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Efficiency, customer service and financial performance among Australian financial institutions

Elizabeth Duncan (Business Improvement Diagnostics Pty Ltd, Aspendale, Australia)
Greg Elliott (Graduate School of Management, Macquarie University, Sydney, Australia)

International Journal of Bank Marketing

ISSN: 0265-2323

Article publication date: 1 August 2004



This paper seeks to explore empirically the relationships between efficiency, financial performance and customer service quality among a representative cross‐section of Australian banks and credit unions and the correlations between these categories of measures. In particular, it seeks to explore the strength of the relationship between efficiency, financial performance and service quality. Results show that all financial performance measures (interest margin, expense/income, return on assets and capital adequacy) are positively correlated with customer service quality scores. In contrast, the absence of a consistently positive relationship between efficiency and financial performance suggests that financial institutions that pursue improved financial performance through the single‐minded pursuit of lower costs may be fundamentally misguided.



Duncan, E. and Elliott, G. (2004), "Efficiency, customer service and financial performance among Australian financial institutions", International Journal of Bank Marketing, Vol. 22 No. 5, pp. 319-342.



Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited

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