From Swipe to Stay

How Digital Banking Service Quality Drives Customer Retention through Customer Satisfaction

Authors

DOI:

https://doi.org/10.32674/5zshz137

Keywords:

Customer retention, customer satisfaction, digital banking, E-S-QUAL, service quality

Abstract

While the adoption of digital banking continues to rise, research on how digital service quality affects customer retention is limited. This study applies an E-S-QUAL-based framework to assess how dimensions of digital banking service quality (DBSQ) influence customer satisfaction and their mediating role in customer retention within commercial banks in Kathmandu Valley. A cross-sectional design was used, collecting data from 426 respondents through structured questionnaires and analyzed through SmartPLS 4.0. Results show that among the five DBSQ dimensions, efficiency, ease of use, and security significantly affect customer satisfaction. Customer satisfaction, in turn, has a significant impact on customer retention and partially mediates the relationship between service quality and retention. These findings highlight the critical role of digital service quality in enhancing customer satisfaction and loyalty. The study offers valuable insights for banks and policymakers aiming to improve digital banking experiences to foster stronger customer retention.

Author Biographies

  • Juna Lama, Pokhara University, Nepal

    Juna Lama is an MBA graduate from Ace Institute of Management, affiliated with Pokhara University, Nepal. With over five years of professional experience in the banking sector, she brings practical insights into financial services. She is an emerging research scholar with a keen interest in banking, finance, and service quality, aspiring to contribute to evidence-based academic and industry practices through rigorous research and scholarly engagement.

     

  • Mijala Kayestha, Tribhuvan University, Nepal

    Mijala Kayestha, serves as a Research Faculty and Research Assistant at the Research Management Cell of Kathmandu Model College (KMC), affiliated with Tribhuvan University. With over two years of experience, she has contributed to academic publications, mentored students, and supported journal management. Her research interests include Behavioral Finance, Financial Literacy, and Environmental Sustainability. Alongside, she also works as a Student Development Officer at KMC, leading career-focused programs, training, and job fairs to enhance student employability and real-world readiness.

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Published

2025-07-02

Issue

Vol. 4 No. 1 (2025): Interdisciplinary Journal of Innovation in Nepalese Academia

Section

Research Articles

License

Copyright (c) 2025 Interdisciplinary Journal of Innovation in Nepalese Academia

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How to Cite

From Swipe to Stay: How Digital Banking Service Quality Drives Customer Retention through Customer Satisfaction. (2025). Journal of Innovation in Academia , 4(1), 135-163. https://doi.org/10.32674/5zshz137