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163796

Examining the Relationship between Customer Service, Efficiency and Financial Performance: an Application on the Egyptian Public Sector Banks

Article

Last updated: 04 Jan 2025

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Abstract

A sound, well-functioning banking system has an essential role in the economic development and sustained growth of any country. Egypt has faced two unexpected shocks; the global financial crisis at the end of 2008 and the recent 2011, January revolution. The Egyptian banking system in general and public banks in specific have shown resilience to the unexpected shocks in terms of solvency and liquidity. This study is important, examining the banking sector in an emerging Arab market that is rarely studied despite its growth potential and in a period of rapid political and economic changes.  It tends to investigate empirically the relationships between customer service, efficiency and financial performance in Egyptian public sector banks and to examine the strength of those relationships if they do exist. For  measuring efficiency, Data Envelopment Analysis model (under the constant returns to scale model) is used to calculate both technical and scale efficiency of the sampled public Egyptian banks using annual observations from 2008-2014. Then, for assessing the bank's financial performance, four financial ratios that are commonly accepted and widely used in the banking industry were calculated for each of the seven years using data from the annual reports of each financial institution. Customers' service quality is then assessed using the modified SERVQUAL model that consists of six critical dimensions; tangibility, reliability, responsiveness, assurance, empathy and convenience. Then the researchers used the linear programming and regression analysis techniques to examine the relationship between customer service, efficiency and banks' financial performance. Our results partially supported the hypothesis. By developing knowledge about the way, customers perceive quality and if this affects banks' profits and if efficiency has a significant impact on this relationship, it will be possible for managers and decision makers to take concrete actions for continuous improvements. Additionally, they can identify the service areas that require improvement as a mean to retain customers, and eventually may improve banks' efficiency as well as financial performance.

DOI

10.21608/jsec.2016.163796

Keywords

Service quality, Efficiency, Financial Performance, Egyptian Public Sector Banks

Authors

First Name

Madiha

Last Name

'Metawie

MiddleName

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Affiliation

Business Department, Faculty of Commerce, Ain Shams University

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Orcid

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First Name

Dalia

Last Name

El Mosalamy

MiddleName

-

Affiliation

Faculty of Business Administration, Economics and Political Science, British University in Egypt

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Orcid

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Volume

46

Article Issue

1

Related Issue

23882

Issue Date

2016-04-01

Receive Date

2016-02-04

Publish Date

2016-04-14

Page Start

65

Page End

92

Print ISSN

2636-2562

Link

https://jsec.journals.ekb.eg/article_163796.html

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https://jsec.journals.ekb.eg/service?article_code=163796

Order

16

Type

المقالة الأصلية

Type Code

914

Publication Type

Journal

Publication Title

المجلة العلمية للإقتصاد و التجارة

Publication Link

https://jsec.journals.ekb.eg/

MainTitle

Examining the Relationship between Customer Service, Efficiency and Financial Performance: an Application on the Egyptian Public Sector Banks

Details

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Article

Created At

22 Jan 2023