subjective, service quality measurement also becomes difficult because of this
subjectivity. To capture these subjective dimensions of service quality, this study employs the Q-
methodology, a qualitative data-gathering methodology.
Section 2 presents a literature review on service quality principles, the related studies on bank
service quality, and the Q-methodology. Section 3 and 4 discuss the research methods and data
analysis, respectively, while Section 5 discusses the research findings. The last part shows the
conclusion, the implications of this study, research limitations, and areas for further study.
2 Literature review
2.1 Service Quality
In 1984, Gronroos described the dimensions of service quality in terms of: (1) technical quality
(what the customer received as an outcome from services provided to him/her); (2) functional
quality (how the outcome was received by the customer); and (3) image (an important attribute
that was developed through word-of-mouth advertising, tradition, and public relations).
Parasuraman, et al., (1985) expanded the definition of service quality to mean the difference
between the expectation of customers about quality vis-à-vis the performance or actual outcome.
In their analysis of four service industries (retail banking, credit card, securities brokerage, and
product repair and maintenance), they were able to identify ten determinants of service quality.
They also introduced a Service Quality Model which tackles five possible gap areas in service
quality, as follows (Parasuraman et al., 1985, p. 4).
Gap 1 Difference between customer expectations and management’s perceptions of
those expectations;
Gap 2 Difference between management’s perceptions of customer expectations and
service quality specifications;
Gap 3 Difference between service quality specifications and actual service delivery;
Gap 4 Difference between actual service delivery and what was externally
communicated to consumers; and
Gap 5 Difference between a consumer’s expectation and perceived service performance.
Ma. Gloria V. Talavera
In 1988, Haywood-Farmer further defined service quality as being achieved when customer
expectations and preferences were met consistently. Three dimensions of service quality were
proposed: (1) professional judgment (competence, confidentiality, knowledge); (2) physical
facilities and processes (location, layout, process flow, timeliness, and speed); and (3) behavioral
aspects (communication, courtesy, attitude, and problem-solving).
Following their exploratory study in 1985, Parasuraman et al. (1988) introduced the Service
Quality (SERVQUAL) framework to measure service quality. The validated service quality
dimensions included “Tangibles, Reliability, Responsiveness, Assurance, and Empathy”
(Parasuraman, et al., 1988, p. 1212). The 22-item service quality instrument was tested for
reliability and content validity, and was found to be applicable in various service settings. The
SERVQUAL framework is useful in understanding the expectations of customers for the services
provided to them, and consequently how such services can be improved.
Service quality is an important source of competitive advantage (Gounaris et al., 2003;
Petridou, Spathis, Glaveli, & Liassides, 2007). A firm that can respond well to the customer’s needs
and queries, and address their concerns empathically results in an improvement in the perception
of quality, customer attraction, customer satisfaction, purchase intention, and consequently in
profitability (Anderson, Fornell, & Lehmann, 1994; Lee & Ing, 2005). Service quality perceived
more consistently by customers leads to better customer acquisition and retention, as well as
higher job satisfaction for staff (Galloway & Ho, 1996).
2.2 Service Quality Studies
Several studies were conducted on service quality following the SERVQUAL frameworks of
Parasuraman et al. (1988). (Refer to Table 1). Reliability was found to be a common significant
dimension of several quality studies (Choudhury, 2013; Guo, Duff, & Hair, 2008; Jabnoun &
Khalifa, 2005; Ladhari et al., 2011). Other studies pointed out empathy, assurance, and
responsiveness as other critical service quality dimensions (Culiberg & Rojsek, 2010; Ladhari et
al., 2011).
Jabnoun and Khalifa (2005) suggested the need for a customized measure of service quality in
different countries considering their unique national culture(s). In their survey of customers of
United Arab Emirates (UAE) conventional and Islamic banks, results indicated four dimensions:
(1) personal skills, (2) reliability, (3) values, and (4) image. The four dimensions were
significantly associated with service quality for conventional banks and while only personal skills
and values were significant determinants of service quality for Islamic banks.
42
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Table 1. Related Studies on Bank Service Quality Dimensions
Authors
Sample
Methodologies
Bank Service Quality
Dimensions Analyzed
Findings
Ahmed (2017)
250 bank
customers
(Pakistan)
Self-administered questionnaires
(5-point Likert scale)
Correlation and regression
analyses
Five SERVQUAL dimensions: (1)
tangibility, (2) reliability, (3)
convenience, (4) competence,
and (5) satisfaction
All five dimensions were important, but Islamic banks
needed to focus on tangibility, reliability, and
responsiveness.
Allred and
Addams
(2000)
143 bank and
credit union
respondents
(USA)
Self-administered questionnaires
(5-point Likert scale)
Descriptive statistics
14-item service quality
questions to assess bank and
credit union measurement of
customer’s expectations,
perceptions of service quality,
and customer retention practices
Credit unions rated better than banks in 11 out of
14 service quality dimensions; 50% of respondents
stopped using financial service due to poor service
performance.
Avkiran
(1994)
791 commercial
bank customers
(Australia)
Exit interviews, telephone
interviews, and mailed surveys
(5-point Likert scale)
Factor analysis using Principal
Axis Factoring
It started with 27 items but
ended with 17 items.
Dimensions studied included
responsiveness, empathy, staff
conduct, access, communication,
and reliability
Validated these service quality dimensions staff
conduct, communication, credibility, responsiveness,
access to branch management, and access to teller
services.
Choudhury
(2013)
570 customers of
3 public and 3
private banks
(India)
Self-administered questionnaires
(7-point Likert scale)
Factor analysis
Original 24 items were reduced
to 15 items.
Modified SERVQUAL to four
dimensions: (1) behavior, (2)
reliability, (3) tangibles, and (4)
convenience
Reliability was important in influencing customer’s
purchase intentions.
Culiberg and
Rojsek (2010)
150 bank
customers
(Slovenia), 100
females and 50
males
Self-administered questionnaires
(6-point Likert scale)
Literature review
Focus group discussion
In-depth interviews
Factor analysis and regression
analysis
28 items
Original five SERVQUAL
dimensions plus Access
Assurance and empathy (considered softer
dimensions dealing with the interaction of customers
with banks), and reliability and responsiveness
(considered harder dimensions dealing with bank
processes) were critical determinants of customer
satisfaction.
Felix (2017)
384 bank
customers (a
bank in Rwanda
with several
branches)
Descriptive and cross-sectional
survey designs (5-point Likert
scale)
Correlation analysis
Five SERVQUAL dimensions: (1)
reliability, (2) responsiveness,
(3) assurance, (4) empathy, and
(5) tangibles
Tangibles and assurance had the highest rating.
Table 1. Related Studies on Bank Service Quality Dimensions
Authors Sample Methodologies
Bank Service Quality
Dimensions Analyzed
Findings
Ahmed (2017)
250 bank
customers
(Pakistan)
Self-administered
questionnaires (5-point Likert
scale)
Correlation and regression
analyses
Five SERVQUAL dimensions:
(1) tangibility, (2) reliability,
(3) convenience, (4)
competence, and (5)
satisfaction
All five dimensions were important, but Islamic
banks needed to focus on tangibility, reliability,
and responsiveness.
Allred and
Addams
(2000)
143 bank and
credit union
respondents
(USA)
Self-administered
questionnaires (5-point Likert
scale)
Descriptive statistics
14-item service quality
questions to assess bank and
credit union measurement of
customer’s expectations,
perceptions of service quality,
and customer retention
practices.
Credit unions rated better than banks in 11 out of
14 service quality dimensions; 50% of
respondents stopped using financial service due
to poor service performance.
Avkiran
(1994)
791 commercial
bank customers
(Australia)
Exit interviews, telephone
interviews, and mailed surveys
(5-point Likert scale)
Factor analysis using Principal
Axis Factoring
It started with 27 items but
ended with 17 items.
Dimensions studied included
responsiveness, empathy, staff
conduct, access,
communication, and reliability.
Validated these service quality dimensions staff
conduct, communication, credibility,
responsiveness, access to branch management,
and access to teller services.
Choudhury
(2013)
570 customers of
3 public and 3
private banks
(India)
Self-administered
questionnaires (7-point Likert
scale)
Factor analysis
Original 24 items were
reduced to 15 items.
Modified SERVQUAL to four
dimensions: (1) behavior, (2)
reliability, (3) tangibles, and
(4) convenience.
Reliability was important in influencing
customer’s purchase intentions.
Culiberg and
Rojsek (2010)
150 bank
customers
(Slovenia), 100
females and 50
males
Self-administered
questionnaires (6-point Likert
scale)
Literature review
Focus group discussion
In-depth interviews
Factor analysis and regression
analysis
28 items
Original five SERVQUAL
dimensions plus Access
Assurance and empathy (considered softer
dimensions dealing with the interaction of
customers with banks), and reliability and
responsiveness (considered harder dimensions
dealing with bank processes) were critical
determinants of customer satisfaction.
Felix (2017)
384 bank
customers (a
bank in Rwanda
with several
branches)
Descriptive and cross-sectional
survey designs (5-point Likert
scale)
Correlation analysis
Five SERVQUAL dimensions:
(1) reliability, (2)
responsiveness, (3) assurance,
(4) empathy, and (5) tangibles
Tangibles and assurance had the highest rating.
Ma. Gloria V. Talavera
43
Authors
Sample
Methodologies
Bank Service Quality
Dimensions Analyzed
Findings
Gounaris et al.
(2003)
793 customers of
commercial banks
(Greece)
Convenience sampling of subjects
in streets and shopping centers
Interview of seven branch
managers (5-point Likert scale)
Exploratory and confirmatory
factor analyses
Service quality dimensions
studied: (1) employee
competence, (2) bank reliability,
(3) product innovativeness, (4)
value for money, (5) physical
evidence, and (6) proximity-
convenience
Service quality had multiple dimensions, such as
value for money, product innovativeness, and
convenience; service quality was not only industry-
specific but was also culture-specific.
Guo et al.
(2008)
259 corporate
customers
(China)
4-stages: (1) Replication study
(using SERVQUAL); (2) in-depth
interviews of 18 financial
managers; (3) draft inventories
of items created; and (4)
exploratory and confirmatory
factor analyses
Chinese Banking Service Quality
(BSQ)
15 out of the original 22 items
with psychometric support
Reliability, empathy, facilities
and equipment, human capital,
access, technology and
communication
Service quality measured in terms of functional
quality (reliability and human capital) and technical
quality (communication and technology); service
quality must address these four service quality
dimensions.
Jabnoun and
Khalifa (2005)
230 bank
customers (UAE)
Brainstorming
Sorting exercise
Factor analysis
30-item instrument
Five SERVQUAL dimensions plus
values, image
Four dimensions (personal skills, reliability, values,
and image) were significant in determining service
quality for conventional banks; two dimensions
(personal skills and values) were important for
Islamic banks; they need to customize measures of
service quality to different countries.
Karim and
Chowdhury
(2014)
110 bank
customers
(different banks
in Pakistan)
Self-administered questionnaires
(5-point Likert scale)
Regression analysis
Five SERVQUAL dimensions: (1)
tangibility; (2) reliability, (3)
responsiveness, (4) assurance,
and (5) empathy
Tangibility scored highest in terms of importance,
and responsiveness scored lowest; all dimensions
associated with customer satisfaction.
