TQM Customer Satisfaction1

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1.0 INTRODUCTION

Today globalization and liberalization are affecting economies of not only developing but

also developed countries. The focus areas for organizations are also changing from profit

maximization to maximizing profits through increased customer satisfaction. The pressures of

competition are forcing the organizations to not only look on the processes but also on the way

they are delivered. In each industry has different product and service but in the bank industry

they provide the same product. The small differences might be the product of conventional banks

and Islamic banks. Competition in Malaysia banking industry, customers have to make a choice

among various service providers by making a trade-off between relationships and economies,

trust and products, or service and efficiency. Customers are increasingly aware of the options on

offer in relation to the rising standards of service (Krishnaveni et al, 2004). In this context,

expectations rise and customers become more critical of the quality of service.

During the past few decades service quality has become a major area of attention to

practitioners, managers and researchers owing to its strong impact on business performance,

lower costs, customer satisfaction, customer loyalty and profitability (Leonard and Sasser, 1982;

Cronin and Taylor, 1992; Gammie, 1992; Hallowell, 1996; Chang and Chen, 1998; Gummesson,

1998; Lasser et al., 2000; Silvestro and Cross, 2000; Newman, 2001; Sureshchander et al., 2002;

Guru, 2003 etc.). Lehtinen and Lehtinen (1982) defined service quality in terms of physical

quality, interactive quality, and corporate (image) quality. Physical quality relates to the tangible

aspects of a service. Interactive quality refers to the two-way interaction between a customer and

a service provider (or the providers representative), including both automated and animated

interactions. Corporate quality refers to the image attributed to a service provider by its current

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and potential customers. Level of customer satisfaction is becoming the major target of banks to

increase the market share. More specifically, the cost of retaining existing customers by

enhancing the products and services that are perceived as being important is significantly lower

than the cost of winning new customers (Krishnan et al, 1999). Customer satisfaction is a

measure of extent the existing bank is fulfilling the general expectations of a customer and how

far and/or close does the existing bank come to the customers ideal bank in his mind (Beerli et

al, 2004). Customer satisfaction can be viewed as the future intentions of customers towards the

service provider, which is more or less related to the attitude (Levesque T et al, 1996).

In the light of the research findings, interest in service quality is, thus, unarguably high.

Poor quality places a firm at a competitive disadvantage. If customers perceive quality as

unsatisfactory, they may be quick to take their businesses elsewhere. Thus, it is clear that service

quality offers a way of achieving success among competing services, particularly in the case of

banks, where establishing service quality may be the only way of differentiating oneself. Such

differentiation can yield a higher proportion of consumers choices and, hence, mean the

difference between financial success and failure. This documented knowledge base through

several studies on the subject can be of great use to researchers and practitioners in providing a

direction on how to explore the existing service quality concepts in the bank base on five key

dimensions of service quality contribute to customers perception in Bank Muamalat Malaysia

Berhad which is located in International Islamic University Malaysia (Gombak Campus).

Regarding to this study, we selected Bank Muamalat because there are only few banks inside

campus so in term of studying in service quality will benefit not only the students but also the

bank itself to improve their service quality according to five key dimensions of service quality

contribute to customers perception.

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1.1 Objectives of study

1) To learn and understand the customer perception regarding service quality

2) To learn and understand the different dimension of service quality in banks.

3) To understand and enhance the quality of the organization and its offering.

2.0 LITERATURE REVIEW

2.1 Customer satisfaction

The banking sector is one of a very growing delivery of services to quickly get to the

customer with satisfactory service. Customer satisfaction is one of the important outcomes of

marketing activity (Spreng et al., 1996; Mick & Fournier, 1999). Customer satisfaction can

represent a modern method for quality in the organizations to help the organizations growth by

focused of managements system and customer. The expression of customers does not only

express a happy Customer, but it will measure on customer satisfaction in their preference and

their expectation through customers feedback.Giese & Cote (2000), identified the components

of satisfaction is one kind of response (emotional or cognitive), the response emphases on a

particular focus (product, consumption, experience, expectations etc), and response occurs at a

particular time (after choice, based on accumulated experience, after consumption etc).

According to Jayaraman, Shankar and etc. (2010) said that the Customer satisfaction is

actually a term most widely used in the business and commerce industry. It is explaining about a

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measurement of the kind of products and services provided by a company to meet its customers

expectation and in a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of business

strategy in the long term. Therefore, customer satisfaction must be translated into a number of

measurable parameters directly linked to peoples job-in other words factors that people can

understand and influence to other around them or it can called word of mouth combination

(Deschamps and Nayak, 1995).According to File & Prince (1992), customers who are satisfied

tell others about their experiences and this increases Word of mouth (WOM) advertising.

