Impact of Digital Banking on Customer Satisfaction, The Mediating Role of Financial Inclusion In Commercial Banks of Pakistan

Abstract

This study examines the impact of digital banking on customer satisfaction, with financial inclusion serving as a mediating variable, in commercial banks of Pakistan. Using a quantitative, deductive research design, primary data were collected from 302 digital banking users through a structured survey and analyzed via Partial Least Squares Structural Equation Modelling (PLS-SEM) in SmartPLS 4.0. Digital banking was operationalized using five SERVQUAL dimensions (Tangibility, Reliability, Assurance, Empathy, and Responsiveness), while financial inclusion was measured through accessibility, affordability, usage, and safety dimensions. Results confirm that digital banking significantly enhances financial inclusion , which in turn positively affects customer satisfaction. Financial inclusion fully mediates the digital banking – customer satisfaction relationship, with a significant indirect effect. The measurement model demonstrated excellent reliability and convergent validity. Grounded in the Technology Acceptance Model (TAM) and Diffusion of Innovation Theory (DOI), this study conceptualizes a 'Digital Banking – Inclusion – Satisfaction Chain. Findings provide actionable guidance for bank managers and policymakers to advance inclusive and equitable digital financial services in Pakistan.