The Effect of Service Quality and Customer Experience on Customer Loyalty: The Mediating Roles of Trust and Satisfaction at Bank Syariah Nasional (BSN) in Banda Aceh

1. Introduction

The banking industry is continuously undergoing dynamic changes due to developments in information technology, changing consumer preferences, and increased demands for quality services from the general public. The digitization process has completely changed the way banks do business. Apart from focusing on app-based services, banks have started providing a range of other innovative financial products. This trend has created stiff competition within the industry. Consumers are not confined to a particular bank anymore; there are plenty of other options available to them. Banks need to do much more than be merely financial intermediaries; they also need to provide value-added services to their customers through excellent customer service experiences.

In such a case, the competitiveness of the bank cannot be considered in terms of the diversity or amount of goods that it provides on the market. What is much more important, the competitiveness is measured in the capability of maintaining relationships with clients. These relationships will manifest themselves in the form of customer loyalty, which is one of the signs of effective client retention practiced by the firm. Customer loyalty does not only consist in regular usage of the services provided. On the contrary, it means that the customer feels trust and is ready to recommend this service to other people.

As an important component of the country’s financial system, Islamic banking faces similar challenges to conventional banks. In addition to engaging in competition through product innovation and superior service delivery, Islamic banks have unique characteristics emanating directly from Sharia principles such as justice, openness, and honesty. These principles are more than just rhetoric; they form the cornerstone of the operations of Islamic banks and the basis upon which the confidence of clients is built. Consequently, besides being appraised based on their performance and profitability, Islamic banks are also rated according to their commitment to Sharia principles in all their endeavors. This implementation of the principles of Sharia significantly impacts client perceptions of the bank’s integrity and reliability.

In terms of service marketing, consumer loyalty develops as a result of continuous evaluations performed by consumers based on their experience with the firm. There are some aspects here, including the quality of the service provided, personal experience of usage of the service, degree of satisfaction, and institutional trust. As a result of constant positive experiences with the bank, consumer satisfaction may develop, leading to increased trust and, thus, consumer loyalty. In case of dissatisfaction, on the contrary, there may be a breakdown of institutional trust, which makes consumers switch banks.

Trust is another aspect that is believed to influence customer loyalty. In the banking industry, trust is a critical element in the customer-bank relationship. It reflects the level of customers' confidence in the ability of the bank to manage their funds effectively, provide reliable services, and operate in a manner consistent with certain principles. For the Islamic banking industry, the concept of trust is directly related to the extent to which the bank adheres to Islamic rules. According to the pre-survey data, the trust level among customers is relatively good, scoring 3.61. However, there are several issues that require attention, particularly in terms of the customers' perception of the bank's commitment to their welfare and the extent of their reliance on the institution to satisfy their financial needs.

Together with trust, customer satisfaction is another element that plays an instrumental role in the creation of loyalty. No less important in its essence is service quality, defined as the capability of the bank to deliver high-quality service that is prompt, dependable, and consistent, all while being relevant to customers’ expectations. Pre-survey analysis of BSN shows a high rate of service quality, with the average rating of 3.88 points. Many characteristics, from facility convenience to employees' readiness to respond and the ability to understand clients’ requests, have received high scores. Nevertheless, there were also respondents who thought that technology and modernity of the services provided by the company was not optimal. Thus, developing innovations in this area is a vital task.

Furthermore, the experience of the customers is vital in creating loyalty. An analysis of previous researches indicates that numerous studies have focused on the relationships among the variables of service quality, experience of the customers, trust, satisfaction, and loyalty. However, it can be seen that there are still limitations associated with the variables taken and the research framework used by many of these studies. For example, there are studies that take into consideration the impact of service quality on the levels of satisfaction and loyalty while not considering customer experience as an important variable. Some researchers, on the other hand, emphasize customer experience but ignore the issue of trust.

