sustainability

Article
Effects of Service Justice, Quality, Social Influence and
Corporate Image on Service Satisfaction and Customer Loyalty:
Moderating Effect of Bank Ownership
Md. Alamgir Hossain 1 , Most. Nirufer Yesmin 1 , Nusrat Jahan 2 and Minho Kim 3, *

1 Department of Management, Hajee Mohammad Danesh Science and Technology University,

Dinajpur 5200, Bangladesh; shamimru@gmail.com (M.A.H.); nirufer107@gmail.com (M.N.Y.)
2 Department of Management Studies, Rabindra University Bangladesh, Sirajgonj 6770, Bangladesh;
njdisha.bd@gmail.com
3 Department of International Trade, Jeonbuk National University, Jeonju 561-756, Korea
* Correspondence: kimmh@jbnu.ac.kr; Tel.: +82632703049

Abstract: Today, the banking sector plays a significant role due to the substantial increase in the num-
ber of banks and has become an intensely competitive field. The purpose of this paper is to strengthen
knowledge of retail banking services by finding the interrelationships between service justice, service
quality, social influence, and corporate image concerning service satisfaction and loyalty. In addition,
we sought to determine the moderating effect of bank ownership (i.e., state-owned and private sector
banks) on the above relationships. Data were collected at random through online surveys that were



analyzed using structural equation modeling. Empirical findings revealed that service justice and


quality have a significant effect on service satisfaction and customer loyalty. Social influence has a
Citation: Hossain, M.A.; Yesmin, significant effect on customer loyalty, but not on service satisfaction; however, corporate image is pos-
M.N.; Jahan, N.; Kim, M. Effects of itively related to service satisfaction, but not to customer loyalty. Understandably, service satisfaction
Service Justice, Quality, Social was assumed to have a fundamental relationship to consumer loyalty. However, moderation results
Influence and Corporate Image on
indicated that state or private sector ownership of banks was an equally important moderating factor
Service Satisfaction and Customer
for almost all dimensions relevant to customer loyalty, other than service justice, social influence,
Loyalty: Moderating Effect of Bank
and service satisfaction. The study presents theoretical contributions and considers the managerial
Ownership. Sustainability 2021, 13,
7404. https://doi.org/10.3390/
implications for banking services that are potentially applicable to other financial institutions.
su13137404
Keywords: service justice; service quality; social influence; corporate image; service satisfaction;
Academic Editor: Giuliana Birindelli customer loyalty

Received: 22 May 2021

Accepted: 29 June 2021
Published: 1 July 2021 1. Introduction
The banking activities of the country have taken a greater role in the service sector
Publisher’s Note: MDPI stays neutral under the rapidly changing circumstances of the monetary market; therefore, the country’s
with regard to jurisdictional claims in banking system acts as a competitive and modern era of the financial system. Banks have
published maps and institutional affil-
become an integral part of the economy and have faced substantial challenges due to
iations.
disruptive innovations and technologies. Technological innovation has made people more
aware of what is going on in the world, especially in a service context [1]. However, COVID-
19 is pushing banks to find more efficient service atmospheres due to the irregular buying
patterns of customers [2]. The COVID-19 pandemic has created rumors and anxieties
Copyright: © 2021 by the authors. among customers that drastically affect their financial decisions and can impact their pre-
Licensee MDPI, Basel, Switzerland. and postadoption behavior, including satisfaction, patronage behavior, and word-of-mouth
This article is an open access article approach [3]. These technological innovations, rumors, and anxieties have challenged the
distributed under the terms and
retail markets, which ultimately affects the financial conditions of customers and service
conditions of the Creative Commons
providers. Banking practitioners have found that competitive and sustainable advantages
Attribution (CC BY) license (https://
in business can be achieved through customer retention, a strategy that may not be easily
creativecommons.org/licenses/by/
copied by rivals [4]. While banking professionals focus on service quality and convenience
4.0/).