Kumar, Kee,
and Charles
(2010)
308 bank
customers
(Malaysian
Islamic and
conventional
banks)
Structured questionnaire
Dominance analysis
Modified SERVQUAL: (1)
tangibility, (2) reliability, (3)
competence, and (4)
convenience
Competence and convenience were relevant factors.
Ladhari et al.
(2011)
250 bank
customers in
Canada and 222
bank customers in
Tunisia
Self-administered questionnaires
(7-point Likert scale)
Confirmatory factor analysis
ANOVA
Linear regression
22 items
Five SERVQUAL dimensions
Canadian sample empathy and reliability predicted
satisfaction and loyalty; Tunisian sample reliability
and responsiveness predicted satisfaction and
loyalty.
Table 1. Related Studies on Bank Service Quality Dimensions
Authors
Sample
Methodologies
Bank Service Quality
Dimensions Analyzed
Findings
Ahmed (2017)
250 bank
customers
(Pakistan)
Self-administered
questionnaires (5-point Likert
scale)
Correlation and regression
analyses
Five SERVQUAL dimensions:
(1) tangibility, (2) reliability,
(3) convenience, (4)
competence, and (5)
satisfaction
All five dimensions were important, but Islamic
banks needed to focus on tangibility, reliability,
and responsiveness.
Allred and
Addams
(2000)
143 bank and
credit union
respondents
(USA)
Self-administered
questionnaires (5-point Likert
scale)
Descriptive statistics
14-item service quality
questions to assess bank and
credit union measurement of
customer’s expectations,
perceptions of service quality,
and customer retention
practices.
Credit unions rated better than banks in 11 out of
14 service quality dimensions; 50% of
respondents stopped using financial service due
to poor service performance.
Avkiran
(1994)
791 commercial
bank customers
(Australia)
Exit interviews, telephone
interviews, and mailed surveys
(5-point Likert scale)
Factor analysis using Principal
Axis Factoring
It started with 27 items but
ended with 17 items.
Dimensions studied included
responsiveness, empathy, staff
conduct, access,
communication, and reliability.
Validated these service quality dimensions staff
conduct, communication, credibility,
responsiveness, access to branch management,
and access to teller services.
Choudhury
(2013)
570 customers of
3 public and 3
private banks
(India)
Self-administered
questionnaires (7-point Likert
scale)
Factor analysis
Original 24 items were
reduced to 15 items.
Modified SERVQUAL to four
dimensions: (1) behavior, (2)
reliability, (3) tangibles, and
(4) convenience.
Reliability was important in influencing
customer’s purchase intentions.
Culiberg and
Rojsek (2010)
150 bank
customers
(Slovenia), 100
females and 50
males
Self-administered
questionnaires (6-point Likert
scale)
Literature review
Focus group discussion
In-depth interviews
Factor analysis and regression
analysis
28 items
Original five SERVQUAL
dimensions plus Access
Assurance and empathy (considered softer
dimensions dealing with the interaction of
customers with banks), and reliability and
responsiveness (considered harder dimensions
dealing with bank processes) were critical
determinants of customer satisfaction.
Felix (2017)
384 bank
customers (a
bank in Rwanda
with several
branches)
Descriptive and cross-sectional
survey designs (5-point Likert
scale)
Correlation analysis
Five SERVQUAL dimensions:
(1) reliability, (2)
responsiveness, (3) assurance,
(4) empathy, and (5) tangibles
Tangibles and assurance had the highest rating.
Authors Sample Methodologies
Bank Service Quality
Dimensions Analyzed
Findings
Gounaris et al.
(2003)
793 customers of
commercial
banks (Greece)
Convenience sampling of
subjects in streets and
shopping centers
Interview of seven branch
managers (5-point Likert scale)
Exploratory and confirmatory
factor analyses
Service quality dimensions
studied: (1) employee
competence, (2) bank
reliability, (3) product
innovativeness, (4) value for
money, (5) physical evidence,
and (6) proximity-
convenience.
Service quality had multiple dimensions, such as
value for money, product innovativeness, and
convenience; service quality was not only
industry-specific but was also culture-specific.
Guo et al.
(2008)
259 corporate
customers
(China)
4-stages: (1) Replication study
(using SERVQUAL); (2) in-
depth interviews of 18 financial
managers; (3) draft inventories
of items created; and (4)
exploratory and confirmatory
factor analyses
Chinese Banking Service
Quality (BSQ)
15 out of the original 22 items
with psychometric support
Reliability, empathy, facilities
and equipment, human capital,
access, technology and
communication
Service quality measured in terms of functional
quality (reliability and human capital) and
technical quality (communication and
technology); service quality must address these
four service quality dimensions.
Jabnoun and
Khalifa (2005)
230 bank
customers (UAE)
Brainstorming
Sorting exercise
Factor analysis
30-item instrument
Five SERVQUAL dimensions
plus values, image
Four dimensions (personal skills, reliability,
values, and image) were significant in
determining service quality for conventional
banks; two dimensions (personal skills and
values) were important for Islamic banks; they
need to customize measures of service quality to
different countries.
Karim and
Chowdhury
(2014)
110 bank
customers
(different banks
in Pakistan)
Self-administered
questionnaires (5-point Likert
scale)
Regression analysis
Five SERVQUAL dimensions:
(1) tangibility; (2) reliability,
(3) responsiveness, (4)
assurance, and (5) empathy
Tangibility scored highest in terms of
importance, and responsiveness scored lowest;
all dimensions associated with customer
satisfaction.
Kumar, Kee,
and Charles
(2010)
308 bank
customers
(Malaysian
Islamic and
conventional
banks)
Structured questionnaire
Dominance analysis
Modified SERVQUAL: (1)
tangibility, (2) reliability, (3)
competence, and (4)
convenience
Competence and convenience were relevant
factors.
Ladhari et al.
(2011)
250 bank
customers in
Canada and 222
bank customers
in Tunisia
Self-administered
questionnaires (7-point Likert
scale)
Confirmatory factor analysis
ANOVA
Linear regression
22 items
Five SERVQUAL dimensions
Canadian sample empathy and reliability
predicted satisfaction and loyalty; Tunisian
sample reliability and responsiveness predicted
satisfaction and loyalty.
44
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Authors
Sample
Methodologies
Bank Service Quality
Dimensions Analyzed
Findings
Monferrer,
Segarra,
Estrada, and
Moliner (2019)
25 bank clients,
15 banking
experts (Spain)
In-depth interviews (5-point
Likert scale)
Partial least squares and
Qualitative Comparative Analysis
48 items
Four service quality dimensions:
(1) outcome quality, (2)
personnel quality, (3)
servicescape quality, and (4)
social quality
Outcome quality (service conditions, product
conditions, price conditions, and access conditions)
had a direct impact on customer loyalty.
Pakurar,
Haddad Nagy,
Popp, and Olah
(2019)
825 bank
customers
(Jordan)
Self-administered questionnaires
(5-point Likert scale)
Exploratory Factor Analysis
Eight SERVQUAL dimensions: (1)
tangibles, (2) responsiveness,
(3) empathy, (4) assurance, (5)
reliability, (6) access, (7)
financial aspects, and (8)
employee competencies
Recommended the following factors in measuring
customer satisfaction in banks professional
features, caring, financial aspect, and tangibility.
Petridou et al.
(2007)
153 Greek bank
customers and 70
Bulgarian bank
customers
In-depth interviews (7-point
Likert scale)
Factor analysis
30 items BSQ of Bahnia and
Nantel (2000)
Six BSQ dimensions: (1)
effectiveness and assurance, (2)
access, (3) price, (4) tangibles,
(5) service portfolios, and (6)
reliability
Greek customers validated BSQ dimensions
included effectiveness, assurance and service
portfolio, reliability, access, price, and tangibles;
Bulgarian customers validated BSQ dimensions
included tangibles, reliability and service portfolio,
price and assurance, effectiveness, access, and
effectiveness; Greek customers perceived having
higher service quality than Bulgarian customers.
Potluri, Angati,
and Narayana
(2016)
300 customers of
3 public and 3
private banks
(India)
Self-administered questionnaires
(5-point Likert scale)
Chi-square tests and t-tests
BANKQUAL statements (15
dimensions consisting of 60
constructs)
Service quality and customer satisfaction had a
strong association; private and public banks differed
significantly in terms of service quality and customer
satisfaction.
Ma. Gloria V. Talavera
45
As presented in Table 1, most of the service quality studies, not just in banks, generally
employed the use of the Likert scale, as originally espoused by Parasuraman et al. (1988)
(Avkiran, 1994; Chinh & Anh, 2008; Choudhury, 2013; Culiberg & Rojsek, 2010; Gounaris et al.,
2003; Ladhari et al., 2011; Petridou et al., 2007).
In general, the Likert scale seeks to gauge the level of agreement and the customer’s purchase
interest, usually in terms of the following:
5
Completely Agree
5
Definitely will buy
4
Somewhat Agree
4
Probably will buy
3
Neither Agree nor Disagree
3
May or may not buy
2
Somewhat Disagree
2
Probably will not buy
1
Completely Disagree
1
Definitely will not buy
However, when gauging the importance of “apple pie questions,” the Likert scale is usually
avoided. “Apple pie questions” refer to questions wherein the responders have difficulty rating
items for which the general level of estimation is high, making it difficult to assess the items of
greater importance from those of lesser importance. An option is to ask responders to rank items
according to importance (sometimes in conjunction with rating them). If the list is too long, the
responders are asked to group the items according to their relative level of importance with the
aid of a sorting board.
The Q-methodology is applicable for researches that seek to explore the “subjectivity” present
in any human or organizational situation in various disciplines (Shemmings, 2006). Since a
service quality study involves eliciting from bank customers “subjective responses” and sensitive
information about the service quality of their banks, the Q-methodology is employed in this
research. Ekinci and Riley (1999; 2001) likewise adopted the SERVQUAL instrument in their
assessment of the service quality of the hotels. However, instead of using the Likert Scale, they
found the Q-sort technique associated with Q-methodology useful to measure a subjective topic
such as service quality.
The Q-methodology is a research methodology that combines the rigor of both qualitative and
quantitative research methods using the Q-sort technique in the rank-ordering of a list of
statements that are being investigated (Brown, 1996). This provides the following advantages for
the researcher:
1. A more organized analysis and investigation of belief patterns and values that takes into
account human subjectivity (Baker, Thompson, & Mannion, 2006; Ogle & Fanning, 2014;
Sexton, Snyder, Wadsworth, Jardine, & James, 1998);
2. A more robust analysis of research problems given the combination of both qualitative
approach and quantitative methodologies (Baker et al., 2006; Brown, 1996);
3. A flexible and engaging methodology that allows the researcher to observe more of the
respondent, his/her reactions to the items being ranked, and his/her struggles to do so
(Ogle & Fanning, 2014); and
4. A pragmatic methodology that can identify the individual and collective views of
respondents about the subject matter being studied (Baker et al., 2006).
