Recommendations to enhance customer satisfaction towards deposit products of SHB

ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

NGUYỄN CHÍ HIẾU

RECOMMENDATIONS TO ENHANCE CUSTOMER
SATISFACTION TOWARDS SAVINGS PRODUCT OF SHB

GIẢI PHÁP NÂNG CAO SỰ HÀI LÒNG CỦA KHÁCH
HÀNG ĐỐI VỚI SẢN PHẨM TIỀN GỬI CỦA NGÂN HÀNG
TMCP SÀI GÒN – HÀ NỘI

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

Hà Nội - 2017


ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

NGUYỄN CHÍ HIẾU

RECOMMENDATIONS TO ENHANCE CUSTOMER
SATISFACTION TOWARDS SAVINGS PRODUCT OF SHB
GIẢI PHÁP NÂNG CAO SỰ HÀI LÒNG CỦA KHÁCH
HÀNG ĐỐI VỚI SẢN PHẨM TIỀN GỬI CỦA NGÂN HÀNG
TMCP SÀI GÒN – HÀ NỘI
Chuyên ngành: Quản trị kinh doanh
Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH
NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. NGUYỄN THỊ KIM OANH

Hà Nội - 2017


DECLARATION
The author confirms that the research outcome in the thesis is the result of
author’s independent work during study and research period and it is not yet published in
other’s research and article.
The other’s research result and documentation (extraction, table, figure, formula,
and other document) used in the thesis are cited properly and the permission (if required) is
given.
The author is responsible in front of the Thesis Assessment Committee, Hanoi
School of Business and Management, and the laws for above-mentioned declaration.

Date: April, 20, 2017

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ACKNOWLEDGEMENT
I have gained huge knowledge, skill and insights from my MBA course. The
course raises my capacity of administration and management up to the next level. I
am now very confident in my position of management. I would like to extend my
sincerest thanks and appreciation to all those who have made this Thesis to be
possible.
I woud like to express my great gratitude to my supervisor Nguyen Thi Kim
Oanhfor her useful comments, remarks and engagement during my process of doing
this master thesis.

I also would like to thanks my classmates for their friendship and reciprocal
encouragement to make our class time to be unforgettable time

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TABLE OF CONTENT
DECLARATION ........................................................................................................ i
ACKNOWLEDGEMENT ......................................................................................... ii
TABLE OF CONTENT ............................................................................................ iii
LIST OF TABLES .................................................................................................... vi
LIST OF FIRGURES .............................................................................................. viii
Chapter 1: INTRODUCTION .....................................................................................1
1.1 Background to the study ...................................................................................1
1.2 Research overview ............................................................................................2
1.3 Aims of the study ..............................................................................................3
1.4 Object of the study ............................................................................................4
1.5 Scope of the study .............................................................................................4
1.6 Research methodology......................................................................................4
1.7 Proposed research structure ..............................................................................5
Chapter 2: RESEARCH FRAMEWORK ...................................................................8
2.1 Deposit products at commercial banks .............................................................8
2.1.1 Concepts ....................................................................................................8
2.1.2 Deposit products at Vietnamese commercial banks ..................................8
2.2 Customer satisfaction and models to evaluate customer satisfaction towards
deposit products at commercial banks ..................................................................13
2.2.1 Customer satisfaction towards deposit products .....................................13
2.2.2 Models related to customer satisfaction towards banks’ deposit products. ...15
2.3.2 Proposed model in the study ...................................................................22
Chapter 3: METHODOLOGY ..................................................................................26

3.1 Preliminary research (qualitative)...................................................................26
3.1.1 Building the preliminary scale ................................................................26
3.1.2 Adjusting the scale ..................................................................................27
3.2 Formal research (quantitative) ........................................................................27
3.2.1 Designing the survey questionnaire ........................................................28