Sustainability 2021, 13, 7404. https://doi.org/10.3390/su13137404 https://www.mdpi.com/journal/sustainability

Sustainability 2021, 13, 7404 2 of 13

for customers, there is also a need to focus on providing fair and equitable services to
customers [5]. Customers tend to rate their experiences with respect to price fairness, which
is likely to impact service perceptions and overall satisfaction. Thereby, an efficient service
with reasonable prices becomes inevitable in achieving customer satisfaction and long-term
buyer–customer relationships [2]. A substantial body of prior research has documented
that instrumental and distributive justice have a significant positive influence on bank
client satisfaction and behavioral intentions [6], while service quality is treated as a strategic
weapon in the battle to achieve perfection in overall service accomplishment [7].
A robust banking sector is essential to stimulating economic growth and maintaining
the financial stability of a country [8]. In retail banking channels, customer satisfaction is
an indicator of how well products or services meet the expectations of the purchasers while
also having a significant impact on bank profitability, and several studies have confirmed
customer satisfaction is a major determinant of service quality [9,10]. In addition, quality
service transport can positively impact consumer preferences, where quality is defined
as the characteristics of a product or service that consistently meet expressed or implicit
needs [11]. Evaluating high-quality service offers a more effective means of determining
service preferences and consumer satisfaction levels [12]. Pomering and Dolnicar [13]
consider that perceptions of social responsibility enhance consumer attitudes towards
businesses, particularly when the client in question is a proponent of corporate social
responsibility. With increasing corporate ethical standards, customers tend to believe
that a company is committed to social responsibility, and once this belief is established,
consumers become satisfied and confident, and stay loyal [14]. In recent decades, cor-
porate image has emerged as an increasingly important issue, playing a significant role
among both academics and practitioners as a key factor in acquisition time [15]. Through
the provision of distinct categories of retail banking, merchandise and services seek to
maximize customer satisfaction [16]. These services fulfill the wishes of the customer by
creating an inherently viable process where service loyalty emanates through a business
enterprise [17]. Therefore, banking practitioners and researchers should explore the nexus
between consumer perceptions of service justice, service quality, corporate image, and
social influence, and their influence on customer satisfaction and loyalty. Research to
date has not addressed the integration of moderator variables into these psychometric
variables in this economic context; thus, this study bridges this gap to enrich customer
behavioral research.
Accordingly, this study focuses in particular on the implications of service justice,
quality, corporate image, and social influence for service satisfaction and loyalty. Carr [18]
observed that bank managers focus on enhancing high-quality customer services, which is
vital to the equitability of bank services as service encounters contain the fair exchange of
value between the service provider and customers. In addition, our research investigates
the multigroup moderation effect of state-owned and private sector banks on the above
relationships. We assume that higher service justice, service quality, corporate image, and
social influence lead consumers to perceive higher satisfaction with the service provided;
consequently, customers are likely to remain loyal to the existing service provider. Con-
sidering the current advancement of banking services, this study attempts to answer the
following research questions (RQs): (RQ1) How are service satisfaction and customer
loyalty driven by service justice, service quality, corporate image, and social influence?
(RQ2) Whether and how bank ownership has moderating effects on service satisfaction
and customer loyalty. The research presented here makes a complementary contribution to
the existing literature by testing the validity and reliability of hypothesized relationships.
The implications of this study could enable Bangladeshi retail banks to better understand
the important psychometric variables and their influence on the behavioral intentions of
customers; consequently, this knowledge will help managers to adopt effective strategies
to dominate their rivals. Our study will additionally provide precious insights on the
moderating impact of state-owned and private sector banks on the connection between
service justice, service quality, social influence, and corporate image in achieving service
Sustainability 2021, 13, 7404 3 of 13

satisfaction and loyalty, which will strengthen benchmarking options and thereby obtain
competitive advantages in the retail market.
After this introduction, the study explores the theoretical background, proposing a
conceptual model and formulating a set of hypotheses. The subsequent section outlines
the research methodology used to determine the factors for service satisfaction and retail
banking quality. For this purpose, the study presents empirical results and discussions
that represent the multigroup moderation impact of state-owned and private sector banks.
Finally, based on the key findings of the study, we make recommendations for bankers on
how to improve information on retail banking services by recognizing the connections be-
tween service justice, quality, social influence, and corporate image and service satisfaction
and loyalty. In addition, we determine the moderating effect of state-owned and private
banks with precious empirical analysis and implications for future research.