Therefore, satisfaction can be related with feelings of acceptance, happiness, relief, pleasure, and

excitement toward to banks performance or outcome in relation with expectation. The relation

of positive value would be strong influence through customer satisfaction with financial

businesses in special treatment and confident transaction if the customers obtain the additional

benefit service provider by banks.

According to Drucker (1954), the fundamentalpurpose of any business is to create

customer satisfaction. Increasing customer satisfaction has been found to lead organization to

higher future profitability (Anderson et al., 1994). One of the main strategic in banking sector to

win the competition is engaged in providing a quality of service to customers. Quality of service

is defined as the overall characteristics and the nature of a product or service that affect its ability

to satisfy stated or implied needs (Kotler, 1997). The banks management is required to be able

to achieve a good level of service quality, it can identify by Quality control system in bank

sector, and this is important system in organization based on Delivery of services with higher

quality than competitors. Service excellence is part of intangible activities attitude or way of

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employees in serving customers in a satisfactory manner, according to (Elhaitammy.T, 1990)

said that fourth component is a unit of service that can achieve the level of excellence in

customers expectation; this consists of Speed, Accuracy, Hospitality and Leisure to be serve a

large benefit of organization. In the context of Consumer Expectations can evaluated in quality

of product and satisfaction has reached customers need as a standard of perception service

provided by the bank. Service is one criterion that is included the appearanceof the stores, the

waiting time such as waiting for queue; the complexity of service processes and the information

provided is easily to understand.

In addition, quality in bank service have to improve level by understand the customers

loyalty if they can produce greater value than their competitors (Dawes &Swailes, 1999).

According to Davies et al., (1995) explained on higher profits can be earned a good position

better than competitors within a specific market if a banking organization can only differentiate

itself from competitors by providing high quality services to be a positive result for financial

institution sectors. Hence, banks should focus on service quality as a core competitive strategy

(Chaoprasert&Elsey, 2004). Consequently, customer satisfaction and service quality have

become the mainmajor fact of all banking organization around the world has to practice

(Hossain& Leo, 2009). Hence, the demographic is one key that make level of customer

expectation toward their need to be high degree of customer satisfaction such as education,

gender and income.Consequently, banks need to focus on service quality as a core competitive

strategy to serve to all level of customer to be more satisfied with.

2.2 Customer Knowledge (internet banking)

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Due to the development of technology, internet has become a popular place in this

century and online banking is one thing that related to internet. With the development of online

banking, it has many advantages on no more to go to the bank and no more waiting in lines.

Online banking enables customers to save time, its available in 24 hours a day; 7 days a week

through making the transactionand also help customer to control on their personal finances

anhelp the environment by opting to receive electronic statements (Applegate et al., 1996).In

other way, your personal computer becomes a virtual teller, ready to assist you with your needs.

According to Daniel, 1999; Mols, 1998; Sathye, 1999fine on technology advancement is

certainly a key factor this spell of banking activity. By this technology plays an importance

satisfying with business requirement abroad. In other hand, without technology, going global just

its not possible. Furthermore, in online banking offer many advantage over traditional banking

methods consist easily to get the online banking from any location that has the internet

connection, it have better control the customer transaction and it can monitor the account in the

real time such as withdrawals, deposits transaction. Online banking is more cost effective for

banks on positive result in lower fees for customers (Karjaluoto, 2002). The real estate,

maintenance, and personal expenses add up quickly in the more of technology increasing and

retail banks have been trying to abate branch network cost in recent years.

Consumer behavior is changing partly because of more spare of time. The way of use of a

financial service is characterized of individual effective through distribution bank channel

(Burnham, 1996). Cause of developing of technology which can make Banking was changing to

online banking like signature now becomes digital signature that one part of consist for increase

in technology. Digital signatures employ encryption technology to validate electronic

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transmissions, increase in unique digital signature. the use of digital signatures in online contract

presents added legal complications and also banking has come out with for bank card; they are

many type of bank card like debit card or credit card or premium card and so on.The protection

privacy is respect privacy in internet financial transactions, preserving the confidentiality and

honesty of online financial transactions and limiting disclosure of personal financial records to

third parties under reliable of dimension in service quality. This may achieve the higher levels of

service quality in customer satisfaction.

2.3 Service and Total Quality Management

Total Quality Management (TQM) is a structured system for satisfying internal and

external customer and supplier by integrating the business environment, continuous

improvement, and breakthroughs with development, improvement, and maintenance cycles while

changing the whole organization culture (Cole &Mogab, 1999). It is a buzzword phrase of the

modern age is based on the assumption that quality can be managed that every business entity

tries to get into. TQM is view as virtually a new organizational culture and a way of thinking. So

the approach has an intense focus on customer satisfaction, accurate measurement of every

critical variable in business operation, continuous improvement of product, services and

processes, and on work relationship based on mutual trust and team work (Pearce & Robinson,

2005).

