MINISTRYOFEDUCATION ANDTRAINING
THES T A T E BANKOFVIETNAM
HOCHIMINHUNIVERSITY OFBANKING
HUYNHTHILAMPHUONG
Factors influencing customer satisfaction with
theInternationalpaymentservice:ThecasestudyoftheJoint Stock
Commercial Bank for Investment
andDevelopmentofVietnam(BIDV),BinhDinhBranch
BACHELORTHESIS
MAJOR: BUSINESS
ADMINISTRATIONCODE:7340101
HOCHI MINH CITY,2022
MINISTRYOFEDUCATION ANDTRAINING
THESTATEBANKOFVIETNAM
HOCHIMINHUNIVERSITY OFBANKING
HUYNHTHILAMPHUONG
Factors influencing customer satisfaction with
theInternationalpaymentservice:ThecasestudyoftheJoint Stock
Commercial Bank for Investment
andDevelopmentofVietnam(BIDV),BinhDinhBranch
BACHELORTHESIS
MAJOR: BUSINESS
ADMINISTRATIONCODE:7340101
SUPERVISORPHAM
HUONGDIEN,Ph.D
HOCHIMINH CITY,2022
1
ABSTRACT
Customer satisfaction plays a pivotal role in driving the success and
growthof every business organization in the way that it helps generate repurchase
fromsatisfiedcustomers,formsstrongbrandloyaltyaswellasfacilitatesword-of-mouth
marketing.
In the context of gradual economy recovery after the 4th outbreak of Covid19
in
Vietnam,
there
is
huge
pressure
among
banks
to
increase
their
charter
capitaltoenhancefinancialcapacityandrevenuediversificationinnews e r v i c e s . Cust
omer satisfaction is crucial because in banking industry where products arehighly
homogeneous,
quality
of
service
is
primary
factor
that
influence
customer’schoiceofbank.
The thesis elaborates on “Factors influencing customer's satisfaction
withthe International payment service: The case study of the Joint Stock
CommercialBank for Investment and Development of Vietnam (BIDV), Binh
Dinh
Branch”withtheaimofidentifyingfactorsbehindcustomersatisfactionin asp
ecificareaof service - International payment at a leading Vietnamese bank - BIDV, assessinglevel of current
performance of BIDV Binh Dinh branch in each area of customersatisfaction
determinants and proposing recommendations for improvement. Thiswillin
turnsupportsthe bank’slong-termgrowthandbrandequity.
DECLARATIONOFAUTHENTICITY
I the undersigned declare that all material presented in this paper is my
ownworkorfullyandspecificallyacknowledged whereveradaptedfromothersources.
IunderstandthatifatanytimeitisshownthatIhavesignificantlymisrepresented
material
presented
here,
any
degree
or
credits
awarded
to
me
on
thebasicofthatmaterialmayberevoked.
I declared that all statements and information contained herein are
true,correctandaccurate tothe bestofmyknowledgeandbelief.
HoChiMinhCity, May2022
Name
HuynhThi LamPhuong
ACKNOWLEDGEMENT
First and foremost, the author would like to express the deepest gratitude
tothededicatedsupervisorDr.PhamHuongDienforhergreatguidanceandmeaningfula
dviceswithoutwhichthethesiswouldnotbecompleted.
Inaddition,throughouttheprocessofdoingresearch,theauthorhasreceivedaloto
fattentionandvaluablesupportfromteachers,friendsa n d relatives.Thus,theauthorwo
uldliketotakethisopportunitytosendd e e p gratitudeto:
- AlllecturersfromBusinessAdministrationDepartmentofBankingUniversit
y based in Ho Chi Minh city who have provided favorable conditions
fortheauthortohavetheopportunitytoenhanceknowledgeofb u s i n e s s administrati
on as well as banking industry and sharpen practical skills during thelastfouryears.
- All senior colleagues from the International payment service team
atBIDV Binh Dinh for their enthusiastic help with providing necessary data for
thethesis.
- Parents,relativesand friendsfortheirtechnicalandmentalsupport.