Table 2 provides a listing of the types of researches where Q-methodology has seen
applications.
Authors Sample Methodologies
Bank Service Quality
Dimensions Analyzed Findings
Monferrer,
Segarra,
Estrada, and
Moliner (2019)
25 bank clients,
15 banking
experts (Spain)
In
-
depth interviews (5
-
point
Likert scale)
Partial least squares and
Qualitative Comparative Analysis
48 items
Four service quality dimensions:
(1) outcome quality, (2)
personnel quality, (3)
servicescape quality, and (4)
social quality
Outcome quality (service conditions, product
conditions, price conditions, and access conditions)
had a direct impact on customer loyalty.
Pakurar,
Haddad Nagy,
Popp, and Olah
(2019)
825 bank
customers
(Jordan)
Self
-
administered questionnaires
(5-point Likert scale)
Exploratory Factor Analysis
Eight SERVQUAL dimensions: (1)
tangibles, (2) responsiveness,
(3) empathy, (4) assurance, (5)
reliability, (6) access, (7)
financial aspects, and (8)
employee competencies
Recommended the following factors in measuring
customer satisfaction in banks – professional
features, caring, financial aspect, and tangibility.
Petridou et al.
(2007)
153 Greek bank
customers and 70
Bulgarian bank
customers
In
-
depth interviews (7
-
point
Likert scale)
Factor analysis
30 items BSQ of Bahnia and
Nantel (2000)
Six BSQ dimensions: (1)
effectiveness and assurance, (2)
access, (3) price, (4) tangibles,
(5) service portfolios, and (6)
reliability
Greek customers
validated BSQ dimensions
included effectiveness, assurance and service
portfolio, reliability, access, price, and tangibles;
Bulgarian customers – validated BSQ dimensions
included tangibles, reliability and service portfolio,
price and assurance, effectiveness, access, and
effectiveness; Greek customers perceived having
higher service quality than Bulgarian customers.
Potluri, Angati,
and Narayana
(2016)
300 customers of
3 public and 3
private banks
(India)
Self
-
administered questionnaires
(5-point Likert scale)
Chi-square tests and t-tests
BANKQUAL statements (15
dimensions consisting of 60
constructs)
Service quality and customer satisfaction had a
strong association; private and public banks differed
significantly in terms of service quality and customer
satisfaction.
Source: Literature Review
Ma. Gloria V. Talavera
As presented in Table 1, most of the service quality studies, not just in banks, generally
employed the use of the Likert scale, as originally espoused by Parasuraman et al. (1988)
(Avkiran, 1994; Chinh & Anh, 2008; Choudhury, 2013; Culiberg & Rojsek, 2010; Gounaris et al.,
2003; Ladhari et al., 2011; Petridou et al., 2007).
In general, the Likert scale seeks to gauge the level of agreement and the customer’s purchase
interest, usually in terms of the following:
5
Completely Agree
5
Definitely will buy
4
Somewhat Agree
4
Probably will buy
3
Neither Agree nor Disagree
3
May or may not buy
2
Somewhat Disagree
2
Probably will not buy
1
Completely Disagree
1
Definitely will not buy
However, when gauging the importance of “apple pie questions,” the Likert scale is usually
avoided. “Apple pie questions” refer to questions wherein the responders have difficulty rating
items for which the general level of estimation is high, making it difficult to assess the items of
greater importance from those of lesser importance. An option is to ask responders to rank items
according to importance (sometimes in conjunction with rating them). If the list is too long, the
responders are asked to group the items according to their relative level of importance with the
aid of a sorting board.
The Q-methodology is applicable for researches that seek to explore the “subjectivity” present
in any human or organizational situation in various disciplines (Shemmings, 2006). Since a
service quality study involves eliciting from bank customers “subjective responses” and sensitive
information about the service quality of their banks, the Q-methodology is employed in this
research. Ekinci and Riley (1999; 2001) likewise adopted the SERVQUAL instrument in their
assessment of the service quality of the hotels. However, instead of using the Likert Scale, they
found the Q-sort technique associated with Q-methodology useful to measure a subjective topic
such as service quality.
The Q-methodology is a research methodology that combines the rigor of both qualitative and
quantitative research methods using the Q-sort technique in the rank-ordering of a list of
statements that are being investigated (Brown, 1996). This provides the following advantages for
the researcher:
1. A more organized analysis and investigation of belief patterns and values that takes into
account human subjectivity (Baker, Thompson, & Mannion, 2006; Ogle & Fanning, 2014;
Sexton, Snyder, Wadsworth, Jardine, & James, 1998);
2. A more robust analysis of research problems given the combination of both qualitative
approach and quantitative methodologies (Baker et al., 2006; Brown, 1996);
3. A flexible and engaging methodology that allows the researcher to observe more of the
respondent, his/her reactions to the items being ranked, and his/her struggles to do so
(Ogle & Fanning, 2014); and
4. A pragmatic methodology that can identify the individual and collective views of
respondents about the subject matter being studied (Baker et al., 2006).
Table 2 provides a listing of the types of researches where Q-methodology has seen
applications.
46
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Table 2. Applicability of Q-methodology in Selected Researches
Type of Research
Applicability
Author(s)
Quality Studies
Understanding the role of training and quality
assurance in risk management
McKeown, Hinks, Stowell‐Smith,
Mercer, and Forster (1999)
Scale development of service quality
dimensions in hotels
Ekinci and Riley (1999, 2001)
Psychological
Researches
Identification of social media users’
perceptional typologies and relationships to
self-identity and personality
Kim (2018)
Assessment of the roles of altruistic traits in
mate selection and personal advertisement
Guo, Feng, and Wang (2017)
Clinical Studies
Identification and description of the various
patterns of parents’ perspectives on avoiding
secondhand smoke exposure
Huang et al. (2019)
Determination of the role of Filipino
occupational therapists in substance addiction
and rehabilitation
Sy, Ohshima, and Roraldo (2018)
Assessment of factors influencing the use of
pharmacological interventions to manage
challenging adult behavior
Wastell, Skirrow, and Hare (2016)
Assessment of patient experience with
inpatient care in public hospitals
Wong et al. (2013)
Education
An analysis of pre-service teachers’ attitudes
and opinions regarding the teaching
profession
Demir (2016)
Identification of leadership perspectives in
counseling
West, Bubenzer, Osborn, Paez,
and Desmond (2006)
Environmental
Management
Views of local experts on the sustainability of
community-based forestry
Nhem and Lee (2019)
Recognition and categorization on how
ecosystem services researchers perceive the
concept and purpose of ecosystem services
Hermelingmeier and Nicholas
(2017)
Source: Literature Review
3 Methodology
3.1 Identification of Service Quality Dimensions
After a thorough review of the literature on service quality dimensions and previous service
quality studies on banks, the following service quality dimensions were identified and served as
the basis for the development of the SERVQUAL constructs. (Refer to Table 3).
Table 3. Service Quality Dimensions
Service Quality
Dimension
Description Author(s)
1) Tangibles
Physical facilities, equipment, the appearance of
personnel
Abdullah, Suhaimi,
Saban, and Hamali
(2011); Ahmed (2017);
Avkiran (1994); Felix
(2017); Karim and
Chowdhury (2014);
2) Reliability
Ability to perform the promised service dependably
and accurately; systematic and orderly arrangement of
banks’ service delivery vis-a-
vis their customers
through effective, standardized, and simplified
procedures and processes
3) Responsiveness
Desire, willingness, and readiness to help customers
and provide prompt service
Ma. Gloria V. Talavera
47
Service Quality
Dimension
Description
Author(s)
4) Assurance
Knowledge and courtesy of employees and their ability
to inspire trust and confidence; confidentiality of bank
transactions
Ladhari et al. (2011);
Pakurar et al. (2019);
Parasuraman et al.
(1988)
5) Empathy
Caring, individualized attention the bank provides its
customers; provision of services and communication
to customers in an understanding, sympathetic, and
professional manner
Source: Literature Review
From these SERVQUAL dimensions, 24 service quality attributes that describe an excellent
bank were identified. (Refer to Table 4).
Table 4. Service Quality Attributes of an Excellent Bank
Service Quality Attributes of an Excellent Bank
TANGIBLES
1. Visually appealing bank layout
2. Functioning ATM and online facilities
3. Professionally dressed personnel
4. Easily understandable bank forms
5. Convenient location
RELIABILITY
6. Error‐free service delivery
7. Consistent and dependable service
8. Orderly and systematic bank services
9. Quick and timely service
RESPONSIVENESS
10. Willingly responds to customer queries
11. Prompt resolution of customer complaints
12. Referral to the right person or department for a concern
13. Effective customer service assistance
14. Limited waiting time for bank transactions
ASSURANCE
15. Knowledgeable and competent staff
16. Respectful employees
17. Secured bank transactions
18. Confidential customer bank information
19. Physical safety inside the bank
EMPATHY
20. The maximum tolerance of complaining customers
21. Individual care and attention
22. Timely advisory and notices to clients
23. Suitable working hours
24. Adequate staff during peak hours
Source: Literature Review
A survey instrument was prepared to include these 24 service quality attributes and the
specific instructions on how to conduct the Q‐methodology.
3.2 Sampling Method
This study targeted a total of 200 respondents with the target respondents being male and
female, from ages 2455 years old, residing within Metro Manila, and in the AB and upper C
income bracket. The selection of respondents to be interviewed was done via multi‐stage
46
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Table 2. Applicability of Q-methodology in Selected Researches
Type of Research
Applicability
Author(s)
Quality Studies
Understanding the role of training and quality
assurance in risk management
McKeown, Hinks, Stowell‐Smith,
Mercer, and Forster (1999)
Scale development of service quality
dimensions in hotels
Ekinci and Riley (1999, 2001)
Psychological
Researches
Identification of social media users’
perceptional typologies and relationships to
self-identity and personality
Kim (2018)
Assessment of the roles of altruistic traits in
mate selection and personal advertisement
Guo, Feng, and Wang (2017)
Clinical Studies
Identification and description of the various
patterns of parents’ perspectives on avoiding
secondhand smoke exposure
Huang et al. (2019)
Determination of the role of Filipino
occupational therapists in substance addiction
and rehabilitation
Sy, Ohshima, and Roraldo (2018)
Assessment of factors influencing the use of
pharmacological interventions to manage
challenging adult behavior
Wastell, Skirrow, and Hare (2016)
Assessment of patient experience with
inpatient care in public hospitals
Wong et al. (2013)
Education
An analysis of pre-service teachers’ attitudes
and opinions regarding the teaching
profession
Demir (2016)
Identification of leadership perspectives in
counseling
West, Bubenzer, Osborn, Paez,
and Desmond (2006)
Environmental
Management
Views of local experts on the sustainability of
community-based forestry
Nhem and Lee (2019)
Recognition and categorization on how
ecosystem services researchers perceive the
concept and purpose of ecosystem services
Hermelingmeier and Nicholas
(2017)
Source: Literature Review
3 Methodology
3.1 Identification of Service Quality Dimensions
After a thorough review of the literature on service quality dimensions and previous service
quality studies on banks, the following service quality dimensions were identified and served as
the basis for the development of the SERVQUAL constructs. (Refer to Table 3).