2. Hypothesis Development
2.1. The Relationship between Service Justice, Satisfaction, and Customer Loyalty
Empirical research has determined that service justice has a direct positive influence
on customer loyalty [19]. This study contributes to this literature on the synergistic connec-
tion between service justice, satisfaction, and consumer loyalty. Service justice is the most
appropriate concept for both the determinants and the properties of service satisfaction [20];
therefore, a loyal customer has become an essential asset for any organization [21] which
includes customers in its service restoration endeavors. Customer appreciation of recuper-
ation satisfaction can improve behavioral consequences of loyalty [22,23]. Contrariwise,
positive service is produced by consumer expectation, customer satisfaction, and loyalty
through reliance, which may reduce incertitude and risks [24]. Drawing on the literature
referenced above, this study proposes the following hypotheses:

Hypothesis 1 (H1). Service justice has a positive impact on service satisfaction (H1a) and customer
loyalty (H1b).

2.2. Nexus between Service Quality, Satisfaction, and Customer Loyalty

Previous research has established a robust connection between service quality and
customer loyalty, and that all services presented should be aimed at increasing customer
satisfaction [25]. The response when customer expectations are met can be characterized
as satisfaction [26]. In today’s competitive market environment, customer and service
satisfaction has become one of the most valuable assets for the banking industry [27].
Yee et al. [28] observed that bank service quality, satisfaction, and customer loyalty have
an advantageous impact on purchaser loyalty. In addition, Omoregie et al. [29] and
Ofori et al. [30] advocated that service quality is leading the way to customer satisfaction,
which then becomes the source of customer loyalty. This paper aims to examine the
connection between service satisfaction and customer loyalty with service quality. It thus
suggests the following hypothesis:

Hypothesis 2 (H2). Service quality has a positive impact on both service satisfaction (H2a) and
customer loyalty (H2b).

2.3. Relationship between Social Influence, Service Satisfaction, and Customer Loyalty
Social interaction between customers and individual employees can be fundamental
to business success [31]. Several studies have suggested that social influence has a direct
relationship with the intention to engage in banking activity [32]. Moreover, Park et al. [14]
and Pérez and del Bosque [33] have observed that social influence is positively associated
with customer repurchase intentions, in addition to showing its significant impact on
customer loyalty. The reproduction of social influence in customers and employees can be
effective in enhancing customer experience. Most importantly, when information originates
Sustainability 2021, 13, 7404 4 of 13

from a public social community (such as Facebook, Instagram, or LinkedIn), in which

customers already have strong trust, conventionally customers tend to follow the opinions
of others, which can also construct a positive link between service satisfaction and customer
loyalty [34]. In the context of banking activities, social influence engages the key customer
consequence variables of customer trust and loyalty [23,35]. This research builds on the
service satisfaction and consumer loyalty that derives from it to understand the connection
between social impact and profitability. High social influence may also be interpreted as a
sign of reputation [36], which may further lead to a more compatible association between
service satisfaction and customer loyalty. On this basis, we present hypothesis H3:

Hypothesis 3 (H3). Social influence has a positive influence on service satisfaction (H3a) and
customer loyalty (H3b).

2.4. Nexus between Corporate Image, Service Satisfaction, and Customer Loyalty
In Bangladesh, bank image is recognized as one of the fundamental variables that
motivates a customer’s intention to use the bank’s services [37]. As several studies have
observed (for example, [29,38,39]), corporate image is a customer’s outcome of standard
and judgement between the different aspects of corporate organizations. Arshad et al. [40]
stated that customer satisfaction influenced corporate image, and also noted that reputation
affects customer switching intentions for bank customers. In particular, several studies
found the corporate image to be an important driver of customer loyalty [41], and also has
an essential impact on customer satisfaction [42]. However, Kevork and Vrechopoulos [43]
depicted that consumer loyalty is as elevated an identification result as consumers’ psy-
chological confirmation because affirmation of each is accelerated by using a summarized
corporate image [44,45]. Providing better quality of service leads to customer satisfaction,
which in turn creates customer loyalty, cuts complaints, and improves bank–client rela-
tionships. It is also obvious that service quality has an affirmative impact on customer
satisfaction, corporate image, and customer loyalty [46]. Thus, the following hypotheses
were proposed:

Hypothesis 4 (H4). Corporate image of banks has a positive impact both on service satisfaction
(H4a) and customer loyalty (H4b).

