The effect of excellent service, diversity of banking products and physical environment on customer loyalty through customer satisfaction

Economic Annals-XXI: Volume 215, Issue (5-6), Pages: 35-40

Citation information

Syafwandi, Budiman, J., Tursunkhodjaeva, Sh., Ruziev, Sh., Alimkhanova, N., & Boymurodov, J. (2025). The effect of excellent service, diversity of banking products and physical environment on customer loyalty through customer satisfaction. Economic Annals-XXI, 215(5-6), 35-40. doi: https://doi.org/10.21003/ea.V215-06

Syafwandi
PhD (Management),
Professor,
Faculty of Economics and Business,
Putra Indonesia University «YPTK»
21 Jl. Raya Lubuk Begalung Str., Padang, Sumatera Barat Padang, 25145, Indonesia
syafwandi@upiyptk.ac.id
ORCID ID: https://orcid.org/0000-0002-6016-167X
Corresponding author

Johan Budiman
PhD (Engineering),
Faculty of Engineering,
Syekh-Yusuf Islamic University
10 Jl. Maulana Yusuf Str., RT.001/RW.003, Babakan, Kec. Tangerang, Kota Tangerang, Banten, 15118, Indonesia
joebudiman@unis.ac.id
ORCID ID: https://orcid.org/0000-0001-8711-4673

Shirin Tursunkhodjaeva
D.Sc. (Economics),
Department of Finance and Financial Technologies,
Tashkent State University of Economics
49 Islam Karimov Str., Tashkent, 100066, Uzbekistan
sh.tursunkhodjaeva@tsue.uz
ORCID ID: https://orcid.org/0009-0000-2340-9667

Shokhruzbek Ruziev
PhD (Management),
Department of Management,
Alfraganus University
2-A Karakamish Str., Tashkent, 100190, Uzbekistan
ruzievshohruz@afu.uz
ORCID ID: https://orcid.org/0000-0001-7662-0554

Nigora Alimkhanova
PhD (Accounting),
Associate Professor of the Department of Accounting and Auditing,
Karshi State Technical University
225 Mustaqillik Ave., Karshi city, Kashkadarya region, 180100, Uzbekistan
alimxanovanigora210@gmail.com
ORCID ID: https://orcid.org/0009-0001-3332-9430

Janon Boymurodov
PhD (Economics),
Department of Economics and Engineering Sciences,
University of Economics and Pedagogy
14 Yuldashev Str., Karshi, 171003, Uzbekistan
boymurodovjasur@ipu-edu.uz
ORCID ID: https://orcid.org/0009-0008-2101-5750

The effect of excellent service, diversity of banking products and physical environment on customer loyalty through customer satisfaction

Abstract. The purpose of this study was to test the effect of service quality, product variety of banking and physical environment towards customer loyalty considering the mediating role of the banking industry in Indonesia. This study was descriptive and descriptive in purpose as well as data collection. The needed data were collected through a standard questionnaire from the customers of four banks (450 people) who are conducting business in Indonesia’s largest cities and cross-checked with structural equation modeling (SEM) and Smart-PLS. The findings were that service quality, product variety and physical environment have significant and positive effects on customer satisfaction and loyalty. Also, the role of the customer satisfaction variable as a mediator was fully confirmed while the service quality was considered the optimum determinant of loyalty. The results emphasize the requirement of capital spending in order to improve the quality of service and attractive environmental design as vital factors to achieve satisfaction and ultimately long-term customer loyalty in Indonesian banking sector.

Keywords: Service Quality; Banking Product Diversity; Physical Setting; Customer Satisfaction; Customer Loyalty; Banking Industry

JEL Classifications: Е24; Е41; Е64; I18; J28; J31

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

Data Availability Statement: The dataset is available from the authors upon request.

DOI: https://doi.org/10.21003/ea.V215-06

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Received 21.03.2025
Received in revised form 20.04.2025
Accepted 25.04.2025
Available online 27.06.2025