Improving the Quality of Electronic Banking Services

Determining the development of e-banking services includes factors such as: number of customers using the service, sales of e-banking products and services, revenue from e-banking services, and the proportion of revenue from e-banking activities to the total income of the bank.

Developing the scale of e-banking services: is to increase the number of customers transacting using e-banking services, increase the frequency of transactions using e-banking services, increase the value of a transaction to increase the amount of value from the services provided by the bank.

The increase in the scale of e-banking services affirms the strong potential of that bank, the increase in scale provides the necessary conditions for the development of e-banking services in the future. This is explained by the fact that e-banking services are built on the information technology platform, and the products in this industry tend to increase rapidly. The increase in e-banking services shows that the level of technology of that bank's products is constantly increasing, and is also a concrete evidence of the financial potential of the bank. This firmly affirms the ability to develop e-banking services of that bank in the future.

Expanding the scale of electronic banking services can be carried out by the following measures:

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The number of devices (ATM, POS) must be installed in large quantities and reasonably: this is the most intuitive factor to see the development of the scale of the bank's e-banking services, because only when the demand for this service is high will the number of devices be installed in large quantities.

Expanding distribution channels: the number of branches and transaction offices is increasing, distributed reasonably and effectively in all regions, demonstrating the growing development of the bank's distribution channels or distribution network.

Banks need to offer many attractive promotions as well as popularize the benefits when customers use their bank's e-banking services. In addition, banks must also simplify the content and operations of transactions, and have specific instructions for customers to easily access and perform when first using e-banking services.

Find new values of e-banking services to increase service usage frequency

Customer's investment. By improving and perfecting existing services and adding new services.

The results of developing the scale of electronic banking services are evaluated through the following manifestations:

Number of customers using e-banking services

This is the most realistic indicator of the development of e-banking services. The better and more superior the service, the more customers it will attract.

The number of customers using e-banking services contributes significantly to the bank's profits. This is also a potential market that helps the bank promote its image, while also creating more opportunities to cross-sell products, attracting customers to use more of the bank's products.

Growth rate of number of customers using e-banking services (G):

(Number of customers this year – Number of customers last year)*100

G =

Number of customers last year

Sometimes, the electronic banking service is the bridge that attracts and connects customers with the bank closer together. Because today, technology develops, everything is done via the internet, requiring speed and convenience, so through electronic banking, customers will find the bank.

Banks with a high rate of customers using e-banking services will certainly have developed e-banking services.

Revenue from e-banking services

Besides the number of customers using e-banking services, the volume and value of transactions are also criteria to evaluate the development of e-banking services.

The largest source of revenue for e-banking services comes from fees collected from customer transactions. Therefore, the more transactions and the larger the transaction value, the more revenue from fees will be generated, or most practically, the larger the mobilized balance.

Revenue from electronic banking services

In there:

P i : price of each service:

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DT = ∑

𝒏=𝟏

𝑷𝒊 ∗ 𝑸𝒊

Q i : Number of i-th service provided: N: Number of e-banking services provided

Revenue growth rate:

(Service fee revenue this year – Service fee revenue last year)*100%

G r =

Service fee revenue last year

As mentioned above, the main source of revenue for e-banking services comes from transaction fees. This is an indispensable factor in assessing the development of e-banking services. If e-banking services develop strongly, revenue from fees will be very large. Most of the revenue structure of banks comes from lending. Currently, banks are aiming to shift the revenue structure towards revenue from services, expanding the contribution of revenue from fees to a higher level.

Increasing the frequency of transactions using e-banking services: Increasing the frequency of transactions using e-banking services is when banks, through their own measures, increase the number of transactions of a customer in the same unit of time. Increasing the frequency of transactions using e-banking services will help increase the income from customers' transaction fees, increase the bank's foreign interest income and also make transactions via e-banking more popular. In addition, increasing the frequency of transactions helps improve the ability to pay through the banking system, and more cash flow will be circulated.

