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The impact of online banking service quality of Vietnam Development Investment Bank on customer satisfaction in Ho Chi Minh City market - 2


LIST OF TABLES AND SCHEDULES

Table 1.1 : Transaction costs of banks on distribution channels 6

Table 1.2 : Products/features of the IBMB system deployed 7

Table 2.1 : Internet banking services currently available in the world 15

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Table 2.1 : Transaction costs of banks on distribution channels 22

Table 2.2 : Scale of factors that make up the overall quality of internet banking services and their impact on customer satisfaction according to the study of Michel Rod, Nicholas J.Ashill and Jinyi Shao and Janet Carruthers, 2009 34

The impact of online banking service quality of Vietnam Development Investment Bank on customer satisfaction in Ho Chi Minh City market - 2

Table 3.1 : Scale of online customer service quality 41

Table 3.2 : Scale of online information system quality 42

Table 3.3 : Scale of quality of banking products and services 44

Table 3.4 : Scale of general Internet banking service quality 44

Table 3.5 : Customer satisfaction scale for

General Internet banking services 45

Table 3.6 : Research sample information 47

Table 4.1 : Results of testing the scales using Cronbach Alpha coefficient 52

Table 4.2 : Results of factor analysis of scale 54

Table 4.3 : Results of testing the scale of variables of general Internet banking service quality 56

Table 4.4 : Results of customer satisfaction scale testing 57

Table 4.5 : Correlation coefficient matrix between factors that make up the overall quality of internet banking services 59

Table 4.6: Results of adjusted R 2 analysis and F test – regression 1 61

Table 4.7 : Regression equation coefficients – regression 1 62

Table 4.8 : Correlation coefficient matrix between service quality

General internet banking with customer satisfaction – regression 2 64

Table 4.9: Results of adjusted R2 analysis and F test in the regression model between general internet banking service quality and satisfaction

customer – regression 2 66

Table 4.10 : Regression equation coefficients – regression 2 66

Table 4.11a : Mean values ​​by group - gender 67

Table 4.11b : Results of testing for gender differences 67

Table 4.12a : Variance test for age 68

Table 4.12b : Results of testing for age differences 68

Table 4.12c : Average test results for age 68

Table 4.13a : Test of variance in educational attainment 69

Table 4.13b : Results of testing for differences in educational attainment 68

Table 4.13c : Average test results on education level 70

Table 4.14 : Statistics of values ​​of synthetic variables 70

Table 4.15 : Statistics of values ​​of observed variables measuring satisfaction 71

Table 4.16 : Statistics of values ​​of observed and measured variables

online customer service quality 72

Table 4.17 Statistics of values ​​of observed variables

online information system quality 73

Table 4.18 : Statistics of values ​​of observed variables

banking product and service quality 76

Table 4.19 : Statistics of values ​​of observed variables

Overall Internet banking service quality 77


LIST OF FIGURES, GRAPHS


Figure 1.1 : Research process 12

Figure 2.1 : Michel Rod's research model,

Nicholas J.Ashill and Jinyi Shao and Janet Carruthers, 2009 30



CHAPTER 1: OVERVIEW OF THE STUDY

1.1 Reasons for choosing the research topic

Today, the world is witnessing a profound transformation and acceleration as a result of the tremendous development of information technology, leading to the emergence of many new types of transactions in different sectors (Joseph et al., 2005). The banking industry is one of the first industries to adopt many electronic applications to improve efficiency and gain competitive advantage. With the widespread application of information technology in the field of communication, the financial and banking services industries provide systems and applications that maximize the existing uses of modern technology (Qaddomo, 2008). Therefore, it is necessary for banks to change the concept of traditional banking services to remote banking services because of the increasing demand for electronic banking services by customers and the increasing competition among banks (Joseph et al., 2005). In addition, banks can also reduce costs, improve efficiency and attract more customers by applying modern technology in their operations.

In the service industry in general and the banking industry in particular, the Internet has been explored and exploited as a means to improve service delivery (Jun et al., 2004). Banks are not only competing in traditional service activities but also expanding their scope of competition into electronic banking areas with internet banking services (Gozales et al., 2004). These banks are introducing internet banking as a guarantee to customers that they can always maintain competitive service quality in the future, in an effort to avoid losing customers of foreign branches (Jenkins, 2007). Internet banking helps banks build and maintain close relationships with their customers, reduce operating and fixed costs (Mols, 2000), and achieve higher financial efficiency (DeYoung et al., 2007).



According to assessment, Vietnam is a country with a young population of more than 90 million people, an increasing average income (in 2011 it was 1300 USD/person/year according to statistics of the Ministry of Industry and Trade), but in reality the proportion of people with bank accounts is still limited, accounting for about 20% of the country's population. Therefore, Vietnam is always considered a country with a potential market for commercial banks.