2.5. Nexus between Service Satisfaction and Customer Loyalty

Service satisfaction involves the discrepancy between people’s expectations and needs
associated with a given service. On the contrary, service stress is another essential deter-
minant of organizational approach and also a strong influence on service satisfaction [47].
For instance, in the retail banking service sector, satisfaction and loyalty have emerged as
the main discretions for profitable commercial enterprise performance. Customers usually
expect a bank to provide satisfactory services if it has excellent credentials in terms of
popularity and reputation [48], and the service quality enhancement leads to positive out-
comes in terms of customer loyalty [23,49–51]. Previous studies have been skewed in their
interpretation of the connection between service satisfaction and customer loyalty [10,52].
Accordingly, the following hypothesis has been formulated:

Hypothesis 5 (H5). Service satisfaction has a significant influence on customer loyalty.

2.6. State-Owned and Private Sector Retail Banks as Moderators

The banking sector is a key component of a country’s financial system. However, little
research to date has focused on the impact of company image as a dimension of service
quality and as a source of client satisfaction in the context of banking. Few studies have
investigated the relationship between service quality and company image within different
sectors of banking, especially in the case of state-owned sector banks [53]. However,
Sustainability 2021, 13, 7404 5 of 13

retail banks are regularly faced with the challenge of preserving customer loyalty [54]
and this loyalty has become essential for retail banks to take account of company equity,
customer experience, and satisfaction. Previous research has determined that customer
particularities, consumer satisfaction, business enterprise experience, trust, and a variety
of impressions are indicators of the relationship with customer loyalty [55]. Briefly, this
research explores the moderating role between state-owned and private sector retail banks.
Accordingly, it is hypothesized that:

Hypothesis 6 (H6). The proposed relationship will be moderated by bank ownership (state-owned
and private sector banks).

3. Research Methodology
3.1. Method and Sample
Our study is based primarily on conclusive research in which various hypotheses
are used to prove the relationship between variables. It was conducted in Bangladesh,
where banking is one of the fastest-growing service sectors. At present, the Bangladeshi
banking system, which comprises a total of 61 scheduled banks, consists of six state-
owned, 43 private, nine foreign, three specialized banks, and five nonscheduled banks [56].
The data were collected from customers who had a bank account and who carried out
transactions using their account. The obtained data were processed and analyzed via SPSS
and SEM using Amos 24 software. We performed SEM to test the direct effects in the model
and multigroup moderation to test moderating effects in the model. We used SEM because
it allows real time valuation of the measurement model and provides path significances
in the structural model. In particular, this method importantly assists in confirming the
validity and reliability of the measurement model, as well as in interpreting the theoretical
connections between constructs in the structural model [57]. This also harvests several
model fit indices, which ensures its efficiency.
Data were collected randomly through an online survey using a structured and self-
administered questionnaire from Bangladeshi bank customers. A total of 234 questionnaires
were collected (following editing and the elimination of inaccurate replies). The sample
size meets the requirement of the statistical method used in this study; SEM analysis [58].
According to the sample characteristics, 22.6% of respondents were male and 77.4% were
female, with approximately 56.4% and 43.6% of the respondents, respectively, using state-
owned and private sector bank services. Among these, 88.0% of respondents utilized the
traditional banking system, while 12.0% utilized the Islamic banking system. The sample
dimension appeared to be appropriate for performing SEM analysis. Table 1 presents the
demographic scheme for the respondents.

Table 1. Demographic statistics (n = 234).

Variable Items Freq. %

Gender
Female 181 77.4
Male 53 22.6
Bank ownership type
State-owned 132 56.4
Private sector 102 43.6
Banking system
Traditional 206 88.0
Islamic 28 12.0

3.2. Instrument and Variables

To examine the hypothetical relationships, we used an online questionnaire instrument
with a five-point Likert scale ranging from “strongly disagree” to “strongly agree”. The
questionnaire instrument had two separate sections; the first was designed to collect
Sustainability 2021, 13, 7404 6 of 13

information about the participant’s demographic profile, and the second was designed
to ask the participant for their opinion on a scale where 1 is “strongly disagree” and 5 is
“strongly agree”. We took several steps to design the questionnaire, such as focus group
discussion, layout design, pretest analysis, and then the final survey instrument. The
independent variables were service justice, service quality, social influence, and corporate
image. The dependent variables were service satisfaction and customer loyalty. Bank
ownership was seen as a moderator in this study. This study derived its measurement
instruments of all constructs from existing research, with certain adjustments to fit the
constructs in the study context. The measurement instrument of service justice was adopted
from [6], such as “The service I received was fair enough”. Service quality items were taken
from [29], such as “The bank has an effective complaint handling process”. The items for
social influence were adapted from [59], such as “People who are important to me think
that I should use bank services”. Corporate image items were taken from [29], such as “My
bank can be trusted in what it says and does”. The items of service satisfaction were taken
from [29,60], such as “I feel very satisfied with the overall experience of using my bank”.
The items of customer loyalty were adopted from [29,59], such as “I intend to purchase
services for this bank again in the future”. Necessary modifications and adjustments were
made to ensure that the questionnaire was appropriate for data collection and met the
objectives of the study. Initially, this study kept 24 questions in total, 4 for each construct.
However, one item has been taken away from service justice, service quality, corporate
image, and service satisfaction to attain better factor loads. Table 2 shows an in-depth view
of the measurement objects used in this study.