Table 3. Service Quality Dimensions
Service Quality
Dimension
Description
Author(s)
1) Tangibles
Physical facilities, equipment, the appearance of
personnel
Abdullah, Suhaimi,
Saban, and Hamali
(2011); Ahmed (2017);
Avkiran (1994); Felix
(2017); Karim and
Chowdhury (2014);
2) Reliability
Ability to perform the promised service dependably
and accurately; systematic and orderly arrangement of
banks’ service delivery vis-a-vis their customers
through effective, standardized, and simplified
procedures and processes
3) Responsiveness
Desire, willingness, and readiness to help customers
and provide prompt service
Ma. Gloria V. Talavera
Service Quality
Dimension
Description Author(s)
4) Assurance
Knowledge and courtesy of employees and their ability
to inspire trust and confidence; confidentiality of bank
transactions
Ladhari et al. (2011);
Pakurar et al. (2019);
Parasuraman et al.
(1988)
5) Empathy
Caring, individualized attention the bank provides its
customers; provision of services and communication
to customers in an understanding, sympathetic, and
professional manner
Source: Literature Review
From these SERVQUAL dimensions, 24 service quality attributes that describe an excellent
bank were identified. (Refer to Table 4).
Table 4. Service Quality Attributes of an Excellent Bank
Service Quality Attributes of an Excellent Bank
TANGIBLES
1. Visually appealing bank layout
2. Functioning ATM and online facilities
3. Professionally dressed personnel
4. Easily understandable bank forms
5. Convenient location
RELIABILITY
6. Error‐free service delivery
7. Consistent and dependable service
8. Orderly and systematic bank services
9. Quick and timely service
RESPONSIVENESS
10. Willingly responds to customer queries
11. Prompt resolution of customer complaints
12. Referral to the right person or department for a concern
13. Effective customer service assistance
14. Limited waiting time for bank transactions
ASSURANCE
15. Knowledgeable and competent staff
16. Respectful employees
17. Secured bank transactions
18. Confidential customer bank information
19. Physical safety inside the bank
EMPATHY
20. The maximum tolerance of complaining customers
21. Individual care and attention
22. Timely advisory and notices to clients
23. Suitable working hours
24. Adequate staff during peak hours
Source: Literature Review
A survey instrument was prepared to include these 24 service quality attributes and the
specific instructions on how to conduct the Q‐methodology.
3.2 Sampling Method
This study targeted a total of 200 respondents with the target respondents being male and
female, from ages 2455 years old, residing within Metro Manila, and in the AB and upper C
income bracket. The selection of respondents to be interviewed was done via multi‐stage
48
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
systematic random sampling. The stages of systematic random sampling consisted of: (1) random
selection of barangay; (2) random selection of households using a random start and skip interval
of five, and (3) random selection of respondents per household. Two valid callbacks were made,
after which the targeted respondents who were not available were replaced. A total of 242
respondents participated in the study.
3.3 Q-methodology
This study generally followed the specific steps involved in the Q‐methodology as prescribed
by Baker et al. (2006): (1) selection of statements (Qset) involving structured items (i.e., items
selected based on settheoretical propositions as described in Table 3); (2) selection of
respondents (Pset) as discussed in the sampling method; (3) the Qsort methodology; and (4) the
data analysis.
After the Qstatements were generated and pilot tested, a card sorting exercise was conducted.
The card sorting methodology deviated from the usual Qsort methodology that employed a
typical QSorting Grid (Sy et al., 2018), as follows:
1. Respondents received sort cards containing the service quality attributes (descriptions
that customers have used to describe what they consider as an “Excellent Bank”). They were
also given a board with three boxed labels. The cards were sorted depending on their
response as to whether they considered the statement as an important attribute of an
“Excellent Bank,” as follows: (a) most important, (b) moderately important, and (c) least
important. (Refer to Exhibit 1).
2. When the respondent was done sorting the cards, the cards grouped under the box most
important were arranged from most important to least important as an attribute of an
“Excellent Bank.’’ The same process was done for the cards placed in the moderately
important and least important boxes. (Refer to Exhibit 2).
3. Once the cards were arranged based on importance, the respondent was then asked to give
a score of 100 to the Top Card and a score of 1 to the Bottom Card. Relative to these scores
of 100 and 1, the respondents were asked to assign a numerical score for each of the other
statements according to their relative importance to each other. (Refer to Exhibit 2).
4 Data Analysis
To measure the instrument’s reliability, this study employed the internal consistency method
using the Cronbach coefficient alpha of the attributes of bank service quality. In studies that
employed Qmethodology using Qsort grid matrix, researchers used the PQMethod Software that
has Principal Component Analysis (PCA) and Factor Analysis in the analysis of the Qsort scores.
In this study, the final part of the card sorting exercise was able to discriminate and identify a
numerical rating of the customer for each service quality attribute. Using the numerical ratings of
each bank service quality attribute, the Exploratory Factor Analysis (EFA) was used to determine
the instrument’s construct validity.
The EFA was the validation process used to ascertain whether the attributes included in the
survey instrument were able to measure what the instrument intended to measure (Emory &
Cooper, 1993; Hair, Black, Babin, & Anderson, 2010). Several iterations of the factor analysis were
conducted, and only items with factor loadings of 0.5 or higher were retained (Hair et al., 2010).
In the conduct of EFA, the Principal Components Analysis (PCA) and Quartimax were explored.
According to Danesh (2017), the PCA is the more common EFA method to use for Qsorts, being
able to generate linear combinations of the Qsorts which are uncorrelated, and taking into
account all the variances in the Qsorts. Quartimax is also recommended as the appropriate
rotational method since it limits the number of factors that would explain the Qsorts under
investigation.
Ma. Gloria V. Talavera
49
The following tests were conducted before the selection of the final set of factors. The Kaiser-
Meyer-Olkin (KMO) measure of sampling adequacy was checked to determine if it was greater
than 0.80. The anti-image correlation was also investigated to check the sampling adequacy for a
variable. Only those variables with a correlation of 0.80 or higher were retained. The reliability
test was done using the Cronbach coefficient alpha as the metric for analysis. A minimum factor
loading of 0.50 was used as a basis for the retention of an item.
5 Discussion
A total of 242 Filipino consumers participated in this study; 56% of which were females and
44% were male. Twenty-six percent of the respondents were from the 31-40 age range, followed
by those in the 41-50 age range (24%), then those in the 51-60 age category (20%). The
respondents also included those in the 21-30 age range (17%) and those between 60-70 years old
(13%).
Based on the ranking of the service quality attributes, the top five service quality attributes
considered important by Filipino consumers are summarized in Table 5.
Table 5. Ranking of Top Five Service Quality Attributes, By Gender
Service Quality Attributes
Female
Male
Both Gender
Rank
Mean
Rating
Rank
Mean
Rating
Rank
Mean
Rating
Secured bank transactions
1
88.77
1
85.10
1
87.18
Confidential customer bank
transactions
2
87.88
2
85.09
2
86.67
Physical safety in the bank
3
80.69
3
80.71
3
79.65
Orderly and systematic bank
services
4
79.20
4
79.90
4
79.50
Knowledge and competent
staff
5
78.92
Effective customer service
assistance
5
77.97
Physical safety in the bank
5
78.59
Regardless of gender, the top two service quality attributes are related to the assurance
dimension: (1) secured bank transactions; and (2) confidential customer bank transactions. The
next service quality attribute common to both male and female respondents is physical safety in
the bank.
Results of the factor analysis show four SERVQUAL dimensions: (1) reliability, (2) empathy,
(3) responsiveness, and (4) tangibles. The cumulative percentage of variance explained by these
four dimensions is 55.7%. Hair et al. (2010) note that in the social sciences, wherein information
is not as precise as quantitative variables, a factor solution that accounts for 60% is described as
satisfactory. Total scale reliability for the 16 validated service quality attributes is 0.834.
According to DeVellis (1991) and Davis (2000), Cronbach coefficient alphas ranging from 0.80
and 0.90 are acceptable for social science researches, such as service quality study. (Refer to Table
6).
48
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
systematic random sampling. The stages of systematic random sampling consisted of: (1) random
selection of barangay; (2) random selection of households using a random start and skip interval
of five, and (3) random selection of respondents per household. Two valid callbacks were made,
after which the targeted respondents who were not available were replaced. A total of 242
respondents participated in the study.
3.3 Q-methodology
This study generally followed the specific steps involved in the Q‐methodology as prescribed
by Baker et al. (2006): (1) selection of statements (Qset) involving structured items (i.e., items
selected based on settheoretical propositions as described in Table 3); (2) selection of
respondents (Pset) as discussed in the sampling method; (3) the Qsort methodology; and (4) the
data analysis.
After the Qstatements were generated and pilot tested, a card sorting exercise was conducted.
The card sorting methodology deviated from the usual Qsort methodology that employed a
typical QSorting Grid (Sy et al., 2018), as follows:
1. Respondents received sort cards containing the service quality attributes (descriptions
that customers have used to describe what they consider as an “Excellent Bank”). They were
also given a board with three boxed labels. The cards were sorted depending on their
response as to whether they considered the statement as an important attribute of an
“Excellent Bank,” as follows: (a) most important, (b) moderately important, and (c) least
important. (Refer to Exhibit 1).
2. When the respondent was done sorting the cards, the cards grouped under the box most
important were arranged from most important to least important as an attribute of an
“Excellent Bank.’’ The same process was done for the cards placed in the moderately
important and least important boxes. (Refer to Exhibit 2).
3. Once the cards were arranged based on importance, the respondent was then asked to give
a score of 100 to the Top Card and a score of 1 to the Bottom Card. Relative to these scores
of 100 and 1, the respondents were asked to assign a numerical score for each of the other
statements according to their relative importance to each other. (Refer to Exhibit 2).
4 Data Analysis
To measure the instrument’s reliability, this study employed the internal consistency method
using the Cronbach coefficient alpha of the attributes of bank service quality. In studies that
employed Qmethodology using Qsort grid matrix, researchers used the PQMethod Software that
has Principal Component Analysis (PCA) and Factor Analysis in the analysis of the Qsort scores.
In this study, the final part of the card sorting exercise was able to discriminate and identify a
numerical rating of the customer for each service quality attribute. Using the numerical ratings of
each bank service quality attribute, the Exploratory Factor Analysis (EFA) was used to determine
the instrument’s construct validity.
The EFA was the validation process used to ascertain whether the attributes included in the
survey instrument were able to measure what the instrument intended to measure (Emory &
Cooper, 1993; Hair, Black, Babin, & Anderson, 2010). Several iterations of the factor analysis were
conducted, and only items with factor loadings of 0.5 or higher were retained (Hair et al., 2010).
In the conduct of EFA, the Principal Components Analysis (PCA) and Quartimax were explored.
According to Danesh (2017), the PCA is the more common EFA method to use for Qsorts, being
able to generate linear combinations of the Qsorts which are uncorrelated, and taking into
account all the variances in the Qsorts. Quartimax is also recommended as the appropriate
rotational method since it limits the number of factors that would explain the Qsorts under
investigation.