Due to limited time, knowledge and research experience, the article can
notavoidlimitations.Therefore,theauthorwouldliketoreceivecomments
fromteacherstobettercomplete herthesis nexttime.
HoChiMinhCity, May2022
Name
HuynhThi LamPhuong
TABLEOFCONTENTS
CHAPTER1.I N T R O D U C T I O N ......................................................................1
1.1.
Researchstatement........................................................................1
1.2.
Research ObjectivesandQuestions...............................................2
1.3.
Researchsubjectand scope............................................................3
1.4.
ResearchMethodology..................................................................3
1.5.
Researchsignificance.....................................................................3
1.6.
Structure ofthethesis.....................................................................4
Summary ofChapter 1...............................................................................4
CHAPTER2.L I T E R A T U R E REVIEW.............................................................6
2.1.
ConceptandTheory........................................................................6
2.1.1. Service.........................................................................................6
2.1.2. Servicequality..............................................................................7
2.1.3. BankingserviceandInternationalpayment service.........................8
2.1.4. Customer satisfaction.................................................................10
2.1.5. Ther e l a t i o n s h i p b e t w e e n s e r v i c e q u a l i t y a n d c u
s t o m e r satisfaction....................................................................................11
2.1.6. Customer satisfactionusinginternationalpaymentservices...........13
2.2.
Previouss t u d i e s o n f a c t o r s i n f l u e n c i n g c u s t o
m e r satisfaction..........................................................................................13
2.3.
Researchmodeland hypothesis....................................................15
2.3.1. Knowledgeableand experiencedconsultantteam..........................16
2.3.2. Tangibles...................................................................................16
2.3.3. Responsiveness..........................................................................16
2.3.4. Convenience..............................................................................17
2.3.5. Assurance..................................................................................17
2.3.6. Competitiveprice........................................................................17
Summary ofChapter 2.............................................................................20
CHAPTER3.R E S E A R C H METHODOLOGY................................................22
3.1.
Researchprocess..........................................................................22
3.2.
Research design...........................................................................23
3.2.1. Datacollection............................................................................23
3.2.2. Designingquestionnaire..............................................................23
3.3.
Dataanalysis.................................................................................26
Summary ofChapter 3.............................................................................26
CHAPTER4.D A T A ANDSITUATIONAL ANALYSIS.....................................28
4.1.
Bank
OverviewofBankForInvestmentandDevelopmento f Vietnam and
For
Investment
and
Development
of
Vietnam,
BinhDinh
branch
……………………………………………………………………28
4.1.1. BankForInvestmentandDevelopmentofVietnam........................28
4.1.2. Bankf o r I n v e s t m e n t a n d D e v e l o p m e n t o f V i e t n a m , B i n
h D i n h branch...........................................................................................29
4.1.3. Mainbusinessactivities................................................................30
4.1.4. Organization of apparatus at
BankF o r I n v e s t m e n t a n d Developmentof Vietnam,
BinhDinhbranch
31
4.2.
InternationalpaymentserviceatBankForInvestmentandDevelopme
ntofVietnam,Binh Dinh branch...............................................................32
4.2.1. InternationalpaymentservicesatBankForInvestmentandDevelopm
entof Vietnam, BinhDinhbranch.............................................................32
4.2.2. International
payment
operation
process
at
Bank
For
InvestmentandDevelopmentof Vietnam,BinhDinh branch......................35
4.3.
Performanceofinternationalpaymentdepartment,atBankForInv
estmentandDevelopmentofVietnam,BinhDinhbranchduring2017–2021
37
4.3.1. Marketdevelopment....................................................................37
4.3.2. Financialperformance.................................................................38
4.4.
SWOTanalysisofcustomerserviceoftheinternationalpayment
atBIDVBinhDinh branch........................................................................42
4.4.1. Strengths....................................................................................42
4.4.2. Weaknesses................................................................................42
4.4.3. Opportunities.............................................................................44
4.4.4. Threats.......................................................................................45
4.5.
