YANGON UNIVERSITY OF ECONOMICS

DEPARTMENT OF MANAGEMENT STUDIES

MBA PROGRAMME

CUSTOMER SATISFACTION AND LOYALTY ON

MOBILE BANKING SERVICE OF MYANMA APEX BANK

SU SU ZIN

MBA II – 92

MBA 23rd BATCH

SEPTEMBER, 2019
 YANGON UNIVERSITY OF ECONOMICS

DEPARTMENT OF MANAGEMENT STUDIES

MBA PROGRAMME

CUSTOMER SATISFACTION AND LOYALTY ON

MOBILE BANKING SERVICE OF MYANMA APEX BANK

SU SU ZIN

MBA II – 92

MBA 23rd BATCH

SEPTEMBER, 2019
 YANGON UNIVERSITY OF ECONOMICS

DEPARTMENT OF MANAGEMENT STUDIES

MBA PROGRAMME

CUSTOMER SATISFACTION AND LOYALTY ON

MOBILE BANKING SERVICE OF MYANMA APEX BANK

ACADEMIC YEAR (2017 – 2019)

Supervised by Submitted by

Daw Kay Thi Soe Su Su Zin

Associate Professor MBA II – 92

Department of Management Studies MBA 23rd Batch

Yangon University of Economics 2017 – 2019

 YANGON UNIVERSITY OF ECONOMICS

DEPARTMENT OF MANAGEMENT STUDIES

MBA PROGRAMME

CUSTOMER SATISFACTION AND LOYALTY ON

MOBILE BANKING SERVICE OF MYANMA APEX BANK

A thesis submitted to the Board of Examiners in partial fulfilment of the requirements for
the degree of Master of Business Administration (MBA)

Supervised by Submitted by

Daw Kay Thi Soe Su Su Zin

Associate Professor MBA II – 92

Department of Management Studies MBA 23rd Batch

Yangon University of Economics 2017 – 2019

 ACCEPTANCE

This is to certify that the thesis entitled “Customer Satisfaction and Loyalty on Mobile
Banking Service of Myanma Apex Bank” has been accepted by the Examination Board
for awarding Master of Business Administration (MBA) degree.

Board of Examiners

……………

(Chairman)

Dr. Tin Win

Rector

Yangon University of Economics

…………… ……………

(Supervisor) (Examiner)

…………… ……………

(Examiner) (Examiner)

SEPTEMBER, 2019
 ABSTRACT

This study intends to analyze the customer satisfaction and customer loyalty on
Mobile Banking Service of Myanma Apex Bank. The main objectives of the study are: to
examine the customer perception on Myanmar Apex Bank’s mobile banking service, to
analyze the effects of customer perception on customer satisfaction and to examine the
relationship between customer satisfaction and their loyalty on mobile banking service of
Myanmar Apex Bank. To achieve these objectives, the primary data for this study are
collected from the responsible persons of MAB and also from 382 respondents who use
MAB’s mobile banking service by using the structured questionnaires with Five-Point
Likert scale. The secondary data are collected through journals, relevant textbooks, other
online sources, the records and interviews with the authorized persons in MAB’s mobile
banking service. The results reveal that customers have highest positive perception on
usefulness of mobile banking service. Respondents have highest satisfaction on ease of use.
Tangibility, reliability, assurance, empathy, usefulness and ease of use have significant
positive effect on customer satisfaction. Moreover, customer satisfaction has significant
positive effect on customer loyalty.

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 ACKNOWLEDGEMENTS

First and foremost, I would like to express my gratitude to Dr. Tin Win, Rector of
the Yangon University of Economics, for acknowledging me to implement this study as a
partial fulfillment of Master Degree of Business Administration. Secondly, I am grateful
to Professor Dr. Nilar Myint Htoo, Pro-Rector of Yangon University of Economics, for
leading me to accomplish the study.

My deepest thanks go to Professor Dr. Nu Nu Lwin, Head of Department,

Department of Management Studies of the Yangon University of Economics, who gave the
permission to complete this research topic as a partial fulfillment of Master of Business
Administration.

I want to give my heartfelt appreciation to my supervisor, Associate Professor Daw

Kay Thi Soe, Department of Management Studies, for her kind guidance, valuable time,
helpful advice, mentoring, supervising and encouragement in supporting to complete this
study successfully.

I would like to express my indebtedness to all of the professors, associate

professors, teachers and visiting lecturers who provided supervision and fortitude to help
me achieving the goals set out for this study. In addition, I would like to extend my
appreciation to the visiting faculty and all the staff in the Department of Management
Studies who have provided me with any administrative support and strength during
academic years.

I want to give a special note of thanks to all employees, customers and mobile
banking agents of Myanma Apex Bank, for their help in providing accurate data,
information and subjective opinions while participating in research survey questions.

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 TABLE OF CONTENTS

Page

ABSTRACT i

ACKNOWLEDGEMENTS ii

TABLE OF CONTENTS iii

LIST OF TABLES v

LIST OF FIGURES vi

LIST OF ABBREVIATIONS vii

CHAPTER 1 INTRODUCTION 1

1.1 Rationale of the Study 2

1.2 Objectives of the Study 3

1.3 Scope and Method of the Study 3

1.4 Organization of the Study 4

CHAPTER 2 THEORETICAL BACKGROUND 5

2.1 Service Quality 5

2.2 Measuring Service Quality 6

2.3 Customer Satisfaction 11

2.4 Customer Loyalty 13

2.5 Conceptual Framework of the Study 14

CHAPTER 3 PROFILE AND MOBILE BANKING SERVICE OF MAB 16

3.1 Profile of Myanma Apex Bank 16

3.2 Services Provided by MAB 17

3.3 Mobile Banking Service of MAB 20

3.4 Demographic Profile of Respondents 24

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 3.5 Customer Usage on MAB’s Mobile Banking Service 26

CHAPTER 4 ANALYSIS ON CUSTOMER PERCEPTION, 28

SATISFACTION AND LOYALTY OF

MOBILE BANKING SERVICE IN MAB

4.1 Reliability Test 28

4.2 Customer Perception towards Mobile Banking Services 29

of MAB

4.3 Analysis of the Influencing Service Quality Dimension 38

on Customer Satisfaction

4.4 Analysis on the Effect of Customer Satisfaction 43

on Customer Loyalty

CHAPTER 5 CONCLUSION 47

5.1 Findings and Discussions 47

5.2 Suggestions and Recommendations 49

5.3 Needs for Further Research 50

REFERENCES

APPENDICES

iv
 LIST OF TABLES

Page

Table 3.1 Personal and Business Banking Services Provided by MAB 17

Table 3.2 Institutional Banking Services Provided by MAB 18

Table 3.3 iBanking Services Provided by MAB 19

Table 3.4 Loaning Services Provided by MAB 20

Table 3.5 Mobile Banking Services Provided by MAB 22

Table 3.6 Mobile Banking Agents in Myanmar 23

Table 3.7 Demographic Profile of Respondents 25

Table 3.8 Customer Usage on MAB’s Mobile Banking Service 26

Table 4.1 Summary of Reliability Test on Customer Perception, 29

Customer Satisfaction and Customer Loyalty

Table 4.2 Customer Perception on Tangibility Dimension 30

Table 4.3 Customer Perception on Reliability Dimension 31

Table 4.4 Customer Perception on Responsiveness Dimension 32

Table 4.5 Customer Perception on Assurance Dimension 33

Table 4.6 Customer Perception on Empathy Dimension 34

Table 4.7 Customer Perception on Usefulness Dimension 35

Table 4.8 Customer Perception on Ease of Use Dimension 36

Table 4.9 Summary of Customer Perception 37

Table 4.10 Customer Satisfaction on Mobile Banking Service 39

Table 4.11 Effect of Influencing Service Quality Dimension 42

on Customer Satisfaction of MAB Mobile Banking Service

Table 4.12 Customer Loyalty on Mobile Banking Service 44

Table 4.13 Effect of Customer Satisfaction on Customer Loyalty 45

of MAB Mobile Banking Service

v
 LIST OF FIGURES

Page

Figure 2.1 SERVQUAL Model 7

Figure 2.2 Technology Acceptance Model 10

Figure 2.3 Conceptual Framework of the Study 14

vi
 LIST OF ABBREVIATIONS

ATM Automated Teller Machine

AYA Ayeyarwady Bank

CASA ` Current and Savings Account

ICT Information and Communication Technology

KYC Know Your Customer

LC Letter of Credit

MAB Myanma Apex Bank

MPU Myanmar Payment Union

SQ Service Quality

SWIFT Society for Worldwide Interbank Financial Telecommunications

TAM Technology Acceptance Model

VISA Visa International Service Association

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 CHAPTER 1

INTRODUCTION

With the emergence of Information and Communication Technology (ICT), the

banking industry has many technological changes in the recent years leading into
technologically dependent one. The more competitive economic environment becomes
today, the more satisfying services of the banks tend to offer their customers. Moreover, as
lifestyle becomes fast-paced in nature, many people start to find the ways to decrease time-
consuming. As a result, many banks try to persuade their customers for increasing market
shares and provide latest financial service technologies by using e-banking technologies.
The customers are provided with the quick, speedy and reliable service through e-banking.
Mobile banking is also the e-banking technology.

Mobile banking service becomes very popular among bank customers in the recent
years. A bank or other financial institution give mobile banking service and the customers
can do financial transactions with the mobile device such as a smartphone or tablet. With
the help of mobile banking service, people are able to perform banking activities at home
via internet without the need to wait to get banking service. It is not necessary for people
to go to banks to be able to do banking activities. It offers the various banking services such
as fund transfer, bill payment, mobile phone top-up, online shopping, donation, etc. It
benefits not only the customers but also the bank because the banks can expand their market
share at low cost.

With the easy access of the mobile phones, fast mobile network and internet speed,
people in Myanmar demand for quick modern technology services instead of the slow ones.
Therefore, the banks in Myanmar tried to introduce mobile banking service to their
customers. At the beginning of the launching of mobile banking service, most people in
Myanmar opposed the idea of the service due to their concern about security issues.
However, nowadays, they gradually accept and trust the mobile banking service. Therefore,
many banks in Myanmar provide mobile banking service in order to attract many
customers. The mobile banking service providing Myanmar banks include KBZ, AYA, CB
and MAB, etc. In a competitive environment, it is necessary for banks to realize customer

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satisfaction and loyalty towards their services so that they can know their strength and
weakness. By using that knowledge, they can fix their weakness and increase their strength.
Moreover, they can offer more services in the future based on the needs and wants of their
customers.

Therefore, this study intends to explore the customer satisfaction and loyalty on
mobile banking service by determining the effect of customer perception on customer
satisfaction and the relationship between the customer satisfaction and loyalty on mobile
service provided by MAB (Myanma Apex Bank). This study can give better ways to
provide mobile banking service so that they can meet the customer expectation and gain
customer satisfaction and loyalty gaining more market share and success.

1.1 Rationale of the Study

Recent years, Myanmar has experienced the improvement in technology such as

fast internet speed, increased availability of mobile phones and people’s familiarity with
technology. Therefore, many banks offer many services for more convenient banking
experiences for customers. Moreover, in Myanmar, the banking industry develops faster
than other sectors. As the government allows opening the public, commercial and private
banks, banking sector has been strong competitive. Currently, every private bank are
offering mobile banking services like KBZ Bank, CB Bank, AYA Bank and MAB are rivals
for market share.

