Improving e banking service quality at VIB HAI BA TRUNG BRANCH

ACKNOWLEDGEMENTS
It is an honor to thank a large number of individuals who contributed
directly or indirectly their encouragement and assistance in the preparation and
completion of this research.
First and foremost, I express my appreciation to my university supervisor,
Ass Prof Dr Bui Duc Tho, National Economics University. This research would
not have been possible without his enthusiastic guidance and invaluable advice.
I am so thankful to my internship guide, Mr Nguyen Xuan Thanh and
number of staff at VIB - Hai Ba Trung Branch for their support and co-operation.
The customers of the Transaction who provided me valuable data for
helping me out the survey.
Finally, I sincerely thank to Center for Advanced Educational Programs
where has raised my passion in field of Banking and Finance, giving me an
opportunity to practice my knowledge at real workplace.

i


STATUTORY DECLARATION
I herewith formally declare that I myself have written the submitted
Barchelor’s Thesis independently. I did not use any outside support except for
the quoted literature an other sources mentioned at the end of this paper.

Hanoi, 03/06/ 2016
Signature

ii


TABLE OF CONTENTS

ABBREVIATION..............................................................................................................V
LIST OF FIGURES...........................................................................................................VI
LIST OF TABLE.............................................................................................................VIII
CHAPTER I: INTRODUCTION...........................................................................................1
1.1.Rationale ..........................................................................................................................................................1
1.2.Research objective ........................................................................................................................................1
1.3 Research methodology ................................................................................................................................2
1.4 Research structure.........................................................................................................................................2
.....................................................................................................................................................................................2

CHAPTER II: THEORETICAL FRAMEWORK OF E-BANKING SERVICE QUALITY IN
COMMERCIAL BANKS....................................................................................................3
2.1 Overview of E-Banking Service .................................................................................................................3
2.1.1 Definition of E-commerce and E-Banking service ........................................................................................... 3
2.1.2 Importance of E-banking service ............................................................................................................................ 4
2.1.3 Evolution of E-banking services............................................................................................................................... 5
2.1.4 Three levels of E-banking service ............................................................................................................................ 5
2.1.5 Categories of E-banking service............................................................................................................................... 6
2.1.6 Delivery channels of E-Banking service................................................................................................................ 7
2.1.7 Risks of e-banking .......................................................................................................................................................... 8
2.2 E-Banking service quality.........................................................................................................................10
2.2.1 Definition of E-Banking service quality.............................................................................................................. 10
2.2.2 Criteria to measure E-Banking service quality .............................................................................................. 11
2.2.3 Conditions to ensure E-Banking service quality of commercial banks.................................................13
2.2.3.1 Subjective condition.......................................................................................................................................... 13
2.2.3.2. Objective conditions ........................................................................................................................................ 14

CHAPTER III: ANALYSIS OF E-BANKING SERVICE QUALITY AT VIB BANK HAI BA TRUNG
BRANCH.......................................................................................................................14
3.1 Overview of VIB............................................................................................................................................14

3.2 Overview of VIB Hai Ba Trung Branch..................................................................................................15
3.2.2 Business result of VIB Hai Ba Trung Branch from 2010 to 2014............................................................16
3.2.2.1 Financial Result................................................................................................................................................... 16

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3.2.2.2 Product and service development............................................................................................................... 23
3.3 Current situation of E-banking service quality at VIB Hai Ba Trung Branch..........................25
3.3.1. Overview of the survey.............................................................................................................................................. 25
......................................................................................................................................................................................................... 29
3.3.2 Analyzing criteria influencing E-Banking service quality at VIB Hai Ba Trung Branch...............30
3.3.2.1Customer satisfaction........................................................................................................................................ 31
3.3.3 Comparisons of E-banking services among commercial banks ..............................................................33

CHAPTER IV: RECOMMENDATIONS FOR IMPROVING E-BANKING SERVICE QUALITY AT
VIB HAI BA TRUNG BRANCH........................................................................................38
4.1 Recommendations to VIB Hai Ba Trung Branch ..............................................................................38
4.2 Recommendations to VIB Head Office .................................................................................................39
4.3 Recommendations to State Bank of Vietnam.....................................................................................41

CONCLUSION...............................................................................................................43

iv


ABBREVIATION
VIB: Vietnam International Commercial Joint Stock Bank

v

LIST OF FIGURES
ABBREVIATION..............................................................................................................V
LIST OF FIGURES...........................................................................................................VI
LIST OF TABLE.............................................................................................................VIII
CHAPTER I: INTRODUCTION...........................................................................................1
1.1.Rationale ..........................................................................................................................................................1
1.2.Research objective ........................................................................................................................................1
1.3 Research methodology ................................................................................................................................2
1.4 Research structure.........................................................................................................................................2
.....................................................................................................................................................................................2