Table 2. Measurement instrument and factor loadings.

Constructs and Items Std. Estimates t-Value p-Value

Service justice [6]
SJ1: My bank tried to be fair. 0.812 Fixed
SJ2: The service I received was fair enough. 0.752 13.068 ***
SJ3: The bank showed me the respect I deserve. 0.684 11.537 ***
Service quality [29]
SQ1: This bank has employees who give me personal attention. 0.853 Fixed
SQ2: The bank is accessible through various ways (ATM, online, in-person) 0.780 13.994 ***
SQ3: The bank has an effective complaint handling process. 0.708 12.170 ***
Social influence [60]
SI1: People in my surroundings who use bank services have more prestige than
0.741 Fixed
those who do not.
SI2: People who influence my behavior think that I should use bank services. 0.808 12.225 ***
SI3: People who are important to me think that I should use bank services. 0.753 11.349 ***
SI4: Using banking services is a status symbol in my surroundings. 0.848 12.850 ***
Corporate image [29]
CI1: My bank can be trusted in what it says and does. 0.655 Fixed
CI2: My bank provider has a positive image with its customers. 0.866 11.058 ***
CI3: My bank provides stable and consistent services. 0.861 11.012 ***
Service satisfaction [29,59]
ST1: I enjoy dealing with my banker. 0.793 Fixed
ST2: I feel very satisfied with the overall experience of using my bank. 0.872 15.358 ***
ST3: Overall, I am satisfied with the services rendered by my bank. 0.906 16.174 ***
Customer loyalty [29,59]
CL1: I consider my bank as my bank. 0.814 Fixed
CL2: I say positive things about my bank to others. 0.778 13.720 ***
CL3: I may use this bank in the future. 0.798 14.229 ***
CL4: I intend to purchase services for this bank again in the future. 0.816 14.695 ***
Notes: SJ = service justice, SQ = service quality, SI = social influence, CI = corporate image, ST = service satisfaction, CL = customer loyalty;
*** p < 0.001.
Sustainability 2021, 13, 7404 7 of 13

4. Empirical Results Discussion

4.1. Measurement Model
The results of the measurement instrument and factor loadings are depicted in Table 2,
which presents the standardized estimated factor loads and related t-value of the items. A
test of the significance of all paths was fulfilled using the bootstrap resampling process.
The measurement model was used to test the convergent and discriminant validity.
Convergent validity is often evaluated by investigating composite reliability (CR) as well as
the average variance extracted (AVE) [61]. Specifically, CR refers to the internal consistency
of the indications measuring a conferred factor; AVE thereby suggests the number of
variances received by a construct, compared to variance due to measurement errors. CR of
0.70 or above and AVE of around 0.50 are considered acceptable [62]. As shown in Table 3,
Cronbach’s alpha values ranging from 0.821 to 0.891 exceed the critical value of 0.70. All
measurements exceed the suggested thresholds, with CR ranges from 0.794 to 0.893, and
AVE ranges from 0.564 to 0.737. Discriminant validity was calculated by checking whether
the square root of the AVE for each construct was higher than the correlations between
that construct and all other constructs [62]. Table 3 presents a correlation matrix of the
constructs, together with the square root of the AVE for each construct. These results
confirmed the reliability of the measurement model [58].

Table 3. Reliability and validity statistics.

Cronbach’s
CR AVE MSV SJ SQ SI CI ST CL
Alpha
SJ 0.823 0.794 0.564 0.982 0.751
SQ 0.821 0.825 0.612 0.826 0.456 0.783
SI 0.868 0.868 0.622 0.787 0.612 0.318 0.789
CI 0.831 0.840 0.640 0.826 0.501 0.190 0.452 0.800
ST 0.891 0.893 0.737 0.943 0.255 0.128 0.299 0.368 0.858
CL 0.876 0.878 0.643 0.982 0.945 0.887 0.873 0.815 0.991 0.802
Note: CR = composite reliability, AVE = average variance extracted, MSV = maximum shared variance; bold
diagonal shows square roots of AVEs.