Moreover, most of the existing studies have been conducted on the use of digital banking in foreign countries. This implies that there is no sufficient data on the particular environment for the practice of national Islamic banking in Banda Aceh City. Different areas feature unique customer characteristics, among which cultural and educational backgrounds and understanding of Islamic banking products can be mentioned. Hence, it is important to conduct studies that would combine all those elements into an integrated model.

2. Theoretical Study

2.1. Customer Loyalty

According to (Kotler et al., 2022), customer loyalty goes well beyond just buying repeatedly. Customer loyalty involves attitude-based aspects as well, such as preference for the brand, loyalty commitment, and recommending the brand to other people. Loyalty is further described by (Griffin, 2002) as involving psychological commitment, whereby customers develop the habit of behaving in the same manner consistently due to their loyalty. As far as the provision of financial services is concerned, customer loyalty can be defined as involving more usage of services offered, less vulnerability towards competing services offered by rival firms, and voluntarily engaging in word-of-mouth. According to (Zeithaml et al., 2020), loyalty is achieved through the development of positive experiences, which eventually build up into satisfaction, trust, and attachment. Recent studies have shown that modern-day customer loyalty cannot be explained simply in terms of transactions alone because loyalty nowadays is more about relationships, digital services experience, and customer value creation (Rather & Hollebeek, 2021).

The elements affecting the creation of customer loyalty comprise a range of interconnected variables, among which are satisfaction, service quality, trust, and customer experience. Satisfaction is one of the main predictors, since customers who have had their needs met are much more likely to retain their interest in a particular service (Zeithaml et al., 2020). This assertion is supported by (Mai & Cuong, 2021), who emphasize that satisfaction plays a significant role in the development of loyalty within the realm of digital banking services. Trust is yet another factor that cannot be overlooked while considering the process of establishing long-term customer relations. If clients see banks as being transparent and reliable institutions with sufficient expertise and resources, their predisposition towards loyal behavior is considerably reinforced (Habibi et al., 2024). Customer experience should also be regarded as an important component influencing loyalty, since it covers all the encounters between customers and providers before, during, and after service delivery.

Customer loyalty can be measured against various dimensions. According to (Griffin, 2002) and (Kotler et al., 2022), loyalty manifests itself in repeat purchases, retention rates, and the ability of customers to recommend others to use the organization’s services. Customer loyalty is also marked by commitment to using the same service provider in future, the customer’s strong feelings towards the company, cross-selling, and reluctance to switch to rival organizations. In essence, all these dimensions point to the fact that customer loyalty is much more than an exchange it represents a relationship.

2.2. Trust

In essence, trust can be understood as an expression of confidence by an individual in another individual's adherence to expectations set out prior to a commitment made. From a business perspective, trust can be considered the cornerstone of business relationships without trust, such business relationships will not be able to endure. According to (Kotler et al., 2022), trust can be described as a willingness of a party to rely on a business partner, influenced by the latter's competency, integrity, honesty, and goodwill. Likewise, (Mowen & Minor, 2017) and (Sumarwan, 2022) argue that customer trust is inherently related to the knowledge of customers about the product/service being offered, including its features and benefits.

Moreover, according to (Zeithaml et al., 2020), trust arises due to the maintenance of high-quality service provision, open communication, and the creation of numerous positive experiences for customers. High-quality service provision, specifically, affects clients' perceptions of organizational competence and professional qualities (Mai & Cuong, 2021). At the same time, the transparency and integrity of information communication are crucial for fostering the perception of honesty, which is particularly relevant for Islamic banking institutions (Habibi et al., 2024). In addition, today, system security and personal data protection become key elements contributing to trust formation, as they affect customers' perceptions of their safety and confidence (Rather & Hollebeek, 2021). Finally, the well-established reputation of an organization, its positive interaction with customers, and the ability to respond to customers' problems play a vital role in trust building and strengthening.

