EMOTIONAL RESPONSES TO SERVICE RECOVERY INITIATIVES IN THE BANKING INDUSTRY
EMOTIONAL RESPONSES TO SERVICE RECOVERY INITIATIVES IN THE BANKING INDUSTRY

Summary/Abstract: In many regular banking transactions, it is not surprising that occasional service failure is inevitable despite tremendous effort for zero-defect service delivery. Consequently, the outcome of service failure can be disastrous for the banks' short- and long-term existence. As a result, this study investigated the impact of service recovery justice (DJ, PJ, and IJ) on consumers' emotions (positive (PEM), and negative (NEM)) and post-recovery satisfaction (PRS), word of mouth (WOM) in the banking industry of Spain. Additionally, this study examined the mediating role of PEM and NEM between (DJ, PJ, and IJ) and PRS. The study collected data from 500 customers of Spanish banks using an online questionnaire. The analysis was performed using the Partial Least Squares Structural Equation Modelling (PLS-SEM) approach. The results indicate that (DJ, PJ, and IJ) positively influence PEM. Moreover, DJ negatively impacts NEM. However, PJ and IJ have no significant effect on NEM. Besides, PEM is shown to positively affect PRS, while NEM negatively impacts PRS. Additionally, PRS is positively influencing WOM. Furthermore (DJ, PJ, and IJ) indirectly impact PRS through PEM. Only DJ indirectly impacts PRS through NEM. The findings have significant implications for theory and practice, offering vital insights for creating effective policies and regulations in the Spanish banking industry to improve customer satisfaction and emotional responses to service failures.

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