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3.2.2 Collecting information from the survey questionnaire ...........................28
3.2.3 Designing the sample ..............................................................................28
3.2.4 Processing the data ..................................................................................29
Chapter 4: THE REALITY OF CUSTOMER SATISFACTION TOWARDS
DEPOSIT PRODUCTS AT SAIGON - HANOI COMMERCIAL JOINT STOCK
BANK........................................................................................................................32
4.1 Overview of Saigon - Hanoi Commercial Joint Stock Bank ..........................32
4.1.1 History of foundation and development ..................................................32
4.1.2 Functions and duties ................................................................................33
4.1.3 Organization ............................................................................................33
4.1.4 Business results .......................................................................................36
4.1.5 Business results of the bank’s deposit products ......................................37
4.2 Some activities to enhance customer satisfaction towards SHB's deposit
products .................................................................................................................40
4.2.1 In terms of prestige and image ................................................................40
4.2.2 In terms of the staff’s responsiveness .....................................................40
4.2.3 In terms of facilities of the bank ..............................................................43
4.2.4 Product policy..........................................................................................44
4.2.5 Interest rate policy ...................................................................................46
4.2.6 Marketing policy .....................................................................................47
4.3 Results of the survey on customer satisfaction towards the bank’s deposit

products .................................................................................................................48
4.3.1 Scale testing .............................................................................................48
4.3.2 Factor analysis .........................................................................................50
4.3.3 Correlation and regression analysis .........................................................53
4.3.4 Evaluation of customers on factors affecting the customer satisfaction
towards the bank’s deposit products ................................................................58
4.4 General assessments .......................................................................................67
4.4.1 Achievements ..........................................................................................67
4.4.2 Limitations ...............................................................................................68
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4.4.3 Causes of the limitations .........................................................................69
Chapter 5: SOLUTIONS TO IMPROVE CUSTOMER SATISFACTION
TOWARDS DEPOSIT PRODUCTS AT SHB ........................................................70
5.1 SHB’s developing target and orientation ........................................................70
5.1.1. Opportunity and challenge .....................................................................70
5.1.2 SHB's developing orientation and target .................................................73
5.1.3 Developing orientation of deposit products ............................................76
5.2 Solutions to improve customer satisfaction towards deposit products ...........77
5.2.1 Solutions to improve business facilities ..................................................77
5.2.2 Solutions to improve staff quality ...........................................................78
5.2.3 Solutions to enhance the prestige of the bank .........................................80
5.2.4 Solutions to improve product policy .......................................................81
5.2.5 Solution to improve the interest rate policy ............................................82
5.2.6 Solution to improve marketing policy .....................................................84
5.2.7 Deposit insurance solution for customers ...............................................87
5.3. Recommendations ..........................................................................................87
5.3.1 Recommendations to the government .....................................................87
5.3.2 Recommendations to the State Bank .......................................................89

CONCLUSION .........................................................................................................91
REFERENCES ..........................................................................................................92

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LIST OF TABLES
Table 2.1 Interpretation of variables in the research model ......................................21
Table 2.2: Summary of previous research models ....................................................23
Table 3.1: Interview questions to SHB’s experts ......................................................27
Table 4.1 Business results of SHB ............................................................................36
Table 4.2: Business results of the bank’s deposit products ......................................38
Table 4.3: Qualifications of transaction staff ............................................................41
Table 4.4: The training of bank transaction staff at the bank ...................................42
Table 4.5: System of branches and transaction offices of the bank ..........................43
Table 4.6: Some specific products of the bank .........................................................44
Table 4.7: Comparison of SHB’s interest rates with those of other banks ...............47
Table 4.8: Results of scale testing .............................................................................48
Table 4.9 Factor analysis results of independent variables .......................................50
Table 4.10 Factor analysis results of dependent variables ........................................52
Table 4.11 Results of correlation matrix between factors in the model ...................54
Table 4.12 Results of regression analysis .................................................................55
Table 4.13 Results of testing research hypotheses ....................................................57
Table 4.14 Evaluation on the prestige of the bank ....................................................58
Table 4.15: Evaluation on the staff’s responsiveness ...............................................59
Table 4.16: Evaluation on the facilities of the bank .................................................60
Table 4.17: Evaluation on the product policy ...........................................................62
Table 4.18: Evaluation on the interest rate policy ....................................................63
Table 4.19: Evaluation on the marketing policy .......................................................65
Table 4.20: Evaluation on customers’ general satisfaction.......................................66

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vii


LIST OF FIRGURES
Figure 2.1: SERVQUAL model (Parasuraman et al., 1988) .....................................15
Figure 2.2: BANKSERV model (Avkiran, 1994) .....................................................17
Figure 2.3: Duong Thi Thanh Hai’s model (2014) ...................................................18
Figure 2.4: CBSQ model of Xin Guo et al. (2008) ...................................................20
Figure 2.5: Research model of Phan Dinh Khoi et al. (2015) ...................................21
Figure 2.6: Nguyen Thi Nhu Quynh’s model (2014)................................................22
Figure 2.7: Proposed model in the study...................................................................25

