Bank Fee Transparency, Customer Satisfaction and Cost Perception : A Data-Driven SEM Approach

Abstract

Using a data-driven Structural Equation Modelling (SEM) approach on a sample of 200 clients during the 2024-2025 period in the banking sector of Kosovo, the present study investigates the effect of bank fee transparency (BFT) on customer satisfaction (CS) and perceived banking costs (PBC). The findings demonstrate that BFT has a significant positive effect on CS (β = 0.992, p < 0.01), but a weak and negative direct effect on PBC, while the indirect effect through CS is strongly positive (total effect β = 0.995, p < 0.05). The mediating role of customer satisfaction is key to this relationship, and in fact, customer satisfaction alone significantly increases perceived banking costs (β = 1.032, p < 0.01). Overall, the study suggests that transparency and satisfaction co-influence cost perceptions of customers, which may offer some insights into how communication, trust, and the customer experience might be enhanced in banking markets of developing economies and provides sound empirical evidence on the behavioural mechanisms that link transparency to cost perception in financial services.