Survey dataanalysis.....................................................................46
4.5.1. Customer satisfaction.................................................................47
4.5.2. Factorsinfluencingcustomersatisfaction......................................47
Summary ofChapter 4.............................................................................52
CHAPTER5.C O N C L U S I O N S ANDRECOMMENDATIONS.....................54
5.1.
Conclusions..................................................................................54
5.2.
Recommendations.......................................................................56
5.2.1. Price...........................................................................................56
5.2.2. Assurance..................................................................................58
5.2.3. Responsiveness..........................................................................59
5.2.4. Tangibles...................................................................................61
5.2.5. Knowledgeableconsultantteam...................................................62
5.2.6. Convenience..............................................................................63
5.3.
Researchlimitationandfutherstudy............................................64
REFERENCES......................................................................................................65
Appendix 1.............................................................................................................69
Appendix 2.............................................................................................................72
Appendix 3.............................................................................................................75
LISTOFABBREVIATIONS
Abbreviations
Fullmeaning
AI
Artificialintelligent
ATM
Automaticteller machine
CES
Customereffortscore
D/A
Documentaryagainstacceptance
D/P
Documentaryagainstpayment
FDI
Foreigndirectinvestment
GSI
Growthstrategiesinternational
ICC
Internationalchamberofcommerce
IPO
Initialpublicoffering
IT
Informationtechnology
L/C
Letterof credit
NPS
Netpromoterscore
T/T
Telegraphic transfer
SWIFT
UCP
SocietyforWordwideInterbank
FinancialTelecomunications
Uniformcustomand practicefor
documentarycredits
UPASL/C
Usancepayableatsightletterof credit
URC
Uniformrulesforcollection
VIP
Veryimportantperson
WTO
WordTrade Organization
LISTOFFIGURES
Nameoffigures
Page
2.1Factorsinfluencingcustomersatisfaction
14
2.2-Researchmodel
18
4.1OrganizationalchartofBIDVBinhDin
hbranch
30
LIST OF TABLES
Nameoftables
Page
36
4.1Numberofinternationalpaymentcustomers
atBIDV BinhDinhbranch
4.2-I m p o r t -
37
exportrevenueatBIDVBinhDinhbranch
4.3 -Number of international
38
paymenttransactionsatBIDVBinhDinhbranch
4.4 -Number of international
39
paymenttransactionsatBIDVBinhDinhbr
anch,bymethodofpayment
40
4.5Revenuefrominternationalpayments
ervices
4.6-Customergroup
45
4.7-Customersatisfactionresults
74
4.8-Tangiblessurveyresults
74
4.9-Responsivenesssurveyresults
75
4.10-Assurancesurveyresults
75
4.11-Convniencesurveyresults
75
4.12 - Price competitiveness
75
surveyresults
4.13-Knowledgeable consultant team
76
1
CHAPTER1.
1.1.
INTRODUCTION
Researchstatement
Customer satisfaction is critical to success and growth of every
businessorganizationinthewaythatitboostsrevenueviarepurchasefromsatisfiedcusto
mers,formsstrongbrandloyaltyasafundamentalspringboardfornewcustomer
acquisition and facilitates word-of-mouth marketing. Its widely observedthat
companies such as Amazon, Apple, Starbucks,…which consistently do theirbest
to meet and exceed customer expectations reap sustainable business growth.Sam
Walton - the legendary founder of the world’s biggest retail chain Walmartonce
emphasized
the
importance
of
customer
satisfaction
to
enabling
companies’competitiveness:“Thereisonlyoneboss.Thecustomer.Andhecanf i r e ev
erybody in the company from the chairman on down, simply by spending
hismoneysomewhereelse.”
In the context of lockdown removal and gradual economy recovery after
the4th
outbreak
of
Covid-19
in
Vietnam,
there
is
huge
pressure
among
banks
toincreaset h e i r c h a r t e r c a p i t a l t o e n h a n c e f i n a n c i a l c a p a c i t y . T o g
e t h e r w i t h t h i s , there is increasing need for revenue diversification, which is reflected in banks’shift from
deposit service as theirprimary traditional source of sales to otherservices
including
payment,
insurance,
securities
as
a
new
growth
driver.