Ma. Gloria V. Talavera
The following tests were conducted before the selection of the final set of factors. The Kaiser-
Meyer-Olkin (KMO) measure of sampling adequacy was checked to determine if it was greater
than 0.80. The anti-image correlation was also investigated to check the sampling adequacy for a
variable. Only those variables with a correlation of 0.80 or higher were retained. The reliability
test was done using the Cronbach coefficient alpha as the metric for analysis. A minimum factor
loading of 0.50 was used as a basis for the retention of an item.
5 Discussion
A total of 242 Filipino consumers participated in this study; 56% of which were females and
44% were male. Twenty-six percent of the respondents were from the 31-40 age range, followed
by those in the 41-50 age range (24%), then those in the 51-60 age category (20%). The
respondents also included those in the 21-30 age range (17%) and those between 60-70 years old
(13%).
Based on the ranking of the service quality attributes, the top five service quality attributes
considered important by Filipino consumers are summarized in Table 5.
Table 5. Ranking of Top Five Service Quality Attributes, By Gender
Service Quality Attributes
Female Male Both Gender
Rank Mean
Rating Rank Mean
Rating Rank Mean
Rating
Secured bank transactions
1
88.77
1
85.10
1
87.18
Confidential customer bank
transactions
2
87.88
2
85.09
2
86.67
Physical safety in the bank
3
80.69
3
80.71
3
79.65
Orderly and systematic bank
services
4
79.20
4
79.90
4
79.50
Knowledge and competent
staff
5
78.92
Effective customer service
assistance
5
77.97
Physical safety in the bank
5
78.59
Regardless of gender, the top two service quality attributes are related to the assurance
dimension: (1) secured bank transactions; and (2) confidential customer bank transactions. The
next service quality attribute common to both male and female respondents is physical safety in
the bank.
Results of the factor analysis show four SERVQUAL dimensions: (1) reliability, (2) empathy,
(3) responsiveness, and (4) tangibles. The cumulative percentage of variance explained by these
four dimensions is 55.7%. Hair et al. (2010) note that in the social sciences, wherein information
is not as precise as quantitative variables, a factor solution that accounts for 60% is described as
satisfactory. Total scale reliability for the 16 validated service quality attributes is 0.834.
According to DeVellis (1991) and Davis (2000), Cronbach coefficient alphas ranging from 0.80
and 0.90 are acceptable for social science researches, such as service quality study. (Refer to Table
6).
50
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Table 6. Validated Bank Service Quality Dimensions
Service Quality Attributes
Service Quality Dimension
Factor 1
Reliability
1
Factor 2
Empathy
2
Factor 3
Responsiveness
3
Factor 4
Tangibles
4
1. Consistent and dependable
service
.744
2. Orderly and systematic bank
services
.730
3.
Quick and timely service
.699
4.
Error-free service delivery
.571
5. Adequate staff during peak
hours
.817
6. Timely advisory and notices to
clients
.786
7.
Suitable working hours
.702
8. Limited waiting time for bank
transactions
.604
9. Referral to the right person or
department for a concern
.694
10. Maximum tolerance of
complaining customers
.597
11. Effective customer service
assistance
.594
12. Knowledgeable and competent
staff
.566
13. Willing response to customer
queries
.535
14.
Convenient location
.776
15. Functioning ATM and online
facilities
.675
16. Easily understandable bank
forms
.511
Percentage of variance explained
30.445
11.832
7.078
6.301
Cumulative of percentage variance
explained
30.445
42.276
49.355
55.656
Cronbach alpha
.709
.759
.698
.656
Measure of sampling adequacy
.858
This study validates the earlier findings of Avkiran (1994), Choudhury (2013), Guo et al.
(2008), Kumar et al. (2010), Ladhari et al. (2011), and Petridou et al. (2007). The identification of
the bank service quality dimensions presented in Table 6 is useful for banks in the design of their
bank layout, bank processes, use of on-site, off-site and self-service technologies, customer service
programs, and monitoring of customer service satisfaction. Table 7 shows a comparison of the
results of this study vis-à-vis other service quality studies.
1 RELIABILITY refers to Process Orientation in terms of process efficiency and quality.
2 EMPATHY refers to Time Orientation in terms of customer time and welfare.
3 RESPONSIVENESS refers to Customer Orientation, the ability to address well customer queries and complaints;
multi-dimensional (with some items from Responsiveness, Assurance and Empathy service quality dimensions).
4 TANGIBLES refers to Accessibility and Availability of bank services and facilities.
Ma. Gloria V. Talavera
51
Table 7. Comparison of Results with other Service Quality Studies
Validated Bank Service Quality Dimension
Relevant Service Quality Studies
Factor 1 Reliability
(1) Consistent and dependable service
Ahmed (2017); Choudhury (2013); Culiberg
& Roisek (2010); Guo et al. (2008); Jabnoun &
Khalifa (2005); Karim & Chowdhury (2014);
Ladhari et al. (2011); Petridou et al. (2007)
(2) Orderly and systematic bank services
(3) Quick and timely service
(4) Error-free service delivery
Factor 2 Empathy
(1) Adequate staff during peak hours
Ahmed (2017); Culiberg & Roisek (2010);
Karim & Chowdhury (2014), Ladhari et al.
(2011)
(2) Timely advisory and notices to clients
(3) Suitable working hours
(4) Limited waiting time for bank transactions
Factor 3 Responsiveness
(1) Referral to the right person or department for a concern
Ahmed (2017); Avkiran (1994); Culiberg &
Roisek (2010); Felix (2017); Karim &
Chowdhury (2014); Kumar et al. (2010);
Ladhari et al. (2011); Pakurar et al. (2019);
Petridou et al. (2007)
(2) Maximum tolerance of complaining customers
(3) Effective customer service assistance
(4) Knowledgeable and competent staff
(5) Willing response to customer queries
Factor 4 Tangibles
(1) Convenient location
Ahmed (2017); Avkiran (1994); Felix (2017);
Karim & Chowdhury (2014); Pakurar et al.
(2019); Petridou et al. (2007)
(2) Functioning ATMs & online facilities
(3) Easily understandable bank forms
Source: Literature Review
While the other service quality studies included in Table 7 used the Likert scale, as prescribed
by Parasuraman et al. (1988), this study showed the service quality dimensions relevant to
Filipino bank consumers using a rigorous and unbiased data collection using Q-sort cards in
generating customer response. The adoption of Q-methodology, despite some deviations from
certain processes associated with the methodology, showed that the survey instrument used in
this study had reliability and content validity.
6 Conclusion
Based on the results of this study, Filipino bank consumers consider important four service
quality dimensions: (1) reliability, (2) empathy, (3) responsiveness, and (4) tangibles. The
validated bank service quality attributes show the importance given by Filipino bank consumers
to bank processes performed accurately and consistently according to set protocols.
The respondents also consider empathy as an important service quality dimension,
particularly on time spent by clients in availing bank services. Since client time is very important,
the deployment of resources to ensure that clients’ requirements get attended to, timely, is
deemed very important.
Results also indicate that while Filipino bank consumers do not expect the immediate
resolution of any of their bank-related concerns, the efforts of the bank personnel to try to
respond and solve the customer’s queries or complaints reflect bank service quality. Lastly,
research findings also support other researchers’ observations that tangibles like accessible
location, functioning ATM, and online facilities, as well as easily understandable bank forms, are
important service quality attributes. Attributes related to aesthetics like bank layout and even the
50
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Table 6. Validated Bank Service Quality Dimensions
Service Quality Attributes
Service Quality Dimension
Factor 1
Reliability1
Factor 2
Empathy2
Factor 3
Responsiveness3
Factor 4
Tangibles4
1. Consistent and dependable
service
.744
2. Orderly and systematic bank
services
.730
3. Quick and timely service
.699
4. Error-free service delivery
.571
5. Adequate staff during peak
hours
.817
6. Timely advisory and notices to
clients
.786
7. Suitable working hours
.702
8. Limited waiting time for bank
transactions
.604
9. Referral to the right person or
department for a concern
.694
10. Maximum tolerance of
complaining customers
.597
11. Effective customer service
assistance
.594
12. Knowledgeable and competent
staff
.566
13. Willing response to customer
queries
.535
14. Convenient location
.776
15. Functioning ATM and online
facilities
.675
16. Easily understandable bank
forms
.511
Percentage of variance explained
30.445
11.832
7.078
6.301
Cumulative of percentage variance
explained
30.445
42.276
49.355
55.656
Cronbach alpha
.709
.759
.698
.656
Measure of sampling adequacy
.858
This study validates the earlier findings of Avkiran (1994), Choudhury (2013), Guo et al.
(2008), Kumar et al. (2010), Ladhari et al. (2011), and Petridou et al. (2007). The identification of
the bank service quality dimensions presented in Table 6 is useful for banks in the design of their
bank layout, bank processes, use of on-site, off-site and self-service technologies, customer service
programs, and monitoring of customer service satisfaction. Table 7 shows a comparison of the
results of this study vis-à-vis other service quality studies.
1
RELIABILITY refers to Process Orientation in terms of process efficiency and quality.
2
EMPATHY refers to Time Orientation in terms of customer time and welfare.
3
RESPONSIVENESS refers to Customer Orientation, the ability to address well customer queries and complaints;
multi-dimensional (with some items from Responsiveness, Assurance and Empathy service quality dimensions).
4
TANGIBLES refers to Accessibility and Availability of bank services and facilities.
Ma. Gloria V. Talavera
Table 7. Comparison of Results with other Service Quality Studies
Validated Bank Service Quality Dimension Relevant Service Quality Studies
Factor 1 Reliability
(1) Consistent and dependable service
Ahmed (2017); Choudhury (2013); Culiberg
& Roisek (2010); Guo et al. (2008); Jabnoun &
Khalifa (2005); Karim & Chowdhury (2014);
Ladhari et al. (2011); Petridou et al. (2007)
(2) Orderly and systematic bank services
(3) Quick and timely service
(4) Error-free service delivery
Factor 2 Empathy
(1) Adequate staff during peak hours
Ahmed (2017); Culiberg & Roisek (2010);
Karim & Chowdhury (2014), Ladhari et al.
(2011)
(2) Timely advisory and notices to clients
(3) Suitable working hours
(4) Limited waiting time for bank transactions
Factor 3 Responsiveness
(1) Referral to the right person or department for a concern
Ahmed (2017); Avkiran (1994); Culiberg &
Roisek (2010); Felix (2017); Karim &
Chowdhury (2014); Kumar et al. (2010);
Ladhari et al. (2011); Pakurar et al. (2019);
Petridou et al. (2007)
(2) Maximum tolerance of complaining customers
(3) Effective customer service assistance
(4) Knowledgeable and competent staff
(5) Willing response to customer queries
Factor 4 Tangibles
(1) Convenient location
Ahmed (2017); Avkiran (1994); Felix (2017);
Karim & Chowdhury (2014); Pakurar et al.