Therefore, it is important for the banks to gain competitive advantage. The service
quality plays an important role in getting competitive advantage. As a result, several banks
are quickly implementing and delivering mobile banking services in order to successfully
interact with their customers because their satisfaction represents a key factor of success in
mobile banking. Customers of the mobile banking service of one bank are the potential
customers for the mobile banking service of other banks. Therefore, it can be said that
customer satisfaction and loyalty are essential both to make old customers loyal and attract
new customers.

Myanma Apex Bank (MAB) is one of the businesses of the Eden Group of
Company Limited in Myanmar and was incorporated on 2nd July, 2010. There are ninety-
four branches all over the country. In 2016, MAB Mobile Bank was launched as the first

2
mobile bank service which could be used to link mobile wallet with current bank account.
However, nowadays, there is many choices offered to customers for mobile banking
services.

Thus, this study tries to analyse and explore the customer satisfaction and loyalty
towards the MAB mobile banking service, the first mobile banking service in Myanmar so
that they can realize their customer perception towards their mobile banking service.
Moreover, they can develop better ways to provide mobile banking service in order to retain
existing customers and gain new customers.

1.2 Objectives of the Study

The main objectives of the study are:

1. To examine the customer perception on service quality dimension of Myanmar

Apex Bank’s mobile banking service
2. To analyze the influencing service quality dimension on customer satisfaction with
mobile banking service of Myanmar Apex Bank.
3. To examine the effect of customer satisfaction on their loyalty towards mobile
banking service of Myanmar Apex Bank.

1.3 Scope and Method of the Study

The study focuses on the customer satisfaction and loyalty on MAB’s mobile
banking service in Yangon, not the whole country due to limited time and other resources.
Data collection is done based on primary data as well as secondary data. Primary data is
collected from the surveys of the customers who are using MAB’s mobile banking service.
The data collection period is from April to June 2019. During this period, the data regarding
the customer satisfaction and their loyalty on MAB’s mobile banking service in Yangon is
collected with structured questionnaires, as research instrument, the self-administered
questionnaires were used in this study. As research participants, total samples of 382
respondents were chosen by two-stage systematic random sampling method among the
total 331 mobile banking agents of MAB in Yangon Region.

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 In first stage of sampling, a systematic random sample method is applied in
choosing 66 agents (20% of total) from the total 331 mobile banking agents of MAB. In
second stage, sampling size for each selected sample agents are chosen proportionately
based on the clients of mobile banking users at each agent. In this stage, random sampling
method was applied. Each respondent was provided questionnaire to be able to self-
administer in response to interview.

Secondary data is collected from Myanma Apex Bank’s authorized persons, official
websites, textbooks, relevant books, previous research papers, respective organizations and
internet websites.

1.4 Organization of the Study

This paper is organized by five chapters. Chapter one is the introduction, rationale,
objectives, scope and method and the organization of the study. Chapter two includes the
theoretical background of the customer satisfaction on mobile banking service of MAB.
Chapter three presents the profile of MAB and its mobile banking service. It also includes
the customer perception on mobile banking service. Chapter four includes the analysis of
the effects of customer perception on customer satisfaction and their loyalty on mobile
banking service. Chapter five concludes with the findings, discussion, suggestions,
recommendations and needs for further study.

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 CHAPTER 2

THEORETICAL BACKGROUND

This chapter gives further explanation about the theoretical background of the thesis
with three different parts. The first part is the definitions of customer satisfaction, loyalty
and mobile banking service quality. The second part is the models used in this study,
SERVQUAL Model and Technology Acceptance Model (TAM). The third part is the
description of the conceptual framework of the study.

2.1 Service Quality

Service quality is a business administration concept used to describe achievement

in service. It can be used to achieve efficient operation and improved business performance.
Importance of quality to service firms and have demonstrated its positive relationship with
profits, increased market share, returns on investment, customer satisfaction, and future
purchase intentions. Service quality is a form of attitude which is related but not equivalent
to satisfaction (Parasuraman, Zeithaml and Berry 1988).

Service quality can be related to service potentials; such as competence of workers,

the speed of service process or the quickness of service and service result or customer
satisfaction. The workers must have required skills and knowledge to perform the quality
service. For customer service improvement, the operation implementation workers and the
operation support workers must have competence in the knowledge and skill about the
service they provide. Service quality acts as a crucial role for a firm in differentiating itself
from its competitors. The service quality can offer competitive advantage to the companies
which continuously try to improve the service quality in order to bring customer
satisfaction. Service quality and customer satisfaction are very important for a service
provider for the competitiveness and growth of the business.

There are a number of different definitions as to what is meant by service quality.

Commonly used definition is the service quality as the extent to which a service meets
customer needs or expectations. Service quality can be defined as the difference between
customer expectations of service and perceived service Service quality can also be defined

5
as the overall assessment of a service by the customer. Therefore, if the service provider
understands existing quality of his product or service, he will be able to deliver services
with higher quality level resulting in increased customer satisfaction. Therefore, during
customers’ comparison of perceived service with expected service, if the perceived service
value is not as great as the expected, the customers are disappointed. Service quality is
measured in order to assist managers in ensuring service quality and customer satisfaction
(Webster, 1988). Measurement is a necessary step towards devising any action plan.

2.2 Measuring Service Quality

Service quality is measured in both subjective and objective processes. The

carefully predefined criteria are need to measure the objective aspect of customer service
precisely. Measuring service quality objectively involve measuring quantifiable factors
such as numbers of customer complaints or numbers of returned goods. However, the
subjective measurement of customer service relies on whether the expected benefit
conforms with the perceived result. The characteristics of SERVQUAL method can be used
for the subjective measurement. This method is based on the customer's expectation in
terms of service and the service provider's ability and talent to present this expected service.
However, customer satisfaction is an indirect measure of service quality.

Service quality is defined as the difference between customer expectation for

service performance prior to the service encounter and their perception of the service
received. Customer expectation also acts as a basis of service quality measurement. The
higher the quality, the more the actual performance exceeds expectation and vice versa.
Expectation is defined as desires or wants of consumer (Parasuraman et al., 1988, p.17).
Perceived service is seen as the outcome of the consumer’s view of the service dimensions,
which are both technical and functional in nature (Gronroos, 1984, p.39).

2.2.1 SERVQUAL Model

The SERVQUAL Model is one of the model of service quality known as the Gaps
model. a group of American authors, A. Parasuraman, Valarie A. Zeithaml and Len Berry,
developed the Gaps model in a systematic research program between 1983 and 1988. The
model was developed by identifying the principal dimensions (or components) of service

6
quality and proposing a scale for measuring service quality (SERVQUAL). The model
comprises seven major gaps in the service quality concept.

The first six gaps (Gap 1, Gap 2, Gap 3, Gap 4, Gap 6 and Gap 7) are identified as
functions of the way in which service is delivered, whereas Gap 5 is considered to be the
true measure of service quality. The Gap on which the SERVQUAL methodology has
influence is Gap 5. Parasuraman (et al. 1985, 1988) conducted a qualitative and quantitative
research in order to conclude to the original five dimensions (tangibles, reliability,
responsiveness, assurance and empathy) and 22 items of SERVQUAL model. The model
develops through many stages into its final model. So, according to Parasuraman et al.
(1988) the five dimensions of Service Quality Theory are Tangibility, Reliability,
Responsiveness, Assurance and Empathy.

Figure 2.1 SERVQUAL Model

Tangibility

Reliability

Customer
Responsiveness
Satisfaction

Assurance

Empathy

Source: Parasuraman et al. (1988)

(a) Tangibility

Tangibility includes the physical facilities, equipment used to deliver service,

communication materials, external appearance of store and appearance of personnel. It
measures the level at which physical facilities, equipment, and appearance of personnel are
adequate. The tangible evidence also includes the conditions of physical surroundings
provided by the service provider.

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 (b) Reliability

If the service provider company is able to provide the service dependably and
precisely as promised, it is called that service reliable. The company keeps his promises to
his customers about his service and products and delivers accordingly. Customers are
willing to buy products and services from companies that keep their promises. Therefore,
the companies need to pay attention to what customers expect about the reliability. If the
companies fail to provide the service of the customer expectation, it will upset the
customers directly.

(c) Responsiveness

Responsiveness “is the willingness to help customers and provide prompt service”
(Zeithaml et al., 2006, p. 117). It measures whether the service providers can deal with
customer’s requests, questions and complaints promptly and attentively. We can call a
company responsive if it tells its customers details such as the time taken to get answers or
the solutions for their problems. Therefore, the companies need to view the responsiveness
from the customer point of view instead of the companies’ in order to become successful
business (Zeithaml et al., 2006).

(d) Assurance

Assurance is defined as “the employees’ knowledge and courtesy and the service
provider’s ability to inspire trust and confidence” (Zeithaml et al., 2006, p. 119). It includes
the competence, courtesy, credibility and security. The person who communicates with the
customer as a representative of the organization may convey the trust and confidence to the
customers (Zeithaml et al., 2006).

(e) Empathy

Empathy is defined as the “caring, individualized attention the firm provides its
customer (Zeithaml et al., 2006, p. 120). In other words, the service provides regards and
communicate with the customer as a unique and special person. The company can provide
the empathy in various ways such as knowing the customer’s name, his preferences and his

8
needs. Many small companies use empathy as a competitive advantage when competing
with larger firm by offering customized services to the customers (Zeithaml et al., 2006).

2.2.2 Mobile Banking Service Quality

Mobile banking service quality is also one of e-service quality. From numerous
studies, it was found that service quality (SQ) plays a vital role in customer service. It helps
company and organizations gain competitive advantages. Traditional SQ is defined as
customer attitudes or beliefs concerning the degree of service excellence given at
organizations physical facilities in this case bank branches. (Santos, 2003).

For the measurement of SQ, Parasuraman et al, (1988) created the SERVQUAL
instrument. This instrument used the following variables; tangible, reliable, assurance,
responsiveness and empathy. With the growth of online network service, it changes the
communication between the company and customers. Key dimensions of e-SQ created by
Ranganathan and Ganapathy (2002) were information content, security and privacy and
design. This was followed by the creation of an instrument to measure online service quality
based on these factors; web design, reliability, fulfilment, customer service, security and
privacy (Wolfinbarger and Gilly, 2003). In Zeithaml, Parasuraman and Malhotra’s (2002)
e-SQ study, eleven dimensions; site aesthetics, ease of navigation, personalization,
assurance, privacy, reliability, access, responsiveness, flexibility, efficiency and price
knowledge were identified. Parasuraman et al (2005) then developed E-SQUAL instrument
consisting of system availability, efficiency, fulfilment and privacy. They also developed
E-RecSQUAL which was made up of eleven dimensions that centred on contact,
responsiveness and compensation.

2.2.3 Technology Acceptance Model

The technology acceptance model (TAM) is an information system theory which

explains how customers come to accept and use a technology. The TAM was specifically
made to know the willingness of the users to accept and use new technology or media in
the field of information system management. The model tells that encountering with a new
technology, there were a number of factors influencing their decision about how and when
they will use it.