Increase the value of a transaction: Increase the value of a transaction is the value of a transaction equal to the increase in electronic banking services. Increasing the scale of each transaction will increase the income of the bank through service fees, improve the ability to pay through the banking system, and increase the cash flow. Besides, it also helps the bank to quickly depreciate fixed assets and invest in

new property

The proportion of income from e-banking services to total banking income is constantly increasing. The ultimate goal of business activities is profit. Therefore, if the proportion of income from e-banking services increases, it is the result of the combination of diversity, development and of course the quality of e-banking services also increases.

1.2.2.2. Improve the quality of e-banking services

“Improving the quality of e-banking services is an inevitable and strategic requirement of commercial banks in the trend of international integration. To improve the quality of e-banking services, it is necessary to develop new e-banking services and improve and upgrade existing banking services. To do so, it is necessary to change the quality, create many types of e-banking services with different quality, change the features of the service, ensure the use of the service is convenient and safe, need to innovate and improve related services, shorten procedures, improve the service style of the staff, civil servants, in order to best satisfy the needs of customers.

The quality of e-banking services is the most important factor in attracting customers to the bank. Therefore, to improve the quality of e-banking services, it is necessary to pay attention to the following criteria:

Simple and fast procedures: The need for capital circulation in society is increasing, banks need to meet that requirement. Therefore, once the banking technology system does not satisfy the timeliness of transactions, banking products and services are not convenient, simple and fast, it is still not considered to be of good quality.

Customer satisfaction: For an e-banking service to be considered quality and effective, it must satisfy customer needs for convenience and reasonable prices.

Accuracy: All customer transactions at the bank involve money. Therefore, every customer wants the bank to ensure that all transactions are carried out accurately, minimizing errors and technical errors.

of the information transmission system and risks during the transaction process. If the transaction processing process often has errors, it will directly affect the quality of service, causing loss of reputation and income of the bank, and loss of customer confidence in e-banking services. On the contrary, when the accuracy of transactions in practice is guaranteed, the quality of e-banking services will be improved.

1.2.3. Factors affecting the development of e-banking services of commercial banks

Based on the characteristics and roles of e-banking services for banks, customers and the economy, the author synthesizes a number of factors affecting the development of e-banking services, including objective and subjective factors, specifically:

1.2.3.1. Objective factors

* Economic environment

The economic environment is a factor that greatly affects the banking services provided because banking itself is an industry that is strongly affected by the economy. Economic growth promotes an increase in people's income, promotes the expansion of businesses, and at the same time will receive more modern technologies from the world, so commercial banks will have capital to invest in technology to help develop e-banking services. When people's income increases, technology is applied more in many fields, people demand more modern, higher quality services, faster processing speed, the economy needs more convenient and accurate means of payment, thus promoting banks to develop e-banking services, offering newer services with higher technology to meet the needs of people and economic entities, and at the same time support faster capital circulation.

* Legal environment

The legal corridor is considered the standard and protection framework for e-banking services. As a service using high technology, related to customer information, requiring high confidentiality but also containing potential risks, a specific legal corridor is needed to ensure no violations of regulations and protection for the bank and customers. Currently, the State Bank and commercial banks also have documents regulating the conditions.

Terms of use of e-banking services, customer information security; regulations on non-cash payment systems; and sanctions for violations of regulations... Completing the legal framework is an important factor affecting the entire process from the launch of the service until the user uses the service. Without legal regulations, ensuring service safety may be difficult, or easily cause disputes and complaints, reducing the quality of e-banking services.

• Customer factors

Customers are those who buy services and use e-banking services. However, there are many types of customers, each customer has different interests and needs, so e-banking services need to be diversified to suit each customer group. In addition, people's habit of using cash is an obstacle to the widespread development of e-banking services. Therefore, commercial banks need to design e-banking services so that they can replace the function of cash, and to convince customers to reduce the use of cash and replace it with e-banking services, the quality of e-banking services needs to be improved and improved regularly.

