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Policy Suggestions for Increasing the Impact of Factors


The results of the multiple linear regression model show that the service capacity factor has the greatest impact on customers' decision to deposit money, followed in decreasing order by the factors of sense of security, financial benefits, product and service, convenience, brand awareness and the lowest is recommendation.


CHAPTER 5: CONCLUSION AND SOME POLICY SUGGESTIONS

5.1. Research summary

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The objective of this study is to identify factors affecting individual customers' decision to deposit money in commercial banks, and at the same time measure the level of influence of factors affecting the decision to deposit money, thereby suggesting some policies to maintain old depositors, attract new depositors, contributing to increasing market share and bank profits.

The study started from referring to previous theories and research results on customers' choice of banks, through which the author proposed a theoretical model to study the factors affecting the decision to deposit money in commercial banks of individual customers including 07 factors: Financial benefits, Products and services, Service capacity, Feeling of security, Convenience, Introduction, Brand awareness with 30 observed variables. The preliminary study was conducted through interview techniques, one-on-one discussions to explore, supplement, and adjust the observed variables in the scale. The official study was conducted in Ho Chi Minh City from early March 2017 to late May 2017, the survey sample was collected through direct sampling using a questionnaire, the number of samples collected and used for this study was 231 samples. The data after collection was processed using SPSS 22.0 statistical software. The reliability of the scale is assessed by Cronbach's Alpha coefficient and tested through EFA exploratory factor analysis. Thereby, 01 observed variable was eliminated, 07 independent factors and 01 dependent factor were extracted to participate in the regression analysis. The results of the regression analysis showed that the initially proposed model was suitable with adjusted R2 = 62.5%, with seven factors affecting the decision to deposit money in commercial banks of individual customers.

Policy Suggestions for Increasing the Impact of Factors

The research results answered the question "What criteria do individual customers care about when deciding to deposit money in a commercial bank and what are the criteria that customers prioritize?", the answer shows that the factors that individual customers prioritize from high to low are Service capacity, Feeling of security, Financial benefits, Products and services, Convenience, and Awareness.


Brand and finally Referral.

5.2. Some policy suggestions

5.2.1. Policy recommendations to increase the impact of factors

5.2.1.1. Impact on the service capacity of the bank

Service capacity is the factor that customers consider to be of the highest importance when choosing a bank to deposit money. This factor is evaluated through two criteria: staff and the bank's ability to troubleshoot and handle problems.

First of all, the bank staff is a very important factor in developing the relationship between customers and the bank. The staff are the ones who directly introduce the bank's image to customers through communication and consultation about the bank's products and services.

For individual customers, the performance of bank employees is a reflection of the quality of service, image and brand of the bank. Therefore, when banks do not have many differences in financial capacity, service products, interest rates and accompanying benefits, the service attitude and communication of employees can be the deciding factor in retaining old customers and attracting new customers.

Bank managers need to focus on the following tasks to build a team of professional staff for their unit, thereby improving service quality:

First of all, the recruitment process needs to be organized in a public and transparent manner with specific information and requirements to select good and suitable candidates. The arrangement and assignment of work needs to be done reasonably, creating an environment for individuals to develop their abilities and stay with the bank for a long time. At the same time, increase the recruitment of new young and dynamic workers to contribute to rejuvenating the workforce.

Improve and innovate human resource maintenance policies such as salary and welfare policies to motivate employees to be dedicated and enthusiastic about their work and improve productivity. Have policies to attract experts and talented employees and retain them through good treatment policies such as attractive salaries, bonuses, and promotion opportunities.


In training, we regularly organize professional skills training courses and courses on banking products and services to help employees understand exactly the products and services provided by the bank. Mastering professional skills is the basic foundation to help employees confidently work effectively, while providing information about products and services to customers in the clearest, most specific and accurate way.

In addition, communication skills and soft skills of employees also need to be focused on training. Good communication skills of employees are one of the strengths that create a good impression and trust of customers towards the bank. Building a standard communication and behavior style for employees will contribute to forming the business culture of the bank, creating a professional image in the eyes of customers.

In addition, it is necessary to create an environment and conditions for employees to improve their skills, share experiences, and exchange and learn through competitions on professional expertise, culture, sports, etc. There is a policy of rewarding and encouraging employees with good achievements. This creates a long-term bond between employees and the bank.

The second criterion that banks need to focus on improving is the ability to fix and handle problems, in which customers are particularly interested in the efficiency and time to fix errors and problems in transactions. For individual customers, transactions at banks are mostly related to personal spending activities, so when risks occur in transactions, they can cause serious consequences for customers and affect the reputation of the bank. Therefore, the requirement to handle problems quickly and effectively is one of the urgent requirements, both to improve the efficiency of banking operations and to strengthen and maintain customer trust. To do this, banks need to:

- Invest in technology development and enhance security in the banking system.

- Closely cooperate and coordinate with other banks to create conditions for mutual support to effectively resolve problems arising in interbank transactions.


effective and less time consuming and costly.

- Invest in and build a 24/7 online customer service system equipped with a modern switchboard system, a team of dynamic, enthusiastic consultants, professionally trained in customer service, to bring customers superior utilities as well as maximum support for problems in transactions.

5.2.1.2. Impact on sense of security

Research results show that among the factors when customers decide to choose a bank to deposit money, Feeling of security is the second most important factor after Service capacity.