Four major factors can be used in measuring levels of trust according to (Kotler et al., 2022), and they include benevolence, ability, integrity, and willingness to depend. The term benevolence describes the level to which the organization cares about its clients and considers their needs as a priority. Ability can describe how the organization can provide high-quality services that meet all the requirements of its clients. Integrity refers to the commitment that the organization makes in ensuring that it does what it promised to do. Finally, willingness to depend can indicate how willing the client is to depend on the organization, regardless of the risks involved in this process. Overall, it can be stated that trust is not just a rational approach, as it includes many other aspects that contribute to building trustful relationships.

2.3 Customer Satisfaction

According to (Zeithaml et al., 2020), satisfaction arises from an evaluation process based on the cumulative experiences of the customers with the service providers. Satisfaction theory is thus similar to the Expectation-Confirmation Theory (Oliver, 2014) which states that satisfaction is a function of the level at which customers' actual experience matches their expectations. For banks, satisfaction cannot be reduced only to the product itself but includes other factors such as service quality, convenience of transactions, security of the system, and the alignment of services with customers' values. Satisfaction thus assumes an important place in customer relationship management.

Satisfaction continues to be one of the critical factors influencing service quality, particularly in service-oriented industries, because timely, respectful, and professional services have a significant impact on the level of satisfaction experienced by customers. Price and perceived value, which are among the critical antecedents of satisfaction, are positively influenced by customers who tend to express satisfaction if they feel that the money spent was worth the benefits gained from using their products or services. The other key factor associated with satisfaction in financial institutions is trust. Customer trust in financial institutions regarding the safety of data and information provided tends to boost satisfaction levels (Mai & Cuong, 2021). Satisfaction is also highly dependent on the usability and convenience of technology platforms such as mobile banking apps.

There are several key dimensions upon which customer satisfaction can be measured, according to (Oliver, 2014) and (Kotler et al., 2022). The first one is expectation confirmation, which refers to the level at which the delivered service meets the previous expectations of the customer. The second one is overall satisfaction, which involves an all-round evaluation of the entire service experience of the customer. The third one is perceived value, which involves the evaluation of whether the benefits gained from the service are proportionate to the sacrifices made either in terms of money or any other thing to access the service. In addition, customer satisfaction also occurs when there are positive affective reactions, fewer complaints, and a readiness to repeat the service or buy again in the future. All these dimensions prove that customer satisfaction goes beyond the mere rational and cognitive evaluation process it involves the affective aspect as well.

2.4. Service Quality

Service quality can be considered an important factor that influences the ability to fulfill the needs of the people and achieve customer satisfaction, especially in the context of the service industry. Generally speaking, services can be defined as a series of actions that help to satisfy the requirements of the service providers and consumers (Hidayat et al., 2015). This also includes helping others in either physical or abstract ways (Aswaty & Anggraini, 2022). Meanwhile, quality is considered to be how well the service provided meets the requirements of the consumers, as well as their ability to improve continuously (Mayasari, 2020).

Service quality can be assessed in relation to five key dimensions, as identified initially by (Parasuraman et al., 1988) and later operationalised by (Aswaty & Anggraini, 2022), namely tangibles, reliability, responsiveness, assurance, and empathy. Tangibles concern the tangible aspects such as facilities, equipment, and the appearance of staff members. Reliability concerns the delivery of service according to promise with accuracy and reliability. Responsiveness pertains to the eagerness to help customers and offer services in an efficient manner. Assurance concerns the skills of the staff members along with their politeness that leads customers to believe in them. Empathy relates to the offering of compassionate and personalised service.

2.5. Experience

The concept of customer experience can be defined as the overall perception developed by customers based on their experience within an organisation from the point at which they start searching for information right up to the end of their service process. Customer experience does not only include the functional aspects but goes further to incorporate aspects like emotions, cognitions, and behaviors that customers experience during each step of interaction. According to (Zeithaml et al., 2020), customer experience is viewed as the sum total of all interactions and provides a complete basis of how customers assess an organization. In service processes, customer experience does not depend solely on technical skills but includes interpersonal communication, service ambiance, and simplicity or complexity of the service process.

