Bank Consolidation and its Effect on Service Quality

The perceived quality of customer service plays a significant role in high involvement products and services. Previous research in the area of bank service quality suggests that as a bank is acquired the quality of service at the new larger bank does not equal what customers received at their old smaller bank. In addition, a newly consolidated bank may eliminate tailored services and create customer dissatisfaction due to higher fees, lower levels of service, and credit availability. Although prior research has focused on specific aspects of bank services, a contribution to the literature can be made by examining this topic in the context of broader dimensions of customer service. Therefore the objective of this research is to determine 1) if overall customer service differs between small bank and large bank organizations and 2) if service quality dimensions of tangibles, reliability, responsiveness, assurance, and empathy differ between small and large bank organizations.