CHAPTER II: THEORETICAL FRAMEWORK OF E-BANKING SERVICE QUALITY IN
COMMERCIAL BANKS....................................................................................................3
2.1 Overview of E-Banking Service .................................................................................................................3
2.1.1 Definition of E-commerce and E-Banking service ........................................................................................... 3
2.1.2 Importance of E-banking service ............................................................................................................................ 4
2.1.3 Evolution of E-banking services............................................................................................................................... 5
2.1.4 Three levels of E-banking service ............................................................................................................................ 5
2.1.5 Categories of E-banking service............................................................................................................................... 6
2.1.6 Delivery channels of E-Banking service................................................................................................................ 7
2.1.7 Risks of e-banking .......................................................................................................................................................... 8
2.2 E-Banking service quality.........................................................................................................................10
2.2.1 Definition of E-Banking service quality.............................................................................................................. 10
2.2.2 Criteria to measure E-Banking service quality .............................................................................................. 11
2.2.3 Conditions to ensure E-Banking service quality of commercial banks.................................................13
2.2.3.1 Subjective condition.......................................................................................................................................... 13
2.2.3.2. Objective conditions ........................................................................................................................................ 14

CHAPTER III: ANALYSIS OF E-BANKING SERVICE QUALITY AT VIB BANK HAI BA TRUNG
BRANCH.......................................................................................................................14
3.1 Overview of VIB............................................................................................................................................14
3.2 Overview of VIB Hai Ba Trung Branch..................................................................................................15
3.2.2 Business result of VIB Hai Ba Trung Branch from 2010 to 2014............................................................16
3.2.2.1 Financial Result................................................................................................................................................... 16
a, Growth in total assets........................................................................................................................................... 16

vi


b, Growth in profit before tax................................................................................................................................. 17
c, Growth in capital mobilization......................................................................................................................... 18
d, Revenue and Profit from E-Banking............................................................................................................... 20
3.2.2.2 Product and service development............................................................................................................... 23
3.3 Current situation of E-banking service quality at VIB Hai Ba Trung Branch..........................25
3.3.1. Overview of the survey.............................................................................................................................................. 25
......................................................................................................................................................................................................... 29
3.3.2 Analyzing criteria influencing E-Banking service quality at VIB Hai Ba Trung Branch...............30
3.3.2.1Customer satisfaction........................................................................................................................................ 31
3.3.3 Comparisons of E-banking services among commercial banks ..............................................................33

CHAPTER IV: RECOMMENDATIONS FOR IMPROVING E-BANKING SERVICE QUALITY AT
VIB HAI BA TRUNG BRANCH........................................................................................38
4.1 Recommendations to VIB Hai Ba Trung Branch ..............................................................................38
4.2 Recommendations to VIB Head Office .................................................................................................39
4.3 Recommendations to State Bank of Vietnam.....................................................................................41

CONCLUSION...............................................................................................................43

vii


LIST OF TABLE
ABBREVIATION..............................................................................................................V
LIST OF FIGURES...........................................................................................................VI
LIST OF TABLE.............................................................................................................VIII
CHAPTER I: INTRODUCTION...........................................................................................1
1.1.Rationale ..........................................................................................................................................................1
1.2.Research objective ........................................................................................................................................1
1.3 Research methodology ................................................................................................................................2
1.4 Research structure.........................................................................................................................................2
.....................................................................................................................................................................................2

CHAPTER II: THEORETICAL FRAMEWORK OF E-BANKING SERVICE QUALITY IN
COMMERCIAL BANKS....................................................................................................3
2.1 Overview of E-Banking Service .................................................................................................................3
2.1.1 Definition of E-commerce and E-Banking service ........................................................................................... 3
2.1.2 Importance of E-banking service ............................................................................................................................ 4
2.1.3 Evolution of E-banking services............................................................................................................................... 5
2.1.4 Three levels of E-banking service ............................................................................................................................ 5
2.1.5 Categories of E-banking service............................................................................................................................... 6
2.1.6 Delivery channels of E-Banking service................................................................................................................ 7
2.1.7 Risks of e-banking .......................................................................................................................................................... 8
2.2 E-Banking service quality.........................................................................................................................10
2.2.1 Definition of E-Banking service quality.............................................................................................................. 10
2.2.2 Criteria to measure E-Banking service quality .............................................................................................. 11
2.2.3 Conditions to ensure E-Banking service quality of commercial banks.................................................13
2.2.3.1 Subjective condition.......................................................................................................................................... 13
2.2.3.2. Objective conditions ........................................................................................................................................ 14