First of all, it can be said that depositors highly appreciate the financial capacity of banks. Therefore, improving financial capacity is one of the prerequisites for banks to increase their competitive advantage in the context of international integration.

In addition, it is necessary to strengthen risk management activities in banks, gradually meeting the requirements, principles, and international practices on risk management. To do that, banks need to:

- Comply with legal documents and regulations of the State Bank on the development and enhancement of risk management systems in banks, closely monitor the development process and participate in giving comments on drafts, Circulars and Regulations on risk management systems in banking activities.

- Proactively build a risk management system in the bank, in which it is necessary to proactively apply the State Bank's regulations related to risk management, as well as proactively research and apply risk management standards and principles according to international practices Basel II.

- Improve the financial capacity of the bank by increasing charter capital to ensure the minimum capital safety ratio according to the regulations of the State Bank and international practices and also to ensure the safety of the bank's own operations. Increased capital will allow the bank to invest in technology development, human resource training and expand distribution channels. This is also an indispensable factor to improve the competitiveness of commercial banks.


In the factor of Feeling of security, the observation variable Bank secures customer information received the highest consensus from customers. In the context of the current technology explosion, the banking industry faces many risks and dangers of information security loss such as: the system has many easily exploited vulnerabilities, risks from mobile devices and lack of understanding of basic security operations from within causing data loss... The evidence is that in recent times, many bank cardholders have had their money stolen from their accounts.

To limit this problem, banks first need to raise employees' awareness of information security, thoroughly inform all employees of legal regulations on information security, and have a mechanism to handle information disclosure that damages customer interests. Provide training on information technology and banking technology for employees to improve operational skills to limit risks and respond to rapid changes in technology.

In addition, banks need to continuously update and invest in new, modern technology to keep up with the technological level of countries in the region and the world; regularly upgrade banking security and safety systems to avoid hacker attacks and data theft.

In addition, information security risks can also come from customers, so banks also need to increase information dissemination and propaganda to customers so that they understand the risks and have appropriate preventive measures to protect their personal information.

5.2.1.3. Impact on interest rates and service fees

The next important factor identified in the research results is Financial Benefits. This factor refers to the monetary benefits that individual customers get when using the bank's products and services, including deposit interest rates and applicable fees.

Customers who choose to deposit money in banks especially value the high interest rate factor, but if banks pay high interest rates to attract and maintain stable deposits, it will increase costs and reduce income. But in reality, with competitive pressure,


Banks must maintain competitive interest rates to attract new deposits and maintain existing deposits.

However, in Vietnam, issues related to interest rates are strictly managed by the State Bank through the ceiling interest rate applied to commercial banks. Therefore, banks need to regularly monitor interest rate fluctuations in the market, predict fluctuation trends, calculate output and input interest rates to provide interest rates that are both competitive and attractive while still ensuring benefits for the bank.

In addition, the service fee policy applied to different service products needs to be established in accordance with the operating situation and characteristics of the bank to ensure both customer benefits and revenue for the bank, while maintaining competitiveness and attracting customers.

5.2.1.4. Impact on banking products and services

Product and service is the fourth important factor influencing individual customers' choice of bank to deposit money.

In today's competitive environment, commercial banks, in addition to making efforts to improve service quality, also need to focus on applying modern technology, increasing product utility to diversify products to meet the increasing needs of customers. Creating a clear difference in products and services is a strong point that helps banks attract new customers and retain old customers. Product supply procedures also need to be streamlined and simplified to better serve the bank's management and save customers' time.

In addition to the diversity and differentiation of product and service lines, banks also need to classify and set target customer groups in order to offer appropriate products, services and preferential policies for each customer group. In addition to common products such as term deposits, non-term deposits, payments, ladders, etc., banks can offer specialized products to serve


certain groups such as children, the elderly... or the need to start a business, invest in business... or sell insurance products. This helps banks to attract idle money from the population, increasing the strength of their bank's deposit products.

Currently, the deposit interest rates at most commercial banks do not have much difference. In order to compete to attract capital, commercial banks continuously implement promotional programs. However, this competitive method is only effective in the short term, customers can still withdraw their deposits to banks with more attractive promotional programs. Therefore, understanding and understanding customer preferences will help banks build attractive incentive programs to attract customers to their banks.

In addition, banks also need to improve customer care services to maintain long-term customer relationships with the bank. Banks can create some small incentive programs to help increase customers' interesting experiences such as: waiving/reducing transaction fees, hourly/daily lucky draws, giving surprise gifts to couples of customers transacting together, to groups of colleagues in the same agency, etc. Or during peak hours, bank leaders can come down to the counter to visit, offer drinks or encourage customers to give their opinions on banking products and services. Paying attention to customer experience is also an important factor that helps banks gain a competitive advantage in the market.

5.2.1.5. Impact on convenience

Convenience is a factor that influences customers' decision to deposit money. Convenience here is mainly reflected in customers' easy access to the bank's distribution channels to use products and services.

In large urban areas such as Ho Chi Minh City, expanding the traditional network will not bring high efficiency, investing in improving quality will attract customers more than investing in quantity. Banks need to pay attention to arranging more modern transaction spaces according to international standards, dedicating the most space to customers instead of dedicating to transaction staff which is very common in Vietnam. Transaction counters

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