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Chapter 1: INTRODUCTION
1.1 Background to the study
Banking industry is the heart of the economy. The banking system in Vietnam
has changed in recent years in both quantity and ranking. Banks in Vietnam have
been developing in the trend of providing customers flexible products and high
quality services. According to Vietnam Banking Industry Report in 2015, there
were currently 48 banks operating in Vietnam, in which there were 5 state- owned
commercial banks (SOCBs), 33 joint stock commercial banks (JSCBs), 5 joint
venture banks, and 5 wholly foreign-owned banks (Tran et al., 2015).
Apart from domestic debit cards (ATM cards), deposits are the primary
product of each bank. Customers’ deposits are the source for the flow of money

within a bank. Being in top 5 largest private commercial banks in Vietnam, SaigonHanoi Commercial Joint Stock Bank (SHB) also pays attention to developing
deposit products. The bank’s annual report in 2015 showed that one of the main
business activities of SHB is mobilizing short-term, medium-term, and long-term
deposits from individuals and organizations. In 2015, the total customers’ deposits
into SHB were over 157 billions VND whereas the customer loans were over 131
billions VND. In comparison to 2014, the total amount of customers’ deposits has
increased 23.7% (SHB, 2015). It can be seen that mobilizing deposits is one of the
vital business activities of SHB.
During more than 22 years of development, SHB has maintained steady
growth and sustainability as well was the confidence and expectations of customers,
shareholders, and investors. The success and reputation of SHB has been recognized
by the Party and the State and the bank has received many prestigious awards from
reputational domestic and international organizations. In 2015, SHB was awarded
as the “Best Customer Service Bank” in Vietnam by the Global Banking and
Finance and the Alpha Southeast Asia. The success in its customer service may
result in positive customers’ attitudes and behaviors towards the bank.
Within the diversely and strictly competitive environment of the banking
market in Vietnam, customers have various choices to entrust their assets.
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Therefore, all the banks are on the race to gain customer satisfaction, and further to
gain customer loyalty in depositing their money into the bank by opening savings
accounts. Defining customer deposits as the most important service product in
SHB’s business, the bank is also striving to win the race. However, during the
operation process, SHB only focuses on large customers (groups and corporations)
without paying much attention to individual customers. As a result, the customer
satisfaction towards SHB deposit products is not very high. The number of
complaints about SHB's deposit transactions has increased steadily (from 65
complaints to 97 complaints in the period of 2014 to 2016). The average waiting

time for a customer's transaction also increased from 13 minutes to 16 minutes. In
addition, customers were not pleased with the interest rate policy and deposit policy
issued by SHB.
Because of those facts, the need to study the determinants of customer
satisfaction and the strategies to achieve customers’ satisfaction is an urgent
problem. Customer satisfaction in the banking industry is not the new or exploratory
research field both in Vietnam and overseas. However, most of the studies focused
on other segments such as credit, cards, internet banking, or consumption loans.
There have been only a few of studies on deposit products and services. In addition,
there have been no studies on customer satisfaction towards deposit products
conducted at SHB. Therefore, the author selected the topic “Recommendations to
enhance customer satisfaction towards deposit products at SHB” as his master
thesis.
1.2 Research overview
In Vietnam, there have been some similar topics by other authors including:
Master thesis of Le Minh Trang (2014) entitled “Studying the customer
satisfaction towards quality of deposit service of AGRIBANK in Ho Chi Minh
City”. The research aimed at investigating the important elements of deposit service
of AGRIBANK, evaluating customers’ feeling about these elements, then
identifying the satisfaction of customers towards these elements to improve the

2


quality of deposit services provided by AGRIBANK. The research results were
achieved by employing both qualitative and quantitative research methods.
Master thesis of Nguyen Thi Quynh Nhu (2014) entitled “Evaluating the
satisfaction of individual customers towards deposit products of VIETINBANK –
Can Tho Branch”. The research applied quantitative method by analyzing data
collected from a survey questionnaire. It considered the satisfaction of more than