CHAPTER III: ANALYSIS OF E-BANKING SERVICE QUALITY AT VIB BANK HAI BA TRUNG
BRANCH.......................................................................................................................14
3.1 Overview of VIB............................................................................................................................................14
3.2 Overview of VIB Hai Ba Trung Branch..................................................................................................15
3.2.2 Business result of VIB Hai Ba Trung Branch from 2010 to 2014............................................................16
3.2.2.1 Financial Result................................................................................................................................................... 16
a, Growth in total assets........................................................................................................................................... 16

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b, Growth in profit before tax................................................................................................................................. 17
c, Growth in capital mobilization......................................................................................................................... 18
d, Revenue and Profit from E-Banking............................................................................................................... 20
3.2.2.2 Product and service development............................................................................................................... 23
3.3 Current situation of E-banking service quality at VIB Hai Ba Trung Branch..........................25
3.3.1. Overview of the survey.............................................................................................................................................. 25
......................................................................................................................................................................................................... 29
3.3.2 Analyzing criteria influencing E-Banking service quality at VIB Hai Ba Trung Branch...............30
3.3.2.1Customer satisfaction........................................................................................................................................ 31
3.3.3 Comparisons of E-banking services among commercial banks ..............................................................33

CHAPTER IV: RECOMMENDATIONS FOR IMPROVING E-BANKING SERVICE QUALITY AT
VIB HAI BA TRUNG BRANCH........................................................................................38
4.1 Recommendations to VIB Hai Ba Trung Branch ..............................................................................38
4.2 Recommendations to VIB Head Office .................................................................................................39
4.3 Recommendations to State Bank of Vietnam.....................................................................................41

CONCLUSION...............................................................................................................43

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CHAPTER I: INTRODUCTION
1.1. Rationale
With the development of science and innovation, data innovation division
has especially impacted all parts of life that change recognition and creation
strategies for different fields of business, different monetary areas , including the
managing an account segment . The idea of electronic saving money , web
exchanging , online installments , have begun to wind up the pattern of
advancement and intensity of business banks in Vietnam . Creating bank benefits
in light of data innovation – Electronic Banking - is the inescapable pattern in the
time of monetary coordination. Today, web saving money has gotten a
development the world and Vietnam keeping money area is not a special case.
Along these lines, to survive and develop, Vietnam International
Commercial Joint Stock Bank (VIB) takes a stab at satisfying their conventional
business, as well as spotlights on creating E-banking an account application to
meet with market prerequisites and upgrade its upper hands among other
business banks.
Notwithstanding, the bank still demonstrates that there are troubles and
restrictions. Discovering measure to enhance its administration capability is by
all accounts a pressing usage. Because of above reasons, I chose to complete a
study looking into the issue of VIB Hai Ba Trung Branch-one of driving
branches in Vietnam in the zone of data innovation application and particularly
in the improvement of e-managing an account benefits with topic “ Improving
E-banking service quality at VIB HAI BA TRUNG BRANCH” for my
graduation thesis.
1.2. Research objective
Banks have invested heavily in introducing and making Internet Banking

service, with the objective of improving customer satisfaction and loyalty,
ultimately the contributing positively income and profits. This study’s purpose
was to explore customer’s perceptions on key electronic service dimensions or
factors of Internet Banking service quality. The survey was done with a primary
objective of having an insight into Internet banking service quality. The

1


secondary objective was to determine if there were any differences in perceptions
on Internet banking service quality based on gender, age or primary banking
institution.
1.3 Research methodology
Two types of data were used: the primary and the secondary data. The
primary data was derived from the answers respondents gave in the selfadministered questionnaire prepared by the researcher. The secondary data, on
the other hand, was derived from published document of VIB’s annual report and
VIB Hai Ba Trung Branch’s data
Furthermore, there were 100 members for the questionnaire overview. In
the wake of gathering the polls, the reactions were tallied, figured, broke down,
and recorded.
One the other hand, for the individual meetings, a large portion of the
interviewees were given time as per their accommodation. Decisions were given
for the interviewees who will answer the inquiries addresses, through telephone,
email, online discussion, visit or individual meeting.
1.4 Research structure
The thesis includes Introduction, Conclusion and 3 main chapters
• Theoretical framework of E-Banking service quality in commercial banks.
• Analysis of E-Banking service quality at VIB Hai Ba Trung Branch.
• Solutions and recommendations to improve E-Banking service quality at
VIB Hai Ba Trung Branch.