In every industry, the lifeblood of any business is customer; this may also include the

bank section. In nowadays, the customer had decided to buy a product and service based on their

perception of product and service quality. In shortly, quality can determines as a main profit and

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customer determines what quality is and should be. Improving service quality and understanding

customer needs and expectations is important to retain existing customer and win new ones. An

organization must provide customer with outstanding quality service that meet and exceed their

demands and expectation, seasonable price, and on time delivery. To attain this level of

excellence service, organization needs to examine their service quality system to see if they are

responsive to changing customer requirements. One of the Implementation tools of quality

improvements is total Quality Management to improve the current product and service (Newall

and Dale, 1991).

For banking sector, most Bankers believe that banks are in financial industry, not in

service industry. Thus, they tend to complete in terms of financial service rather than service

quality. People, resource, time, and system are devoted more to manage assets and cash rather

than managing customer and service. In today banking service is highly competitive based upon

the satisfaction of both internal and external customers. The philosophy of TQM guides toward

this direction to be more improvement the current based since quality of service is the most

important aspect which banker and marketer should not ignore in order to gain improvement in

quality service.

Based on past management literature, many challenges have been facing banks in the

current global context. Therefore, it has been also emphasized that in the knowledge-based

society, the quality alone is not sufficient to attract customer. Furthermore, in the era of

knowledge, the basis for sustainable competitive advantage has shifted from quality to

innovation that can surprise customer and gain their loyalty (Hong, Igel, &Laosirihonthong,

2006). Banks among other organizations have been facing a dynamic business environment that

is technologically driven, globally unbounded, and customer oriented. These challenges among

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many others called and forced banks for extensive search for suitable strategy to adopt

innovation and quality strategy to achieve a better strategic position and to growth and survival

in the changing and turbulent marketplace (Feng, Prajogo, Tan &Sohal, 2006, and Al-Mansour,

2007).

It has been widely emphasized on customers of the bank are the main business partner

that used product and services. Hence, the customers for a bank are more important than

salesmen due to their role in attractive new customers and recommending the products and

service to others (Peschel, 2008). But for some organization it also straight point to the employee

as well for being a productive, they are believe employees outcome is part of customer

satisfaction.

In relation of TQM system in banking section focus all about the processing in system

toward the customer satisfaction an expectation. Thus, the banks should stand to benefits from

TQM; in order to apply TQM to a service sector it is important to decide on how to evaluate the

quality of service. Service can be evaluated according to cost, flexibility, acquire ability, totality,

and respond time (Evans J.R., 1993).

Edward and Smith (1990) conducted a research on TQM in banking focusing on quality

performance standard setting, measuring a monitoring of current system. The study concluded

that customer care on bankings programs, action teams and improved communications within

the staff, this were the first step; the next step in maintaining the competitive edge was the

establishment of quality performance standards, and devising systems for measuring and

monitoring their effectiveness. The best way to institute quality into an organization, particularly

a bank, was to train employees to do their job better through a top down training structure.

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2.4 Customer Service Quality

Berry et al (1988) stated that quality is conformance to customer specifications; it is the

customers definition of quality, not managements that counts. Sander et al (2000) have

highlighted the importance of using customers as the base to measure the service quality. The

authors have caution the use of inside-out approach to identify the short falls in the service

quality. Inside-out approach uses the academic insiders viewpoints to improve the quality of

services in the institutions. This approach of evaluation may lead to mis judgment of the whole

quality standings of the institutions thus contributing to poor service quality.

Customer satisfaction and service quality are inter-related. One reference of higher

customer satisfaction can related on higher the service quality expectation. As we known in the

banking sector, there are no recognized standard scales to measure the perceived quality of a

bank service. Thus, competitive advantage through high quality service is an increasingly

important weapon to survive. Measuring service quality seems to pose difficulties to service

providers because of the unique characteristics of services: intangibility, heterogeneity,

inseparability and perishability (Bateson, 1985). Because of these complexities, various

measuring models have been developed for measuring perceptions of service quality (Gronroos,

1990; Parasuraman et al., 1985; Stafford, 1996; Bahia and Nantel, 2000; Aldlaigan and Buttle,

2002). Hence, in TQM form there is one tool model that can be used as a measurement tool to

measure customer satisfaction on level of service quality, It can called the five dimension of

service quality model.

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Besides that, the listed ten determinants of service quality that can be generalized to any

type of service (Parasuraman et al., 1985). The ten dimensions include tangibility, reliability,

responsiveness, competence, access, courtesy, communication, credibility, security and

understanding can be a guide in measuring the level of service provided. In addition, these ten

dimensions were then regrouped in the well-known five dimensions in the SERVQUAL model

(Parasuraman et al., 1990) which include assurance, empathy, reliability, responsiveness and

tangibility. Moreover, there was a previous research done by Mahiah., S. et al. (2006) also

confirmed Parasuraman, Zeithaml and Berry (1985) and they suggest that increasing of

sophistication of reliability, empathy, tangibility, responsiveness and assurance can increase

customer satisfaction towards services rendered by Human Resource department.

