CUSTOMER EXPECTATION, SERVICE QUALITY, AND LOYALTY IN PERSONAL FINANCIAL SERVICES: EVIDENCE FROM REGIONAL BANKS IN GUANGXI, CHINA

Abstract

This study examines the structural relationships among customer expectation, perceived quality, perceived value, customer satisfaction, and customer loyalty in personal financial services at regional banks in Guangxi, China. Using partial least squares structural equation modelling (PLS-SEM) with data from 400 customers across four local commercial banks, six hypotheses derived from the American Customer Satisfaction Index (ACSI) framework were tested. Results reveal that customer expectation has the strongest effect on customer satisfaction (β = 0.642, p < 0.001), and customer satisfaction significantly influences loyalty (β = 0.456, p < 0.001). Notably, perceived quality shows a significant negative relationship with customer satisfaction (β = -0.163, p < 0.001), while perceived value's effect is not significant. These findings suggest the traditional ACSI model operates differently in regional banking contexts, where customers evaluate experiences primarily through an expectation-based lens, offering implications for expectation management in regional banking.