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 Figure 2.2 Technology Acceptance Model

Perceived
Usefulness

External Attitude Intention to Use Actual Usage

variables towards Use

Perceived Ease
of Use
Source: Fred Davis (1989)

Figure 2.2 presents Technology Acceptance Model of Fred Davis (1989). In the
model, the attitude of the person towards a particular system and his perception towards
the usefulness of that system determine his behavioural intention which is used to measure
the likelihood of a person using application. The behavioural intention determines the use
of the information system. As said in the model, even if the person doesn’t welcome the
system, the probability that he will use a particular information system is high if he regards
it as useful for his performance. Ease of use and perceived usefulness are the most important
determinants of actual system use. These two important determinants are explained as
follows:

(a) Usefulness

Usefulness is one of the factors of Technology Acceptance Model. This factor is

considered in adoption of new technology whether the new system is good or useful for the
users. It means the degree to which a person believes that using a particular system would
enhance his or her job performance.

(b) Ease of Use

Ease of Use is one of the important factors of Technology Acceptance Model. It is

defined as "the degree to which a person believes that using a particular system would be
free from effort". People are more likely to use the application which they perceived to be

10
easier to use. Additionally, Guriting (2006) examined the determinant to use internet
banking in Malaysia Borneo. He found out that “the perceived ease of use and perceived
usefulness factors are considered to be fundamental in determining the acceptance and use
of various information technologies”.

2.3 Customer Satisfaction

When purchasing the products, the customers think about the customer perceived
value. It is a value that the customers perceive regarding the benefit of a product or service
as compared to the cost of getting the product or service. The customer perceived value is
the customer perception of what is received and what is given (Zeithaml, 1988). Better
customer value as compared to what the competitors deliver will make customer feel
satisfied and in turn will drive him to be loyal. Therefore, Kotler (2000) said that the
customers will purchase from the supplier which they regard to have the highest customer
value.

The customers compare their expectation on the product performance with the
actual performance delivered. If they meet, the customers are satisfied. McQuity et.al.
(2000) states that consumers learn from their experience and therefore, they are satisfied if
there are less expectation that are not met. Further, Kotler and Armstrong (2004) mention
that: “Consumers always require a product or service that is able to satisfy their needs. How
do they choose among the marketed products? Consumers choice is based on their
perception on the value and satisfaction of the product and service they receive”.

About the relationship between satisfaction and customer loyalty, Kotler (2000)
said that “a highly satisfied customer generally stays loyal longer, buys more as the
company introduces new products and upgrade existing products, talk favourably about the
company and its product, pay less attention to competing brands, and is less sensitive to
price, offers product or service ideas to the company, and costs less than new customers
because transaction is routine.” Based on the theory mentioned by Kotler and Armstrong
(2004) and by Kotler (2000), it shows that consumers will choose product or service in
accordance with the customer perceived value which fulfils their needs. If the customers
are satisfied, this kind of customers are good for the business. Thus, in conclusion, it can
be said that theoretically a relationship exists among customer perception, customer

11
satisfaction, and customer loyalty. Due to the finding of previous research, it can be said
that the customer perceived value is the forerunner of satisfaction. Therefore, customer
satisfaction acts as one of the factors causing customer loyalty. Wang et.al. (2004) found
that the role of customer perceived value on customer satisfaction, brand loyalty, and
customer behaviour based on customer relationship management (CRM) performance.

According to Richard L. Oliver (1980), customer satisfaction occurs by comparing

their expectation before the purchase of the product to their subjective perception regarding
the actual performance. According to Philip Kotler & Kevin Lane Keller (2006),
‘‘Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing
a product’s performance (outcome) in relation to his or her expectation’’. Pairot (2008) also
said that if the company is able to fulfil the business, emotional, and psychological needs
of its customers, the customer satisfaction occurs. It acknowledged that customers usually
have varied levels of satisfaction since they have different attitudes and experiences as
perceived from the company. According to Churchill and Surprenant (1982), customer
satisfaction can be defined as a “disconfirmation paradigm” since it is a result of
confirmation/disconfirmation of expectation that evaluates a product’s performance with
its expectation and desire.

In Johnson and Gustafsson (2000, p. 63), the two authors said that service attributes
provide customers with benefits and the benefits cause overall satisfaction. Therefore, if
the customers gain more benefits from the production, their satisfaction level is higher.

Bank customer satisfaction is regarded as banks fully meeting the customer

expectation (Bloemer, Ruyter, and Peeters, 1998) and also said to be a feeling or attitude
formed by bank customers after service, which expressly connects the various purchasing
behaviour and serves as a link between the various stages of consumer buying behavior
(Jamal and Nasser, 2002). In another study, (Oluoch, 2012) examined the factors affecting
the adoption of online banking by customers where she looked at the relationships between
the perceived usefulness, perceived ease of use, perceived risk toward the use of mobile
banking technology and found out that customers were opened to use of mobile banking
technology but some were put off by the perceived risk element which is the concern of
their security in using the technology.

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 Customer satisfaction has received wide attention as an important variable in
business strategy in a very dynamic and competitive market (Lovelock and Wirtz, 2007).
This study approaches customer satisfaction in a process perspective because in mobile
banking, customer evaluation of quality happens during the delivery process.

2.4 Customer Loyalty

It indicates the extent to which the commitment and devotion of the customers to
certain product or service. As a result, the customers have strong tendency to select that
certain brand over its competitors in the future without the care of the situational influences
and marketing efforts which have potential to make them switch. Nowadays, it becomes
more complicated to create and maintain customer loyalty than it used to be in the past
years. This is because of technological breakthrough and widespread of the internet uses.
For loyalty building, the company needs to focus the value of its product and services in
order to reveal that it is eager to fulfil the desire or build the relationship with customers
(Griffin 2002). It could be seen that the expenses to gain a new customer is much more than
retaining existing one. Loyal customers will encourage others to buy and think more than
twice before changing their mind to buy other services. That’s the reason building customer
loyalty is important.

Customer loyalty is not gained by an accident; they are constructed through the
sourcing and design decisions. Designing for customer loyalty requires customer-centred
approaches that recognize the want and interest of service receiver. Customer loyalty is
built over time across multiple transactions. It can be seen that good relationship with
customers is important in customer loyalty. Gremler and Brown (1999) categorized the
customer loyalty into three different kinds such as behaviour loyalty, intentional loyalty,
and emotional loyalty. Behaviour loyalty is the act of repeating purchasing behaviour.
Intentional loyalty is the possible buying intention. Nevertheless, emotional loyalty gained
only when a customer feels that a brand corresponds with their value, ideas, and passion.

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2.5 Conceptual Framework of the Study

A conceptual framework is an analytical tool with several variations and contexts.

Based on the above concepts and theories studied from the literature reviews, conceptual
framework of the study can be depicted as following model, Figure 2.3. This conceptual
framework is crafted from the empirical literature in this study. Following figure is
conceptual framework for this study is based on the Technology Acceptance Model (TAM)
and SERVQUAL Model.

Figure 2.3 Conceptual Framework of the Study

Customer Perception on Service Quality Dimension

Tangibility

Reliability

Responsiveness

Customer Customer
Assurance Satisfaction Loyalty

Empathy

Usefulness

Ease of Use

Source: Own Compilations (2019)

This study focuses on the customer satisfaction and loyalty on mobile banking
service of MAB. In the framework, two major parts are included. These are customer
satisfaction and loyalty. The factors such as the tangibility, responsiveness, assurance,

14
empathy, usefulness and ease of use have effects on customer satisfaction and loyalty on
the mobile banking service of MAB.

To measure the mobile banking service, the following variables are used.

1. Tangibility: It include the physical facilities of mobile banking service providers, the
outlet of mobile banking service agents and materials such as form, posters, leaflets,
pamphlets provided by Mobile Banking service.

2. Reliability: It measures whether the bank can provide the quick and speedy mobile
banking service, error free service and the sufficient number of mobile banking service
agents.

3. Responsiveness: measures the willingness of mobile banking service agents and

providers to help the customers and responsiveness to customers.

4. Assurance: It measures the safety of the mobile banking transactions, knowledge

sufficiency of the service providers to answer questions and courteous behaviour.

5. Empathy: It measures the personal attention given by the mobile banking service
providers and agents.

6. Usefulness: It measures the degree to which customers believes that using mobile
banking is beneficial to them.

7. Ease of use: It measures the user’s perception of the amount of effort required to utilize
the mobile banking or extent to which a user believes that using a particular technology
will be effortless.

15
 CHAPTER 3

PROFILE AND MOBILE BANKING SERVICE OF MAB

This chapter describes the profile of the Myanma Apex Bank (MAB) which
includes the background of MAB, mission, services provided by the bank and mobile
banking service. It also describes the demographic profile of respondents and customer
usage of mobile banking service.

3.1 Profile of Myanma Apex Bank (MAB)

Myanma Apex Bank is a private commercial bank in Myanmar. The government

issued banking licenses to the four private banks in May, 2010. Four private banks started
operations in August 2010 since the establishment of Innwa Bank in 1997. MAB is one of
them. In July 2012, the government allowed the permission to use the letter of credit (LC)
service for the eleven private banks including MAB. It received the permission to open
foreign current accounts.

The bank was founded by U Chit Khaing, owner of Eden Group of Company
Limited. The company was registered on 2nd July, 2010 and started operating with its first
branch office in Naypyitaw on 17th August, 2010. The head office of the bank is located at
Block (10), Asint Myint Zay, Yaza Thingaha Road, Oattara Thiri Township, Nay Pyi Taw.
It has opened many branches and already opened 94 branches across the country with 196
ATMs and 47 currency exchange counters. SLCM Group (Sohan Lal Commodity
Management), the only Agri Logistics Group which provide Warehouse Management and
Collateral Management Services in Myanmar through its wholly owned subsidiary, SLCM
Ltd. has signed a MoU with Myanma Apex Bank for collateral financing in Myanmar on
19th December 2015. It is the first private bank to offer warehouse and collateral
management in Myanmar. It recently launched premium banking service called MAB Gold
wealth banking in January 2019.

It has personal banking, business banking, institutional banking, mobile banking,

ibanking service, loan service and other services. For domestic banking, there are a range
of deposit products, financing options for large and small businesses through loans,

16
overdraft and hire purchases, reliable and extensive ATM, POS service via the Myanmar
Payment Union (MPU), VISA and MASTER card network. For international banking, it
provides foreign trade finance as well as worldwide payment services with partners,
including Western Union, VISA, Master Card, China Union Pay and other major card
organizations. Other services include gift cheques, payment orders and local remittance and
other ancillary services.

The vision of the bank is “To be a multi-service bank providing financial solutions
to both individual and corporate customers, in accordance to their needs, while maintaining
excellence in our customer service at all times.

3.2 Services Provided by MAB

MAB provide the following main banking services. They are personal banking,
business banking, institutional banking, mobile banking, ibanking and loan services.

Table 3.1 Personal and Business Banking Services Provided by MAB

No. Type Personal Banking Services Business Banking Services
1 Accounts Saving Account Saving Account
Current Account Current Account
Fixed Deposit Account Fixed Deposit Account
Call Deposit Call Deposit
Smart Deposit Smart Deposit
2 Other services Gift Cheque Gift Cheque
Bank Guarantee Bank Guarantee
Remittance Remittance
Bank Certificate Bank Certificate
Payment Order Payment Order
Source: Myanma Apex Bank (2019)

As shown in Table 3.1, Personal banking services include account saving services
such as current saving, fixed account saving, call deposit, smart deposit, etc. and other
services such as gift cheque, bank guarantee, remittance, bank certificate and payment
order.

17
 Business banking services include account saving services such as current saving,
fixed account saving, call deposit, smart deposit, etc. and other services such as gift cheque,
bank guarantee, remittance, bank certificate and payment order.