In banking sector it need to know what customers care about, this model will help to

evaluate more on customers needed, this are consists of five proportions which include of

assurance, reliability, tangible, empathy, and responsiveness. Subsequent work by Parasuraman

et al. (1988) resulted in the service quality measurement scale on 5 dimensions consists of

reliability, responsiveness and tangibles were retained as identified in 1985 whereas

communication, competence, credibility, courtesy and security merged as a new dimension

assurance. Access and understanding knowing the customer merged to form the dimension

empathy.

The measurement of service quality in the service sector should take into account

customer expectations of service and perceptions of service. One service quality measurement

model that has been extensively applied is the SERVQUAL model developed by Parasuraman et

al. (1985, 1986,A. Shahin41988, 1991, 1993, 1994; Zeithaml et al. , 1990). The SERVQUAL

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approach to measuring service quality departs from the customers perception. It is argued that

perceived service quality involves a comparison of expectations with actual performance.

Assurance

It refers to knowledge and courtesy of the employees and their ability to convey trust and

confidence. Based on finding of Jayaraman, Shankar, and Hor Wai (2010), assurance has

positive relationship with customer satisfaction, but without significant effect. From the research,

assurance is mean of being safe, the responses of the research state that the customers do not feel

assurance is being important as part of the service quality that should be included.

Tangibility

Refers to appearance of physical facilities, equipment and communication material. The

tangibles component measures such factors as the appearance of a banks physical facilities,

equipment tools and employees. These are all factors that customers can notice before or upon

entering the bank such as the visual factors help consumers form their initial imitation. Since

tangible elements have a significant bearing on consumers satisfaction and loyalty, banks should

take actions to design a pleasant banking environment to be more grateful as possible. The

interior decoration can be one special enhance conditions to customer, it can be in part of

lighting, temperature and spatial layout of furnishings and color to be used. Traffic flow should

be carefully planned and plenty of seating should be provided for those waiting to see a bank

officer (Ugur Yavas, Zeynep Bilgin, and Donald J. Shemwell , 1997).

Reliability

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Reliability can defined in to perform the promised service dependably and accurately

from the staff. In relation to banking sector reliability is about the accuracy and timeliness in the

service provided. According to previous research of Jayaraman Munusamy, Shankar Chelliah

and Hor Wai Mun (2010), measure the word reliability has no significant impact on customer

satisfaction. This may be caused by the growth of technologies in phone banking and internet

banking, customers do not concern about the reliability level since they have an option to turn

into. With the rapid growth in the internet technology, many banks have setup their internet

banking portal to be competitive advantage level for rivalry, to persuade their customers use the

internet banking. Retail banks are competent to reduce the operation cost by and reduce staffs

expenses, since the Internet banking can working 24 hours a day without supervision.

Responsiveness

It is a willingness to help customers and provide prompt service. Willingness to help

customers and delivery of prompt services are key ingredients of responsiveness. As the results

of this study show responsiveness, similar to tangible elements, is closely linked to consumers

satisfaction with a bank and their continued patronage decision (i.e. commitment). In a milieu

where customer-contact personnel long subscribed to production orientation as a way of

viewing their customers and where customers still form double horizontal lines in front of a

tellers window and fight each other to reach the teller, provision of responsive services become

a real challenge (Ugur Yavas, Zeynep Bilgin, and Donald J. Shemwell , 1997).

Empathy

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It refers to the caring and individualized attention, organization provides to its customers

as best services. In bank sector can with concentration to all customers and understands the

specific needs of customers and get them in highly quality needed. It is easy to see how banks

perform in this area by customer complain box. Image of bank will reduce if the bank not

concern on empathy part. This situation may be depressing at first quick look, if the customer

feel the bank does care about their individual needs, that does want to provide high levels of

service quality, and that does respond appropriately to legitimate complaints. Thus, the current

situation actually represents a great chance for banks that are willing to seize the service quality

banner and carry it on to the battlefield (Ugur Yavas, Zeynep Bilgin, and Donald J. Shemwell ,

1997).

All of the above dimensions are found relevant to banking sector to be more valuable in

win-win situation as customer side and bank itself (Zeithaml and Bitner, 1996). For example

trustworthiness is important to display the good reputation of the bank. Security is another

important matter to articulate the safety for the customers to use the ATMs machine in anytime

and to protect all information. Empathy or accessibility is another key related factor that enables

customers to deal with their banks more easily (Levesqueand McDougall, 1996). The bank area

may need to practice the five dimensions in service quality for long term reputation of the bank

and make more customers to be loyalty of their current banking.

