Code Encoding Question Content
False rumors affect the bank's reputation.
4.3 BN3 Agribank carefully selects product suppliers,
service,... to minimize errors.
4.4 BN4 Agribank focuses on security to limit cases
theft, vandalism, fire and natural disaster prevention.
4.5 BN5 Agribank often forecasts and takes measures to prevent changes in policies of the Government and the State Bank that affect Agribank's operations.
DGC General Assessment
DGC1 Operational risk management at Agribank Quang Tri Branch is good.
(Source: 2017 survey data, processed on SPSS software)
2.3.2. Characteristics of the survey sample
Information about the subject of investigation plays an important role in collecting
Collect data, which is the basis for drawing objective and accurate conclusions.
Table 2.8: Sample size characteristics
Characteristic
Answer | Quantity | Percent (%) | |
Object | Leadership, management | 29 | 19.33 |
Staff | 121 | 80.67 | |
Sex | Male | 63 | 42.00 |
Female | 87 | 58.00 | |
Education level | Postgraduate | 7 | 4.67 |
University | 112 | 74.67 | |
College | 22 | 14.67 | |
Intermediate | 9 | 6.00 | |
Age | <30 | 50 | 33.33 |
30-50 | 89 | 59.33 | |
>50 | 11 | 7.33 |
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(Source: Data processing results)
2.3.2.1. Sample structure by subject
The author investigated 150 samples, of which 19.33% of the subjects were in management positions from director to deputy head of department and the remaining 80.67% were employees in departments such as tellers, credit, accounting, information technology of branches, transaction offices and Head Office of Agribank Quang Tri Branch. The proportion of leaders, managers and employees in the survey sample is consistent with the personnel structure of Agribank Quang Tri Branch.
2.3.2.2. Sample structure by gender,
By gender, 42% of employees are female and 58% are male. The survey sample structure is appropriate because Agribank employees in Quang Tri province have more female employees than male employees because of the characteristics of the banking industry, positions such as tellers are predominantly female.
2.3.2.3. Sample structure by level
The sample structure has differences between groups according to educational level. Specifically, the post-graduate group accounts for 4.67%, the university group accounts for 74.67%, the college group accounts for 14.67%, and the intermediate group accounts for 6%. Thus, it can be seen that the staff of Agribank Quang Tri Branch have a fairly high level of education when the university level accounts for the largest proportion and there are a number of staff at the postgraduate level, in addition to college and intermediate levels. The better the level of the staff, the higher the ability to implement risk management contents.
2.3.2.4. Sample structure by age
By age, there is a difference between different age groups, the group under 30 years old accounts for 33.33%, the group 31-50 years old accounts for 59.33%, the group over 50 years old accounts for 7.33%. Thus, the survey sample appropriately reflects the characteristics of the overall Agribank staff of Quang Tri province branch with the majority of employees being quite young and the proportion of employees aged 31-50 years old accounting for the largest proportion.
2.3.3. Assessment of the respondents on operational risk management at Agribank Quang Tri Branch
2.3.3.1. Descriptive statistics on operational risk management of Agribank Quang Tri branch
Risk management is assessed based on 5 groups of operational risk factors and the general assessment of Agribank Quang Tri Branch staff. The results are shown in the following table:
Central | Deviation | ||||
jar | standard | ||||
CN1 | 150 | 3 | 5 | 4.37 | 0.60 |
CN2 | 150 | 2 | 5 | 4.27 | 0.63 |
CN3 | 150 | 2 | 5 | 4.17 | 0.68 |
CN4 | 150 | 2 | 5 | 4.18 | 0.66 |
CN5 | 150 | 2 | 5 | 4.18 | 0.67 |
QT1 | 150 | 2 | 5 | 4.21 | 0.68 |
QT2 | 150 | 2 | 5 | 4.01 | 0.73 |
QT3 | 150 | 2 | 5 | 4.01 | 0.78 |
QT4 | 150 | 2 | 5 | 4.12 | 0.67 |
QT5 | 150 | 2 | 5 | 4.07 | 0.66 |
HT1 | 150 | 1 | 5 | 3.48 | 0.73 |
HT2 | 150 | 1 | 5 | 3.45 | 0.76 |
HT3 | 150 | 2 | 5 | 3.49 | 0.74 |
HT4 | 150 | 2 | 5 | 3.59 | 0.61 |
HT5 | 150 | 2 | 5 | 3.57 | 0.65 |
BN1 | 150 | 1 | 5 | 3.35 | 0.96 |
BN2 | 150 | 1 | 5 | 3.21 | 1.04 |
BN3 | 150 | 1 | 5 | 3.32 | 0.90 |
BN4 | 150 | 1 | 5 | 3.34 | 0.88 |
BN5 | 150 | 1 | 5 | 3.26 | 0.90 |
DGC | 150 | 3 | 5 | 4.37 | 0.60 |
Table 2.9: Descriptive statistics on operational risk management at CN Statement Sample Lowest Highest
(Source: Data processing results)
a, Assessment of Human Factors