Withinservicesector,customersatisfactionplaysacrucialrolebecauses a t i s f i e d cu
stomers are likely to stay loyal to their chosen banking services, to try
newserviceofferingsandtorecommendthebanktoothercustomers.
Due to aforementioned reasons, the author decided to write a thesis
on“Factors influencing customer's satisfaction with the International
paymentservice: The case study of the Joint Stock Commercial Bank for
Investmentand Development of Vietnam (BIDV), Binh Dinh Branch”with the
aim ofidentifying factors behind customer satisfaction in a specific area ofservice
-Internationalp a y m e n t a t a l e a d i n g V i e t n a m e s e b a n k BIDV,assessinglevelof
currentperformanceofBIDVBinhDinhbranchineachareaofcustomersatisfaction
determinants and proposing recommendations for improvement. Thiswillin
turnsupportsthe bank’slong-termgrowthandbrandequity.
1.2.
ResearchObjectivesandQuestions
The thesis aims to achieve the overall objective is to investigate the
currentsituationoftheinternationalpaymentservicesprovidedbyBIDVBinhD i n h bra
nchinodertorecommendnecessarysolutionstoimprovingthecustomersatisfaction.
First, Thesis provides a brief explanation of customer satisfaction andits common
measures, followed by the identification of key factors influencingcustomer
satisfaction. Then, present overall current process of customer service
ininternationalpaymentatBIDVBinhDinhbranch.Basedonthat,makeanassessment
of
performance
level
in
each
identified
customer
satisfaction
factor.
Asaresult,itpointsoutareasofimprovementincurrentcustomerinternationalpaymentserv
icepracticeatBIDVBinhDinhbranchandp r o p o s e recommendations
to
help
enhance level of customer satisfaction. Specifically, theauthoraimsat three
detailed objectives as followed:
To discuss the internal and external factors that influence the satisfaction
ofthecustomers.
To propose conceptual framework and some managerial implications
toBIDV Binh Dinh Branch to improve their services in oder to level up the
customersatisfaction.
Based on the above objectives, the current study is to answer the
followingresearchquestions:
Howi s t h e s i t u a t i o n o f t h e I n t e r n a t i o n a l p a y m e n t s e r v i c e a t B I D V B i
nh
Dinh?
What are the influencing factors of customer satisfaction on the
internationalpaymentservicesof BIDVBinhDinhbranch?
How does each factor influence customer satisfaction with the
InternaionalpaymentservicesatBIDVBinhDinhbranch?
WhatcanBIDVBinh Dinhdotoimprovetheircustomers’satisfaction?
1.3.
Researchsubject andscope
The
subject
of
research
is
the
customer
satisfaction
on
the
internationalpaymentservice
The scope of research is BIDV Binh Dinh branch in terms of geography
andfrom 2017-2021 in terms of time. In 2017 the services was launched for the
firsttime.Toservetheresearch,thecustomerswhohavebeenusingtheservices
willbesurveyed.
1.4.
ResearchMethodology
The research uses the secondary data with analysis and summarization
oftheories from trusted articles, reports and related studies. Also, questionaires
arebuilttosurveycustomers’opinions.
Almost all previous studies related to customer satisfaction in
internationalpayment service applied quantitative method as core method.
However, in thisthesis, due to the scope of research is BIDV Binh Dinh branch
where number ofinternational payment customers is quite limited (only 39
customers),
number
ofsamplesissmallandnotsizeableenoughtoapplyquantitativea p p r o a c h . Therefo
re,theauthordecidedtoapplyqualitativeapproachforthethesis.
1.5.
Researchsignificance
As majority of customers of international payment at BIDV Binh
Dinhbranch are B2B customers possessing high volume transaction, a huge
amount ofeffort should be devoted to customer satisfaction improvement in order
to retentthese customers as a key source of revenue for this activity. This research,
viaidentifyingfactorsthatdeterminecustomersatisfactionandproposerecommendatio
ns
for
service
enhancement
andloyaltyofthecompany.
contribute
to
the
customer
retention
1.6.