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CHAPTER II: THEORETICAL FRAMEWORK OF
E-BANKING SERVICE QUALITY IN
COMMERCIAL BANKS
2.1 Overview of E-Banking Service
2.1.1 Definition of E-commerce and E-Banking service
Definition of E-commerce
Electronic commerce, usually known as E-commerce or eCommerce, is a
type of industry where the purchasing and selling of items or services is
conducted over electronic systems, for example, the Internet and other computer
networks. Electronic commerce draws on technologies, for example, mobile
commerce, electronic finances transfer, store network management, Internet
marketing, online exchange processing, electronic information interchange
(EDI), inventory management systems, and automated information collection
systems. Modern electronic commerce normally uses the World Wide Web in
any event at one point in the exchange's life-cycle, in spite of the fact that it
might encompass a wider range of technologies, for example, e-mail, mobile
devices, online networking, and telephones too.
Electronic commerce is generally considered to be the sales aspect of ebusiness. It additionally comprises of the exchange of information to facilitate
the financing and payment aspects of business exchanges. This is an effective
and efficient method for imparting inside of an association and one of the best
and useful methods for leading business.
Definition of E-banking
Electronic banking, otherwise called e-banking, virtual banking and online
banking, is a service that permits customers to access their bank data, conduct
monetary exchanges, make deposits, withdrawals and pay charges through the
Internet without having to physically visit their bank.

3


Currently, some people still heterogeneous internet banking services with
electronic banking (e-banking). Truth be told, e-banking services have wider
meanings compared with internet banking. While internet banking is merely
giving services through internet banking, e-banking service covers the
procurement of services through some other means, for example, fax, telephone ,
e-mail .Therefore, internet banking is a division of e-banking, and with the
inexpensive exchange price and quick speed, internet banking is considered as
the spirit of e-banking.
2.1.2 Importance of E-banking service
Given the way of the exchange is totally done through electronics and
telecommunications networks, the appearance of electronic banking has brought
numerous down to earth advantages for both banks and clients, and society.
For banks, the conceived of electronic banking services opens another
channel improvement for banking services. Through the procurement of
electronic banking service, banks can without much of a stretch extend the extent
of their exercises, achieve clients at whatever time, anyplace without any
breaking points on space and time. Through the electronic media and telecom
arranges, banks can direct limited time exercises, acquaintance of items with
clients all the more rapidly and advantageously. Moreover, the bank could cut
too the related costs, for example, office costs, staff costs and different costs of
papers, treasury administration framework and so on..
For clients, the real electronic banking administrations is anything but
difficult to utilize, viable and can help clients spare time and cost. The stride
exchange through electronic banking administrations are now pre-customized, so
the client just needs to agree to the required steps, the exchange will be done
accurately. Utilizing electronic banking benefits, with the electronic media

organizing telecom clients can perform their exchanges at whatever time and
anyplace. Also, the attributes of the exchange totally on the web, the bank can
connect together into the card relationship to encourage clients to make interbank
exchanges of his.

4


For society, the appearance of electronic banking services has made another
method of operation, adding to the monetary and business exercises,
administrations and tourism improvement, encouraging open broad exchange and
financial collaboration with the locale and the world.
2.1.3 Evolution of E-banking services
The idea of electronic banking systems started when the first automated
teller machines (ATMs) were introduced in the 1970s. ATM machines permitted
stores to be produced using remote areas ;an accommodation for clients who
generally would have needed to withdrawal money from their bank. As indicated
by D. K. Murthy and K. R. Venugopal in the book ; the focal points offered by
ATM machines immediately overflowed to envelop different territories of bank
administrations, modernizing manual systems for more noteworthy effectiveness
and time funds. The idea driving ATM machines offered ascend to shrewd cards,
intranet and Internet banking, EFT (electronic funds transfer ) and POS (point of
sale) systems, telephone banking and other electronic services.
2.1.4 Three levels of E-banking service
E-banking services are categorized into three singular levels:
At the elementary level, e-banking is very little different to the exchange on
phone or dealing with an automated teller machine. By utilizing the phone's
keypad, customers can know the status of your record or can perform simple
exchanges like transferring money from a bank account to the current record of
the same subject record.

At the second level, the Internet play a more active role. Nowadays each
bank's home page on the Internet is viewed as an exchange window.
Notwithstanding checking account, customers can likewise use a variety of
online services, for example, shopping loan, purchasing an insurance policy and
even investing in securities.
At the third level, banks play a very important role in supporting for
electronic commerce among businesses. All exchanges, for example, money
transfers, letters of credit opened for sales contracts between importers and
exporters, opening the letter of guarantee, all should be possibly online.