The comprehensive standardized solutions produced by Amos 24 demonstrated that

all 20 items were loaded entirely on corresponding constructs. To estimate the general fit
of the measurement model (shown in Table 4), the following indicators were examined:
the ratio of chi-square to degrees of freedom (CMIN/df = 1.598), the CFI = 0.976; the
goodness of fit index (GFI = 0.918); the adjusted GFI (AGFI = 0.881), the Tucker–Lewis
index (TLI = 0.970), the incremental fit index (IFI = 0.977), and the root mean square error
of approximation (RMSEA = 0.051). All these evaluations sought their respective value
standards, confirming an appropriate fit for the overall model [58,63,64].

Table 4. Model fit statistics.

Model Fit Indices Recommended Value Obtained Value

CMIN/DF <3 1.598
GFI ≥0.90 0.918
AGFI ≥0.85 0.881
CFI ≥0.90 0.976
IFI ≥0.90 0.977
TLI ≥0.90 0.970
RMSEA ≤0.08 0.051

4.2. Structural Model Assessment

The quality of affiliation between constructs was evaluated by scrutinizing their
respective standardized path coefficients (β values) and their significances (p values).
Table 5 shows that the paths supported seven of nine hypotheses. Service justice has a
Sustainability 2021, 13, 7404 8 of 13

positive and significant impact on both service satisfaction (β = 0.78, t = 9.06, p < 0.001)
and customer loyalty (β = 0.62, t = 2.92, p < 0.001), confirming hypotheses H1a and H1b.
Service quality significantly impacts both service satisfaction (β = 0.29, t = 5.04, p < 0.01)
and customer loyalty (β = 0.27, t = 3.06, p < 0.01), confirming hypotheses H2a and H2b. Our
study also discovered a significant positive impact of social influence on customer loyalty
(β = 0.43, t = 5.28, p < 0.001), of corporate image on service satisfaction (β = 0.23, t = 4.13,
p < 0.001), and of service satisfaction on customer loyalty (β = 0.22, t = 5.28, p < 0.001),
supporting H3b, H4a, and H5. By contrast, neither social influence nor corporate image
had a significant impact on service satisfaction or customer loyalty, thus contradicting
hypotheses H3a and H4b.

Table 5. Hypothesized results.

Std. Coefficient
Hypotheses Paths Result
(t-Value)
H1a Service justice → Service satisfaction 0.786 (9.06) *** Supported
H1b Service justice → Customer loyalty 0.625 (2.92) *** Supported
H2a Service quality → Service satisfaction 0.293 (5.04) ** Supported
H2b Service quality → Customer loyalty 0.274 (3.06) ** Supported
H3a Social influence → Service satisfaction 0.165 (0.723) n.s. Not supported
H3b Social influence → Customer loyalty 0.437 (5.285) *** Supported
H4a Corporate image → Service satisfaction 0.236 (4.139) *** Supported
H4b Corporate image → Customer loyalty 0.123 (1.619) n.s. Not supported
H5 Service satisfaction → Customer loyalty 0.228 (5.289) *** Supported
Variance explained: R- squared
Service satisfaction 0.68
Customer loyalty 0.56
Note: *** p < 0.001, ** p < 0.01, n.s. not significant.

4.3. Moderation Model Assessment

Results of the multigroup moderation analysis of state-owned and private sector
banks are presented in Table 6. It is clear from this table that customer loyalty is not
consistent between state-owned and private sector banks. The relationships between
service justice and customer loyalty, social influence and customer loyalty, and service
satisfaction and customer loyalty vary between the respective groups. However, for the
remaining relationships, no significant differences were found between state-owned and
private sector banking services. Hypothesis H6 was thus partially confirmed.

Table 6. Moderation results.

State-Owned Private Sector X2 Difference Test

Estimate p-Value Estimate p-Value Result
0.544 *** 0.574 *** Not different
0.431 *** 0.171 0.568 Different
0.178 *** 0.165 0.001 Not different
0.17 0.001 0.1 0.301 Not different
0.162 0.003 0.172 0.002 Not different
0.287 *** 0.190 0.03 Different
0.211 0.004 0.183 *** Not different
0.007 0.91 0.086 0.401 Not different
0.144 0.41 0.617 0.198 Different
Note: *** p < 0.001.