The survey results show that the Human factor in risk management is highly appreciated by bank employees. This is reflected in all statements including "Agribank staff in different departments have a high sense of cooperation", "Agribank has a good remuneration policy to promote employees to develop their abilities and limit internal fraud", "Agribank has appropriate disciplinary policies for staff who do not comply with business procedures, causing losses to the bank's assets and reputation", "Agribank regularly has training programs to improve professional qualifications, soft skills and professional ethics for employees", "There are few cases of violations of professional ethics at Agribank" all have an average score of greater than 4. Thus, for the human factor, Agribank Quang Tri Branch has implemented and managed the factors well to prevent operational risks. Agribank Quang Tri Branch has good treatment policies, appropriate disciplinary policies for employees who do not comply with professional procedures as well as training to improve professional and technical skills. Therefore, Agribank Quang Tri Branch employees have a high sense of cooperation and rarely violate professional ethics. Thanks to that, risk management work on the human factor is well controlled at Agribank Quang Tri Branch.
b, Evaluation of the factors of Regulations and operating procedures
Similar to the Human factor, the Regulations and operating procedures factor is well evaluated with statements including "All Agribank products and services have complete guidance documents", "Internal regulations are issued promptly and synchronously", "Documents and regulations on business processes are in accordance with legal regulations", "Guidelines are clear and reasonable, with few misunderstandings and overlaps in the process of performing business operations", "Internal regulations fully design control points in business processes" are evaluated with an average score of greater than 4. The banking industry is characterized by having to properly and fully implement the system of procedures. Therefore, to perform related operations, there are always tightly built procedures and full instructions so that employees can minimize errors and facilitate. Besides, the
Issue documents in a timely manner to disseminate to employees so that they can perform their duties well. Thus, with the investigation results, we can see that Agribank Quang Tri Province Branch has well implemented the contents of the Regulations and business processes to control operational risks for its bank.
c, Evaluation of System factors
For the contents of the System factor including "Solid and safe infrastructure system, timely repair when there is damage", "The hardware system from the Head Office to the transaction office is modern, synchronous, meeting work requirements", "Agribank focuses on maintenance, quickly fixing hardware system errors", "Safe information security system, few errors", "Modern ATM system, few errors" have not been highly appreciated with the average score of these factors at the normal level of above 3 points but below 4 points. Although Agribank Quang Tri Branch has focused on risk management work for the System factor, it has only been evaluated at the normal level. Thus, the infrastructure system needs to be further strengthened to increase solidity, safety and promptly fix problems; the hardware system also needs to be more modern and synchronous; More attention should be paid to maintenance, troubleshooting of software systems, and strengthening of ATM system maintenance so that operational risk management for this group of factors can be better implemented.
d, Evaluation of External Impact factors
Similar to the System factor, the contents of the External Impact factor are all rated at a normal level, including "Agribank is often careful and vigilant against acts of sabotaging system security", "Agribank often quickly controls and resolves false rumors that affect the bank's reputation", "Agribank carefully selects partners providing products and services,... to minimize errors", "Agribank focuses on security to limit cases of theft, property damage, fire prevention, natural disasters", "Agribank often forecasts and has measures to prevent changes in policies of the Government and the State Bank that affect Agribank's operations" with an average rating of more than 3 and less than 4. Although there are many measures to effectively manage operational risks from External Impact,
external activities, but Agribank Quang Tri Branch needs to be highly vigilant against possible acts of sabotage against system security because currently high-tech criminals have many sophisticated tricks to steal data or disable their systems, affecting operations and causing loss of assets of the bank. In addition, it is necessary to quickly control and completely resolve rumors to avoid affecting reputation because the destructive power of rumors is extremely large. In addition, it is necessary to carefully select service providers, focus on security, fire prevention and fighting as well as better adapt to policy changes so that banks can control their operational risks.
e, General assessment of operational risk management at Agribank Quang Tri Branch.