(2019); Petridou et al. (2007)
(2) Functioning ATMs & online facilities
(3) Easily understandable bank forms
Source: Literature Review
While the other service quality studies included in Table 7 used the Likert scale, as prescribed
by Parasuraman et al. (1988), this study showed the service quality dimensions relevant to
Filipino bank consumers using a rigorous and unbiased data collection using Q-sort cards in
generating customer response. The adoption of Q-methodology, despite some deviations from
certain processes associated with the methodology, showed that the survey instrument used in
this study had reliability and content validity.
6 Conclusion
Based on the results of this study, Filipino bank consumers consider important four service
quality dimensions: (1) reliability, (2) empathy, (3) responsiveness, and (4) tangibles. The
validated bank service quality attributes show the importance given by Filipino bank consumers
to bank processes performed accurately and consistently according to set protocols.
The respondents also consider empathy as an important service quality dimension,
particularly on time spent by clients in availing bank services. Since client time is very important,
the deployment of resources to ensure that clients’ requirements get attended to, timely, is
deemed very important.
Results also indicate that while Filipino bank consumers do not expect the immediate
resolution of any of their bank-related concerns, the efforts of the bank personnel to try to
respond and solve the customer’s queries or complaints reflect bank service quality. Lastly,
research findings also support other researchers’ observations that tangibles like accessible
location, functioning ATM, and online facilities, as well as easily understandable bank forms, are
important service quality attributes. Attributes related to aesthetics like bank layout and even the
52
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
professional look of bank personnel are some service quality attributes that are not validated in
this study. That is not to say that banks should not make improvements in these aspects.
Results reveal that the service quality programs of Philippine banks should ensure that bank
consumers get dependable, timely, accurate, and error-free bank services, whether such services
are done offline or online. Therefore, a bank’s facility and information technology structure should
always be up-to-date and maintained, since any technical glitch or disruption affect consumer
experience, their perception of service quality, and overall customer satisfaction.
Bank personnel also need to be trained to do immediate troubleshooting and problem-solving
should problems occur. Resource allocation in banks also needs to be properly studied to ensure
that there is always bank personnel, especially during peak bank hours. Training programs on
service quality, particularly on service quality recovery and effective handling of customer
complaints, should be integral components of such training programs. Regular reviews of bank
processes, including bank forms and directions (online and offline), need also to be done.
This study was not able to validate service quality attributes related to confidentiality, the
security of transactions, and safety. It is possible that Filipino bank consumers considered these
attributes as given and should be strictly implemented, not just because these are valuable to
consumers, but because it is the fiduciary duty of the banks to ensure the integrity and security of
any of its customer’s bank transactions.
This service quality study used a different methodology in generating the response of the
customers concerning their expectations of the attributes of an excellent bank. While most studies
used the Likert scale to generate customer perceptions, this study used Q-methodology. This
methodology utilized Q-sort cards as a way of generating better responses from the customers in
the assessment of the degree of importance of each attribute relative to the other attributes. The
use of Q-sort cards in ranking responses, however, posed some difficulties in response generation
due to the lack of familiarity of the respondents with the process. The data gatherers had to
explain lengthily about the process of ranking. Also, since the majority of the literature on the
SERVQUAL applications utilized the Likert scale, thus, the results of this study with similar studies
cannot be compared. But while the process of generating responses was tedious, this method
significantly reduced response bias as the customers essentially had to determine numerically the
score rating of one attribute vis-à-vis the other.
In the future, researches may wish to assess service quality using parallel methodologies (i.e.,
the use of both the Likert scale and Q-methodology) to determine which of these methodologies
can capture more accurately customer perception of service quality. Also, since this study focused
on customers’ perception of the “Excellent Bank,” future studies may want to expand the scope of
this study to include a gap analysis (i.e., expectations on excellent bank vis-à-vis actual
performance).
Since this study focused only on the respondent’s perception of his/her bank, the research did
not focus on the comparison of service quality of Philippine banks. Another area for further
research, therefore, is a comparative assessment of the service quality of banks in the Philippines,
either by competing banks or by type of banks (universal banks, rural banks, commercial banks,
and other types of financial institutions).
Lastly, similar studies can also be pursued to understand the service quality dimensions
unique to different industries, such as fast food, telecommunications, educational institutions,
government agencies, and other entities with regular interaction with customers/stakeholders.
Ma. Gloria V. Talavera
53
References
Abdullah, F., Suhaimi, R., Saban, G., & Hamali, J. (2011). Bank service quality (BSQ) index: An indicator
of service performance. International Journal of Quality and Reliability Management, 28(5), 542-
555.
Ahmed, M. (2017). Service quality measurement regarding banking sector. International Journal of
Business and Social Science, 8(6), 50-61.
Allred A. T., & Addams, H. L. (2000). Service quality at banks and credit unions: What do their
customers say? Managing Service Quality: An International Journal, 10(1), 52-60.
Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer satisfaction, market share, and
profitability: Findings from Sweden. Journal of Marketing, 58(3), 53-66.
Avkiran, N. K. (1994). Developing an instrument to measure customer service quality in branch
banking. The International Journal of Bank Marketing, 12(6), 10-18.
Avkiran, N. K. (1999). The evidence on efficiency gains: The role of mergers and the benefits to the
public. Journal of Banking and Finance, 23, 991-1013.
Baker, R., Thompson, C., & Mannion, R. (2006). Q methodology in health economics. Journal of Health
Services Research & Policy, 11(1), 38-45.
Brown, S. R. (1996). Q methodology and qualitative research. Qualitative Health Research, 6(4), 561-
567.
BSP assessing BPI glitch. (2019, May 1). bworldonline.com. Retrieved from
https://www.bworldonline.com/bsp-assessing-bpi-glitch
Chinh, V. T. M, & Anh, N. V. (2008). Measuring customer satisfaction based on service quality gap at a
local bank in Vietnam. Journal of International Business Research, 7(3), 27-51.
Choudhury, H. (2013). Service quality and customers’ purchase intentions: An empirical study of the
Indian banking sector. International Journal of Bank Marketing, 31(7), 529-543.
Culiberg, B., & Rojsek I. (2010). Identifying service quality dimensions as antecedents to customer
satisfaction in retail banking. Economic and Business Review, 12(3), 151-166.
Danesh, N. A. (2017). A comparison between major factor extraction and factor rotation techniques in
Q-methodology. Open Journal of Applied Sciences, 7, 147-156.
Danisman, G. (2018). Overview of competition in the banking sector. International Journal of
Economics, Commerce and Management, 6(4), 59-71.
Davis, D. L. (2000). Business research for decision making (5th ed). Pacific Grove, CA: Duxbury Press.
Demir, S. (2016). An analysis of pre-service teachers’ attitudes and opinions regarding the teaching
profession via Q-methodology. European Journal of Contemporary Education, 17(3), 295-310.
DeVellis, R. F. (1991). Applied social research methods series, Vol. 26. Scale Development: Theory and
Applications. Thousand Oaks, CA: Sage Publications, Inc.
Duke, A., & Cejnar, L. (2013). Competition and the banking sector: Friend or foe? Law and Financial
Markets Review, 152-158.
Ekinci, Y., & Riley, M. (1999). Measuring hotel quality: Back to basics. International Journal of
Contemporary Hospitality Management, 11(6), 287-293.
Ekinci, Y., & Riley, M. (2001). Validating quality dimensions. Annals of Tourism Research, 28(1), 202-
223.
Emory, C. W., & Cooper, D. R. (1993). Chapter 6: Measurement. In Business research methods (4th ed.,
pp. 168-189). Homewood, IL: Richard D. Irwin.
Felix, R. (2017). Service quality and customer satisfaction in selected banks in Rwanda. Journal of
Business & Financial Affairs, 6(1), 1-11.
Galloway, L., & Ho, S. (1996). A model of service quality for training. Training for Quality, 4(1), 20-26.
Gronroos, C. (1984). A service quality model and its marketing implications. European Journal of
Marketing, 18(4), 36-44.
Gounaris, S. P., Stathakopoulos, V., & Athanassopoulos, A. D. (2003). Antecedents to perceived service
quality: An exploratory study in the banking sector. The International Journal of Bank Marketing,
21(4), 168-190.
Guo, C., Duff, A., & Hair, M. (2008). Service quality measurement in the Chinese corporate banking
market. International Journal of Bank Marketing, 26(5), 305-327.
52
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
professional look of bank personnel are some service quality attributes that are not validated in
this study. That is not to say that banks should not make improvements in these aspects.
Results reveal that the service quality programs of Philippine banks should ensure that bank
consumers get dependable, timely, accurate, and error-free bank services, whether such services
are done offline or online. Therefore, a bank’s facility and information technology structure should
always be up-to-date and maintained, since any technical glitch or disruption affect consumer
experience, their perception of service quality, and overall customer satisfaction.
Bank personnel also need to be trained to do immediate troubleshooting and problem-solving
should problems occur. Resource allocation in banks also needs to be properly studied to ensure
that there is always bank personnel, especially during peak bank hours. Training programs on
service quality, particularly on service quality recovery and effective handling of customer
complaints, should be integral components of such training programs. Regular reviews of bank
processes, including bank forms and directions (online and offline), need also to be done.
This study was not able to validate service quality attributes related to confidentiality, the
security of transactions, and safety. It is possible that Filipino bank consumers considered these
attributes as given and should be strictly implemented, not just because these are valuable to
consumers, but because it is the fiduciary duty of the banks to ensure the integrity and security of
any of its customer’s bank transactions.
This service quality study used a different methodology in generating the response of the
customers concerning their expectations of the attributes of an excellent bank. While most studies
used the Likert scale to generate customer perceptions, this study used Q-methodology. This
methodology utilized Q-sort cards as a way of generating better responses from the customers in
the assessment of the degree of importance of each attribute relative to the other attributes. The
use of Q-sort cards in ranking responses, however, posed some difficulties in response generation
due to the lack of familiarity of the respondents with the process. The data gatherers had to
explain lengthily about the process of ranking. Also, since the majority of the literature on the
SERVQUAL applications utilized the Likert scale, thus, the results of this study with similar studies
cannot be compared. But while the process of generating responses was tedious, this method
significantly reduced response bias as the customers essentially had to determine numerically the
score rating of one attribute vis-à-vis the other.
In the future, researches may wish to assess service quality using parallel methodologies (i.e.,
the use of both the Likert scale and Q-methodology) to determine which of these methodologies
can capture more accurately customer perception of service quality. Also, since this study focused
on customers’ perception of the “Excellent Bank,” future studies may want to expand the scope of
this study to include a gap analysis (i.e., expectations on excellent bank vis-à-vis actual
performance).
Since this study focused only on the respondent’s perception of his/her bank, the research did
not focus on the comparison of service quality of Philippine banks. Another area for further
research, therefore, is a comparative assessment of the service quality of banks in the Philippines,
either by competing banks or by type of banks (universal banks, rural banks, commercial banks,
and other types of financial institutions).
Lastly, similar studies can also be pursued to understand the service quality dimensions
unique to different industries, such as fast food, telecommunications, educational institutions,
government agencies, and other entities with regular interaction with customers/stakeholders.
Ma. Gloria V. Talavera
References
Abdullah, F., Suhaimi, R., Saban, G., & Hamali, J. (2011). Bank service quality (BSQ) index: An indicator
of service performance. International Journal of Quality and Reliability Management, 28(5), 542-
555.
