Impact of Operational Performance and Service Quality Experience on Customer Satisfaction and Loyalty

Abstract

Background: A significant trend in the financial industry is embedded banking (EB), which incorporates banking services straight into platforms or apps developed by third parties. In addition to providing consumers with advantageous circumstances, this also presents chances for market expansion and value addition for the bank. Banks will be able to maximise these services if they can drive customer loyalty (CLT) through customer satisfaction (CST) by boosting the operational performance (OPF) and service quality experience (SQE).

Objective: This article aimed to investigate the impact of OPF and SQE on CLT. Additionally, the study sought to understand the mediating role of CST in the relationship between SQE and CLT, as well as the mediating role of OPF in the relationship between CST and CLT.

Methodology: The study sample comprises 318 customers who use EB services in Vietnam. The data was analysed in two stages and processed using Smartpls 4.0 software.

Result: The results show that SQE, OPF and CST have a positive impact on CLT. CST and OPF were also found to have a mediating role in the relationship between SQE and CLT, and between CST and CLT, respectively.

Conclusion: The results demonstrate that improving SQE, OPF, and CST can significantly boost customer loyalty in EB services, especially when CST and OPF serve as mediators. This provides practical insights for Vietnamese banks to develop more competitive and customer-focused digital strategies.

Unique Contribution: This study not only adds to the Theory of Planned Behaviour but also provides practical data for bank managers to formulate effective policies and solutions.

Key  Recommendation: Bank managers need to focus on the factors that make up a positive CLT of EB services. In addition, considering the factors that drive SQE, OPF, and CST should also be focused on through a variety of activities.