5


Customers don't have to go to the boycott yet at the same time can perform
exchanges through a bank program installed in the customer's office. This
program permits access to the bank's server 24/24 hours and seven days a week.
2.1.5 Categories of E-banking service.
Internet-banking service provides automated data items and banking
services by means of the Internet. This is a wide circulation items and banking
services to customers anywhere and whenever. With a computer connected to
the Internet, customers can visit the bank's website for the data provided,
complete guide to items and services. Furthermore, with access code and secret
key issued, customers can view account balances, print statements . Besides,
Internet-banking is likewise an effective feedback channel between customers
and the Bank.
The Internet-banking provides following services:
- View account balances at present
- View exchange and transaction history
- View information exchange, interest rate savings
- Payment of bills for electricity, water, telephone.

- Customers can send all questions and comments on items, products,
services
Home banking The capacity to lead a wide range of budgetary exchanges
that require interaction with the bank while a person is in an inaccessible area is
sometimes called home banking. Such capabilities may likewise be referred to as
electronic or online banking. The types of exchanges that can be conducted in
this manner include applying for new bank services, checking balances on
existing accounts, and transferring money between a person's account and to the
account of others. Benefits of home banking include convenience, speed, and
investment funds.
Telephone banking is a service provided by a financial institution , that
enables customers of the budgetary foundation to perform monetary exchanges
over the telephone, without the need to visit a bank office or automated teller
machine. Telephone banking times can be longer than branch opening times, and
some money related establishments offer the service on a 24 hour premise. From
the bank's perspective, telephone banking reduces the cost of taking care of

6


exchanges by reducing the need for customers to visit a bank office for nonmoney withdrawal and deposit exchanges.
Mobile banking (also known as M-Banking, mbanking) is a term used for
performing balance checks, account exchanges, payments, credit applications and
other banking exchanges through a mobile device, for example, a mobile phone
or Personal Digital Assistant (PDA).
SMS banking is a type of mobile banking, a technology-enabled service
offering from banks to its customers, permitting them to operate selected banking
services over their mobile phones utilizing SMS messaging.
2.1.6 Delivery channels of E-Banking service
Credit cards: plastic cards issued by a financial establishment that permits

its user to acquire pre-approved supports at the point of sale in order to complete
a purchase. Credit cards have a most extreme sum or credit restrict the user can
get amid a given period. As far as possible is pre-determined by the card issuer
based on the cardholder's credit rating and credit history. Visa and MasterCard
are the two most normal types of credit cards.
Debit cards: plastic cards used in real money exchanges, yet which is not a
credit card. In a debit card exchange, the measure of a purchase is pulled back
from the available balance in the cardholder's account. On the off chance that the
available finances are insufficient, the exchange is not completed. Additionally
called asset card (in the US), or payment card (in the UK).
ATM Cards: A plastic card used to pull back money from a banking
establishment's automatic teller machine (ATM). Sometimes this card may
likewise be used as a debit card, yet not all ATM cards have this capacity.
Automated Teller Machines (ATMs machines automated teller to
customers, performs customer identification through ATM card (debit card,
credit card) or compatible devices, and helps customers check accounts, money
withdrawals, transfers, payments for merchandise and services.
Electronic Funds Transfer at Point of Sale (EFTPoS): Onlinetransaction taking care of system regularly used in retail trade. The buyer swipes
his or her bank or credit card through a magnetic-stripe reader and enters a
personal identification number (PIN). The sum authorized by the buyer is
electronically transferred from his or her account to that of the retailer.

7


2.1.7 Risks of e-banking
• Operational risk is defined as the danger of misfortune stemming from
deficiencies in system reliability or integrity. The most widely recognized danger
of e-banking, operational danger can be demonstrated in three manes.
• Security risk comprises of internal and external frauds. Internal frauds

can be intentional, for instance, misappropriation of assets, duty evasion, stealing
of client's account, and accidental, for example, employee's negligence. External
fakes include yet not limited to hacker's assault, theft of data or money
counterfeit, all of which can greatly damage bank operations.
• Traditional risks are in this case of secondary importance as they don't
cause the same damage as essential danger. Conventional dangers are
characterized into four categories as takes after
• Credit risk refers to the danger that a borrower won't settle a commitment
for full value, either when due or whenever thereafter . E-banking credit danger
is like conventional credit hazard in the sense that it is managed and controlled
by the same methods. The differences are in e-banking, payment is electronic and
client applies for credit by means of remote banking procedures and they come
up short make required payment.
• Liquidity risk is the danger emerging from a bank's failure to meet its
commitments when due without bringing about unacceptable losses despite the
bank may ultimately be able to meet its commitments. The significant problem
banks have in this case is to ensure adequate asset to cover redemption and
settlement demands at a specific time as in conventional banking. (Procedure is
complicated by including e-banking into accounting for need liquidity.)
• Strategic risk refers danger to earnings and capital, either current or
prospective,

emerging

from

adverse

business

decisions

or

improper

implementation of business decisions. Competition and peer pressures cause
bank to introduce or expand Internet banking without an adequate money saving
advantage examination and without completely understanding the strategic and
technical aspects of Internet banking. As a result, the association structure and
resources might not have adequate aptitudes to manage Internet banking
• Transaction risk is the current and prospective danger to earnings and
capital emerging from extortion, error, negligence and the powerlessness to keep