Ahmed, M. (2017). Service quality measurement regarding banking sector. International Journal of
Business and Social Science, 8(6), 50-61.
Allred A. T., & Addams, H. L. (2000). Service quality at banks and credit unions: What do their
customers say? Managing Service Quality: An International Journal, 10(1), 52-60.
Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer satisfaction, market share, and
profitability: Findings from Sweden. Journal of Marketing, 58(3), 53-66.
Avkiran, N. K. (1994). Developing an instrument to measure customer service quality in branch
banking. The International Journal of Bank Marketing, 12(6), 10-18.
Avkiran, N. K. (1999). The evidence on efficiency gains: The role of mergers and the benefits to the
public. Journal of Banking and Finance, 23, 991-1013.
Baker, R., Thompson, C., & Mannion, R. (2006). Q methodology in health economics. Journal of Health
Services Research & Policy, 11(1), 38-45.
Brown, S. R. (1996). Q methodology and qualitative research. Qualitative Health Research, 6(4), 561-
567.
BSP assessing BPI glitch. (2019, May 1). bworldonline.com. Retrieved from
https://www.bworldonline.com/bsp-assessing-bpi-glitch
Chinh, V. T. M, & Anh, N. V. (2008). Measuring customer satisfaction based on service quality gap at a
local bank in Vietnam. Journal of International Business Research, 7(3), 27-51.
Choudhury, H. (2013). Service quality and customers’ purchase intentions: An empirical study of the
Indian banking sector. International Journal of Bank Marketing, 31(7), 529-543.
Culiberg, B., & Rojsek I. (2010). Identifying service quality dimensions as antecedents to customer
satisfaction in retail banking. Economic and Business Review, 12(3), 151-166.
Danesh, N. A. (2017). A comparison between major factor extraction and factor rotation techniques in
Q-methodology. Open Journal of Applied Sciences, 7, 147-156.
Danisman, G. (2018). Overview of competition in the banking sector. International Journal of
Economics, Commerce and Management, 6(4), 59-71.
Davis, D. L. (2000). Business research for decision making (5th ed). Pacific Grove, CA: Duxbury Press.
Demir, S. (2016). An analysis of pre-service teachers’ attitudes and opinions regarding the teaching
profession via Q-methodology. European Journal of Contemporary Education, 17(3), 295-310.
DeVellis, R. F. (1991). Applied social research methods series, Vol. 26. Scale Development: Theory and
Applications. Thousand Oaks, CA: Sage Publications, Inc.
Duke, A., & Cejnar, L. (2013). Competition and the banking sector: Friend or foe? Law and Financial
Markets Review, 152-158.
Ekinci, Y., & Riley, M. (1999). Measuring hotel quality: Back to basics. International Journal of
Contemporary Hospitality Management, 11(6), 287-293.
Ekinci, Y., & Riley, M. (2001). Validating quality dimensions. Annals of Tourism Research, 28(1), 202-
223.
Emory, C. W., & Cooper, D. R. (1993). Chapter 6: Measurement. In Business research methods (4th ed.,
pp. 168-189). Homewood, IL: Richard D. Irwin.
Felix, R. (2017). Service quality and customer satisfaction in selected banks in Rwanda. Journal of
Business & Financial Affairs, 6(1), 1-11.
Galloway, L., & Ho, S. (1996). A model of service quality for training. Training for Quality, 4(1), 20-26.
Gronroos, C. (1984). A service quality model and its marketing implications. European Journal of
Marketing, 18(4), 36-44.
Gounaris, S. P., Stathakopoulos, V., & Athanassopoulos, A. D. (2003). Antecedents to perceived service
quality: An exploratory study in the banking sector. The International Journal of Bank Marketing,
21(4), 168-190.
Guo, C., Duff, A., & Hair, M. (2008). Service quality measurement in the Chinese corporate banking
market. International Journal of Bank Marketing, 26(5), 305-327.
54
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Guo, Q., Feng, L., & Wang, M. (2017). Chinese undergraduates’ preferences for altruistic traits in mate
selection and personal advertisement: Evidence from Q-sort technique. International Journal of
Psychology, 52(2), 145-153.
Hair, J. F. Jr., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Chapter 3: Factor Analysis. In
Multivariate data analysis (7th ed., pp. 91-149). Essex: Pearson International Ltd.
Haywood-Farmer, J. (1988). A conceptual model of service quality. International Journal of Operations
& Production Management, 8(6), 19-29.
Hermelingmeier, V., & Nicholas, K. A. (2017). Identifying five different perspectives on the ecosystem
services concept using Q methodology. Ecological Economics, 136, 255-265.
Huang, C., Liao, J., Huang, S., Hsu, Y., Hsu, H., & Guo, J. (2019). Patterns of parents’ perspectives on
protecting young children from secondhand smoke exposure: A Q‐methodology study. Journal of
Advanced Nursing, 1-12.
Jabnoun, N., & Khalifa, A. (2005). A customized measure of service quality in the UAE. Managing Service
Quality, 15(4), 374-388.
Johnston, R. (1997). Identifying the critical determinants of service quality in retail banking:
Importance and effect. International Journal of Bank Marketing, 15(4), 111-116.
Kantar TNS reveals the top 3 performing Philippine banks in the past 10 years. (2019, January 31).
marketing-interactive.com. Retrieved from https://www.marketing-interactive.com/kantar-tns-
reveals-the-top-3-performing-philippine-banks-the-past-10-years
Karim, R. A., & Chowdhury, T. (2014). Customer satisfaction on service quality in private commercial
banking sector in Bangladesh. British Journal of Marketing Studies, 2(2), 1-11.
Keaveney, S. M. (1995). Customers switching behavior in service industries An exploratory study.
Journal of Marketing, 59(2), 71-82.
Kim, J.Y. (2018). A study of social media users’ perceptional typologies and relationships to self-
identity and personality. Internet Research, 28(3), 767-784.
Kumar, M., Kee, F. T., & Charles, V. (2010). Comparative evaluation of critical factors in delivering
service quality of banks (An application of dominance analysis in modified SERVQUAL model).
International Journal of Quality & Reliability Management 27(3), 351-377.
Ladhari, R., Ladhari, I., & Morales, M. (2011). Bank service quality: Comparing Canadian and Tunisian
customer perceptions. International Journal of Bank Marketing, 29(3), 224-246.
Lee, M. C., & Ing, S. H. (2005). Relationships among service quality, customer satisfaction and
profitability in the Taiwanese banking industry. International Journal of Management, 22(4), 635-
648.
Lewis, B. R., & Spyrakopoulos, S. (2001). Service failures and recovery in retail banking: The customers’
perspective. International Journal of Bank Marketing, 19(1), 37-48.
Manlagñit, C. V., & Lamberte, M. B. (2004). Evaluating the impacts of competition policy reforms on the
efficiency of Philippine commercial banks. Philippine Institute for Development Studies, Discussion
Paper Series No. 2004-46, 1-46.
McKeown, M., Hinks, M., Stowell‐Smith, M., Mercer, D., & Forster, J. (1999). Q methodology, risk training
and quality management. International Journal of Health Care Quality Assurance, 12(6), 254-266.
Monferrer, D., Segarra, J.R, Estrada, M., & Moliner, M.A. (2019). Service quality and customer loyalty in
a post-crisis context. Prediction-oriented modeling to enhance the particular importance of a
social and sustainable approach. Sustainability, 11(18), 1-27.
Nhem, S., & Lee, Y. J. (2019). Using Q methodology to investigate the views of local experts on the
sustainability of community-based forestry in Oddar Meanchey province, Cambodia. Forest Policy
and Economics, 106, 1-20.
Ogle, A., & Fanning, S. (2014). Quasi-Q-sorting innovation: The use of tangible cues in sorting
methodology. Journal of Hospitality Application & Research, 9(1), 69-80.
Operational lapses caused BPI system glitch BSP. (2017, December 2). bworldonline.com. Retrieved
from https://www.bworldonline.com/operational-lapses-caused-bpi-system-glitch-bsp/
Pakurar, M., Haddad, H., Nagy, J., Popp, J., & Olah, J. (2019). The service quality dimensions that affect
customer satisfaction in the Jordanian banking sector. Sustainability, 11(4), 1-24
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of service quality and its
implications for future research. Journal of Marketing, 49(4), 41-50.
Ma. Gloria V. Talavera
55
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A multiitem scale for measuring
consumer perceptions of service quality. Journal of Retailing, 64(1), 1240.
Petridou, E., Spathis, C., Glaveli, N., & Liassides, C. (2007). B ank service quality: Empirical evidence from
Greek and Bulgarian retail customers. International Journal of Quality & Reliability Management,
24(6), 568585.
Potluri, R. M., Angati, S. R., & Narayana, M. S. (2016). A structural compendium on service quality and
customer satisfaction: A survey of banks in India. Journal of Transnational Management, 21(1), 12‐
28.
Rejikumar, G. (2015). An empirical study on antecedents of perceived service recovery quality in e
banking context. Journal of Internet Banking and Commerce, 20(3), 1‐10.
Sexton, D., Snyder, P., Wadsworth, D., Jardine, A., & James, E. (1998). Applying Q methodology to
investigations of subjective judgements of early intervention effectiveness. Topics in Early
Childhood Special Education, 18(2), 95107.
Shelton, D. (1995). Distribution strategy in the life and pensions market. International Journal of Bank
Marketing, 13(4), 4144.
Shemmings, D. (2006). “Quantifying” qualitative data: An illustrative example of the use of Q
methodology in psychosocial research. Qualitative Research in Psychology, 3(2), 147165.
Sy, M. P., Ohshima, N., & Roraldo, M. P. N. R. (2018). The Role of Filipino occupational therapists in
substance addiction and rehabilitation: A Q‐methodology. Occupational Therapy in Mental Health,
34(4) 1‐22.
Talib, F., & Rahman, Z. (2012). Impact of total quality management and service quality in the banking
sector. Journal of Telecommunications System & Management, 1(2), 15.
Wastell, S., Skirrow, P., & Hare, D. J. (2016). Factors influencing the use of psychotropic medication for
challenging behavior in the United Kingdom: A Q method investigation. Journal of Applied Research
in Intellectual Disabilities, 29(4), 295304.
West, J. D., Bubenzer, D. L., Osborn, C. J., Paez, S. B., & Desmond, K. J. (2006). Leadership and the
profession of counseling: Beliefs and practices. Counselor Education & Supervision, 46(1), 2‐16.
Wong, E. L., Coulter, A., Cheung, A. W., Yam, C. H., Yeoh, E. K., & Griffiths, S. (2013). Item generation in
the development of an inpatient experience questionnaire: A qualitative study. BMC Health
Services Research, 13(1), 265-277.
Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value. A meansend model and
synthesis of evidence. Journal of Marketing, 52(3), 222.
Zeithaml, V. A. (2000). Service quality, profitability, and the economic worth of customers: What we
know and what we need to learn. Journal of the Academy of Marketing Science, 28(1), 6785.
