Efficiency, customer service and financial performance among Australian financial institutions

Elizabeth Duncan, Greg Elliott

Research output: Contribution to journalArticle

39 Citations (Scopus)

Abstract

This paper seeks to explore empirically the relationships between efficiency, financial performance and customer service quality among a representative cross-section of Australian banks and credit unions and the correlations between these categories of measures. In particular, it seeks to explore the strength of the relationship between efficiency, financial performance and service quality. Results show that all financial performance measures (interest margin, expense/income, return on assets and capital adequacy) are positively correlated with customer service quality scores. In contrast, the absence of a consistently positive relationship between efficiency and financial performance suggests that financial institutions that pursue improved financial performance through the single-minded pursuit of lower costs may be fundamentally misguided.

Original languageEnglish
Pages (from-to)319-342
Number of pages24
JournalInternational Journal of Bank Marketing
Volume22
Issue number5
DOIs
Publication statusPublished - 1 Aug 2004

Keywords

  • Australia
  • Banks
  • Credit unions
  • Customer services quality
  • Financial performance
  • Process efficiency

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