Structureofthethesis
Thethesisisdividedintofivechapters:
Chapter 1. Introduction: This chapter provides background information
ofther e a s o n s f o r c h o o s i n g t h e t o p i c , o b j e c t i v e s , s c o p e a n d m e t h o d s o f c
o n d u c t i n g theresearch.
Chapter 2. Literarture review: This chapter compares previous studies
onfactors influencing customer satisfaction as well as introduces the
Internationalpayment servicein general. Futhermore, the conceptual framework of
factors isbuiltbased onthesuitabilityinVietnamcontext.
Chapter 3. Research methodology: This chapter consists of the overview
oftheresearchprocess,researchdesignanddata analysis.
Chapter4.Dataandsituationalanalysis:Inthischapter,thereisthedevelopment
history of BIDV in general and BIDV Binh Dinh branch in particular,alongwiththemain
businessactivitiesofthisbranch.Moreover,theInternationalpayment operation process and performance of
this service are also depicted indetails. This chapter is aimed at analyze and
identify the current situation for eachfactor influencing the customer satisfaction
with
the
International
payment
servicesatBIDVBinhDinhbranchthroughsurveyresultsanddepartment’sinternaldocu
ments.
Chapter 5. Conclusions and recommendations: This chapter sums up
theoverallperspectiveandgivesrecommendationsassociatedwitheachfactortoimrprove
thelevelofcustomersatisfactionwiththeInternationalpaymentserviceatthe branch.
SummaryofChapter1
Int h e c o n t e x t o f i n c r e a s i n g c o m p e t i t i v e n e s s a n d r e l a t
i v e l y h i g h homogeneityofproductsinbankingindustry,thereisthecrucialneed
tocreate
andbuildoutstandingcustomerserviceasafundamentalwaytoincreasecustomer
retention,grow revenuevia cross-purchase and purchaseu p a s w e l l as fuel new
customer
acquisition
via
improved
brand
reputation.
Therefore,
theauthorwouldliketowritethethesisonfactorsthatdeterminecustomersatisfactionini
nternationalpaymentserviceatBIDVbank.
The thesis applies secondary data which is based on multiple
previousstudiesandresearch.Dataiscollectedandanalyzedfrom
surveyssenttocustomers at BIDV Binh Dinh branch during the period of 2017
to 2021. Thethesis aims to figure out the situation of the international payment
service
atBIDVBinhDinh,influencingfactorsofcustomersatisfactionontheinternational
payment services at the branch, salience of impact of each factoraswellas
recommendation for improvement.
CHAPTER2.
2.1.
LITERATUREREVIEW
ConceptandTheory
2.1.1. Service
According to Philip Kotler (1987), services are intangible products
andare not associated with ownership of anything. Since it is a product, the
serviceis still provided by one entity to another, the production of the service may
ormaynotbetiedtoaphysicalproduct.
Gronröos(1990)argued
thata
service
isone
or
aserieso f a c t i v i t i e s with more or less intangible nature in it and
manifests itself in the interactionsbetween the customer and the service staff
or
the
service
provider's
system.Servicesareprovidedintheformofsolutionstosolvecustomercertainproble
ms.
According to Bui Nguyen Hung (2004), "Service is a process
consistingof after-sales activities and front-end activities, where customers and
serviceproviders interact with each other. The purpose of this interaction is to
satisfythe needs and wants oft h e
customer
in
the
way
the
c u s t o m e r e x p e c t s , a s w e l l ascreates value forthecustomer.”
AccordingtoNguyenThuongThai(2006),thetheoryofservicemarketing
states
that
services
consist
of
four
basic
characteristics:
intangible,heterogeneous,inseparableandcannotbestored.
First, most services are considered intangible products. They cannot
bemeasured in quantity nor test for quality before purchase. Given reasons
relatedtointangibility,thecompanyfindsitverydifficulttounderstandh o w custom
ersperceivetheserviceandassesstheservicequality.