3.0 PROBLEM STATEMENT AND RESEACH QUESTION

3.1 Statement of the problem

Service quality is a main important kind of service that all the organizations have

provided to the customers, especially in the banking sector. Customer perception determines as

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getting highly profit for the business. 1Moreover, focusing of the customers, it can growth market

share and need drive for competitive advantage. The best service quality is highly to get

profitability.

At the current time, most of the customers concern more on quality both of services and

products. They consider on perfect serve by the organization. By getting a good service, it can

make trust worthiness between organization and consumers. Also there are a lot of competitive

in the banking industries such as Bank Islam, Ambank and Maybank. This service quality issue

is the best way to get customers loyalty. As a result, can growth the market share in the Bank

Muamalat.

By practicing this issue inside the Bank Muamalat, it can ensure a substantial return. It is

significant for banking to offer more reliable, a good security and overall service dimensions that

it can serve customers perceive value. Besides that, deliver service that it cannot reach the

customers loyalty, it will lead to much impact for all industries like the banking industry. For

example, the customers will have a lot of complaint, word of mouth which it can reduce

profitable and image of the company. Thus, the bank must practice for the best service high

quality in their organization to get advantage competitive.

Consequently, the banks require understanding the characteristics of the customers that it

can easily come out with a good product by classified in terms of target of the customers to

improve service quality management. The project comes out to examine the customers

satisfaction on service quality of bank Muamalat.

3.2Research questions

1http://mpra.ub.uni-muenchen.de/30782/2/Customer_satisfaction_a_case_study_on_Bank_Islam.1.2.pdf

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This project more specifies on service quality management, that answering the following

questions which are:

1. What are the dimensions of service quality?

2. What are the levels of customers perception on service quality for the bank?

4.0 RESEARCH METHODOLOGY

4.1 Data Sources

This step is very significant in conducting the marketing research is to determine the

problem. This project was used qualitative methodology in collecting the data.This project

determines service quality dimension in banking. Also it was conducted to qualitative method or

secondary data by interview IIUM students who live in campus at International Islamic

University Malaysia, Kuala Lumpur. The population for this research is determined as the people

who have experience on using service at the Bank Muamalat. It aims at finding out the opinions

of using service as financial products in the bank.

The sources of information we used for this project comes from varied articles on the

quality service for the bank which is important for leading to customers satisfaction on its.

Moreover, to make our project come out better result, we conduct interviews with IIUM

students who has experiences in bank Muamalat.

It was conducted on IIUM students perception on service quality of the bank. It was

more concerned on understanding their opinion rather than statistical analysis. It will be open

minded questions for them to answer and get information in detail. Interview customers can get

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quality, measure and satisfaction for their previous experience in service at the Bank Muamalat.

As a result, all answering through interview will be the result to improve quality service for that

sector. The questions gathered information on consumers attitudes of the bank, the explanation

why they choose this bank. Thus, it aims to identify the customers compliant to improve the

service in the bank.

In order to consider their perception in the service quality of the bank by interviewing

face to face by approaching perceive value of the customers due to it would afford in depth

exploration of the issue, it can allow us flexibility. For example it can modify the order of the

questions, simplify the question to interviewer.

These questions were designed to identify measurement toward bank quality service.

Also to entrance their willingness of the significance for each of those five types of services. It

were designed on observe of value service and also the question asks about the awareness of

reliable and trust from the staffs itself. The interview will conduct 20-30 minutes per respondent.

The question will base on attitude on feature of the bank, how staffs take good care to the

customers in addition, they awareness on security at the Bank. This study has interviewed at

International Islamic University and the data was collected from 1 November, 2012 and finished

on 7 November, 20

4.2 Data Analysis

Data analysis started with repeated reading of interview transcripts from discussion with

IIUM students. The reason was to determine the concentrate of the phenomenon and experiences

of the customers on using service at the bank and it related with attitude of customers.

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In addition, the purpose for this study was to recognize the IIUM students perception on

service quality dimensions. Thus, the procedure of interview questions were came out in five

levels. Firstly, they were asked how the customers concern on reliable in the bank. Secondly, it

was apprehension in assurance, security of its. Thirdly, they were asked how the staffs empathy

to their customers. Fourthly, the question was asked the tangible physical within the bank, in

terms of how they provide to the customers. Lastly, most of the questions are concerned on

service dimensions that making the customers serve the best quality service.

In sum up, by using qualitative method on this project, it will lead to get the customers

loyalty on the service. Also the bank can get high profitable. So deriving the quality service is

very important on business section.

