Customer Satisfaction as a Mediator between FinTech Service Quality and Loyalty: An SEM Based Analysis

Abstract

In recent years, the rapid growth of financial technology (FinTech) has revolutionized the delivery of financial services and is enabling the development of faster, more convenient, and accessible financial services solutions for consumers. Despite the abundance of FinTech platforms, it also offers a problem of ensuring customer loyalty as service quality, trust in reliability and quality of service as the user experience vary from one provider to another. This study investigates the mediating effect of customer satisfaction in the link of FinTech service quality and customer loyalty in Pakistan. Drawing upon the Service Quality (SERVQUAL) and the difference theory of loyalty, the research examines how dimensions of service quality such as reliability, responsiveness, assurance, empathy and tangibles affect customer satisfaction, which then affects loyalty intentions. Data collection was carried out from 400 users of FinTech services in urban and semi-urban areas and structured questionnaires were used. Using correlation, regression and structural equation modelling (SEM), the results show that the service quality has a significant impact on the customer satisfaction, and customer satisfaction mediates fully the impact of service quality on customer loyalty. The study offers empirical insights to FinTech providers and the policymakers to improve the quality of services, strengthen the customer satisfaction and create customer loyalty for the long term customers in Pakistan.