100 customers and evaluated the factors that significantly affected the level of
customer satisfaction towards deposit products of AGRIBANK in Can Tho.
In addition to specific topics in customer deposits segment, there have been
also various studies on customer satisfaction in banking products and services in
general and other banking segments in particular.
Scientific research of Tran Hong Hai (2014) entitled “Studying factors
affecting customer satisfaction towards ATM card services of VIETCOMBANK –
Vinh Long Branch”. The research model was built based on models such as
SERVQUAL (service quality model), SERVPERF (service perform model), ACSI
(American Customer satisfaction Index) and ECSI (European Customer satisfaction
Index). The result showed four factors affecting customer satisfaction towards ATM
card services of VIETCOMBANK-Vinh Long. On that basis, the author proposed
some recommendations to enhance this satisfaction.
From the results of previous studies, some aspects of customer satisfaction
were revealed. Although the quality of services has constantly been increasing,
there are still some limitation in the quality of services such as service capacity,
behavior, infrastructure conditions, equipment, network, and service charges. This
is the basis for the author to conduct a study on deposit products of SHB in Hanoi in
these aspects.
1.3 Aims of the study
Basing on the urgency of the study, the main purposes of the research
consisted of:


Reviewing primary theories and issues that are generally related to
customer satisfaction.
3




Specializing the theoretical frameworks and research models to
evaluate the customers’ satisfaction in banking industry in general and
in deposit products in particular.



Analyzing the customer satisfaction towards SHB’s deposit products in
Hanoi.



Determining the factors that influence customer satisfaction towards
SHB’s deposit products in Hanoi.



Providing some recommendations to enhance the satisfaction of
customers with SHB’s deposit products in Hanoi.

1.4 Object of the study


Customer saving deposit products of SHB



Data collected from SHB’s customers who were using SHB’s deposit

products in Hanoi.

1.5 Scope of the study
Due to limitations in time and budget, this research had a limited scope in
terms of space and time.
 Space: This study was carried out on the basis of gathering information from
SHB and a survey with customers who were using SHB’s deposit products in
Hanoi.
 Time: Survey information used in this topic is the data collected from the survey
using questionnaire with customers using deposit products of SHB in Hanoi.
The research was carried out during the period of July, 2016 to
November, 2016.


Content: The core content of the study was to focus on identifying the factors

that influence customer satisfaction and analyze the impact of these factors on
the satisfaction of customers who were using deposit products of SHB in Hanoi.
1.6 Research methodology
This study combines two methods: qualitative and quantitative methods
through the following steps:

4


Step 1: Qualitative study
Qualitative study is used to have an overview of the research problem and
clearly identify the topics by studying secondary data. The source of the data
includes Internet, essays, research projects, books, newspapers, professional
documents, and so on.
Step 2: Selecting model
After comparing the models in previous studies on customer satisfaction in

banking industry in general and towards deposit products in particular, the author
will review and select the elements to build the research framework in his study.
Step 3: Building the questionnaire
The author refers to relevant questionnaires to build up appropriate contents
for each factor in the study.
Step 4: Conducting the survey
After the questionnaire has been built and adjusted, the author will deliver the
survey questionnaires to the customers.
Step 5: Data analysis
After the entire collected data are input, they will be analyzed to consider the
influence of variable factors to be studied and the exact impact of each factor on
customer satisfaction towards SHB’ deposit products in Hanoi.
Step 6: Discussion and recommendations
After the data has been analyzed, some recommendations to enhance the level
of customer satisfaction towards SHB’s deposit products will be proposed.
1.7 Proposed research structure
Apart from acknowledgement, abstract, appendices, this research consists of
five chapters.
Chapter 1: Introduction
In the Introduction part, the details in motivation to conduct the research as
well as the research purpose, research objectives, the scope of study will be stated.
In addition, research questions will also be clarified as the orientation for the study.

5


Moreover, the highlights of SHB’s business overview in general and its deposit
services in particular will be mentioned.
Chapter 2: Research framework
Research framework consisted of two main part (1) Literature review and (2)

Research model.
Literature review: Firstly, the term “Customer satisfaction” will be discussed
based on published articles including: concepts and the importance of customer
satisfaction in business. Secondly, the related researches by both domestic and
international researchers on the factors affecting customer satisfaction in general
and in banking industry in particular will be reviewed and discussed as the basis to
conduct the research.
Research model: By studying and taking advantages of existed research model
on customer satisfaction, especially in banking industry, the research model in the
study will be proposed. The research model is the inheritance and modification from
previous studies on deposit products.
Chapter 3: Research methodology
In this chapter, the research process will be discussed in more details for each
stage. The main focus of this chapter is questionnaire design and data analysis
method. The procedure of designing the questionnaire including identifying sample
size and sampling method and stating the questionnaire structure. Moreover, the
process of data collection and data analysis will also be clearly explained in this
chapter.
Chapter 4: Research findings
Data collection through survey will be the core content of this chapter. Then,
the analysis will be implemented through the following steps:
Reliability testing using Cronbach’s Alpha coefficient
Exploratory Factor Analysis (EFA) with KMO test
Correlation analysis
Regression analysis
Chi Square null hypothesis test
6


