The impact of digital banking service quality on customer loyalty: An interplay between customer experience and customer satisfaction

The purpose of this study is to examine the impact of service quality dimensions on customer experience, satisfaction and loyalty in the context of digital banking in Indian public sector banks. Data collection involved purposeful sampling, resulting in 524 valid survey responses. Psychometric characteristics were examined, and the hypotheses were tested using the Hayes process approach. Statistical analysis was conducted using SPSS 25 and AMOS 22 (structural equation modeling software). The study uses the Cognitive-Motivational-Relational (CMR) theory to examine the dynamics of service quality dimensions (RATER) in the context of digital banking, as well as their impact on customer experience and, ultimately, customer loyalty. The study’s findings reveal that service quality dimensions play a significant role in promoting customer experience. The study emphasizes the importance of customer experience as a predictor of customer satisfaction and loyalty. Customer satisfaction has been identified as a strong predictor of customer loyalty. It has also been identified as a mediating factor in the relationship between customer experience and loyalty. Banks and financial institutions can use these findings to optimize their digital banking services and enhance customer experience. Audits of the quality of digital banking services provided by Indian public sector banks will help them to strategize their operations in a highly competitive and digitized environment to meet the ever-increasing demands of today’s tech-savvy, digitally empowered customers who expect a seamless customer experience, thereby attracting new customers and strengthening the relationships with existing ones.