Moreover, according to (Rather & Hollebeek, 2021), there are four major dimensions of the customer experience. These include cognitive, emotional, social, and sensory dimensions. The cognitive dimension relates to the evaluation of the services by customers on a rational basis, while the emotional dimension concerns the feelings generated during service delivery. The social dimension refers to the quality of the relationship between customers and employees who deliver the service, whereas the sensory dimension refers to the customer perceptions of the service environment, both tangible and virtual. In the case of banks, customer experience can be seen through the clarity of information about products, the professionalism of employees, quick service delivery, ease of use of digital interfaces, and the security customers feel when carrying out transactions. Customer experience can have a great impact on customer loyalty because it affects customer engagement, satisfaction, and trust (Mai & Cuong, 2021).

The aspects that can be considered when assessing customer experience include, among others, those outlined by (Rather & Hollebeek, 2021). The first is related to information clarity and access, meaning the extent to which information provided to customers is clear and understandable. Next comes the quality of interaction, referring to the level of professionalism and courtesy with which employees communicate with customers. Then there is the service process convenience, which means the level to which services offered are efficient. The fifth indicator involves digital experience, which refers to digital platform usability and overall customer security while using them. Emotional response refers to customers' positive emotional experience, such as being comfortable and satisfied while engaging with services offered by the organization. Lastly, service consistency refers to the level of stability in the experience provided to customers at each phase of their journey. It is evident that all the above indicators support the assertion that customer experience is an essential aspect of the ongoing relationship between customers and organizations.

3. Research Methods

The study was carried out on the branch offices of BSN operating in Banda Aceh city of Indonesia. There are five core constructs included as research objects in the study, namely service quality, customer experience, trust, customer satisfaction, and customer loyalty.

The target population for this research is the entire group of customers registered with BSN in Banda Aceh City. In view of the lack of any official data on the total population, the sample size estimation was based on the recommended multiplier suggested by (Ferdinand, 2014). According to the recommendation, the ratio of sample size per indicator item should be between five and ten. This means that this research used a multiplier of ten to the number of all indicator items, which are 33, and hence the overall sample size is 330.

The data used in the research presented above is classified as primary data. This refers to data that does not exist in the observable environment before research and as such requires interaction between the researcher and the respondents (Ferdinand, 2014). The research involved the administration of a structured self-administered questionnaire to all respondents through Google Forms. In addition, all items under measurement were rated on a five-point Likert scale, with scores ranging from 1 to 5, where 1 = strongly disagree, while 5 = strongly agree.

The collected data was then analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM) via SmartPLS software. The choice of PLS-SEM as the analysis method was due to the fact that PLS-SEM is suitable for analyzing multi-construct models, can analyze non-normally distributed data, and provides efficient assessment of the measurement and structural models (Hair et al., 2021). PLS-SEM is especially appropriate for exploratory studies where predicting the relationship between constructs is the main goal.

4. Research Results and Discussion

4.1. Hypothesis Testing

The testing of the research hypothesis is as in Table 1 below.

Source: Processed Primary Data, (2026)

4.1.1.Direct Hypothesis Testing

Based on the results obtained from hypothesis testing directly, most of the relationships proposed between the variables in the research model appear statistically significant, where the T-statistics is greater than 1.96 and p-value is less than 0.05. Out of the eight hypotheses tested, seven hypotheses have proven statistically significant, whereas one hypothesis fails to be significant. Overall, based on the results obtained, trust, customer satisfaction, service quality, and customer experience all emerge as significant drivers of customer loyalty.

Both customer trust and customer satisfaction were found to have a positive impact on the level of customer loyalty, which means that higher levels of customer trust and customer satisfaction result in a higher chance that the customers will continue to remain loyal to the bank. Moreover, service quality proved to be an important factor in the context under discussion as well because it positively impacted all three variables: customer trust, customer satisfaction, and customer loyalty. Yet, it had a relatively small direct impact on loyalty compared to its indirect impact which is mediated by customer satisfaction.