Table 3.2 Institutional Banking Services Provided by MAB

Sr.No. Institutional Banking Services Provided by MAB

1 Foreign Exchange Service

2 Foreign Currency Account

3 Western Union

LC Advising
LC Negotiation
Export Collection
Transferrable LC
4 Trade Finance Services
LC Confirmation
LC Discounting
Import LC
Banker’s Guarantee
Fund Transfers and Payments Outward SWIFT Telegraphic Transfer
5
(Telegraphic Transfers) Inward SWIFT Telegraphic Transfer
Performance Guarantee
Tender Guarantee or Bid Bond
6 Bank Guarantee
Guarantee
Trade Guarantee
Source: Myanma Apex Bank (2019)

As shown in Table 3.2, Institutional banking services include foreign exchange

service, foreign currency account, trade finance services, fund transfers and payments
(Telegraphic Transfers), Western Union and bank guarantee.

18
 Table 3.3 iBanking Services Provided by MAB
No. iBanking Services Provided by MAB
1 Accounts Saving Account
Current Account
Fixed Deposit Account
Loan Account
Call Deposit Account
Smart Saving
2 Services Account Enquirers
Pay Later Payment
Standing Instructions
Own Account Transfer
Internal Account Transfer
Loan and Other Deposit Enquiries
Inward Remittance and Outward
Remittance Inquires
Interest Rate Inquires
Cheque Status Inquires
Cheque Book Request
Online Bank Statements
Apply for MPU card Request
Notifications
Change Password
Pay roll services
Bill Payment Services
Mobile Top-up Services
Source: Myanma Apex Bank (2019)

As shown in Table 3.3, ibanking services include accounts and other services. The
type of accounts which can be used in ibanking services are saving account, current
account, fixed deposit account, loan account, call deposit account and smart saving.

19
 Table 3.4 Loaning Services Provided by MAB
No. Loaning Services Provided by MAB
1 Individual and Joint Personal Lending
2 Company or Joint Venture Lending
Account Pledge Lending
3 Special Types of Lending Gold Pledge Lending
Hire Purchase Lending
Auto Finance Lending
SME Loans
Source: Myanma Apex Bank (2019)

As shown in Table 3.4, Loaning services include Individual and Joint Personal
Lending, Company or Joint Venture Lending and other special types of lending. Special
types of lending include Account Pledge Lending, Gold Pledge Lending, Hire Purchase
Lending, Auto Finance Lending and SME Loans. SME Loans include JICA Two step Loan,
SME-KfW Loan and SME-MAB Loan.

3.3 Mobile Banking Service of MAB

MAB launched its mobile banking service in July 2016. The first mobile bank
service which links mobile wallet with current bank account is MAB Mobile
Bank. Because it targets both account and non-account holders, MAB Mobile Bank can
also be utilized by customers without an account at MAB. The service can be enjoyed as
soon as the users install the mobile banking application in their smart phones and make
mobile banking account according to instructions. All mobile banking users can transfer
money to both account holders and non-account holders through the agents and branches
around the country.

It has tight security system. In addition, the highly secure central computer at MAB
store the user information. The transactions are encrypted at both ends and for every
transaction i.e the send and receive transmissions. Therefore, in the case of lost or stolen
phones, there is no risk of losing mobile bank account because the other person can’t have
no access to the accounts. Additionally, it has provided dual factor authentication. To make

20
the transactions accurate, MAB app uses multi steps data confirmation to minimize the
chance of making a wrong transaction.

There are three ways to open MAB Mobile Bank account by self-registration (self
KYC), at the local mobile banking agents around the country and at all the MAB branches
around the country. User can self-register and open self-account without the need to go to
MAB branches and MAB Mobile Agent counters. To open account, users need to download
MAB Mobile Banking Application first and fill in required information and then submit
photo of NRC (or) Driving licence (Passport for foreigners). For the first time after opening
the account, user has to use the user name and six-number PIN code sent by MAB via SMS
to the mobile bank registered phone numbers. After that, users will be able to make
transactions with account holders and non-account holders around the country. The users
can enjoy banking services everywhere anytime as long as they have mobile banking
account and application in their phones. They can do banking services such as balance
checking, money transfer to account-holders and non-account holders, bill payments, top
up phone charges, top up Visa and Master Cards and many more additional services.

There is also 24/7 call center which can be accessed if the customers encounter
problem or have question. MAB Mobile Bank users can also use mobile banking to pay at
places like supermarkets, convenience stores, and city bus and toll gates. Users who lives
in Yangon, Mandalay and NayPyiDaw can also pay electricity bill with their mobile
banking account. Currently, MAB has partnership with Telenor, MPT, Ooredoo, MecTel,
4TV, Columbus Travels and Tours, Sun Far Travels and Tours, Signature Fine Dining, Fuji
Coffee House, The Garden Bistro Titan Source, BNF and JCGV Cinemas. There are also
MAB Merchant which are retail shops, companies and enterprises where the customers can
make payment with MAB mobile banking. MAB Supplier which are nation-wide
distribution companies and organization can also accept payment transfer from their retail
shops via MAB mobile banking. It has 132 mobile banking merchants/ suppliers all over
the country.

MAB Mobile Banking Service can be used with any types of phones whether
keypad phones or smartphones and any types of SIM cards. It can be downloaded from
Google Play Store for Android Version and Apple App Store for iOS version. The MAB’s
mobile banking channels are application and SMS.

21
 Table 3.5 Mobile Banking Services Provided by MAB
No. Mobile Banking Service Services Provided by MAB
Send to Own Account
1 Money Transfer Send to Other MAB Accounts (CASA / Wallet)
Send to Non-Account Holder
QR Pay
Bills Payment
Mobile Prepaid Top Up
2 Payment Services MAB Visa / MasterCard Prepaid Top Up
Buy Travel Ticket / Movie Ticket
Pay to Merchant
Pay to supplier
3 Banking Services Statement Request
Deposit Rate Inquiry
4 Inquiry Services Foreign Exchange Rate Inquiry
Interest Rate Calculator
Source: Myanma Apex Bank (2019)

As shown in Table 3.5, MAB’s mobile banking service offers both financial and
non-financial transactions. Financial transactions include money transfer and payment
services. Non-financial transactions include banking services such as statement request and
inquiry services about deposit rate, foreign exchange rate and interest rate. The users of
MAB mobile bank apps can easily find special offers & deals such as latest promotion and
MAB branches, ATMs, Agents, Merchants.

Mobile Banking Agents

MAB mobile agents are the ones appointed by MAB both for account and non-
account holders so that the users can enjoy mobile banking services easily and conveniently
as the agents provide cash in, cash out and cash remittance services on behalf of MAB.
There are 1559 mobile banking agents all over the countries. The mobile agents are located
in 14 Regions/ States. The number of mobile banking agents in each state/ region can be

22
seen in Table 3.6. Customers can also make the mobile banking accounts at the mobile
banking agents.

Table 3.6 Mobile Banking Agents in Myanmar

No. State/ Region Number of mobile Percent (%)
banking agents
1 Yangon 331 21.2
2 Mandalay 242 15.5
3 Tanintharyi 129 8.3
4 Kachin 87 5.6
5 Magway 133 8.5
6 Bago 127 8.1
7 Sagaing 124 8.0
8 Shan 126 8.1
9 Rakhine 55 3.5
10 Ayeyarwaddy 82 5.3
11 Naypyidaw 50 3.2
12 Mon 45 2.9
13 Kayah 17 1.1
14 Kayin 11 0.7
Total 1559 100.0
Source: Myanma Apex Bank (2019)

According to Table 3.6, Yangon has the maximum number of mobile banking
agents, 331 mobile banking agents representing 21.2% of MAB mobile banking agents
across the country. The second largest number of mobile banking agents are located in
Mandalay (242, representing 15.5% of all MAB mobile banking agents in Myanmar. Kayin
State has the minimum numbers of mobile banking agents having only 11 MAB mobile
agents.

23
3.4 Demographic Profile of Respondents

In this section, the demographic factors of respondents are analyzed with their
gender, age, marital status, education level, employment status and income per month.
Demographic profile of respondents is shown in Table 3.7.

Regarding to gender of respondents, as shown in Table 3.7, 58.1% of the

respondents (222 out of total 382) are male and 41.9% (160 out of total 382) are female.

For the age of the respondents, the six age groups are formed for analysis. These
groups are under and equal to 20 years old, 21-30 years old, 31-40 years old, 41-50 years
old, 51-60 years old and over 60 years old. The results show that the largest numbers of
respondents (53.9%) are 21- 30 years old. The second (27.7%) and third largest age group
categories (11.0%) of the respondents who are using MAB’s mobile banking service are
31-40 years old and under 20 years old. Therefore, majority of the respondents who are
using MAB’s mobile banking are middle aged people.

The marital status of the respondents is classified into single, married and other.
From the study, 46.9% of the total respondents are single, 50.0% are married and 3.1% are
divorced.

The education level of the respondents is classified into primary school, secondary
school, high school, under graduate, graduate, master’s degree/ post graduate, PhD and
other. The largest group of the respondents is graduate with the percentage of 56.0%, the
second being under graduate with the percentage of 24.1% and the third being education
level of high school with the percentage of 12.6%. Therefore, the majority of mobile
banking customers have achieved the education level above high school.

For the occupation of the respondents, the types of occupation are classified into
student, government staff, Company staff, self-employed, unemployed and other. The
group of company staff is the largest group with the 69.1% of the total respondents. The
second largest group is the government staff (12.0%) and the third one is the student
(11.0%) group. It shows that the most of the customers who are using MAB’s mobile
banking service are employees who are too busy to go to banks.

24
 Table 3.7 Demographic Profile of Respondents
No. of
Percent
No. Demographic Factor Respondents
(%)
(N= 382)
1 Gender Male 222 58.1
Female 160 41.9
2 Age Group Under and equal to 20 years old 42 11.0
21- 30 years old 206 53.9
31- 40 years old 106 27.7
41-50 years old 25 6.5
51- 60 years old 3 0.8
3 Marital Status Single 179 46.9
Married 191 50.0
Divorced 12 3.1
4 Education High school 48 12.6
Level Under Graduate 92 24.1
Graduate 214 56.0
Master’s Degree or Post-Graduate 28 7.3
5 Employment Student 42 11.0
Status Government Staff 46 12.0
Company Staff 264 69.1
Self-employed 30 7.9
6 Income per Less than and equal to 250,000 MMK 81 21.2
Month 250,001 to 500,000 MMK 141 36.9
500, 001 to 750,000 MMK 107 28.0
750,001 to 1,000,000 MMK 46 12.0
Above 1,000,000 MMK 7 1.8
Total 382 100.0
Source: Survey Data (2019)

The income per month is classified into less than and equal to 250,000 MMK,
250,001 to 500,000 MMK, 500,001 to 750,000 MMK, 750,001 to 1,000,000 MMK and
above 1,000,000 MMK. According to the survey results, most customers (36.9%) earn

25
monthly income 250,001 - 500,000 MMK. It is followed by 28.0% for 500,001- 750,000
MMK, 21.2% for less than and equal to 250,000 MMK, 12.0% for 750,001 – 1,000,000
MMK and 1.8% for above 1,000,000 MMK respectively.