4.4. Brief Discussions

The present study focused on enhancements in perceived service quality and investi-
gated the impact of service justice, service quality, social influence, and corporate image on
Sustainability 2021, 13, 7404 9 of 13

service satisfaction and loyalty, with a particular focus on the moderation effect between
state-owned and private sector retail banks. The evaluation results revealed that service
justice, quality, and corporate image have a consistent and significant impact on service
satisfaction. Service justice, service quality, and social influence were also found to have a
significant influence on customer loyalty. Our moderation results also indicated that the
influence of service justice and social influence on customer loyalty is not consistent in the
case of either state-owned or private sector banks. However, the fact that the results did
not confirm two hypotheses of our study, H3a and H4b, suggests a direction for future
research. Our results indicate that the impact of social influence does not extend across
all dimensions of service satisfaction. Conversely, corporate image does not have a major
influence on customer loyalty in common with other such factors. In the state-owned
and private sector banks, difference tests confirmed that hypotheses H3a and H4b are
comparable for both sectors.
Our findings on the significance of service quality as a prerequisite of customer loyalty
in retail banking relationships are consistent with other studies [65–67]. Within the banking
system, Kaura et al. [68], Khazaei et al. [69], and Rorio [70] also confirmed that service
quality is regarded as an essential and indispensable aspect for impacting customer loyalty.
The findings accord with the suggestions of earlier studies concerning customer loyalty,
while also demonstrating that service satisfaction and customer loyalty have several well-
established prerequisites and that they play an important role as moderating factors. While
the present research has investigated the interplay between service justice, service quality,
social influence, and corporate image, and their influence on service satisfaction and
customer loyalty, it has also found that whether banks are state-owned or belong to the
private sector has a significant moderating effect for these dimensions.

5. Conclusions and Implications

This study has examined the impact dimensions of service justice, service quality,
social influence, and corporate image through structural equation modeling in the context
of Bangladeshi retail banking. In addition, its purpose was to observe the moderating effect
of state-owned and private sector banks on the interrelationships between service justice,
service quality, social influence, and corporate image with regard to customer satisfaction
and loyalty. Thereby, this study addressed the perceived research questions, RQ1; how are
service satisfaction and customer loyalty driven by service justice, service quality, corporate
image, and social influence? and RQ2; whether and how bank ownership has moderating
effects on service satisfaction and customer loyalty. In Bangladesh, retail banking is the
predominant motivation for banking itself. It provides banking services to customers
from all income segments, maximizing profit while mitigating liquidity problems, as well
as playing a major role in economic improvement. This paper has effectively presented
empirical findings to better understand how retail banks can ensure customer satisfaction
and loyalty. Moreover, this study has highlighted the market-driven psychometric factors
that are vital for financial decision making by customers or any stakeholder. These factors
can serve as engines for relationship building and as a basis for examining the barriers that
aggravate resistance and inertia to financial decision making.
The study has some significant theoretic implications. As an extensive study, it imple-
ments and explores associations between constructs in a way that has not been previously
undertaken in the context of retail banking; thus, this study offers specialized theoreti-
cal underpinnings. In terms of theoretical implication, the analysis of the current study
amplified the discussion on the principal directors of service satisfaction and customer
loyalty in a multigroup moderation effect between state-owned and private sector retail
banks. These reveal that service justice, social influence, and service satisfaction have
different impacts depending on the nature of the banking. Therefore, we reiterate that
bank ownership is an important issue in the choice of financial transactions by customers.
Government-owned banks provide more equitable services and societal influence is also
stronger than it is for private banks. However, customer satisfaction with the service is
Sustainability 2021, 13, 7404 10 of 13

