The Effect of Service Fairness and Service Quality on Customer Satisfaction and Loyalty: A Case of Mobile Financial Applications in Phnom Penh

Abstract

Abstract

Aim/Purpose: This study examined how service fairness and SERVQUAL dimensions influenced customer satisfaction and loyalty in mobile financial applications (MFAs) in Phnom Penh, Cambodia. As digital transformation reshapes financial services, understanding these factors is crucial for improving user experiences and fostering long-term engagement.

Introduction/Background: Mobile financial applications (MFAs) have become an essential part of Cambodia’s urban financial ecosystem by providing accessible and cost-effective financial solutions. Despite their increasing usage, limited research exists on the factors influencing customer satisfaction and loyalty in this sector. This study aimed to bridge this gap by examining how service fairness dimensions (distributive, procedural, interpersonal, and informational) and SERVQUAL dimensions (reliability, responsiveness, assurance, and empathy) impacted customer satisfaction and loyalty.

Methodology: A quantitative research methodology was employed to explore the relationships among service fairness, SERVQUAL factors, customer satisfaction, and loyalty. The study targeted individuals aged 18 and above who actively use MFAs in Phnom Penh. Due to the absence of precise population data, stratified purposive sampling was used to ensure diverse representation across Phnom Penh’s districts. Using Cochran’s formula with a 95% confidence level and a 5% margin of error, the study aimed for a sample size of 400 respondents, but 560 surveys were distributed to enhance reliability, yielding 470 valid responses. Data collection took place between May and July 2024 through online surveys and self-administered questionnaires distributed across various digital platforms.

The survey instrument was structured into four key sections: demographic information, MFA usage experience, behavioral factors, and service fairness/SERVQUAL dimensions, which were measured on a five-point Likert scale. Survey items were adapted from prior studies to ensure measurement reliability and validity. The questionnaire was pretested with 30 respondents, and refinements were made to improve clarity and relevance. Advanced statistical techniques were used to analyze the data. Descriptive statistics provided an overview of respondent demographics and usage behavior. Cronbach’s Alpha was employed to assess reliability, while Confirmatory Factor Analysis (CFA) validated the construct dimensions. Structural Equation Modeling (SEM) was utilized to test the relationships among service fairness, service quality, customer satisfaction, and loyalty, with results presented through detailed statistical models and tables.

Findings: The study revealed that both service fairness and SERVQUAL dimensions significantly influenced customer satisfaction, which, in turn, drives customer loyalty. Among service fairness dimensions, distributive and procedural fairness had the strongest effects on satisfaction, highlighting the importance of transparent processes and fair service outcomes. Customers responded positively to equitable resource allocation and well-structured procedural guidelines. Regarding SERVQUAL dimensions, responsiveness and assurance emerged as the most influential factors shaping customer satisfaction. Customers highly valued prompt responses to inquiries and the expertise and reliability of service providers. While empathy contributed to satisfaction, its impact was comparatively less pronounced. Customer satisfaction was found to mediate the relationships between service fairness, service quality, and loyalty. This underscored the necessity of fostering positive user experiences to enhance long-term customer retention and loyalty. The findings suggest that MFA providers should prioritize procedural fairness and responsiveness to optimize customer satisfaction and long-term engagement.

Contribution/Impact on Society: This study provides empirical evidence of the role of service fairness and SERVQUAL factors in shaping customer satisfaction and loyalty in the Cambodian MFA market. While previous research has examined these factors in other industries, this study uniquely focused on MFAs in a developing Southeast Asian context. The findings emphasize the importance of fair service design and high-quality service delivery in building customer trust and loyalty. By implementing transparent service processes and prioritizing customer support quality, MFA providers can foster financial inclusion and promote sustainable business growth in emerging markets.

Recommendations: For MFA providers, the study recommends emphasizing transparency, equitable service outcomes, and efficient customer support to enhance satisfaction and trust. Specifically, providers should:

Improve distributive and procedural fairness by implementing clear, transparent, and fair resource allocation policies.

Enhance responsiveness by ensuring customer inquiries are addressed promptly and effectively.

Strengthen assurance through professional training programs that enhance staff expertise and reliability.

Invest in customer service training to improve staff empathy and engagement with users.

For researchers, further exploration into additional variables such as trust, security, and digital literacy could offer a more comprehensive understanding of MFA user behavior.

Research Limitation: This study had several limitations. Its cross-sectional research design captured data at a single point in time, limiting the ability to infer causal relationships. Additionally, the study focused exclusively on Phnom Penh, restricting the generalizability of findings to other regions or countries. The reliance on self-reported data may have introduced potential bias, including social desirability bias. Future studies should adopt longitudinal designs and include a broader geographic scope to enhance research validity

Future Research: Future studies should expand on this research by incorporating additional factors such as perceived security, trust, and digital literacy to provide deeper insights into customer satisfaction and loyalty in MFAs. Comparative studies across different regions or countries could reveal cultural differences in how service fairness and quality affect customer perceptions. Additionally, longitudinal studies tracking changes in satisfaction and loyalty over time would provide a dynamic perspective on user behavior and evolving service expectations.