3.5 Customer Usage on MAB’s Mobile Banking Service

In this study, the customer usage on MAB’s Mobile Banking Service is

analyzed by frequency of usage, number of transactions in a month, purpose and reasons
of using MAB’s Mobile Banking Service.

Table 3.8 Customer Usage on MAB’s Mobile Banking Service

No. of
Percentage
No. Customer Usage on MAB’s Mobile Banking Service Respondents
(%)
(N=382)
1 Frequency of Daily 26 6.8
using MAB’s Weekly 213 55.8
Mobile Banking Monthly 143 37.4
Service
2 Number of 1 to 10 283 74.1
transactions 11 to 25 73 19.1
made in a month Above 25 26 6.8
3 Purposes of Money transfer 218 57.07
using MAB’s Mobile Phone Top-up 294 77.0
Mobile Banking Bill Payment 194 50.8
Service Check the account balance 282 73.8
4 Reasons for Good Reputation 16 4.2
choosing MAB Good Customer Service 11 2.9
mobile banking Easy Availability and Accessibility 145 38.0
Fast Banking Service 67 17.5
My salary is given through MAB
134 35.1
account
My company asks me to do 9 2.4
Source: Survey Data (2019)

26
 According to Table 3.8, most respondents (55.8%) use MAB mobile service
weekly. 74.1% of the respondents mostly make the transactions of 1 to 10 times in a month.
Most respondents (77%) use mobile banking for the purpose of mobile phone Top-up.
38.0% of mobile banking users choose MAB mobile banking service due to easily available
and accessible.

27
 CHAPTER 4

ANALYSIS ON CUSTOMER PERCEPTION,

SATISFACTION AND LOYALTY OF

MOBILE BANKING SERVICE IN MAB

This study explores the customer perception, satisfaction and loyalty of MAB
mobile banking service. For this purpose, customer perception, satisfaction and loyalty are
measured by the responses from 382 mobile banking users in Yangon by using structured
questionnaire. This chapter presents the detail information about customer perception
towards mobile banking service and the analysis on customer perception, satisfaction and
loyalty.

4.1 Reliability Test

The reliability of the scales used in the questionnaire can be examined by using the
Cronbach's alpha reliability test. In this study, customer perception on service such as
tangibility, reliability, responsiveness, assurance, empathy, usefulness, and ease of use,
customer satisfaction and customer loyalty are measured. Each factor includes different
number of items and each item is measured on five-point Likert scale. A scale consists of
more than one item. Only when items within the scale are internally consistent, they can be
reliable. Because of Cronbach Alpha value can be interpreted as a correlation coefficient,
it ranges in value from 0 to 1. Cronbach’s Alpha values near to zero indicate low reliability
while the values close to one indicate high reliability. Cronbach Alpha value is a measure
of internal consistency. If alpha value is equal or more than 0.7, this variable is accepted as
a reliable variable. The summary of the reliability test based on Cronbach Alpha Coefficient
for the scale items in the study are mentioned in the Table 4.1.

28
 Table 4.1 Summary of Reliability Test on Customer Perception, Customer
Satisfaction and Customer Loyalty

Sr. No. Scale items No. of Items Cronbach’s Alpha

1 Tangibility 5 0.824
2 Reliability 5 0.782
3 Responsiveness 5 0.776
4 Assurance 5 0.703
5 Empathy 5 0.747
6 Usefulness 5 0.875
7 Ease of use 5 0.883
8 Customer satisfaction 8 0.731
9 Customer loyalty 5 0.839
Source: Survey Data (2019)

According to Table 4.1, it is found that the Cronbach’s alpha values for all values
are higher than the cut-off value of 0.7, indicating high reliability and thus it can be
expected that the scales used in this study are producing highly reliable data.

4.2 Customer Perception towards Mobile Banking Services of MAB

This section examines the customer perception on MAB’s Mobile Banking Service.
The five-point Likert scale questionnaire is used to measure the customer perception level
on the following factors. The value for the scales were given as: 1= Strongly disagree, 2=
Disagree, 3= Neutral, 4= Agree, 5= Strongly Agree. Thus, the mean value of each statement
can range between 1 and 5. It can be assumed that the respondents have more agreement
on a particular statement if their mean value for the statement is larger than 3.0. Otherwise,
they will have more disagreements.

4.2.1 Tangibility

The descriptive analysis of the customer perception on tangibility of MAB’s mobile

banking service including means, standard deviation of each statement for tangibility of
MAB’s mobile banking service are also mentioned in Table 4.2.

29
 Table 4.2 Customer Perception on Tangibility Dimension

Std.
No Description Mean
Dev
1 Providing the up-to-date equipment and technology in 3.35 0.828
mobile banking application
2 Providing the visually appealing presentation of the 3.14 0.847
mobile banking application
3 Providing enough information through the mobile banking 2.94 0.725
application
4 Providing enough information through the leaflets and 2.83 0.771
pamphlets of mobile banking
5 Providing the good physical facilities at the mobile service 2.73 0.666
agents. (e.g. decoration, CCTV, etc.)
Overall Mean 3.01
Source: Survey Data (2019)

According to Table 4.2, the overall average means value is 3.01. From this finding,
we can see that the respondents have positive view on tangibility of mobile banking service.
Among the tangibility statement, the customers have highest positive perception on the
equipment and technology provided by the mobile banking application. As MAB keep
upgrading the mobile application in order to fix the technical problem for the sake of the
user convenience, the customers recognize their action and agree about the latest
technology and equipment used in mobile banking. Therefore, MAB should maintain the
quality of equipment and technology of the mobile banking application.

However, the customers have negative perception on the mobile application,

leaflets and pamphlets. They feel that the mobile application, leaflets and pamphlets don’t
give enough information about the mobile banking. It is found that although MAB mobile
banking is currently trying so hard to provide the good mobile banking service, they still
lack in the information giving to customers. If the customers know clear information about
the mobile banking, they will be easier to use and satisfied with the service. Giving enough
information can also attract the new customers. Therefore, MAB should emphasize more
on delivering enough information through leaflets, pamphlets and applications. Moreover,
they have negative perception on the physical facilities provided at the mobile service

30
agents. Most customers feel that the physical facilities provided at the mobile service agents
are not good. As all mobile service agents are shop owners who provide the mobile banking
service in addition to their original business, MAB should provide them with the physical
facilities like the visible signboard, poster and CCTV in order for the user convenience.

4.2.2 Reliability

The descriptive analysis of the customer perception on reliability of MAB’s mobile

banking service including means, standard deviation of each statement for Reliability of
MAB’s mobile banking service are also mentioned in Table 4.3.

Table 4.3 Customer Perception on Reliability Dimension

No Description Mean Std. Dev

1 Delivering service as promised 3.62 0.914
2 Providing clear and accurate time and date record of 3.66 0.985
performance/ transactions.
3 Having secure enough security protocols installed in mobile 3.67 0.858
banking application
4 Having the quick and speedy transactions done in mobile 4.14 0.817
banking application
5 Providing the error free services by mobile banking 3.56 0.893
application
Overall Mean 3.73
Source: Survey Data (2019)

According to Table 4.3, the overall mean of 3.73 means that the customers have
overall positive perception on reliability of services provided by MAB mobile banking.
Among the reliability statement, the customers have highest positive perception on the
quick and speed transaction done by the mobile banking application. Nowadays, as the
lifestyle become busy and active, the people prefer quick service so as not to waste their
precious time. Therefore, the mobile banking application uses latest technology and
upgrades them based on the user feedback.

31
 Moreover, among the statements, the statement about the error free service provided
by mobile banking application has the lowest perception. However, its value is greater than
the neutral value of 3. It indicates that even though most respondents do not meet with error
while using mobile application in general, some respondents think that the services
provided by the mobile banking application have some error. Therefore, the bank has to
upgrade the application in order to be error free.

4.2.3 Responsiveness

The descriptive analysis of the customer perception on Responsiveness of MAB’s

mobile banking service including means, standard deviation of each statement for
Responsiveness of MAB’s mobile banking service are also mentioned in Table 4.4.

Table 4.4 Customer Perception on Responsiveness Dimension

Std.
No Description Mean
Dev
1 Giving prompt responds to the request and questions of the 3.55 0.814
customers by the mobile banking service’s help centre
2 Telling what to do if the transaction is not processed in 3.13 0.441
mobile banking application
3 Taking care of problem promptly 3.24 0.586
4 Having the mobile banking service providers who are willing 3.51 0.887
to help customers
5 Compensating for the problem the bank creates 2.94 0.472
Overall Mean 3.27
Source: Survey Data (2019)

According to Table 4.4, the respondents have overall positive perception on

responsiveness of mobile banking services provided by MAB. Among the responsiveness
statements, most respondents have highest perception on the help center of the mobile
banking because they promptly respond to their request and questions. MAB mobile
banking service has the 24-hr help centre and they give them training regularly to improve
their customer service, communication and problem-solving skill. Due to these trainings,

32
the response time is found to be short showing that the staff of the help center are fast in
replying customers’ messages.

However, most respondents have negative perception on the compensation the

mobile banking service made for the problem they create. They don’t feel that the bank
gives them some kind of compensation if they encounter any problem created by the bank.
As there are many alternative mobile banking services available to customers, MAB mobile
banking should fill this gap in order to get competitive advantage. Therefore, the bank
should consider to give compensation in the form of apology or present based on the
amount of effect the problem makes to the customers.

4.2.4 Assurance

The descriptive analysis of the customer perception on Assurance of MAB’s mobile

banking service including mean and standard deviation of each statement for Assurance of
MAB’s mobile banking service are also mentioned in Table 4.5.

Table 4.5 Customer Perception on Assurance Dimension

No Description Mean Std. Dev

1 Believing that my information is kept confidential 4.18 0.850

2 Believing in the security of my transactions 4.21 0.818
3 Providing clear and understandable instructions in the 3.64 0.707
mobile banking system
4 Having sufficient knowledge about mobile banking service 2.85 0.855
in the service providers
5 Giving confidence in customer through the behavior of 2.66 0.613
mobile banking service providers
Overall Mean 3.51
Source: Survey Data (2019)

According to Table 4.5, the overall mean of 3.51 means that the customers have
positive perception on assurance of mobile banking services provided by MAB. Among
the statements about the assurance, most respondents have strongest positive perception on
the security of the transactions made by using mobile banking service. The current security

33
system of MAB mobile banking which uses SMS and password makes the customers feel
secure of their transactions.

However, most respondents have negative perception on the knowledge and

behavior of the mobile banking service providers. They think that the service providers
don’t have sufficient knowledge about mobile banking service and their behavior don’t
instill confidence in them. The customers doubt the knowledge level of the mobile banking
service providers so that their behavior doesn’t give them confident enough to use mobile
banking. The bank gives training to their internal service providers such as the call and help
center staff regularly. But they can only give on-site training to the mobile banking agents
because they are busy. Therefore, during their regular training to the internal service
providers, they should emphasize on the knowledge about the mobile banking and their
behavior. Moreover, they should give frequent on-site training to the mobile banking
agents.

4.2.5 Empathy

The customer perception on Empathy of MAB’s mobile banking service are

analyzed. The results of descriptive analysis including means, standard deviation of each
statement for Empathy of MAB’s mobile banking service are also mentioned in Table 4.6.