8


up expected service levels. Transaction hazard appears as Internet banking items
require sophisticated internal controls, information integrity, nonrepudiation of
exchanges and steady accessibility. As most Internet banking stages are based on
new stages which use complex interfaces to connect with legacy systems,
exchange errors danger are altogether increased. Besides, the involvement of
outsider providers additionally increases exchange dangers, since bank does not
have full control over them. Without seamless process and system connections
between the bank and the outsider, there is a higher danger of exchange errors
• .Compliance risk refers to the danger to earnings or capital emerging
from infringement of, or nonconformance with, laws, regulations and ethical
measures. Compliance risk may lead to diminished reputation, monetary losses
and reduced business opportunities. Banks need understand and carefully
interpret existing laws as they apply to Internet banking and ensure consistency

with other channels, for example, branch banking. Compliance danger is further
amplified when the customer, the bank and the exchange are in multiple
countries as a result of clashing laws, charge procedures and reporting
requirements crosswise over different wards. The need to keep customer
information private and seek customers' consent before sharing the information
likewise adds to compliance hazard. Customers are very concerned about the
protection of their information and banks need to be seen as reliable gatekeepers
of such information. At long last, the need to consummate exchanges
immediately (straight-through processing) may lead to banks relaxing
conventional controls, which expect to reduce compliance hazard.
• Reputation risk refers to hazard to earnings and capital emerging from
negative popular opinion. A bank's reputation can be damaged if its Internet
banking services are shoddy (e.g., limited accessibility, carriage software or poor
response). Customers are less sympathetic of any problems and demand even
higher performance from the Internet channel. Hypertext connections could
interface a bank's site to other sites and may reflect a verifiable endorsement of
the other sites.
• Information security risk is the danger to earnings and capital emerging
out of remiss data security processes, in this way exposing the establishment to
pernicious hacker or insider assaults, viruses, denial-of-service assaults,

9


information theft, information destruction and extortion. The fast change of
technology and the way that the Internet channel is accessible universally make
this danger especially basic.
2.2 E-Banking service quality
2.2.1 Definition of E-Banking service quality
Prior reports acknowledged numerous dimensions as criteria of e-service

quality. The conceptualization and growth of e-SQ measurements is desired
because it will aid to control and advance the functioning of online companies
(Yang et al., 2003). Most studies of the concept and measurement of electronic
service (e-SQ) have shown the dimensions of the form from either the customer's
perspective or the provider's perspective (Heim and Field, 2007). An evaluation
of prevailing literature on eservice quality shows more different dimensions in
eservice quality that are useful for different research circumstances (Madu and
Madu 2002, Li and Suomi, 2009; Santos 2003; Field et al. 2004; Ho and Lin,
2010: Kim and Stoel 2004; Yang and Fang 2004; Long and McMellon 2004;
Gounaris et al. 2005; Lee and Lin 2005; Kim et al. 2006)
Cox and Dale (2001) set up 6 dimensions of online retailing service quality
with the correlation of the customary dimensions of service quality, and the six
dimensions are website appearance, correspondence, accessibility, credibility,
understanding and accessibility (Cox and Dale 2001).Yoo and Donthu's (2001)
SITEQUAL believes the e-service quality includes four dimensions, for example,
the accessibility, taking care of speed of the memorizer, the creative design and
the response rate of interaction. Lociacono et al. (2002) develop an eservice
quality scale called WEBQUAL, which is composed of 12 dimensions
(Lociacono et al. 2002). Consequently, Kaynama and Black (2000) expand on
the customary SERVQUAL dimensions to develop an e-service quality measure
comprised of seven dimensions: content, access, route, design, response,
foundation, and personalization. Parasuraman, Zeithaml, and Malhotra (2005)
mention five expansive sets of criteria as relevant to E-SQ: (a) data accessibility
and content; (b) ease of use or ease of use; (c) protection/security; (d) realistic
style; and (e) reliability/fulfillment. Yang and Jun (2008) measured e-service

10


quality utilizing two gatherings: Internet purchasers and Internet non-purchasers.