Second, services are heterogeneous, especially those with a high
contentof human labor. This is because the operation of the service often varies
fromserviceproviders,fromcustomers,andthequalityofserviceprovidedis
consistentlythesameorinotherwords,subjecttotheskilloflaborprovidingit.
Third,productionandconsumptionformanytypesofservicesareinseparable
. The quality of the service cannot be produced in a factory and thendelivered
tocustomers. For services with a high laborcontent,s e r v i c e q u a l i t y is
reflectedintheinteractionbetweencustomersandemployeesoftheserviceprovider.
Finally, because services are intangible, they cannot be stored, stored,
orshipped by both providersandcustomers. Service isa productthatis usedimmediately after its creation
and finished immediately, hence it is not possibletocheckthequalitybeforedelivery,onlypossible
toknowaftercustomer'sexperienceand evaluation.
Thus, from the above statements, it can be understood that in a
generalway service is a product of goods but immaterial, creating useful
values forindividualsororganizationsthroughthecapacityof serviceproviders.
2.1.2. Servicequality
Unliketangibleproducts,whichcanbemeasuredbyd u r a b i l i t y indicators
andthenumberofdefects(Crosby1979;Gavin1983),serviceisanintangible. Therefore, the assessment
of service quality often has no specificstandards and is generally defined in
different ways depending on the researchenvironment.
AccordingtoJosephM.Juran(2001),"Qualityofserviceisthesuitabilityofus
e,whichisassessedbytheuser".
The definition and method of quality assessment that researchers
oftenrefertointheirresearchisthegapbetweencustomer’sexpectationsandperceptions
afterusingtheservice(Parasuraman,ZeithamlandBerr,1985,1988).
In
addition,
the
concept
of
servicequality
is
theresult
of
customercomparison,createdbetweentheirexpectationsoftheserviceandtheirperc
eption of using that service (Lewis et al. Booms, 1983; Gronroon,
1984;Parasuramanetal.,1985,1988,1991).
2.1.3. Bankingservice andInternationalpayment service
Currently, there are many different views on banking services, in
theresearchcontentof the thesis,wecan mention someofthefollowingviews:
AccordingtoNguyenChiTrung(2006)"Bankingservicesareunderstooda s b a n
k i n g o p e r a t i o n s i n t e r m s o f c a p i t a l , c u r r e n c y , p a y m e n t . . . i n the way
that
banks
provide
activities
to
meet
customers
and
business’
needsincludingp r o f i t g e n e r a t i o n , d a i l y l i f e f u n c t i o n , h i g h v a l u e a
s s e t s t o r a g e . . . a s wellascollectthedifferenceininterestrates,exchangeratesor
c h a r g e s throughservices".
Meanwhile,a c c o r d i n g t o H a T h a c h ( 2 0 1 2 ) , " B a n k i n g s e r v i c e s i n
c l u d e allbankingoperationssuchascapitalmobilization,lending,payment,foreignexchange, etc. commercial
goods
these
services
are
supplied
to
the
economy”.AndNguyenThanhCongsaid:“Bankingservicesarealli n t e r m e d i
a r y activitiesi n c u r r e n c y , c r e d i t , p a y m e n t , f o r e i g n e x c h a n g e , e
t c . , o f a b a n k t o meettheneedsofcustomersandg e n e r a t e profit”.
From the above points of view, it can be seen that in Vietnam there
isstillnoofficialconceptofbankingservices,buttherearestillsomecommonalities.
Within the research scope of the thesis, we can understandbanking services
including
activities
related
to
money,
credit,
payment,
foreignexchanget h a t b a n k s p r o v i d e t o c u s t o m e r s . T h i s v i e w i s a l s o c o n s i
s t e n t w i t h thatoftheWorldTradeOrganization(WTO)andisappliedinmanydevelopedcountries.
International payments, also known as cross border payments or
globalpayments,a r e t r a n s a c t i o n s t h a t i n v o l v e m o r e t h a n j u s t b a n k
s.Theyconnect