Table 4.6 Customer Perception on Empathy Dimension

No Description Mean Std. Dev
1 Giving personal attention through the help centre and call 2.76 0.694
centre of mobile banking
2 Trying to satisfy specific needs of users in any way 2.80 0.694
3 Being able to understand the specific needs of users 2.76 0.727
4 Collecting information about the satisfaction of their users 3.32 0.950
5 Being accessible to the call centre of the mobile banking 3.43 0.949
Overall Mean 3.01
Source: Survey Data (2019)

According to Table 4.6, the customers have overall positive perception on empathy
of mobile banking services provided by MAB. Among the statement about empathy, most
respondents have highest positive perception on the the call center of mobile banking

34
service because this is accessible easily to them. MAB’s 24-hour call center can be easily
contacted whenever the users encounter problems or have questions. They should maintain
this condition and try to gain more market share by using this advantage.

However, the respondents have negative perception on the help center and call
center of mobile banking service giving them personal attention, understanding their
specific needs and trying to satisfy these specific needs of users in any way. They think that
the help center and call center of mobile banking service don’t give them personal attention,
understand their specific needs and try to satisfy these specific needs of users in any way.
Even though the call center and help center is accessible to the users, they lack in giving
personal attention to individual customers. Moreover, they don’t understand and try to
satisfy specific needs of users. Therefore, the mobile banking service should train their staff
in active listening, how to focus the customers’ need and obtain customers’ feedback to be
able to give personalized attention to the customers. Moreover, the bank should also carry
out the market research on the customer needs in order to be able to understand and satisfy
the specific needs of the customers.

4.2.6 Usefulness

The customer perception on Usefulness of MAB’s mobile banking service are

analyzed. The results of descriptive analysis including means and standard deviation of
each statement for Usefulness of MAB’s mobile banking service are also mentioned in
Table 4.7.

Table 4.7 Customer Perception on Usefulness Dimension

No Description Mean Std. Dev
1 Being able to utilize banking services more quickly 3.99 0.642
2 Increasing the productivity for the banking services 3.93 0.718
3 Being useful for the banking activities 4.32 0.693
4 Being able to reduce queuing time 4.29 0.758
5 Being able to save travelling expenses 4.33 0.817
Overall Mean 4.17
Source: Survey Data (2019)

35
 According to Table 4.7, most respondents have positive perception on usefulness
of mobile banking services provided by MAB. Among the statements about the usefulness,
most respondents have positive perception on the thing that using mobile banking service
can save travelling expenses because they don’t need to personally go to the bank to get
banking service. They can easily access to all banking services everywhere as long as they
have their mobile phones.

The mean value of increasing productivity for the banking activities is the lowest
but its value is greater than the neutral value of 3. Therefore, most respondents have positive
view on the increasing productivity for the banking activities because they can do banking
activities at a more rapid rate than before with the help of the mobile banking application.
Before they use mobile banking service, they have to personally go to the bank which is
both tiring and time-consuming. Nowadays, they can finish their work faster than before as
they don’t need to go to the bank to get service anymore.

4.2.7 Ease of Use

The customer perception on Ease of Use dimension of MAB’s mobile banking

service are analyzed. The results of descriptive analysis including means and standard
deviation of each statement for Ease of Use dimension of MAB’s mobile banking service
are also mentioned in Table 4.8.
Table 4.8 Customer Perception on Ease of Use Dimension
No Description Mean Std. Dev
1 Being able to download the mobile banking application 4.21 0.869
easily
2 Being easy and simple to use mobile banking 3.70 0.920
application
3 Being easy to make a mobile banking account. 3.69 0.860
4 Being easy to login. 3.93 0.902
5 Being easy to find what the users need in mobile 3.64 0.972
banking application
Overall Mean 3.83
Source: Survey Data (2019)

36
 According to Table 4.8, the customers have overall positive perception on ease of
use of services provided by MAB mobile banking. Among the statements about the ease of
use, most respondents have highest perception on the mobile banking application being
easy for them to download indicating that the customers find no problem in downloading
the application from Google play store and Apple store. The mobile banking application
upgrades the application in order to fix the problem. Consequently, the users don’t have
difficulties in download the application.

It is found that the statement about being easy to make a mobile banking account
has the lowest mean value and greater than neutral value of 3. Most customers have no
difficulties in making mobile banking accounts via application or mobile banking agents.
However, as the mean value is lowest, some respondents encounter problem in making
mobile banking accounts. Therefore, MAB should clearly mention the requirements, steps
needed to make a mobile banking account and where the customers can make the mobile
banking account through the leaflets, pamphlets and social media such as Facebook.

4.2.8 Analysis of the Overall Values of Customer Perception

The results of descriptive analysis including overall means of customer

perception on MAB’s mobile banking service are also mentioned in Table 4.9.

Table 4.9 Summary of Customer Perception

No. Description Overall Mean Value
1 Tangibility 3.01
2 Reliability 3.73
3 Responsiveness 3.27
4 Assurance 3.51
5 Empathy 3.01
6 Usefulness 4.17
7 Ease of Use 3.83
Source: Survey Data (2019)

According to Table 4.9, generally, the respondents have positive or high perception
on all seven factors because the mean values of these factors are higher than 3. Among
these factors, usefulness of the mobile banking service has highest mean value among the

37
seven factors showing that most customers have highest positive perception on MAB’s
mobile banking useful and helpful to them because they can get banking service anywhere
with the help of the mobile banking application in their phone. They no longer need to go
to the bank to get banking service. They can make and access bank services at home if they
have mobile banking account and application.

Among the seven factors, tangibility and empathy has lowest mean value. As the
value is the lowest and barely pass the neutral value of 3, the bank still needs to improve
the tangibility and empathy of mobile banking. For the tangibility dimension, the bank
should upgrade the tangibles such as physical facilities of service agents such as
decorations, signboards and CCTV, pamphlets, leaflets and the application. They should
renew the physical facilities of service agent, pamphlets and leaflets and upgrade the
application with the more error-free and bug-free version. For the empathy dimension, the
customers have lowest positive perception. As the mobile banking gives a standardized
service to all the customers, they still fail to fulfill and understand the specific needs of the
customers. Most of the service providers are not able to give personal attention to the
customers. Therefore, MAB should fill that gap and gain competitive advantage by giving
customers personalized attention and trying to fulfill and understand the specific needs of
the customers.

4.3 Analysis of Influencing Service Quality Dimension on Customer Satisfaction

The effect of service quality dimension in MAB’s mobile banking service on

customer satisfaction is analysed. Simple linear regression is used to analyse that effect.

4.3.1 Customer Satisfaction on Mobile Banking Service of MAB

The customer satisfaction on MAB’s Mobile Banking Service is examined. The

five-point Likert scale questionnaire is used to measure the customer satisfaction level on
the following factors. The value for the scales were given as: 1= Strongly disagree, 2=
Disagree, 3= Neutral, 4= Agree, 5= Strongly Agree. Thus, the mean score of each statement
can range between 1 and 5.

38
 Table 4.10 Customer Satisfaction on Mobile Banking Service
No Description Mean Std. Dev
1 Satisfaction with the appearance of physical facilities, 2.95 0.880
equipment, personnel and communication material
provided by mobile banking service
2 Satisfaction with the ability of the mobile banking 3.61 0.949
service to perform the service dependably and accurately
as promised
3 Satisfaction with the willingness of the mobile banking 3.33 0.867
service to help customers and to provide prompt service
4 Satisfaction with assurance and courtesy of employees 3.53 0.995
and their ability to convey trust and confidence.
5 Satisfaction with the personalized care and attention 2.97 0.993
provided to me by the mobile banking service
6 Satisfaction with the usefulness of mobile banking 3.85 0.505
service
7 Satisfaction with the ease of use of mobile banking 3.93 0.668
service
8 Satisfaction with overall mobile banking service 3.92 0.638
Overall Mean 3.51
Source: Survey Data (2019)

According to Table 4.10, the overall mean of the customer satisfaction is 3.51 which
is larger than the neutral value of 3. Therefore, the customers have positive perception
towards and are satisfied with the overall customer service of mobile banking. Among the
customer satisfaction statements, the customers have strongest positive response on their
satisfaction of the ease of use of mobile banking service indicating that the customers find
that they can easily find and do the banking service they wanted with this mobile banking
application. In order to fulfill their mission statement “My Bank in My Phone”, MAB
works hard to ensure that the customers don’t encounter any difficulties using mobile
banking. Therefore, MAB upgrades the mobile banking application and the user interface.
As a result, the customers believe that the mobile application of MAB mobile banking is
easy to use.

39
 However, the satisfaction mean values of tangibility and empathy of mobile
banking application are less than neutral value of 3 indicating that the customers are not
satisfied with the tangibility and empathy of mobile banking service. The application,
leaflets and pamphlets of mobile banking service don’t give enough information. Moreover,
the facilities provided at the service agents which the customers encounter such as the
CCTV, signboard and decoration are not good. the caring, individualized attention the firm
provides its customers. Therefore, the MAB should upgrade the physical facilities provided
at the mobile banking service agents and the information given in the application, the
leaflets and pamphlets. For the empathy, the customers feel that they don’t receive
individualized attention and as a result, MAB don’t try to understand and fulfill their
specific needs related to mobile banking service. It is found that even though MAB is trying
hard to achieve their mission, they still lack in individualized customer service care.
Therefore, they should make a plan in order to fulfill that gap and train their service
providers accordingly.

4.3.2 Influencing Service Quality Dimension on Customer Satisfaction

Regression analysis have been conducted to meet the research objective of this
study. The multivariate regression model is used to analyze the effects of customer
perception on customer satisfaction of MAB mobile Banking service. The results of the
regression analysis among each average value of customer perception and average value of
customer satisfaction are described in the Table 4.11.

In regression test, the strength of the relationship between the dependent variable
and independent variables in the regression equation is the correlation coefficient, R, and
is always a value between -1 and 1, inclusive. The regression coefficient is the slope of the
line of the regression equation. When the regression formula is Y = a + bi Xi; where bi are
the regression coefficient that represents the rate of change of one variable 'y' as a function
of changes in the other 'xi values.

The results of the regression test are presented in Table 4.11. The correlation
coefficient or coefficient of determination, R value, signifies the correlation between
independent variables (average values of customer perception) and dependent variable
(average values of customer satisfaction). The R Square value is 0.736 and the Adjusted R

40
Square value is 0.731. The Adjusted R Square value indicates the proportional of variance
in dependent variable (average value of customer satisfaction) that is predicted by 7
perception values (independent variables). In this case, it can be interpreted that 73.1% of
the variation in customer satisfaction is caused by changes in independent variables;
average values of 7 perception on mobile banking service.

The regression model can be written as:

Y = a + b1 X1 + b2X2 + b3X3 + b4X4+ b5X5 + b6X6+ b7X7

Where, Y is for average value of customer satisfaction, dependent variable of

regression model, a is the regression constant of the equation, X1 is for Average value of
Tangibility, X2 is for Average value of Reliability, X3 is for Average value of
Responsiveness, X4 is for Average value of Assurance, X5 is for Average value of Empathy,
X6 is for Average value of Usefulness, and X7 is for Average value of Ease of Use, which
are independent variables or predictors, b1 is the regression coefficient for Tangibility, b2
is the regression coefficient for Reliability, b3 is the regression coefficient for
Responsiveness, b4 is the regression coefficient for Assurance, b5 is the regression
coefficient for Empathy, b6 is the regression coefficient for Usefulness and b7 is the
regression coefficient for Ease of Use.