54
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Guo, Q., Feng, L., & Wang, M. (2017). Chinese undergraduates’ preferences for altruistic traits in mate
selection and personal advertisement: Evidence from Q-sort technique. International Journal of
Psychology, 52(2), 145-153.
Hair, J. F. Jr., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Chapter 3: Factor Analysis. In
Multivariate data analysis (7th ed., pp. 91-149). Essex: Pearson International Ltd.
Haywood-Farmer, J. (1988). A conceptual model of service quality. International Journal of Operations
& Production Management, 8(6), 19-29.
Hermelingmeier, V., & Nicholas, K. A. (2017). Identifying five different perspectives on the ecosystem
services concept using Q methodology. Ecological Economics, 136, 255-265.
Huang, C., Liao, J., Huang, S., Hsu, Y., Hsu, H., & Guo, J. (2019). Patterns of parents’ perspectives on
protecting young children from secondhand smoke exposure: A Q‐methodology study. Journal of
Advanced Nursing, 1-12.
Jabnoun, N., & Khalifa, A. (2005). A customized measure of service quality in the UAE. Managing Service
Quality, 15(4), 374-388.
Johnston, R. (1997). Identifying the critical determinants of service quality in retail banking:
Importance and effect. International Journal of Bank Marketing, 15(4), 111-116.
Kantar TNS reveals the top 3 performing Philippine banks in the past 10 years. (2019, January 31).
marketing-interactive.com. Retrieved from https://www.marketing-interactive.com/kantar-tns-
reveals-the-top-3-performing-philippine-banks-the-past-10-years
Karim, R. A., & Chowdhury, T. (2014). Customer satisfaction on service quality in private commercial
banking sector in Bangladesh. British Journal of Marketing Studies, 2(2), 1-11.
Keaveney, S. M. (1995). Customers switching behavior in service industries An exploratory study.
Journal of Marketing, 59(2), 71-82.
Kim, J.Y. (2018). A study of social media users’ perceptional typologies and relationships to self-
identity and personality. Internet Research, 28(3), 767-784.
Kumar, M., Kee, F. T., & Charles, V. (2010). Comparative evaluation of critical factors in delivering
service quality of banks (An application of dominance analysis in modified SERVQUAL model).
International Journal of Quality & Reliability Management 27(3), 351-377.
Ladhari, R., Ladhari, I., & Morales, M. (2011). Bank service quality: Comparing Canadian and Tunisian
customer perceptions. International Journal of Bank Marketing, 29(3), 224-246.
Lee, M. C., & Ing, S. H. (2005). Relationships among service quality, customer satisfaction and
profitability in the Taiwanese banking industry. International Journal of Management, 22(4), 635-
648.
Lewis, B. R., & Spyrakopoulos, S. (2001). Service failures and recovery in retail banking: The customers’
perspective. International Journal of Bank Marketing, 19(1), 37-48.
Manlagñit, C. V., & Lamberte, M. B. (2004). Evaluating the impacts of competition policy reforms on the
efficiency of Philippine commercial banks. Philippine Institute for Development Studies, Discussion
Paper Series No. 2004-46, 1-46.
McKeown, M., Hinks, M., Stowell‐Smith, M., Mercer, D., & Forster, J. (1999). Q methodology, risk training
and quality management. International Journal of Health Care Quality Assurance, 12(6), 254-266.
Monferrer, D., Segarra, J.R, Estrada, M., & Moliner, M.A. (2019). Service quality and customer loyalty in
a post-crisis context. Prediction-oriented modeling to enhance the particular importance of a
social and sustainable approach. Sustainability, 11(18), 1-27.
Nhem, S., & Lee, Y. J. (2019). Using Q methodology to investigate the views of local experts on the
sustainability of community-based forestry in Oddar Meanchey province, Cambodia. Forest Policy
and Economics, 106, 1-20.
Ogle, A., & Fanning, S. (2014). Quasi-Q-sorting innovation: The use of tangible cues in sorting
methodology. Journal of Hospitality Application & Research, 9(1), 69-80.
Operational lapses caused BPI system glitch BSP. (2017, December 2). bworldonline.com. Retrieved
from https://www.bworldonline.com/operational-lapses-caused-bpi-system-glitch-bsp/
Pakurar, M., Haddad, H., Nagy, J., Popp, J., & Olah, J. (2019). The service quality dimensions that affect
customer satisfaction in the Jordanian banking sector. Sustainability, 11(4), 1-24
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of service quality and its
implications for future research. Journal of Marketing, 49(4), 41-50.
Ma. Gloria V. Talavera
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A multiitem scale for measuring
consumer perceptions of service quality. Journal of Retailing, 64(1), 1240.
Petridou, E., Spathis, C., Glaveli, N., & Liassides, C. (2007). B ank service quality: Empirical evidence from
Greek and Bulgarian retail customers. International Journal of Quality & Reliability Management,
24(6), 568585.
Potluri, R. M., Angati, S. R., & Narayana, M. S. (2016). A structural compendium on service quality and
customer satisfaction: A survey of banks in India. Journal of Transnational Management, 21(1), 12‐
28.
Rejikumar, G. (2015). An empirical study on antecedents of perceived service recovery quality in e
banking context. Journal of Internet Banking and Commerce, 20(3), 1‐10.
Sexton, D., Snyder, P., Wadsworth, D., Jardine, A., & James, E. (1998). Applying Q methodology to
investigations of subjective judgements of early intervention effectiveness. Topics in Early
Childhood Special Education, 18(2), 95107.
Shelton, D. (1995). Distribution strategy in the life and pensions market. International Journal of Bank
Marketing, 13(4), 4144.
Shemmings, D. (2006). “Quantifying” qualitative data: An illustrative example of the use of Q
methodology in psychosocial research. Qualitative Research in Psychology, 3(2), 147165.
Sy, M. P., Ohshima, N., & Roraldo, M. P. N. R. (2018). The Role of Filipino occupational therapists in
substance addiction and rehabilitation: A Q‐methodology. Occupational Therapy in Mental Health,
34(4) 1‐22.
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56
Measuring Service Quality in Philippine Banks: An Exploratory Study Using SERVQUAL and Q-Methodology
Exhibit 1
SORT BOARD Classification of SERVQUAL Attributes
SERVICE QUALITY ATTRIBUTES OF AN EXCELLENT BANK
Instructions: Sort the 24 service quality attributes according to the three categories (1) Most Important, (2)
Moderately Important, (3) Least Important.
Most Important Moderately Important Least Important
Exhibit 2
SORT BOARD Ranking of Cards per Classification of SERVQUAL Attributes
SERVICE QUALITY ATTRIBUTES OF AN EXCELLENT BANK
Instructions:
1. Once the 24 Service Quality
attributes have been sorted to the
three card categories in Exhibit 1,
arrange the attribute within each
category (e.g., Most Important
category) from highest to lowest in
terms of importance.
2. Once the attributes in a category in
Exhibit 2 have been ranked
according to importance, the
respondent was then asked to give a
score of 100 to the Top Card and a
score of 1 to the Bottom Card.
Relative to these scores of 100 and
1, the respondents were asked to
assign a numerical score for each of
the other statements according to
their relative importance to each
other. This serves as the final score
of the attribute.
3. Do the same process for all card
categories.
Most Important Moderately Important Least Important
Philippine Management Review 2020, Vol. 27, 57-78.
Determining e-Government Trust: An Information Systems Success
Model Approach to the PhilippinesGovernment Service Insurance
System (GSIS), the Social Security System (SSS),
and the Bureau of Internal Revenue (BIR)
1
Erik Paolo Capistrano, Ph.D.*
University of the Philippines, Cesar E.A. Virata School of Business, Diliman, Quezon City 1101, Philippines
Building trust in e-government is not easy, especially in a country that faces many contextual,
technological, and social challenges. This discourse on Philippine e-government is an ongoing
one, as many of these initiatives are piecemeal in the various branches and levels of
government. This research particularly looks at three e-government platforms rendering some
mandated financial services to the citizens: (1) social security services provided by the
Government Service Insurance System (GSIS) and the Social Security System (SSS), and (2) tax
services delivered by the Bureau of Internal Revenue (BIR). Employing a theoretical
framework based on interpretations of the Information Systems Success Model and trust
building towards e-government, data collected from a total of 668 respondents across the three
government institutions are subjected to structural equation modeling to determine what
factors influence trust in e-government. The results show that trust in technology and
information quality perceptions are the most significant determinants of trust in e-
government, while there are some concerns regarding system quality in building trust in e-
government. Further implications and recommendations are also included in this research.
Keywords: e-government, trust, GSIS, SSS, BIR
1 Introduction
1.1 Rationale
The United Nations (UN) has defined e-government as “the use of information and communication
technologies (ICTs) and its application by the government for the provision of information and public
services to the people.” It also agrees with other contemporary definitions that e-government is “the
government use of ICTs to offer for citizens and businesses the opportunity to interact and conduct
business with government by using different electronic media such as telephone touch pad, fax, smart
cards, self-service kiosks, e-mail, internet, and electronic data interchanges (EDI). ” The World Bank (WB)
likewise states that e-government is “government-owned or operated systems of ICTs that transform
relations with citizens, the private sector and/or other government agencies so as to promote citizen
empowerment, improve service delivery, strengthen accountability, increase transparency, or improve
government efficiency.” It further adds that e-government is “the pragmatic use of the most innovative
ICTs, like the internet, to deliver efficient and cost-effective government services, information, and
knowledge.” Many academic researches and practical endeavors have grounded their efforts on e-
government on these definitions. Additionally, these international efforts have also advocated that
such researches and endeavors should be geared towards improving e-government in a more citizen-
centric manner (Mpinganjira, 2015).
In a bid to adhere to the thrusts of these big multilateral organizations, and to garner favorable
valuations, the Philippines has been increasingly pushing for more comprehensive e-government
platforms, especially with open data features (Capili, 2015). Mandated by Republic Act (R.A.) 10844,
* Correspondence: escapistrano@up.edu.ph
The author would like to acknowledge invaluable contributions of the BA174 Market Research class (Second
Semester, Academic Year 2017-2018) handled by Ms. Agnes Tayao, of the Cesar E.A. Virata School of Business,
University of the Philippines, for a significant part of the data collection for this research.
1
An earlier version of this research, focusing on the discussion of the analysis and results, and on managerial
implications, was presented at the 2019 BSP-UP Professorial Lecture Series held at the Bangko Sentral ng
Pilipinas.
... Parasuraman et al. (1985Parasuraman et al. ( , 1988) suggested a gap-based SERVQUAL measurement which evaluates the service quality by employing a gap-based comparison between the expectations and perception of actual service performance. The SERVQUAL instrument has been successfully adopted across diverse service organizations such as banking (Baoy and Talavera, 2020), telecommunication (Bello, 2020), hotel (Savi c and Veselinovi c, 2019), healthcare (Ampah and Ali, 2019), restaurant (Tuncer et al., 2020) and others. Additionally, many researchers have suggested to adopt the SERVQUAL instrument in the HEIs (Datta and Vardhan, 2017; Gregory, 2019;Li et al., 2018;Nojavan et al., 2021). ...
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