higher in private banks than in government banks. Thus, our study provides the very
interesting theoretical basis that even when equitable service or social pressure is higher, it
may not create customer satisfaction, which pushes scholars to find additional dimensions
of customer satisfaction, such as corporate image, service quality, buyer–seller interactions,
etc. Contrastingly, previous research has targeted the use of identical changeableness in
the perception of customer satisfaction and overall performance of banks. The result of
the study has provided empirical support for a measurement model, despite two of its
hypotheses being excluded during the validation process. In doing so, this paper has
sought to address the theoretical gap that has appeared in existing analyses of the relation-
ships between variables in the context of the retail banking industry of Bangladesh. These
reveal that hesitations and fear of customers can be overcome by providing value-added
services with relatively competitive prices. Our proposed research model evidenced that it
can bring together customer satisfaction and loyalty. Researchers can therefore adopt this
model to eliminate customer resistance before adoption in order to improve the positive
behavioral attitude toward service providers.
The research also offers some key managerial implications for enhancing service
satisfaction and customer loyalty. These managerial implications drive practitioners to
strengthen strategies to strike a balance between factors aimed at improving patronage
behavior and factors aimed at eliminating fear and inertia in transaction decisions. Our
study demonstrates that managers or practitioners should implement effective strategies
for standardizing service pricing that should be competitive relative to their rivals. Or-
dinary/regular pricing cannot always be a strategic choice to attain positive customer
reactions; equitable and rational pricing would instead capture customers’ attention, re-
sulting in social gossip or recommendations that may broaden the market size. In general,
customers want higher level service feedback while incurring lower costs; thus, the product
differentiation strategy would become more appropriate when customers’ opinions were
given maximum weight in strategy formulation. Understanding the nexus between service
quality and customer loyalty may allow managers to restore customer trust, service justice,
and quality, and to improve corporate image within Bangladeshi banks. The banking
professional should deliver services to the customer in the most friendly and homely
atmosphere, in which the customer should feel treated with care and dynamic support.
Bankers should pay close attention to the real drivers of financial decisions, namely finan-
cial knowledge, information, sophistication, economic trend, and progress reports, thus
educating customers to originate optimal financial decisions and to keep them for longer.
Thereby, this study’s findings also provide a source of knowledge and innovative ideas
that may assist managers in improving relationships with clients. In addition, bank service
managers should recognize the importance of the moderating effect of bank ownership on
service satisfaction and customer loyalty. The policymakers of state-owned banks should
seek to build an institutional reputation, quality services, and affirmative action to compete
with their private sector rivals. Managers of government banks should focus on factors
other than service justice and social influence in order to improve customer satisfaction. In
this regard, they could take customers’ feedback into account in developing their strategy
and ought to provide a cohesive environment to deflect customer perceptions and address
customer concerns in the most effective manner. Similarly, private banking professionals
could take the initiative to readjust their pricing strategies and take affirmative social
responsibility actions in order to build trustworthiness and customer loyalty.
The generalizability of the study’s effects is a fundamental limitation. Since its method-
ology was developed from specific research literature, any generalizations should be un-
dertaken with caution. By adopting the structural equation model, the study identified
two unconfirmed hypotheses that involve the relationship between service satisfaction and
social influence and their impact on customer loyalty. However, several other hypotheses
were confirmed that suggested whether banks are state-owned or private sector has a
significant moderating effect. Future research should comprise these models when testing
multigroup moderating effects, and, additionally, categorize the sample with appreciation
Sustainability 2021, 13, 7404 11 of 13

to demographic data and conduct the analysis so that the satisfaction factors fluctuate
for distinctive categories. The present study should not be treated as all-encompassing,
as other variables, measures, or constructs, such as switching intention, social media in-
fluence, etc., including variables specific to situation or individual, can be identified that
may also account for the satisfaction and loyalty of clients. Further investigation is thus
indispensable to identify other factors that may potentially impact service satisfaction and
loyalty within the Bangladeshi banking context. Overall, the limited scope of the present
study signals the necessity of extending its findings to other service sectors, as well as to the
retail banking sector in other countries. Despite these limitations, our study makes a timely
attempt to frame a comprehensive model of attitudinal decisions by banking customers
in terms of service justice, service quality, social influence, and corporate image, thereby
offering a framework to advance future studies and practices related to consumer behavior.

Author Contributions: M.A.H. generated the research idea and designed the survey; M.A.H. and
M.N.Y. wrote the manuscript; N.J. and M.K. suggested the research idea and contributed to revisions
of the manuscript. All authors have read and agreed to the published version of the manuscript.
Funding: This work was funded by the Institute of Research and Training, for financial year
2020–2021, reference number HSTU/IRT/3005, project number 66, at Hajee Mohammad Danesh
Science and Technology University, Dinajpur-5200, Bangladesh.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: Not applicable.
Conflicts of Interest: The authors declare that there are no conflict of interest.

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