4.3 Research Instrument

This study used interview question as a medium to obtain the data needed. There are two

sections in the questionnaire, consisting of Section A: Demographic factor, Section B:

Measurement of student satisfaction to service quality in higher education. In this section A; 4

question covering from the demographic information. Then, followed by section B: 6 questions

are covering the five dimensions of service quality from the level of student satisfaction to

service performance of employees at Bank Muamalat, IIUM. Instrument used in this research is

SERVQUAL which is adapted from A. Parasuraman, Leonard Berry and Valarie Zeithaml using

the fives dimensions in service quality (tangibility, assurance, reliability, responsiveness and

empathy) as well as using the open answer, ask participants about their past experiences or

feelings. Interview report is also very useful for logistical reasons, as it is often the simplest of

methods to apply and requires the least resources.

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5.0 FINDING

The survey forms distributed, only 7 responded. Based on figure 1, the mode of

communication was via face-to-face interview a total respond rate of 100% includes of 57.14%

is male and 42.86% is female, the age group that we focused is under 21-26 and the level of

study inclusive of Bachelors degree and Master Degree.

The survey reading representative that internal consistency under five dimensions of

service quality control, which consists of assurance, tangible, reliability, responsiveness and

empathy. By this survey we are choosing among UIA students to evaluate Bank Muamalat in

overall of five dimensions under service quality in Bank. Our survey had conducted in to two

section which are included of section A and section B. Section A is demographic include of

Gender, Age and Level of Study and section B is questionnaire about determined of service

quality listed in Bank Muamalat. Its indicated that perceived service quality is the result of

customers comparison with another banks of expected service with perceive service.

Table 1: Demographic

Section A: Demographic

Gender Male 4 57.14%

Female 3 42.86%

Age 20-25 5 71.42%

26-30 2 28.58%

Education Bachelor 2 28.58%

Master 5 71.42%

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Table 2: Service quality in Bank Muamalat

Five Factor under Service Quality Satisfaction Satisfaction inpercentage

Dissatisfaction Dissatisfacti(in percenta

Do you reliable on service with the

bank such as in term of securities

transaction?

7 100% 0 0%

Does the bank quickly react on yourproblem?

5 71.42% 2 28.58%

Do they provide enough facilities inthe bank such as seats, machine?

2 28.58% 5 71.42%

Are the staff well verse with all the

products and services offered?4 57.14% 3 42.86%

Do the staff willingness to schedule

delivery at the customers?5 71.42% 2 28.58%

According to the table 2, it is showed that students have agreed with the service quality received

from the Bank Mualmalam Branch IIUM Gombak which the highest score was Reliable

dimension that has 100%, followed by Empathy is 71.42%, that equal with Responsiveness

71.42% and Assurance (37.0%), and the lowest score was Tangible has 28.58 %. Therefore, it

can be explained that the Bank Mualmalam Branch IIUM Gombak has the excellent service

quality in Reliability dimension that contributes most to satisfaction of the students, which

indicates the perform the promised service dependably and accurately from the staff their ability

to convey trust and confidence.

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6.0 DISCUSSION

We are using Qualitative to conduct the research study on customer

satisfaction in Bank Muamalat at IIUM. All despondence from IIUM Gombak,

the questionnaire was designed to seek information about the respondents,

age, gender, education. Present analysis shows that 57.1% of the

respondents are male and 42.9% are female.

We are using the five dimensions on service quality to be measure the students satisfaction to

bank Muamalat. The discussion as below:

6.1 Assurance

Dimension of assurance explain in term of knowledge and courtesy of employees and

their ability to convey trust and confidence to make their customers feel safe. Examples include

being able to answer the questions, having the capabilities to do the necessary work, and being

polite and pleasant during customer transactions.

According to interview, Most of respondents are satisfy with the bank service in

providing assurance. Data collected shows that customers trust in the bank staff and their

capabilities in providing knowledge concerning with product of the bank. They believe that staff

are well-trained by the bank because the organization like bank they have to train their staff to

work accurately and efficiency to meet the banks objective and to meet customers expectation.

As shown as below;

Basically, I think the staff are well trained and fully equipped with knowledge about their tasks

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In contrast, some respondent feel unsatisfied with service of the bank staff. Regarding to

service, every job concerning to service because if compete purely in term of product in some

certain industry are not differentiate especially in bank industry so their staff should have

service-minded (difference meaning in difference culture); - the willingness to service others. As

one interviewee said that;

There was one staff, when I did transaction. Shes not friendly. She did not even smile to me,

she did not

From the statement above shows that respondent who are customer of the bank and did

the transaction with one staff who did not smile to her. In customers perception, they expect to

meet with staff that is cheerful and smile to them, willing to serve them happily. But there are

one interviewee have answered that;

All of them are very good in serving the customers. They speak nicely, greeting in Islamic way,

helpfulness with me

Therefore, we summarize that the performance of bank Muamalat in IIUM that we have

conducted from interview under the dimension of assurance are positive and customers are

satisfy and trust that the bank do the safety way to provide product to them. Moreover,

Customers have found the well-equipped product knowledge of the bank staff but in term of

willingness of serving service to customer because the definition of assurance not only provide

safety but also being polite and pleasant during transaction so bank should improve and ensure

that every bank staff are highly willing to perform their work to meet customers satisfaction in

every transaction in order to be differentiate organization in the market.