According to Table 4.11, tangibility, reliability, assurance, empathy, usefulness and

ease of use have significant positive relationship with customer satisfaction because their
significance values are less than 0.05. However, responsiveness has no significant
relationship with customer satisfaction because its significant value is greater than 0.05.
Since b1 is (0.064), b2 is (0.238), b4 is (0.094), b5 is (0.257), b6 is (0.153) and b7 is (0.084),
which are regression coefficients of the model and the regression equation is:

Y = 0.064 X1 + 0.238X2 + 0.094X4 + 0.257X5+ 0.153X6 + 0.084X7

Reliability has the most effect on customer satisfaction because its standardized
coefficient is 0.319 which indicates that reliability has strongly positive relationship.
Therefore, MAB should emphasize on the reliability dimension more in order to get more
customer satisfaction. Thus, the bank should provide service as promised to customers. The
bank should provide more quick, speedy and error-free service. Furthermore, the number
of the mobile service agents should be increased in order to be accessible to customers
more.

41
 Table 4.11 Effect of Influencing Service Quality Dimension on
Customer Satisfaction of MAB Mobile Banking Service
Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Model t Sig.
Std. Tolerance VIF
B Beta
Error

(Constant) 0.198 0.123 1.610 0.108

Tangibility 0.064** 0.025 0.077 2.607 0.010 0.800 1.250

Reliability 0.238*** 0.027 0.319 8.665 0.000 0.523 1.911

Responsiveness 0.051 0.032 0.050 1.575 0.116 0.694 1.441

Assurance 0.094*** 0.032 0.101 2.977 0.003 0.619 1.615

Empathy 0.257*** 0.030 0.301 8.482 0.000 0.562 1.779

Usefulness 0.153*** 0.035 0.186 4.375 0.000 0.390 2.566

Ease of Use 0.084*** 0.029 0.129 2.915 0.004 0.364 2.750

R Square 0.736

Adjusted R 0.731
Square

F value 148.623***

Durbin-Watson 1.874
Source: Survey Data (2019)
*** Significant at the 0.01 level (2-tailed), ** Significant at the 0.05 level (2-tailed)

As regression coefficient of tangibility (0.064) is significant at the significance

level of 5%, it implies that customer satisfaction increases by 0.064 units if the tangibility
increases by one unit. As regression coefficient of reliability (0.238) is significant at the
significance level of 1%, it implies that customer satisfaction increases by 0.238 units if the
reliability increases by one unit. As regression coefficient of assurance (0.094) is significant
at the significance level of 1%, it implies that customer satisfaction increases by 0.094 units
if the assurance increases by one unit. As regression coefficient of empathy (0.257) is
significant at the significance level of 1%, it implies that customer satisfaction increases by
0.257 units if the empathy increases by one unit. As regression coefficient of usefulness

42
(0.153) is significant at the significance level of 1%, it implies that customer satisfaction
increases by 0.153 units if the usefulness increases by one unit. As regression coefficient
of ease of use (0.084) is significant at the significance level of 1%, it implies that customer
satisfaction increases by 0.084 units if the ease of use increases by one unit.

As Durbin-Watson value is 1.874 which is between 1.54 and 2.46, there is no

autocorrelation. All tolerances are more than 0.1 and all VIF values are less than 10.
Therefore, there is no multicollinearity between independent variables.

The factors such as tangibility, reliability, assurance, empathy, usefulness and ease
of use have significant positive relationship with the customer satisfaction. Therefore, the
mobile banking service should upgrade the tangibility such as the pamphlets, leaflets,
application and physical facilities of mobile banking service. MAB should make sure that
they give quick, speedy, secure, accurate and error-free service as promised. The bank has
to train the service providers more on their knowledge and behavior so as to give confidence
to the customers. The bank also has to not only train their service providers but also do
short surveys in order to be able to understand and fulfill the customers’ specific needs and
give them individual attention. The bank should maintain the usefulness of the mobile
banking application by keep doing quality control on their features and emphasize their
advertisement on the usefulness. The bank should also make their application and service
easy and simple to use for people of any ages.

4.4 Analysis on the Effect of Customer Satisfaction on Customer Loyalty

The effect of customer satisfaction on customer loyalty towards mobile banking

service of MAB is analyzed. Simple linear regression is used to analyze that effect.

4.4.1 Customer Loyalty

MAB mobile banking customers were asked with 5-point Likert scales questions
about customer loyalty with 5 statements. The results of descriptive analysis including
means and standard deviation of values for 5 statements of Customer Loyalty are mentioned
in the Table 4.12.

43
 Table 4.12 Customer Loyalty on Mobile Banking Service
No Description Mean Std. Dev
1 Saying positive things about MAB mobile banking 3.80 0.828
service.
2 Recommending the mobile banking service to 3.45 0.543
someone
3 Encouraging someone to use this mobile banking 2.93 0.867
service
4 Being my first choice for future transaction 3.23 0.711
5 Doing more business with this mobile banking in the 3.69 0.812
coming months
Overall Mean 3.42
Source: Survey Data (2019)

According to Table 4.12, the overall mean which is greater than 3 means that the
customers are loyal to the MAB mobile banking service. Among the customer loyalty
statements, the customers have strong positive perception about saying positive things
about MAB mobile banking service. It indicates that the customers say good things about
mobile banking service even though there are many alternative mobile banking services for
them. However, the customers don’t agree that they actively encourage someone to use
MAB mobile banking service. Even though the customers agree that they will say positive
things about the MAB’s mobile banking service, they will not encourage others to use it. It
may be because they are not loyal enough to encourage others to use it. In addition, it may
be due to many mobile banking choices the customers have with the low switching cost.

4.4.2 The Effect of Customer Satisfaction on Customer Loyalty

Simple linear regression is used to analyse the effects of customer satisfaction on

customer loyalty on MAB mobile banking service. The regression results are taken from
the output of SPSS analysis. According to the Table 4.11, average value of customer
satisfaction is correlated with average value of customer loyalty. The coefficient is 0.789
and correlation is significant at the at the 0.01 level (2-tailed). From the findings of the

44
analysis results, there are significant positive relationship between customer satisfaction
and customer loyalty upon Mobile Banking services of MAB.

In this regression analysis, the independent variable is customer satisfaction. The

dependent variable is customer loyalty. As 𝑅2 value is 0.623, the independent variables can
cause changes of 62.3% of variance in dependent variable (customer loyalty). Customer
satisfaction is significant and has strong positive relationship with customer loyalty because
its significance is less than 0.01.
Table 4.13 Effect of Customer Satisfaction on Customer Loyalty
at MAB Mobile Banking Service
Unstandardized Standardized
Coefficients Coefficients
t
Variable Std. Sig.
B Error Beta
(Constant) 0.052 0.136 0.386 0.700
Customer satisfaction 0.959*** 0.038 0.789 25.075 0.000
R Square 0.623

Adjusted R Square 0.622

F value 628.768***
Source: Survey Data (2019)
*** Significant at the 0.01 level (2-tailed), ** Significant at the 0.05 level (2-tailed)

In this Linear Regression Model,

Y = a + b1 X1

Where, Y is for average value of customer loyalty, a is the regression constant of

the equation, X1 is for Average value of satisfaction and b1 is the regression coefficient for
customer satisfaction. The independent variable is customer satisfaction and dependent
variable is customer loyalty. Since the constant of linear regression model; Constant (a)
value is (0.052) and b1 is (0.959). The constant (a) is not significant. Thus, Regression
Model can be written as:

Y= 0.959 X1

Where, Y is for average value of customer loyalty, dependent variable of regression model,
X1 is for average value of customer satisfaction, independent variable or predictor.

45
 As regression coefficient of customer satisfaction (0.959) is significant at the
significance level of 1%, it implies that customer loyalty increases by 0.959 units if the
customer satisfaction increases by one unit. Nowadays, there are many mobile banking
alternatives available to the customers with low or no switching cost. So, the customers
have the high bargaining power. Therefore, MAB should try hard to gain competitive
advantage. Therefore, they should try hard to get the customer satisfaction first by using
the above factors which can significantly affect the customer satisfaction such as
tangibility, reliability, assurance, empathy, usefulness and ease of use. As the customer
satisfaction have significant positive relationship with the customer loyalty, by gaining the
customer satisfaction, these customers tend to more loyal to the mobile banking service of
MAB.

46
 CHAPTER 5

CONCLUSION

This chapter presents the findings and discussions of the study and states
recommendations and suggestions according to the results and findings. The limitations
and needs for further research of the study are also mentioned. Suggestion and
recommendations are based on findings of the study.

5.1 Findings and Discussions

In this study, the analysis of the customer satisfaction and loyalty on MAB’s mobile
banking service is done. In order to meet this objective, the data collection was done with
the structured questionnaire. It is found that most of the respondents are middle aged
company staff. They all use the mobile top-up service via the mobile banking application.
Most customers use MAB mobile banking because they are easily available and accessible
to them.

It highlights that the customers have positive perception on all seven factors
(tangibility, reliability, responsiveness, assurance, empathy, usefulness and ease of use).
All service quality dimensions except responsiveness have significant positive effect on
customer satisfaction. Responsiveness may be perceived as the hygiene factor by the
customers of MAB mobile banking. Even though the presence of responsiveness may not
create satisfaction but the absence of responsiveness may create dissatisfaction among
mobile banking customers. Therefore, MAB should emphasize more on tangibility,
reliability, assurance, empathy, usefulness and ease of use. Customer loyalty has significant
positive effect on customer satisfaction.

Customers have weak positive perception on tangibility. Tangibility has significant

positive effect on customer satisfaction. Therefore, MAB should provide not only enough
information through the leaflets, pamphlets and mobile banking applications but also the
physical facilities provided by mobile service agents (such as decoration and CCTV). For
the reliability dimension, both the overall and individual perceived values are positive.
Reliability has significant positive effect on customer satisfaction. Therefore, MAB should

47
emphasize more to provide quick, speedy and error free service. Moreover, they should
ensure whether the mobile banking service agents are sufficient. For the responsiveness
dimension, even though the customer perception of overall responsiveness is positive and
has insignificant effect on customer satisfaction, the customers have the negative
perception on the compensation given by the bank for the problem they create indicating
that the customers don’t receive any compensation if they encounter the problem which
occurs due to MAB.

For the assurance dimension, though the perception of overall assurance is positive,
the customers don’t agree that the service providers have sufficient knowledge about
mobile banking service and their behavior instill confidence in customers. Thus, it can be
said that the customers doubt the knowledge level of the mobile service providers about the
service. As a result, the customers don’t feel confident in using mobile banking service due
to the behavior of the mobile service providers. As assurance has significant positive effect
on customer satisfaction, MAB should emphasize on training the knowledge and behavior
of mobile banking service providers. For the empathy dimension, although its overall
perception is positive, the customers don’t think that the mobile banking tries to understand
and satisfy the users’ specific needs and that the help center and call center of mobile
banking give them personal attention. As empathy has significant positive effect on
customer satisfaction, MAB should emphasize on giving personal attention to customers
by mobile banking service providers. For the usefulness and ease of use dimensions, both
the overall and individual perceived values are positive and both have significant positive
effect on customer satisfaction. MAB should emphasize their advertising on usefulness of
mobile banking service. They should upgrade their mobile application so as to become
more user-friendly and easier to use.