Chapter 5: Discussion and recommendations

Basing on the data analysis from chapter 4, the results will be further
discussed in this chapter. It focuses on the determinants of customer satisfaction
towards SHB’s deposit products. Subsequently, the feasible recommendations to
enhance the satisfaction of customers towards deposit products of SHB will be
made. Furthermore, those recommendations will also be considered to be applied to
other banks in Vietnam.

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Chapter 2: RESEARCH FRAMEWORK
2.1 Deposit products at commercial banks
2.1.1 Concepts
* Banking service products
The concept of products in general is very complicated. The concept of
banking service products is even more complicated because of the generalization,
diversification, and sensitivity of banking operations. Basically, a product launched
to the market must be able to satisfy a certain need of customers. Banking service
products are offered to carry out payment services, allow customers to withdraw
money at any time, and ensure the safety of the money kept at the bank and the
convenience of performing payment transactions with modern technology, etc.
During the implementation process, each banking service product demonstrates
its attributes and characteristics. A banking service product is defined to be a collection
of features, functions, and uses created by the bank to meet certain needs and desires of
customers in the financial market (Nguyen Thi Minh Hien, 2007).
* Deposit products
Deposit products are a part of the unused income of individuals or
organizations. They deposited money in the bank for the purpose of accumulating
money safely and enjoying interest from that amount. Deposits are a special form of
money accumulation in the consuming sector. When depositing money in a bank,

the depositors receive a savings book as a certificate of having made a deposit into
the bank. On due date, the depositors withdraw their money and receive an interest
amount on the savings book (Deposit Regulations, 2004).
The capitals mobilized from deposit products in the economy account for the
large amount in the mobilized capital proportion. It depends much on customers’
income, customers’ psychological characteristics, the service quality of the bank,
the stability of the currency, and the solid growth of the economy.
2.1.2 Deposit products at Vietnamese commercial banks
(1) Payment deposit
Payment deposit is one of the forms of capital mobilization of commercial
banks by opening customers’ account called payment account (Nguyen Thi Quy,
8


2008). This kind of account is opened to customers, individuals, or organizations
who wish to make payments via banks.
This type of deposit serves the customers’ non-cash payment activity but the
interest that customers received from this payment account is very low. Therefore,
customers using this service do not aim at getting profits.
(2) Demand deposit
In fact, this is a regular deposit. For this deposit, the account holders can
withdraw their money at any time without prior notice. This type of deposit is
similar to payment account, but it is always entitled to interest and customers do not
enjoy payment services via banks. People use this type of deposit to secure their
money and reserve money for short-term spending needs while also enjoying a low
interest. This account balance is usually not large but less fluctuant than the
payment account. Therefore, this type of deposit is often paid higher interest rates
than the payment account. That is the condition for commercial banks to mobilize
this source of capital.
- Concept: Demand deposit is a kind of savings without definite time.

Depositors can withdraw their money without prior notice on any working day of
the deposit receiver (Bui Van Trinh, 2013).
- Objects and scope of application: Applied to all Vietnamese citizens and
foreigners living in Vietnam.
Deposit account in foreign currency is only applied to the following objects:
+ Vietnamese citizens who have resided abroad for less than 12 months.
+ Foreigners who have resided in Vietnam for 12 months or more.
+ Vietnamese citizens who are studying, having medical treatment, or visiting abroad.
+Vietnamese citizens who are working in the following agencies: diplomatic
representatives, consulates, army forces and political organizations, socio-political
organizations, socio-professional organizations, social funds, charity funds of
Vietnam overseas and individuals accompanying them.
- Customers’ benefit: Customers can deposit and withdraw money but still
enjoy a stable interest rate which is higher than the interest rate of payment deposit.
9