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6.2 Tangible

This point is consisted of all physical equipment and material within the organization,

this study shown that it has very strong connection with the customers service. Especially, retail

banking which the customers make transaction there. In fact, it is very significant for the bank

should provide a good decoration for physical and equipment in the office. Also they want to get

comfortable when their get service there. By providing good equipment and a good interior

design, it can improve quality service for the firm. Also it can develop competitive advantage

with the same industry like Bank Islam and Am bank. However, the result of the study explained

that most of IIUM students concern more on having comfortable equipment for them to make

service in retail banking.

Some of respondents mentioned that in the camps of UIA they have enough machines

and also the facilities are good and most of the banks branches have a very comfortable

environment which makes it convenient for me to the transaction. Consequently, they are feeling

good with this service. On the other hand, most of the students commented that the branch in

IIUM is quite small, so during certain period time, the bank is overcrowded. It is not enough in

terms of equipment like chairs that they did not provide many chairs for the customers. In fact,

most of students have used this bank for making tuition fees payment.

In overall, the bank has decorated with nicely interior facilities but it is not enough to the number

of its customers. Sometimes the queue machine is broken and it has to take a long time to get a

queue because there is only one machine.

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Furthermore, this bank also provides machine (ATM), cash deposit machine and cheque

deposit machine easily for the customers to make transaction and it can improve for walk in

customers. Moreover, these machines can help them reducing their time in making services and

it can do it any time they wanted. but it has only two machines which it does not enough for

them to make service. Sometimes, it is broken and the customers have to wait for a long queue.

In sum up, retail banking should provide comfortable physical tangible in terms of equipment

and all material there. This is because it will develop quality service in the bank also it can

increase customers loyalty. By applying this concept are leading to valuable for customers.

6.3 Reliability

To obtain a score on each scale, we considered the mean value of items. Reliable value is

increasingly being importance to the users of financial information based on customers account.

The bank had focused on ability to manage the positive value of good management in keeping

customers trust. Reliability can defined in to perform the promised service dependably and

accurately from the staff. This is the first priority when clients judge service quality. Cronbachs

alpha coefficients were computed using the scales reliabilities (Cronbach, 1951). The Reliability

can describe about accuracy and appropriateness of time in the service required according to

given specifications and conditions. Reliability is one key dimension of service quality that

significant impact on customer satisfaction. As we can see from the interviewer that we had

conduct the respondent in seven IIUMs customer, all of them are satisfied and concern about the

reliability level with the bank perform and promised to serve on time and accurately transaction.

Bank Muamalat are able to replace the Internet banking to help customers in many

transaction which consists of cash withdraw, credit transfer, cheque, bank book update, and

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many other services. Bank Muamalat have spend great afford on advertising through customer

satisfaction in their bank, such as TV advertising or pamphlet. The bank need to enhance their

reputation of reliability by improvement their service goals and make sure the staff can be easily

recognized by putting the name and service evaluation in each table of staff, whether customer

are satisfaction with their performance or not. Bank Muamalat had practice this system that focus

on commentary by customer to develop customer satisfaction and it may increase their market

share and profits in the future as well

6.4 Responsiveness

This concept is willingness of the staffs that provided timely service to customers,

including the willingness to schedule delivery at the customers. The bank might be immediately

resolving the consumers problem. In fact, this is very important issue that it will lead to

customers desirable also it can increase competitive advantage for the bank. This concept is

very significant to respond for the customers need and get to their satisfaction. The result for

this study has come out that responsiveness has positive affiliation and affected on customers

desirable. Yet, it does not affect much for the organization.

Most of the respondents stated that the staffs have willingness to treat them well in terms

of making transaction. However, some people said that it didnt reach their value because of the

place is really crowed so their action is not really cheerful and some time, they do transaction

quite slowly. Even though, they have problem with the transaction but they still feeling good

with the staff because the staffs have tried their best in services and they are friendly and smiley.

For the male respondent said that they serve with a good commitment in terms of

greeting, helping me. For instance, I will pay for my first tuition fees and I do not know which

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transaction that I have to use for. So they help me to resolve this problem. All of them are

willingness to serve for me. Whats more, if the customers ask something they will immediately

helping us. On the other hand some of respondents stated that the staffs are not promising on her

with her transaction problem. She said that they did not finish my request on time, also when

they finished they did not inform to me. So it made me does not satisfied with that commitment.