They found that reliability was the most imperative dimension for Internet
purchasers even when compared to access, ease of use, personalization, security,
and credibility.
Yoo and Donthu (2001) develop a 4dimension scale called SITEQUAL to
measure online service nature of website, and the four dimensions are ease of
use, esthetic design, processing speed, and interactive responsiveness (Yoo and
Donthu 2001). These researchers emphasized both system and service attributes
in measurement of e-SQ. For example, Zeithaml et al. (2005) developed the "ES-Qual" by extending and refining SEVQUAL to measure e-SQ. It consisted of
two sections, i.e. routine service encounter and service errors (E-ResS-QUAL).
Yoo and Donthu (2001) develop a 4dimension scale called SITEQUAL. Lee and
Lin (2005) adopted a modified SERVQUAL scale to measure e-SQ in terms of
web site design, reliability, responsiveness, trust, and personalization.
Wolfinbarger and Gilly (2003) developed a 14-item scale "eTailQ," based on
reasoning of aggregate quality management to measure e-SQ and predict
customer e-SAT, dedication, and attitude
In this thesis, I used the six-dimensions criteria to measure the E-Banking
service quality
2.2.2 Criteria to measure E-Banking service quality
Initially is Qualified procedure and process: This dimension guidelines
are available on website or from bank's staff. This dimensions interpret the ability
of bank in terms of processing the customer’s demand, for example, apply the Ebanking service. It is not only about the ability but also the time , which is a vital
element to satisfy customer.
Second is Customer Service: Customer service has been recognized as a
vital element for enhancing service quality in online shopping and banking. This
dimension needs to do with service reliability, customer sensitivity, personalized
service, and quick response to grievances that have been described as
responsiveness to customer needs and protestations.

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Third is Assurance or Security: This is constantly best need of banks when
developing electronic exchanging systems. Because security technology is
always enhancing and continually evolving. In the business environment
turbulence, as the economy develops, data theft, stolen money online, hackers
accident likewise always evolved. Banks ought to concentrate on this issue
because the technology security and safety will manufacture trust in customers,
giving them solace, peace of brain when dealing with banks.
When customers register personal data, for example, credit card number
(Master card, Visa card ...), identity card number they often fear of being hackers
collect this data in order to serve the shady guide. Clearly, electronic exchanging
poses very levels of popularity on security and safety. When working in the
tremendous Internet environment, we face dangers related to the security of data
transmitted over that stream.
Fourth is Time of response: This element measures ability of giving
banking services through websites. When an incident happens, the customer
receives the data from the customer protestations. For example, customers don't
know how to register to use the online request service; or to take after multiple
steps, or to complete data to complete an exchange. So what they would
expect from a bank? Ordinarily, clients expect to be notified by the bank
rapidly by means of e-mail inbox established between internal bank and client,
banker or call directly to illuminate the cause of the problem and afterward
provide guidance to bolster clients perform undertakings that they were not
commonplace. There are numerous banks have set the guidelines of
quantitative circumstances like this. For example, when receiving the email
bolster request utilizing the e-services customers, banks must respond inside
of 12 hours by e-mail, and inside of 24 hours have direct contact with
customers through phone or text.
Fifth is Product Diversification: Varity of item choices has become one of
the key elements of online service quality, as customer would need the right data

that enables them complete online banking exchanges successfully. This feature
is likewise a critical element that creates competitive advantages among banks.

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Sixth is Number of errors or mistakes: Qualified service is measured by
low number of errors or mistakes. Errors happen for a number of reasons and
manifest themselves in different ways. For example, ATMs may likewise assume
a role in the miscounts, registering a withdrawal incorrectly, with the result either
finding to support you or not. Extra charges or extra deposits that are not
accounted for are the most glaring problems
2.2.3 Conditions to ensure E-Banking service quality of commercial banks
2.2.3.1 Subjective condition
Infrastructure
This is an essential variable of the implementing of e-banking services. The
bank can just develop e-banking services effectively with the qualified data
technology infrastructure. A data technology office is considered to be qualified
on the off chance that it meets the accompanying two requirements: advanced
and economical. In a competitive market these days, it is clear that the utilization
of advanced technologies is a urgent requirement. In the case of utilizing
outdated technology, banks themselves kick out of the game. Notwithstanding
innovative technology, banks ought to likewise pay attention on economic aspect
of that sort of technology.
Internet: The Internet is an essential instrument to connect people and
association over the world. Without it, E-banking is not able to work.
Intranet: A network is internal inside of an association that helps
association to perform their own operations inside of their association
boundaries. An Intranet is regular in online banking system.
Hardware : Personal computers, servers, modems, switches, purpose of

sale, automated teller machines
Software: To lead online banking operations several software are currently
available, for example, FLEXCUBE, which enables banks to process and store
banking exchange information and making payments.
Human resource of the company