- Interest rate: The interest rate of demand deposit is a bit higher than the
interest rate of payment deposit but much lower than that of time deposit.
- Interest calculation formula:
The interest is calculated as the percentage (%) over the actual balance with
the interest rate and the number of actual deposit days. For deposit accounts in
VND, the interest rate is determined on a monthly (30 days) or annual (360 days)
basis. For deposit accounts in foreign currency, the interest rate is determined on an
annual basis (360 days). The number of actual deposit days is counted from the date
of deposit until the end of the date prior to the withdrawal date (the withdrawal day
is not counted) (Bui Thi Hoai Thu, 2014).
Interest rate of demand deposit (annual) x number of actual deposit days
Interest =
360

- Interest payment method: The interest is paid or monthly added to the
principal on the closing date.
(3) Time deposit
When individuals deposit money into a bank with a time deposit on the
agreement between customers and the bank about the time and prescribed interest
rates, the customers can only withdraw money on due date. In theory, when
customers use this type of deposit, they are not allowed to withdraw the money
before due date. However, to increase competition in attracting deposits, some
banks still allow customers to withdraw money before due date and enjoy flexible
interest under the policy of interest payment policy of the bank in each period.
- Concept: Time deposit is a type of savings account that depositors can only
withdraw money after a certain deposit time as agreed with the deposit receiver
(Nguyen Thi Minh Hien, 2007).
- Objects and scope of application: Similar to demand deposit.
- Customer benefit: Serving the accumulating purpose and enjoying high
interest rates.

10


- Interest rate: Depending on the time levels, there are different interest rates
for customers to select.
- Interest calculation formula (Bui Thi Quy, 2008)
Interest rate of time deposit (annual) x number of actual deposit days
Interest =
360

- Interest payment method:
For time deposit, the payment of interests depends on the interest payment

method that customers have registered under the regulations of the bank: Later
payment (paid once on due date); Upfront payment (paid once at the time of
depositing money); periodical payment (paid every 1 month, 3 months, 6 months,
12 months, etc.).
+ If customers withdraw the deposit on due time, they will receive the
principal and the interest corresponding to the interest rate at the time of depositing.
+ If customers withdraw the deposit before the agreed time, they will only be
entitled to an interest rate lower than the agreed interest rate prescribed by the bank
over the actual deposit time.
+ If customers withdraw the deposit after the due time or if customers do not
come to receive the principal and interest on due date, the bank will add the interest
to the principal to make new principal, change the new principal to the new time
with current interest rates. If customers only receive the interest without
withdrawing the principle, the bank will pay the interest to the customers and
change the principal to the new time with current interest rates.
Deposit products of several commercial banks in the world
+ Commercial banks in Thailand (Ariful Islam & Proshenjit Ghosh, 2014)
- Checking account: This is a deposit account held at a commercial bank for the
purpose of ensuring and promptly providing account information to customers on
demand through a variety of distribution channels. This deposit account is also
called demand account or demand deposit account.

11


- Savings account: Deposit accounts are maintained by commercial banks and
interests are paid periodically; customers can not directly use this account in cash
but through the form check writing. Although it is not as convenient to use as a
checking account, this account allows customers to earn an income from interest.
Although not as convenient to use as checking accounts, these accounts let

customers keep liquid assets while still earning a monetary return.
- Money market deposit account: This deposit account has a relatively high interest
rate. It is a form of instant access deposit depending on savings account regulations
of commercial banks such as transaction limit and transaction time.
- Term deposit: This is a deposit which customers can not withdraw before the
transaction time. When the term is over, customers can receive both principal and
interest of the deposit or transfer to a new term.
+ Commercial banks in India (Malhotra, Naresh K, 2012)
Commercial banks in India offer a variety of deposit products to customers. There
are two types of deposit products that are most commonly used: Savings account
(Special savings account) and Term deposit account.
- Savings account: is the most popular account opened by any individual for saving
purposes. Traditionally, commercial banks in India will add interest to their clients’
accounts daily/ monthly/ quarterly or semiannually depending on the banks' policies
and clients’ agreements. This deposit is mainly reserved for customers with small
savings amount. Savings accounts are divided into two main products:
(1) Regular savings accounts: are commonly used in India.
(2) Special savings accounts: are private accounts which are offered to a number of
subjects, including: Salary account, Access account, Post graduate account, High
performance account, etc.
- Term deposit account: This is a type of account which the principal is deposited in
a certain period of time and the interest is credited after a specific period of time.
The total amount of principal and interest will be paid when the account is settled.
This is a fixed deposit which the bank must pay after a predetermined period set by
customers, ranging from 3 months to 3 years.
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2.2 Customer satisfaction and models to evaluate customer satisfaction towards
deposit products at commercial banks