Also, it was established that customer experience has a significant positive impact on trust, satisfaction, and loyalty. It was established that having good service experiences improves the perception of the bank by its customers and this makes them more loyal to the organization. The conclusions that have been drawn indicate that customer loyalty is best understood as something that results from the coming together of service quality and customer experience.

4.1.2.Hypothesis TestingMediation

Testing of the mediation hypothesis as in Table 1 below.

Source: Processed Primary Data, (2026)

It can be observed from the output of bootstrapping analysis that both customer satisfaction and customer trust act as significant mediating variables in the links between service quality, customer experience, and customer loyalty in view of p-values of all indirect effects being less than 0.05. Service quality and customer experience, therefore, appear to have direct and indirect impacts on customer loyalty via mediating mechanisms of customer satisfaction and customer trust.

In a more detailed analysis, the indirect impact of service quality on customer loyalty via customer satisfaction has been noted to have significance, suggesting that higher service quality improves customer satisfaction, which further works as a means through which loyalty can be achieved. Additionally, the indirect influence working via trust has been observed to have significance, meaning that higher service quality creates trust among customers, which further helps in creating customer loyalty.

In line with this, customer experience was shown to have a considerable indirect influence on customer loyalty via satisfaction and trust. The results affirm that favorable service experiences influence customers' evaluation processes such that they improve their satisfaction levels and build trust, which increases their loyalty intention.

From the above discussion, customer satisfaction is shown to be partially a mediator since there is a significant effect directly along with the indirect one. On the other hand, trust is shown to be a comparatively strong mediating variable that serves to reinforce the indirect effect between antecedent variables and customer loyalty. Therefore, both mediators are identified as important channels that will help transmit the effects of the variables of service quality and customer experience to customer loyalty.

4.2. Discussion

Quality of service has been empirically proven to have a positive effect on customer trust. The area of finance services and especially within Islamic banking quality of service is seen as one of the key indicators of a bank’s integrity. As the customers get high-quality service on an ongoing basis, there is less uncertainty for them in regard to the bank’s capability to handle funds efficiently.

Customer experience, apart from service quality, is another crucial factor in determining whether trust will be formed. Trust cannot be built overnight; on the contrary, it builds up gradually through a series of positive encounters between the customer and the organization. A smooth, safe, and clear customer experience reduces the perceived level of risk and increases trust in the reliability of the organization. With regard to Islamic banks, customer experiences that are clearly linked with the concepts of honesty, fairness, and transparency help strengthen customer trust.

Customer experience plays a crucial role in determining customer satisfaction. If the service process goes well, either because of the simplification of the processes involved or due to the courteous and attentive nature of the interaction with the customers, the latter become more likely to feel valued and comfortable. On the other hand, even the best quality of services cannot compensate for the negative influence that poor customer experience can have on satisfaction.

In addition, customer experience makes a strong and direct impact on customer loyalty. Positive experiences build a feeling of connection between the client and the organization, resulting in greater loyalty over time. Experience-based loyalty usually lasts for a longer period because it is built through repeated positive experiences during every service engagement.

Finally, the existing literature confirms that trust and satisfaction are key factors in fostering loyalty. Trust acts as the base for sustained interaction between the parties, reducing risk perceptions and ensuring commitment on the part of the client towards the firm. On the other hand, satisfaction acts as an inducement for sustained usage of the services while increasing customer resistance to competing services. Both trust and satisfaction play a critical role in sustaining customer loyalty.

5. Conclusion

5.1 Conclusion

From the study findings, customer loyalty, satisfaction, trust, quality of services, and customer experience offered by BSN in Banda Aceh City have been reported to be positively regarded by the respondents. This implies that the organization has shown great consistency in providing good services and experience to the customers, thus creating a good organizational image.

In addition to this, the research findings indicate that the quality of services provided and customer experience have a significant influence on both customer trust and customer satisfaction. In particular, an increase in the quality of services offered and an increase in customer experience are linked to increased trust and satisfaction with the bank. In addition, it was established that both variables had a direct impact on customer loyalty.