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Regardless, man dependably plays an imperative role. Besides reducing a
lot of organization personnel, the development of e-banking services requires
human resource to equip themselves the necessary knowledge to be able to apply
data technology effectively. Banks likewise need to have a team of experts
sufficient to be able to continue research and development of electronic systems
of banks. Moreover, experts need to set up e-banking system easy to use, user
friendly. Besides, when the service is quite new, the fear of customers is
inevitable, therefore, the necessity of friendly staff and persuasive capacity is to
remove fears of customers and entice customers to use bank's services.
2.2.3.2. Objective conditions
Living Standard of customers
Living Standard is an essential element to advance payment services
electronics. Assume that people live with low salary; maybe they couldn't care
about bank services. They will use money instead of electronic payment services.
Therefore, economic improvement and developed way of life are dependably the
prerequisite for the improvement of E-Banking services.
Understanding and acceptance of customer
Propensities and favorite of money might be the primary obstacle for the
development of E-Banking. This would be no reason for the Bank to provide
electronic banking services without customer endorsement. The understanding of
numerous customers in the electronic banking services and benefits of these

services is essential. Clearly, E-banking services are modern and qualified.
However, banks cannot assume that the service is enough. To promote electronic
banking services, banks need to make sure customers know these services and
provide them detailed guidelines.

CHAPTER III: ANALYSIS OF E-BANKING
SERVICE QUALITY AT VIB BANK HAI BA
TRUNG BRANCH
3.1 Overview of VIB

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Vietnam International Commercial Joint Stock Bank, abbreviated as
Vietnam International Bank (VIB), was founded on 18th September 1996, with
its head office based at 16 Phan Chu Trinh, Hoan Kiem District, Hai Ba Trung.
By 15th June 2015, after 19 years in operation, VIB has become one of the
leading commercial joint stock banks in Vietnam, with total assets of nearly
VND 80,000 billion. The bank’s charter capital is now VND 4,250 billion while
its shareholders’ equity is nearly VND 8,200 billion. Currently, it has 4,000
people working at nearly 160 branches and transaction offices in 27 key
provinces/ cities across the country.
2010 marked a significant development milestone of VIB by a strategic
partnership with the Commonwealth Bank of Australia (CBA) - the Number One
retail bank in Australia and the world’s leading bank with over 100 years of
experience. CBA has officially become our strategic shareholder with an initial
stake proportion of 15%. After one year, on 20th October 2011 CBA made an
additional investment of 1,150 billion dong in VIB, increasing its stake to 20%
from 15% in order to further strengthen the capital base and capital adequacy
ratio (CAR), and expand business opportunities and operation scale for VIB. This

strategic partnership facilitates its improvement to successfully implement the
long-term plans in the bank’s business strategy and especially to improve the
customer service quality in line with international standards.
Being one of the pioneers in reforming business activities, it always takes
our customers as the focus and our service quality and innovative solutions as the
business motto. VIB has been enhancing its efficiency in the use of capital and
management capacity and continuing to focus on the development of retail
banking networks and new products through diversifying distribution channels in
order to provide financial solution packages to focused customer groups, and
simultaneously improving the service quality to serve its customers better.
3.2 Overview of VIB Hai Ba Trung Branch
3.2.1. Organizational structure
The VIB Hai Ba Trung transaction office’s scale is equivalent to a VIB

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branch, so its organization structure includes departments as followings:
Figure 3.1: VIB Hai Ba Trung’s organizational structure

(Source: VIB Hai Ba Trung)
3.2.2 Business result of VIB Hai Ba Trung Branch from 2010 to 2014
3.2.2.1 Financial Result
As indicated by the consolidated financial statements of VIB for the year
ended 2014, net profit after tax was 522,670 million VND, increasing by 1040%
compared to the year 2013 which is 50,248 million VND. Total assets with
80,660,959 million VND saw an increase of 5.2% versus a year ago.
VIB Hai Ba Trung is despite the fact that a Card center of VIB however it
possesses a scale and operates like a VIB branch. Since its establishment nearly 5
years prior, VIB Hai Ba Trung has developed very firmly with critical

achievements, adding to the development of VIB. Here are some key financial
pointers of VIB Hai Ba Trung
a, Growth in total assets
In recent years, the banking and financial market experienced different
changes; however, VIB Hai Ba Trung worked out proper strategies and took

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