Customer perception towards banking sector: Structural equation modeling approach

In order to survive and excel in the competitive scenario, organizations have to understand the customers’ requirements. Service quality can be measured with the help of the two important instruments, namely SERVQUAL and SERVPERF. BANKSERV model can be used to measure the service quality of the banking sector. Customers’ perception with regard to various services rendered by the banking industry was taken for this study. Data were collected from 300 customers of the bank located in different parts of Tamilnadu and Pondicherry, India. In order to evaluate the association between the variables used in the model, structural equation modeling (SEM) was used for data analysis. The findings of the research showed that, absolute fit indices fits the sample data and reveals that the proposed model has the acceptable fit, by way of satisfying the recommended values.   Key words: Banking industry, service quality, customers’ perception, structural equation modeling (SEM), confirmatory factor analysis.