From the analysis of customer satisfaction and customer loyalty, the customers have
overall positive perception on both of them. However, the customers are not satisfied with
the tangibility of mobile service such as pamphlets, application and mobile banking agents
and caring, individualized attention the bank provides its customers. Similarly, even though
the customers response that they will say positive things and recommend the mobile
banking to other, they don’t agree that they will encourage the others.

48
 As the summary, the findings of the study are very useful for the bank to gain user
preference in the competitive market of mobile banking. Through this study, the bank can
understand the customer perception, satisfaction and loyalty.

5.2 Suggestions and Recommendations

According to the findings, as most of the mobile banking application users are
middle aged, MAB’s mobile banking service should target the middle-aged people by
advertising in social media especially Facebook which is widely used in Myanmar.
Moreover, as customers mostly do mobile top-up and money transfer using mobile banking
service, the bank should organize more mobile top-up promotion campaign in cooperation
with the telecommunication companies like Telenor, etc. They should also make the mobile
banking service more available and accessible by having mobile banking agents in almost
all states and divisions.

They should review the information and content of the leaflets, pamphlets and
mobile application whether the information they currently give is enough or not. Moreover,
they should also care about the physical facilities of mobile banking agents such as
signboard and CCTV so as to be visible and satisfy the customers. They should plan the
compensation process in advance for the delay or error in application due to MAB.
Compensation ranges from verbal apology to monetary compensation. By doing this, even
if the customers have negative view on MAB mobile banking due to the problem they
encounter, the compensation can reverse their view on MAB mobile banking.

Moreover, MAB should give more knowledge and service refresher trainings to
mobile banking service providers including mobile banking service agents. As most of the
mobile banking service agents are shop owners, they are too busy to attend the trainings.
Therefore, they should form training team and that team should give onsite trainings to
them. Moreover, in order to understand more about customers’ specific needs, MAB should
perform short surveys frequently so that they can know their needs and satisfy accordingly.

By using the findings, the bank should launch campaigns to increase awareness to
potential customers using the factors that affect positively on customer satisfaction such as
tangibility, reliability, responsiveness, assurance, empathy and ease of use.

49
5.3 Needs for Further Research

This study focuses on to analyze the customer perception, satisfaction and loyalty
on MAB’s mobile banking service. Due to time and resources limitation, the survey data is
collected 382 respondents and emphasized only in Yangon area. The study emphasizes only
on MAB mobile banking service quality factors such as tangibility, reliability,
responsiveness, assurance, empathy, usefulness and ease of use. But there are many
customers using MAB mobile banking service around the country. Therefore, further
studies that investigate the different customer perception and their impact on customer
satisfaction and loyalty with more sample size should be done. These kinds of studies
should be done in many states and divisions. Moreover, there are many banks which offer
mobile banking service such as CB Bank, KBZ Bank and AYA bank. Therefore, the further
research on the customer satisfaction or customer loyalty compared to other banks should
be done.

50
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 APPENDIX A

YANGON UNIVERSITY OF ECONOMICS

DEPARTMENT OF MANAGEMENT STUDIES

MBA PROGRAMME

Questionnaire for Customer Satisfaction and Loyalty on Mobile Banking Service of

Myanma Apex Bank (MAB)

This survey is a partial fulfilment of the requirements for Master Degree of Business
Administration Program (“MBA”), aiming at investigating customer satisfaction and
loyalty on mobile banking service of MAB bank. This survey is only concern with MBA
thesis paper and not related with other business purpose. Please kindly answer the following
questions. Thank you for your precious time.

Part 1: Demographic

1. Gender
o Male
o Female
2. Age
o Under and equal to 20
o 21 - 30
o 31 – 40
o 41 – 50
o 51 – 60
o Over 60
3. Marital status
o Single
o Married
o Others (Specify) ……………………………………
4. Education level
o Primary School
o Secondary School
o High School
o Under Graduate
 o Graduate
o Master’s Degree or Post-Graduate
o PhD
o Others (Specify) ……………………………………….
5. Employment Status
o Student
o Government Staff
o Company Staff
o Self-employed
o Unemployed
o Others (Specify)…………………………………………….
6. Income per Month
o Less than and equal to250,000 MMK
o 250,001 to 500,000 MMK
o 500,001 to 750,000 MMK
o 750,001 to 1,000,000 MMK
o Above 1,000,000 MMK
Part 2: Customer Usage on MAB bank’s Mobile Banking Service

7. How often do you use MAB Bank’s Mobile Banking Service?

o Daily
o Weekly
o Monthly
o Yearly
o Other (Specify)……………………………………..
8. How many transactions did you make during a month using MAB Bank’s Mobile
Banking Service?
o 1 to 10
o 11 to 25
o Above 25
o Other……………………………………………….
9. What are your purposes of using MAB Bank’s Mobile Banking Service? (You can
choose more than one option)
o Money Transfer
o Bill Payment
o Mobile Phone Top-up
o Check the account balance
o Credit/ Loan Payment
o Online shopping
o Hire-purchase Payment
o Donation
o Top-up Visa/ Master card
o Others (Specify)…………………………………………….

10. What are your reasons for choosing MAB mobile banking?
o Good reputation
o Good customer service
o Easy availability and accessibility
o Fast banking service
o My salary is given through MAB bank account
o Others (Specify)………………………………………………
Part 3: Customers’ Perception on MAB bank’s Mobile Banking Service

Rank the following statements for your perception on MAB bank’s Mobile Banking
Service. (1= Strongly Disagree, 2= Disagree, 3= Neutral, 4= Agree, 5= Strongly
Agree)
1 2 3 4 5
Tangibility
1. The equipment and technology provided by
mobile banking application are up-to-date.
2. The presentation of the mobile banking
application is visually appealing.
3. The mobile banking application provides
enough information.
4. The leaflets and pamphlets of mobile banking
convey enough information.
5. The physical facilities provided by mobile
service agents. (e.g. decoration, CCTV,etc.)
are good.
Reliability 1 2 3 4 5
1. The mobile banking service delivers service
as promised.
2. The mobile banking service provides clear
and accurate time and date record of
performance/ transactions.
3. The security protocols installed in mobile
banking application are secure enough.
4. The transactions done in mobile banking
application are quick and speedy.
5. The services provided by mobile banking
application are error free.
Responsiveness
1. The mobile banking service’s help centre
promptly responds to the request and
questions made by customers.
2. Mobile banking application tells what to do if
the transaction is not processed.
3. Mobile banking service takes care of problem
promptly.
4. The mobile banking service providers are
always willing to help me.
5. The bank compensates for the problem they
create.
Assurance
1. I believe that my information is kept
confidential.
2. I believe in the security of my transactions.
3. Instructions provided in the mobile banking
system are clear and understandable.
4. The service providers have sufficient
knowledge about mobile banking service.
5. The behaviour of mobile banking service
providers instil confidence in customer.
Empathy
1. The help centre and call centre of mobile
banking gives me personal attention.
2. Mobile banking tries to satisfy specific needs
of users in any way.
3. Mobile banking is able to understand the
specific needs of users.
4. Mobile banking collects information about
the satisfaction of their users.
5. The call centre of the mobile banking is
accessible.
Usefulness
1. Using mobile banking service enables me to
utilize banking services more quickly.
2. Using mobile banking service for my banking
services increases my productivity.
3. Using mobile banking service is useful for my
banking activities.
4. Using mobile banking service can reduce
queuing time.
5. Using mobile banking service can save
travelling expenses.
Ease of Use
1. The mobile banking application is easy to
download.
2. The mobile banking application is easy and
simple to use.
3. It is easy to make a mobile banking account.
4. The mobile banking application is easy to
login.
5. The mobile banking application makes easy
to find what the users need.
Part 4: Customer Satisfaction on MAB bank’s Mobile Banking Service

Rank the following statements for your satisfaction on MAB bank’s Mobile Banking
Service. (1= Very Dissatisfied, 2= Dissatisfied, 3= Neutral, 4= Satisfied, 5= Strongly
Satisfied)
Customer Satisfaction 1 2 3 4 5
1. I am satisfied with the appearance of physical
facilities, equipment, personnel and
communication material provided by mobile
banking service.
2. I am satisfied with the ability of the mobile
banking service to perform the service
dependably and accurately as promised.
3. I am satisfied with the willingness of the
mobile banking service to help customers and
to provide prompt service.
4. I am satisfied with assurance and courtesy of
employees and their ability to convey trust and
confidence.
5. I am satisfied with the personalized care and
attention provided to me by the mobile banking
service.
6. I am satisfied with the usefulness of mobile
banking service.
7. I am satisfied with the ease of use of mobile
banking service.
8. I am satisfied with overall mobile banking
service.

Part 5: Customer Loyalty on MAB bank’s Mobile Banking Service

Rank the following statements for your loyalty on MAB bank’s Mobile Banking
Service. (1= Very Dissatisfied, 2= Dissatisfied, 3= Neutral, 4= Satisfied, 5= Strongly
Satisfied)
Customer Loyalty 1 2 3 4 5
1. I say positive things about MAB mobile
banking service.
2. I recommend the mobile banking service to
someone.
3. I encourage someone to use this mobile
banking service.
4. This mobile banking service is my first choice
for future transaction.
5. I will do more business with this mobile
banking in the coming months.
 APPENDIX B

STATISTICAL OUTPUT

Regression Analysis Results for Customer Perceptions on Customer Satisfaction

Model Summary

Change Statistics
R Adjusted Std. Error of R
Model R
Square R Square the Estimate Square F Durbin-
Change Change Watson
1 .858a 0.736 0.731 0.25364 0.736 148.623 1.874

ANOVAa
Sum of
Model Squares df Mean Square F Sig.
1 Regression 66.929 7 9.561 148.623 .000b

Residual 24.060 374 0.064

Total 90.989 381

a. Predictors: (Constant), Tangibility Mean, Reliability Mean, Responsiveness Mean,

Assurance Mean, Empathy Mean, Usefulness Mean, Ease of Use Mean
b. Dependent Variable: Customer Satisfaction Mean
 Coefficients

Unstandardized Standardized Collinearity

Coefficients Coefficients Statistics
Model t Sig.

Std.
B Beta Tolerance VIF
Error
(Constant) 0.198 0.123 1.610 0.108
Tangibility
0.064 0.025 0.077 2.607 0.010 0.800 1.250
Mean
Reliability
0.238 0.027 0.319 8.665 0.000 0.523 1.911
Mean

Responsiveness
0.051 0.032 0.050 1.575 0.116 0.694 1.441
Mean

Assurance
0.094 0.032 0.101 2.977 0.003 0.619 1.615
Mean

Empathy Mean 0.257 0.030 0.301 8.482 0.000 0.562 1.779

Usefulness
0.153 0.035 0.186 4.375 0.000 0.390 2.566
Mean
Ease of Use
0.084 0.029 0.129 2.915 0.004 0.364 2.750
Mean
 Regression Analysis Results for Customer Satisfaction on Customer Loyalty

Model Summary

Adjusted R Std. Error of the

Model R R Square Square Estimate
1 .789a 0.623 0.622 0.36487

ANOVAa
Sum of
Model df Mean Square F Sig.
Squares

Regression 83.707 1 83.707 628.768 .000b

1
Residual 50.589 380 0.133
Total 134.297 381

a. Dependent Variable: Customer Loyalty Mean

b. Predictors: (Constant), Customer Satisfaction Mean

Coefficientsa
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
(Constant) 0.052 0.136 0.386 0.700
1 Customer
Satisfaction 0.959 0.038 0.789 25.075 0.000
Mean