Thus, it can be seen that customer factors greatly influence the development of e-banking services. Due to the complexity of customers' needs, preferences, and incomes, e-banking services must be more diverse in both form and features.

* Competitive environment

With the current rapid speed of communication, when a bank launches a new product, offers a new e-banking service or installs a new upgraded feature, immediately after a while another bank will deploy a similar service to be able to compete. Thus, the competitive environment puts pressure on banks to upgrade and improve their services to provide higher quality, more diverse, more modern, and differentiated services, while developing many new e-banking services to attract customers and create a difference.

1.2.3.2. Subjective factors

* Brand and policy of providing electronic banking services of the bank

The goals and policies related to e-banking services that the bank sets out are the basis for

basis to promote service development. Therefore, banks build a regulatory framework on service provision processes, decentralization, build appropriate and competitive fee schedules and limits, and establish a clear and specific service fee sharing mechanism that will help services be provided more conveniently, bring higher quantitative results, and at the same time ensure that services are registered in accordance with the process, limiting risks. Banks with good marketing policies and the ability to link with partners create many opportunities to reach and increase customer scale, as well as expand payment features for many units, creating convenience for customers, contributing to increasing the diversity of features. In addition, the bank's brand is a factor that greatly affects the development of e-banking services. Banks with good brands and high reputations attract better investment capital, so they will have resources to invest in improving the quality of technology and service software, while also creating trust for customers and promoting scale more easily.

* Banking human resources

The second factor when customers approach a bank is the bank staff. Professional, dynamic, professional, enthusiastic and friendly staff are plus points to evaluate the quality of e-banking services. Especially for technology-related services such as online services, it is even more necessary to have staff with the ability to access technology, quickly adapt to be able to support, market and advise customers. A team of dynamic staff, with good technology absorption ability, consulting skills, and product sales are supporting factors to increase the scale of services, creating sympathy with customers. Therefore, the bank's human resources have a direct impact on the development of e-banking services of that bank.

* Risk management system

Although the current e-banking service is designed with 2-layer security, ensuring safety for customers. However, in the era of technology explosion, which also means risks, the operating process and supervision are important factors to minimize the loss of assets and reputation of the bank's e-banking service and contribute to the sustainable development of e-banking service.

* Technology factor

This is the most important factor because it directly affects service development.

e-banking services of each bank. Good technology software, regularly upgraded will support services that meet customer needs for speed and novelty. On the contrary, products using outdated technology will not be able to compete, reduce the quality of e-banking services and can be unsafe for customers when information theft methods are increasingly sophisticated. In addition, technical errors, errors of money being deducted but transactions not being successful during transactions via e-banking often occur, affecting customer confidence, so banks must have a system of people and software to limit the number of error transactions, and have software to handle errors, automatically refunding money as quickly as possible to customers. Thus, having a highly automated software system, capable of handling errors, limiting the phenomenon of hanging is a factor that helps to affirm the quality of e-banking services, also contributing to the development of e-banking services of each bank.

* Distribution channel network

Building a suitable network of operations will be of great significance to the business activities of commercial banks. With a wide network of operations, banks can maximize the distribution of e-banking services. The network of operations will be expanded when banks use means of providing e-banking services such as ATMs, POS systems, and the Internet. Investing in equipment to develop e-banking services will certainly help banks achieve certain economic benefits.

1.3. Experience in developing e-banking services of some commercial banks and lessons for Vietnam Joint Stock Commercial Bank for Investment and Development - Quang Trung Branch

1.3.1. Experience in developing e-banking services of Joint Stock Commercial Bank for Foreign Trade of Vietnam - Hanoi Branch

Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), formerly the Foreign Exchange Department under the State Bank of Vietnam, was established and officially put into operation on April 1, 1963. From a specialized bank serving foreign economic affairs, Vietcombank has now become a multi-functional bank, operating in many fields, providing the market with a full range of financial services. With 50 years of development

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