The impact of service quality on customer satisfaction in electronic banking at Viet Nam prosperity bank Ho Chi Minh City: Bachelor thesis of Banking and Finance / Le Thi Yen Linh ; Nguyen Thi My Hanh supervisor

BANKING UNIVERSITY HO CHI MINH CITY

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LE THI YEN LINH

THE IMPACT OF SERVICE QUALITY ON CUSTOMER

SATISFACTION IN ELECTRONIC BANKING AT

VIET NAM PROSPERITY BANK HO CHI MINH CITY

GRADUATION THESIS

MAJOR: FINANCE – BANKING

CODE: 734021

HO CHI MINH CITY, JANUARY - 2021

THE STATE BANK OF VIET NAM MINISTRY OF EDUCATION & TRAINING

BANKING UNIVERSITY HO CHI MINH CITY

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LE THI YEN LINH

THE IMPACT OF SERVICE QUALITY ON CUSTOMER

SATISFACTION IN ELECTRONIC BANKING AT

VIET NAM PROSPERITY BANK HO CHI MINH CITY

GRADUATION THESIS

MAJOR: FINANCE – BANKING

CODE: 734021

SUPERVISOR

NGUYEN THI MY HANH, PhD

HO CHI MINH CITY, JANUARY - 2021

THE STATE BANK OF VIET NAM MINISTRY OF EDUCATION & TRAINING

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ABSTRACT

Information technology advancements have been rapidly implemented in the

banking industry to increase bank performance and productivity. "Electronic banking",

with the help of information technology, allows conducting retail transactions at a high

and continuous speed. Banks are racing to modernize their information systems, and

launch a series of new services such as "phone banking"; "Internet banking", automatic

money transfer and withdrawal ... make banking services popular and widely available.

Therefore, for a bank to get closer to customers, the bank itself must improve and apply

e-banking to its obvious products and services. To serve the demands of customers

promptly, regardless of time and space, banks must constantly be updating consumer

reviews and improve products and services in the best way. Since VPBank recognized

the value of e-banking for its services and clients, it introduced an electronic application

(VPBank Online) to link banks and consumers. Besides, the society and the demands of

customers will be higher, the bank should pay attention to how satisfied customers are

when using VPbank Online. The author made the decision to investigate “The impact of

service quality on customer satisfaction in electronic banking at Viet Nam Prosperity

Bank Ho Chi Minh City” to find out factors affecting customer satisfaction. In terms of

the quality of e-banking services offered by VPBank in Ho Chi Minh City, there is a

foundation for the bank to steadily increase operational quality and customer satisfaction.

The structure of the thesis is divided into five chapters: Chapter 1: Introduction;

Chapter 2: Literature review; Chapter 3: Research methodology; Chapter 4: Research

results; Chapter 5: Conclusions and recommedations.

The research utilizes qualitative and quantitative approaches to assess the variables

impacting e-banking satisfaction, focusing on a database of surveys of 385 consumers

using power banking services using the service level assessment model that provided by

Sakhaei, et al. (2014). According to Sakhaei, et al. (2014) described 6 factors: reliability,

efficiency, responsiveness, fulfillment, security/privacy, and website design as internet

banking service quality dimensions were identified and proposed indicators to measure

customer satisfaction with service quality customer surveys confirmed.

Construction survey: developed from an analytical framework with a 5-level

Likert scale to evaluate the impact of service quality on customer satisfaction in

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electronic banking at VPBank Ho Chi Minh City. (1) Strongly disagree, (2) Disagree, (3)

No idea, (4) Agree, (5) Strongly agree. Sample selection: Respondents are based on a

convenient, non-probabilistic method because this is an easy sampling method, which

means that clients who agree to be interviewed can be survey samples.

Methods of processing and analyzing data including descriptive statistics are used

for statistical purposes; Cronbach's Alpha's confidence coefficient method: to test the

reliability of the scale; Exploratory factor analysis (EFA): to determine observed

variables as well as test the scale based on the Extraction coefficient of the variables;

Multi- variable regression analysis: Evaluate the suitability of the model and explain the

effect of variables in practice. ANOVA analysis: The average bottle test of two separate

samples to compare the average outcomes of the variable age, gender, average monthly

salary, and time using personal Internet Banking service of VPBank customers.

