Bank versus credit union service quality: What has changed in the last 25 years?

Purpose Twenty-five years ago, the quality of customer service at banks and credit unions was examined. The researchers found that service quality at credit unions outstripped that at banks on all ten determinants of the SERVQUAL model. This study examines the changes in service quality at credit unions and banks since then. During the examination of the service literature, a significant shift from face-to-face to digital service is identified. A cross-sectional survey design is used to compare perceptions of face-to-face and digital service quality among bank customers and credit union members at their respective institutions. Four hundred and twenty-four customers were surveyed. Results indicate that face-to-face credit union service quality was significantly higher on five of the six dimensions of the updated service quality (SERVQUAL) model. No significant differences were identified in the electronic SERVQUAL (e-SQ) dimensions. However, credit union members were significantly more likely to recommend their institution to others. These findings suggest that credit unions have a competitive advantage in the human services sector. Credit union managers should continue to emphasize their customer service strategies. Digital services, however, may have neutralized the credit union service-quality advantage. The study contributes to the growing body of knowledge on service quality and its impact on sustainable business practices. Design/methodology/approach A cross-sectional survey is developed to compare the perceptions of face-to-face and digital service quality among bank and credit union customers at their respective institutions. Four hundred and twenty-four customers were surveyed. Findings Results indicate that face-to-face credit union service quality was significantly higher on five of the six dimensions of the updated service quality (SERVQUAL) model. No significant differences were identified in the electronic SERVQUAL (e-SQ) dimensions. These findings suggest that credit unions have a competitive advantage in human services and should continue to emphasize their exceptional, personalized customer engagement strategies. Originality/value These findings suggest that credit unions have a competitive advantage in human services and should continue to emphasize their exceptional, personalized customer engagement strategies. The study contributes to the growing body of knowledge on service quality and its impact on sustainable business practices.