We can conclude that this point is a need for quality service due to customers loyalty,

especially, for the bank. This is because they are dealing direct with the people. Furthermore, as

a result for this study shown that the customers are concerned more on dealing with the staffs

more than dealing with internet, if they have problem to resolve it. Because of it can direct get

true information and they can get on truly emotional. In sum up, most of the respondents are

satisfactions for the service that treating by the staff. Sometimes, some problem cannot solve but

they still can make service in the bank.

6.5 Empathy

Empathy in bank can import in caring an individualized attention side to provide for

customers as part of quality service. In bank segment, the specific needs of customers are more

significant to guide them in satisfaction level as individual require.

Based on the result that we had conducted the interview, it shows that there is a

significant positive relationship between the empathy and customer satisfaction in service quality

of Bank Muamalat. Most of the customers are satisfied with the individual attention through the

staff that serves good service to them but some also not satisfied with their service. From the

question asked to the respondents Do the staff willingness to schedule delivery at the customer?

The reaction of customers as below:

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Yes, each time, when Im doing the transaction with the bank.

Yes, I think they have tried their best. They are friendly and smiley.

Yes, they serve with a good commitment in terms of greeting, and helping me. For

example, I would paid for my first tuition fee and I did not know which one it has to be used for,

so they helped me to resolve this. All of them were willing to serve for me.

Yes, they do, but sometime may be because of the place is really crowded, so their

action is not really cheerful and sometime they do transaction very slow.

By human nature, people tend to expect high empathy to someone who they wish to deal with. In

relation, empathy is very important skill which is able to fulfill this customers needs. The bank

should preserve and improve empathy skill since customers are very important in banking sector.

Scope and limitation

The study looked at bank Muamalat sector organization in the International Islamic

University Malaysia. The study concerned on quality service management dimension which it

can offer good service to IIUM students. Also it process was flexible of determination of key

concept of five dimensions.

The quality service in Muamalat bank is proposed to improve customers loyalty for

IIUM students. The quality itself is aim to determine customers valuable, trust worthiness in the

bank sector. There are some limitations of the understanding quality service management in the

bank which is:

- Customers loyalty, satisfaction and perceptions are highly to get reality from the

customers. To come out the real result, it is difficult to get by measuring.27


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7.0 RECOMMEDATION

We are suggested for Bank Muamalat to re-design its job description for front desk

personnel as to instill motivation and courtesy of the personnel to respond to students queries. A

system which can be accesses by the front desk personnel to check frequently asked questions

(FAQ) is helpful to ensure the effectiveness of service provided to the customers. Research

shows that, among the secrets of success is the smile from front desk personnel as the first

impression always counts. Many successful organizations have a strong back up from front desk

personnel who demonstrate knowledge and polite behaviors and are seen as a competitive

advantage of the organization.

Furthermore, the service quality is importance in service sector as well as in banking

industry. Furthermore, this dimension is also the only dimension which is having positive score

for the comparison between the perceived and actual service quality received by customers.

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Students stated that the employees are not friendly enough to assist customers. The sincerity of

the employees to solve the students problem is questioned. It is crucial for Bank Mualmalat to

give a good perception towards the students who are its main customers hence the bank has to

encourage its employees to forwardly looking to entertain the students. The inspiration may be

given through the non-monetary mechanism such as by instill a spiritual motivation to the

employees. For example, the spiritual motivation may be triggered through a constant reminder

of the need to fulfill the Amanah given.

Allah s.w.t. says in al-Quran, Surah al-Nisa verse 58:

Verily Allah s.w.t. commands you to fulfill your trusts to those whom it is due and when you

judge, judge with justice, Very how excellent is the guidance Allah gave you, it is He who sees

all things.

In this verse, we can extract that, the trusts are to be fulfilled to whom it is due, in this context,

the employees at GSM have to fulfill the amanah and entertain the students wholeheartedly.

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8.0 CONCLUSION

Undoubtedly, no business can exist without customers. In the philosophical words of

Peppers and Rogers The only value your company will ever create is the value that comes from

customersthe ones you have now and the ones you will have in the future. This is absolutely

true. Customer value is an asset to the organization. Hence, in order to maintain the customer, the

organization needs to ensure that the right products and services, supported by the right

promotion and making it available at the right time for the customers while quality service and

merchandise are essential in todays competitive market especially in the bank sector. According

to finding, this paper found that the service quality has a great impact on customers satisfaction.

Although Bank Muamalat has few competitors inside the IIUM (Gombak campus) but to be

fairly to customers is necessary, moreover, to be number one leader in service quality in banking

is challenging. Bank is the huge service sector in todays competitive market so learning from

the five key dimensions of service quality contributes to customers perception can help the

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organization to create and maintain value to their customers and make them to be the most

successfully bank in the industry.

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