2.2.1 Customer satisfaction towards deposit products
* Customer satisfaction
There have been a lot of studies on customer satisfaction towards more than
15,000 essays and articles by many authors (Peterson and Wilson, 1992), and in fact
there have been many different interpretations of this concept.
In a simple way, customer satisfaction can be defined as customers’
perception/ feeling about the service provider after using the service (Terrence
Levesque and Gordon H. McDougall, 1996).
More specifically, customer satisfaction is the emotional response/ entire
perception of customers towards the service provider on the basis of comparing the
difference between what they receive and what they expected (Oliver, 1999 and
Zineldin, 2000).
Also on this viewpoint, Kotler (2000) thinks that satisfaction is determined on
the basis of the comparison between the results obtained from the service and
customers’ expectations. This satisfaction is based on the following levels:
If the results are less than expected, customers will be dissatisfied.
If the results are the same as expected, customers will be satisfied.
If the results are more than expected, customers will be very satisfied and
enjoy the service.
Meanwhile, Oliva, Oliver, and Bearden (1995) argue that customer
satisfaction is the task of enterprises expressed in the relationship between the value
of the products and services and customer's prior expectations about them.
Obviously, although there have been many different concepts, the definitions of
customer satisfaction always refer to the following factors:
Sentiment/ attitude towards the service provider
Customers’ expectations of the service provider’s ability to meet the demands
Results of the service/ Values that the service brings
Intention to continue using the service
13

* Service quality
Service quality is what customers feel. Service quality is based on the
perceptions or feelings of customers about their individual needs.
According to Parasuraman, Zeithaml, and Berry (1985), service quality is
good when customers’ perceptions about a service match their expectations. They
add that customers’ expectations about service quality are customers' desires. This
means they feel that service providers must fulfill rather than will fulfill the service
requirements.
According to Hurbert (1995), before using a service, customers have formed a
scenario on the quality of that service. When the scenario of customers and
suppliers is not the same, customers will feel dissatisfied.
Crolin and Tailor (1992) argue that customer satisfaction should be evaluated
in a short time, and service quality should be evaluated based on customers’
attitudes towards that service over a long period of time.
* Customer satisfaction towards bank deposit products
From the concepts of customer satisfaction and service quality mentioned
above, the author gives his opinion on customer satisfaction towards deposit
products as follows:
Customer satisfaction towards deposit products of commercial banks is the
feelings of customers about the deposit products and services that commercial banks
provide. And these deposit products and services have quality exceeding customer
expectations. Deposit products and services of the banks must ensure the following
aspects:
First, the deposit transaction staff (from senior managers to the lowest level
employees) must have good professional skills, communication skills, professional
sales skills, agile manners, attentive and enthusiastic serving attitudes, etc. since
banking service is a service requiring high quality.
Second, the banks' deposit products and services have their own characteristics
which are designed to meet the maximum needs of their customers.

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Third, the transaction process that provides fast, simple and accurate deposit
services to customers is supported by modern and reliable equipment.
Fourth, with a convenient distribution channel, customers are easy to access
the deposit products aiming at the best customer service.
2.2.2 Models related to customer satisfaction towards banks’ deposit products.
2.2.2.1 SERVQUAL model (Parasuraman et al., 1988)
Parasuraman was one of the pioneers in the study of service quality. The
success of the model was a major breakthrough for enterprises and financial
institutions to apply to improve their service quality. The quality is evaluated
through the feelings of the customers who use the enterprises’ services.
This was also the most popular research model of service quality and was
widely applied in marketing research. According to Parasuraman, service quality
can not be generally determined but depends on customers’ perceptions towards the
service and these perceptions are considered based on many factors. The
SERVQUAL model was built based on the comparison between customers’
expectations and their perceptions. SERVQUAL considered two key aspects of
service quality including the outcome of the service and the process of service
provision which were studied through 22 scales of the five criteria: reliability,
Tangibles
Reliability
Responsiveness

Satisfaction

Assurance
Empathy

responsiveness, tangibles, assurance, and empathy.
Figure 2.1: SERVQUAL model (Parasuraman et al., 1988)

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