Vietnam, with a population of over 90 million people and 1/3 of the population using the internet, however, only 1% of the population uses e-Banking services (according to statistics from BIDV HO Product Development Department), so the market for BIDV eBanking services is still very potential. Most customers do not know about e-Banking services, do not understand the utilities and superior features that the service brings compared to traditional transaction channels. BIDV considers e-Banking services as one of the retail banking services that need to be focused on developing in the last 6 months of 2012 and the whole year of 2013.

In addition, according to O'Loughin C. and Coenders (2004), customer satisfaction becomes an important asset for businesses and organizations in their efforts to improve service quality, maintain loyalty, and enhance business competitiveness. Therefore, research on the factors that create Internet banking service quality and the relationship between them and customer satisfaction is becoming a worthy issue to study and will bring some specific applications in a positive direction for service activities at BIDV HCMC.

1.2 Introduction to BIDV HCMC Internet banking service

From June 1, 2012, the Bank for Investment and Development of Vietnam officially launched Internet banking and Mobile banking (IBMB) services for all BIDV customers.

1.2.1 Evaluation of the results of IBMB service implementation in June 2012 (according to the official dispatch on strengthening the implementation of products and services on Internet Banking & Mobile Banking channels):



To prepare for the expansion of the IBMB system to external customers, the Head Office has focused on completing the conditions for launching products and services, including: Systematizing and issuing documents guiding the implementation of products and services; Preparing documents and publications for sales and self-training at branches; Announcing promotional programs for customers on media channels and at branches ( Promotional program to welcome the launch of BIDV eBanking service ); Organizing direct training courses for key branches in developing IBMB products and services; Exchanging and updating information as well as difficulties and obstacles during the implementation process at branches.

During the implementation process, many branches have actively and proactively implemented: Issuing specific directive documents at the branch; Assigning focal staff to manage and monitor the implementation of IBMB services; Implementing the hanging of roll tapes, providing promotional materials to customers; Identifying target customers for product sales; Actively organizing the research of guidance documents, training materials on IBMB services...

However, there are also many branches that are not interested in implementing products and services for a number of subjective and objective reasons such as: Branches are not really interested in and organizing the implementation of IBMB services because they are focusing on other business goals; Staff have not yet mastered the operating process; Staff who were previously trained in IBMB have transferred to other jobs or are on leave; Some areas have low educational levels and customers are not familiar with high-tech products.

1.2.2 Evaluation of the potential and benefits of Internet Banking and Mobile Banking services in BIDV's operations

E-Banking service is one of the retail banking services that need to be developed in the last 6 months of 2013 in BIDV's development strategy. June 2012 is considered the month to launch the service. In the last 6 months of 2012 and 2013, the Head Office requests the Branches to



The branch focuses on marketing services to customers, accelerating the expansion of services, especially to individual customers. BIDV's plan by the end of 2013 is to have 300,000 individual customers and 1,000 corporate customers.

1.2.3 Comparison of BIDV's IBMB service and services of other banks in the market (according to a survey by BIDV HO's Retail Banking division)

During the process of testing the service, researching the market and proposing development policies, BIDV Headquarters has researched similar services of many banks in the market (about 76% of banks are providing this service). The comments after comparing and evaluating the service are as follows:

About the features

- BIDV eBanking service provides all basic features, meeting most of customers' needs when transacting with the Bank: Transfer money within and outside the system, periodic transfer, transfer money on future date, inquiry, bill payment, savings deposit, sending request... In addition, BIDV provides some other convenient features compared to other banks on the market such as: sending debt repayment request, loan disbursement, card issuance, mailbox to receive questions, complaints, placing payment orders...

- With a modern technology platform, BIDV eBanking ensures fast, automatic money transfers (compared to some banks that are applying semi-automatic technology, online transactions are still carried out through tellers), and safe (with OTP two-factor authentication security technology).

- Friendly, simple service interface, easy to use for many customers.

About fees and limits



- BIDV eBanking service transaction fees are guaranteed to be competitive with other banks and compared to transaction counters.

- Relatively high transaction limit and convenient for customers.


Thus, BIDV's E-Banking service ensures to meet customers' needs, is competitive in the market with attractive promotional programs.

Over the time of service implementation, it has been shown that many customers highly appreciate BIDV's IBMB service and they decide to make most of their transactions via IBMB channel instead of going to the counter and request BIDV to allow transactions via internet banking with high limits.

1.2.4 Benefits of implementing Internet Banking Mobile Banking services


The emergence of Electronic Banking Services with the advantage of applying information technology has brought many benefits and is a common development trend of banks in the coming time.

With the electronic banking channel, branches can increase their ability to serve customers while maintaining the current number of staff. Customer service will take place at a much lower cost than traditional distribution channels due to the reduction of labor costs, management costs as well as reducing other work and costs at the branch such as land survey rental costs, administrative costs, minimizing control work, post-control...

Electronic banking transaction channels aim to meet diverse customer needs, increase competitiveness, maintain and attract more potential customers.

The development of services through electronic banking channels helps overcome geographical limitations compared to distribution channels through branches and ATMs.

According to the survey results of research firm Booz, Allen & Hamilton (2000), the transaction costs of banks on distribution channels including internet banking compared to other distribution channels are as follows:

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