The relationship between corporate governance and service quality in the South African banking industry : a case study of Capitec Bank

Abstract

The study sought to investigate the relationship between corporate governance and service quality in the South African banking industry. To achieve the study aims, a mixed methods approach was used, which included a set of questionnaires distributed to Capitec Bank clients and employees. Client data was collected and analysed using descriptive sampling techniques (SPSS) and employee data was collected and analysed using NVIVO software. Questionnaires were distributed to 30 Capitec Bank employees and 384 clients at three Capitec Bank locations in the Durban area (Westwood Mall, Overport City Shopping Centre and The Pavilion Shopping Centre). The researcher distributed a face-to-face, paper-based data collection tool personally to the participants. Respondents were chosen via non-probability sampling. The problem of the study emanated from the seriousness of the challenges confronting banks, since a number of scandals and crises have occurred in the history of corporate governance, causing substantial damage. To tackle these issues and find solutions to address them, excellent corporate governance must be established; hence, improving corporate governance may have a positive impact on service quality, leading to increased customer satisfaction and loyalty. The issue has been resolved. The study's findings show that there are sufficient and effective laws and rules that support strong corporate governance practices; the bank is effectively controlled; and it has ethical policies and procedures. Furthermore, the bank has internal programs in place to improve the level of service it provides to its customers. This means that Capitec Bank's successful involvement in corporate governance to enhance standards of service quality may have an impact on customer happiness and loyalty. Based on the findings of the study, recommendations have been made to close the gaps and, finally, improve service quality so that the bank may achieve customer satisfaction and, as a result, higher productivity. It was recommended that internal programs be enhanced to increase service quality. This will result in happier clients and better compliance with corporate governance norms. It was also recommended that bank management work towards improving appropriate corporate governance procedures to maintain customer satisfaction; a lack of these procedures may have a negative effect on customer satisfaction. In Chapter Five, the final chapter of this thesis, a number of conclusions and recommendations are presented based on the findings.