According to the findings of the report, there are six factors shaping individual

customer satisfaction with the current level of e-banking services at VPBank, and the

degree of impact of those factors varies. The scale in the building model illustrates 66.6

percent of customer satisfaction by using e-banking services. There are six factors: EF

(Efficiency), RE (Reliability), RES (Responsiveness), PR (Privacy/Security), WD

(Website Design), and FU (Fulfillment). In which the following regression equation is

used to measure the strength of the factors' influence:

CS = 0.427RE+0.354EF+0.208RES+0.202PR+0.089FU+0.080WD

Reliability has the strongest influence on satisfaction, followed by Efficiency,

Responsiveness, Privacy/Security. The element that has the least effect on satisfaction are

Fulfillment and Website Design. This result would serve as the framework for the author

to provide specific and realistic ways to boost customer satisfaction by using VPBank

HCMC's e-banking services.

From the above research results, the author also gives some suggestions for

administrators in completing policies to improve the quality of e-banking services at

VPBank the coming time.

(1) Recommendations for the element of Reliability

The number of customers signing up for VPBank's e-banking services is growing

everyday. New electronic banking products must still be checked, as there may be many

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errors during operation. VPBank must closely scrutinize the commodity before releasing

it to consumers. Information management teams and counter tellers can organize and

answer requests efficiently and easily.

(2) Recommendations for the element of Efficiency

VPBank should invest in its technological resources to help address the demands

of its customers. VPBank must adopt a long-term plan for investment and new

technology growth in order to achieve high efficiency and cost savings.

(3) Recommendations for the element of Responsiveness

VPBank should train and enhance bank employees' knowledge of psychology so

that services are continuously managed during the e-banking service delivery process.

(4) Recommendations for the element of Privacy/Security

VPBank must audit and refresh the IT system on a regular basis in order to find

security vulnerabilities. Customers should be informed as soon as possible, and

functional officials should still put their customers' needs first. VP bank should

strengthen its implementation of international security requirements such as ISO 27001

and PCI DSS. It is important to direct and encourage consumers to increase awareness

while using online services.

(5) Recommendations for the element of Fulfillment

VPBank need enhance the usability of mobile banking services so that they are

easy, safe, and fast, with reasonable transaction costs. VPBank should take more care to

upgrade network infrastructure, update and expand transmission lines. The management

department must create and perfect a legal document structure to solely administer

internet operations and facilities.

(6) Recommendations for the element of Website Design

Attracting consumers is still a high priority for banks in e-banking services since it

is the basis for increasing earnings. A tidy, elegant, and simple-to-use can put consumers

at ease and make their choices simpler. The bank's website interface should be built in a

stunning manner, gaining interest so that customers do not feel bored when surfing this

website. Services should be organized scientifically and easily, and each usage should be

simple and easy to understand.

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The research aided the VPBank Ho Chi Minh City in determining factors

influencing customer loyalty by using e-banking services. However, the analysis has

certain drawbacks, which are as follows:

To begin with, the analysis was only performed for individual customers who used

e-banking services at VPBank Ho Chi Minh City, so generalizability is restricted.

Secondly, since the analysis only reports on individual consumers using their own

satisfaction appraisal requirements, the test findings cannot be applicable to all customers

at the same time. Since business customers have different performance requirements than

andividual customers, this analysis cannot be used by corporate clients.

Thirdly, since the analysis was performed using a convenient approach (one of the

non-probability sampling methods), the representativeness, uniformity, and

generalization are poor.

Fourthly, the research did not investigate several groups of variables such as

gender, age, salary, and so on to decide if the above factors influence consumer loyalty

while using the service.

Keywords: Service quality, e-banking, Service quality model by Sakhaei, et al.

(2014), customer satisfaction, VPBank in Ho Chi Minh City.

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STATEMENT OF AUTHORSHIP

I hereby promise that the study is my original work, not replicated by others, with

the instructor's help is Ms. Nguyen Thi My Hanh, and that it was produced by my own

study, reading, translation, synthesis, and implementation. Theoretical material in the

study I drew from a variety of sources, which are mentioned in the references. The

records, software program, and findings in the thesis are accurate and have not been

published elsewhere.

HCMC, April 8th 2021

Author’s signature

Le Thi Yen Linh