NEXUS BETWEEN SERVICE QUALITY & CUSTOMER LOYALTY: MEDIATING ROLE OF CUSTOMER SATISFACTION IN BANKING SECTOR

Abstract

In modern banking industry, for maintaining competitive edge, standing of customer loyalty has become paramount and indispensable. Due to fierce competition within banking sector, understanding and nurturing customer loyalty has appeared as a strategic imperative. This research investigates the service quality impact on customer satisfaction and effect of customer satisfaction on customer loyalty. It looks at the role of customer satisfaction as a mediator in relationship amid dependent and independent variables. In order to validate this link, data was collected from 250 customers across the five major banks operating in Nikpikhel, Swat. The results revealed a significant positive relationship amid two study variables. The mediation analysis reveals that customer satisfaction partially mediates relationship between the given variables. The findings of study highlight the critical importance of study factors which enhance customer loyalty in banking sector. The conclusion offers certain clues towards some recommendations to banking sector and customers concerning the issues under consideration in this study.