The survey results show that the staff's assessment score for operational risk management at Agribank Quang Tri Branch is 4.37. Thus, although there are still many issues that need to be addressed regarding the contents of the System and External Impact, in general, the operational risk management at Agribank Quang Tri Branch is well implemented. In the coming time, there should be solutions to address the contents of the System and External Impact so that risk management can be increasingly improved.
2.3.3.2. Scale reliability test (Cronbach's Alpha)
The results of the scale reliability test are shown in the table below and the specific results for each group of variables are shown in Tables 1 to 6 in Appendix 2.
Table 2.10: Cronbach's Alpha test results
Variable group name
Number of variables observe | Cronbach's Alpha | Total variable correlation lowest in the group | |
Human | 5 | 0.77 | 0.49 |
Regulations, business processes | 5 | 0.80 | 0.55 |
System | 5 | 0.83 | 0.56 |
External impact | 5 | 0.87 | 0.61 |
(Source: Data processing results)
Cronbach's Alpha coefficient reflects the strength of the correlation.
between the observed variables of the target factor.
“A Cronbach's Alpha from 0.8 or higher to nearly 1 is a good measurement scale, from 0.7 to nearly 0.8 is usable. Some researchers also suggest that a Cronbach's Alpha from 0.6 or higher is usable in cases where the concept being measured is new or new to the respondents in the research context”[12], According to Nunnally (1978), Peterson (1994), a scale that is considered acceptable and good requires two conditions at the same time: the overall Cronbach's Alpha coefficient > 0.6 and the total item correlation coefficient (Corrected Item-Total Correlation) > 0.3.
From the Cronbach's Alpha analysis table presented above, it can be seen that the Cronbach's Alpha coefficient of each scale is greater than 0.6 and the Corrected Item-Total Correlation coefficient of all observed variables is >0.3, so the scale is accepted and ensures good quality. Therefore, all observed variables are kept intact for further analysis.
2.3.3.3. Exploratory factor analysis EFA
a, Extract factors affecting risk management at Agribank Quang Tri branch.
The survey form evaluates the operational risk management work at Agribank Quang Tri Branch. The assessment content includes 20 observed variables built on a 5-level Likert scale (1: Completely disagree, 2: Disagree, 3: Neutral, 4: Agree and 5: Completely agree). Group 1: People includes 5 observed variables. Group 2: Regulations, business processes have 5 observed variables. Group 3: System has 5 observed variables. Group 4: External impacts have 5 observed variables. To analyze the EFA, we need to extract the factors. Specifically:
To extract the factors that influence risk management
At Agribank Quang Tri province branch, it is necessary to rely on the following criteria:
Factor Loading > 0.5
0.5 < KMO < 1
Bartlett test has Sig < 0.05
Total Variance Explained > 50%
Eigenvalue > 1
The results of EFA analysis are shown in Table 5, Table 6, Table 7 of Appendix 2 as follows:
The KMO coefficient is 0.73 (greater than 0.5 and less than 1) and in Bartlett's Test we have a Sig. value of 0.00 (less than 0.05) proving that the observed variables are correlated in the whole, satisfying the above two conditions, it is possible to conduct EFA factor analysis with the collected data.
There are 4 factors extracted from the scale, all of which have Eigenvalue>1, proving that the extracted factors have a better effect in summarizing information than the original variable and are retained in the model. The total extracted variance is 59.59% (greater than 50%), so the analysis is appropriate.
Table 2.11: Results of factor analysis affecting risk management
at Agirbank Quang Tri Province Branch
Factor Group - Extracted Variance
Variable name notation | Factor loading | |
Human ( 13.23 %) | CN2 | 0.77 |
CN4 | 0.74 | |
CN1 | 0.70 | |
CN3 | 0.70 | |
CN5 | 0.69 | |
Regulations, business processes ( 14.21 %) | QT2 | 0.79 |
QT4 | 0.79 | |
QT5 | 0.75 | |
QT1 | 0.71 | |
QT3 | 0.71 | |
System ( 15.18 %) | HT1 | 0.82 |
HT2 | 0.78 | |
HT3 | 0.75 | |
HT4 | 0.75 | |
HT5 | 0.73 | |
External impact ( 16.96 %) | BN5 | 0.89 |
BN4 | 0.88 | |
BN3 | 0.79 | |
BN1 | 0.76 | |
BN2 | 0.74 |
(Source: Data processing results)