Impact of Service Quality on Customer Satisfaction in Digital Banking: An Empirical Study

Abstract

The present study examined the impact of service quality on customer satisfaction in digital banking from a management perspective. The study focused on four major service quality dimensions, namely security, ease of use, reliability, and responsiveness, and evaluated their influence on customer satisfaction through a quantitative, cross-sectional research design. Primary data were collected from 200 active digital banking users through a structured questionnaire using a 5-point Likert scale. The empirical analysis included descriptive statistics, normality testing, hypothesis testing, and regression analysis, while a supplementary predictive comparison was also incorporated. Quantitatively, the findings showed that all the independent variables had a statistically significant positive relationship with customer satisfaction, with p-values below 0.05 for all hypotheses. Among the variables, ease of use emerged as the strongest determinant, with the highest t-value of 4.92 and the highest regression coefficient of β = 0.35, followed by security (β = 0.28), reliability (β = 0.22), and responsiveness (β = 0.18). The regression model explained 89% of the variance in customer satisfaction with an R² value of 0.89, indicating strong explanatory power. In the comparative modeling stage, the Gradient Boosting model outperformed Linear Regression, achieving an R² of 0.96, RMSE of 0.19, and MAE of 0.15, compared with R² = 0.89, RMSE = 0.28, and MAE = 0.21 for Linear Regression. Qualitatively, the study revealed that customers place the greatest importance on digital banking platforms that are simple to use, secure, accurate, and dependable. While users reported generally favorable perceptions of digital banking, responsiveness was relatively weaker than the other dimensions, suggesting the need for improved complaint handling, prompt support, and faster service recovery. The study concludes that customer satisfaction in digital banking is a multidimensional construct shaped by both technological efficiency and service delivery quality, and it offers useful managerial implications for banks seeking to improve customer experience and retention in the digital era.