Apart from the above, customer trust and satisfaction were also discovered to have considerable direct impacts on customer loyalty, thus helping customers foster their tendency to be committed to using the bank's offerings. What is more, both of the variables are used as mediators, becoming intermediaries for passing the influence of service quality and customer experience on customer loyalty. Therefore, customer loyalty can be formed either directly or indirectly, via the use of trust and satisfaction as critical mediators.

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5.2 Suggestions

1. The Service Quality variable scored the least average value of 3.71 for the item "Bank employees quickly assist me whenever I have an issue." This does not mean that it falls below the good level; it simply means that more effort should be made to improve the responsiveness dimension. Hence, Bank Syariah Nasional is recommended to improve its employees' response time and accuracy by ensuring service excellence training, using Service Level Agreements (SLA), and evaluating the complaint handling process regularly.

2. The Customer Experience was the second highest variable with the indicator “I am served consistently each time I transact” which scored only 4.14. Although this score too belongs to the good category, it indicates that more efforts can be made to maintain the consistency of services throughout all transactions. In this case, BSN should make sure that SOPs are maintained throughout the various service points from branch office to online transactions in order to maintain consistency in customer experience.

3. The Trust factor obtained the lowest mean value of 3.76 for the indicator “BSN demonstrates sincerity in serving customer interests.” From this outcome, it is clear that the level of the bank’s sincerity and its commitment towards meeting customer interests is not satisfactory and needs to be improved. In order to achieve this objective, management should work on communicating more openly, adopt a personalized approach to serving customers, and ensure they have genuine concerns for them.

4. The indicator "The service I received met my expectations" in the Customer Satisfaction variable had the least mean score of 3.86. The outcome suggests that there is some kind of mismatch between the customers’ expectations and the service provided. Hence, it can be said that BSN needs to evaluate customer expectations consistently, improve the quality of personalized interactions with clients, and ensure that clear service standards are established, so that customers’ expectations can be satisfied efficiently.

5. Variable Customer Loyalty scored the lowest average of 4.00 for the measure “I am committed to becoming a lifelong customer of this bank.” While this figure is still considered acceptable, it suggests that the long-term commitment of the customers can still be enhanced. For this purpose, the following recommendations have been offered to BSN: formulate a structured loyalty program; enhance customer interaction through consistent communication; and offer other related products/services.

6. BSN is further recommended to improve the quality of its digital service encounters, since advanced technologies have become an expectation of today’s customers. It is necessary for BSN to strengthen its technological products such as mobile banking, internet banking, and digital customer service solutions in order to guarantee promptness and reliability of service delivery. By providing a better digital encounter, customers are provided more convenience and assurance, leading to higher satisfaction and loyalty levels.

7. Firms are advised to focus on the development of skills among their employees, especially when it comes to communication among themselves and empathy for their customers. An employee who has the ability to understand the customer's needs and demands is better placed to assist him/her. Thus, it is necessary to ensure that training programs are conducted to build skills such as good communication, customer service using empathy, and proper complaint management.

8. Businesses are also advised to develop more efficient processes by which customers’ opinions can be systematically collected. Customer opinions obtained through any means, such as from customer satisfaction surveys, suggestion programs, or online platforms, need to be systematically analyzed, enabling better understanding of the needs and demands of customers. These results can then be used to plan better customer service activities.

9. he management needs to be consistent in reinforcing the image and values of the institution based on Sharia through all aspects of the delivery of services. This requires that the services offered and the products provided reflect Sharia compliance in terms of mode of delivery and in terms of values such as fairness, transparency, and credibility. This will create greater levels of trust from customers.

10. Moreover, the need for banks to develop innovative products and services that would better meet the ever-changing needs of customers is also highlighted in the article. Innovation could involve offering more flexible financial products to the customers, implementing advanced services through technology, or developing personalized services based on customers’ profiles. Through the continuous delivery of valuable offerings, the bank can cater to the requirements of its existing customers while at the same time protecting its competitive edge.