Research on customer satisfaction on the quality of e banking services in vietnamese commercial banks

Cohort 2016-2018

Master’s Thesis
Research on Customer satisfaction on the
quality of E-Banking
Banking services in Vietnamese
Commercial Banks

Author
: Pham The Tuyen
Supervisor : Assoc. Prof. Dr. Pham Thi Lien

Hanoi, May 2018


ACKNOWLEDGMENTS

Firstly, I would like to thank all of professors and teachers of Ha Noi national
university gave me the opportunity to study in an international standard quality program.
Secondly, I would like to thank Prof.Dr. Pham Thi Lien is teacher led me to complete
this Thesis.
Thirdly, I would like to thank my parents who have always beside me to encourage
and support me throughout learning process as well as this thesis.
Finally, I would like to thank friends, colleagues have always supported me complete
a master's thesis.

Signature

Pham The Tuyen

TABLE OF CONTENTS
ACKNOWLEDGMENTS .......................................................................................................... 0
ABSTRACT ............................................................................................................................... 4
ABBREVIATIONS .................................................................................................................... 5
LIST OF TABLES ..................................................................................................................... 6
LIST OF CHARTS ..................................................................................................................... 6
LIST OF DIAGRAMS ............................................................................................................... 6
INTRODUCTION ...................................................................................................................... 7
1. Rationale for the Research ...................................................................................................... 7
2. Overview of research situation ............................................................................................... 7
3. Research Objectives ............................................................................................................. 10
4. Research Subjects ................................................................................................................. 10
5. Research Scopes ................................................................................................................... 11
6. Research Questions ............................................................................................................... 11
7. Research Methods ................................................................................................................ 11
8. Structure of the thesis ........................................................................................................... 11
CHAPTER 1. LITERATURE REVIEW ............................................................................. 12
1.1. Electronic Banking services ........................................................................................... 12
1.1.1. The concept of E-banking..................................................................................... 12
1.1.2. The benefits and risks of E-banking ...................................................................... 12
1.1.2.1. The benefits of E-banking .......................................................................................... 12
1.1.2.2. The risks of E-banking ................................................................................................. 14
1.1.3. Types of electronic banking services ..................................................................... 14
1.1.3.1. Mobile Banking ........................................................................................................... 14
1.1.3.2. Phone Banking ............................................................................................................. 15
1.1.3.3. Home Banking ............................................................................................................. 15
1.1.3.4. Internet Banking .......................................................................................................... 16
1.1.3.5. Call Center .................................................................................................................. 17
1.1.3.6. Kiosk Banking .............................................................................................................. 17
1.1.3.7. Electronic Wallet ......................................................................................................... 17

1.1.4. The technical means for the use of E-banking services .......................................... 18
1.2. Quality of E-banking services ......................................................................................... 18
1.2.1. Definition of service quality .................................................................................. 18
1.2.2. The concept of quality of E-banking services ........................................................ 19
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1.2.3. Criteria for measuring the quality of E-banking services ....................................... 20
1.3. Customer satisfaction ...................................................................................................... 21
1.3.1. The concept of customer satisfaction ..................................................................... 21
1.3.2. The relationship between service quality and customer satisfaction ....................... 22
1.4. Models of service quality measurement......................................................................... 22
1.4.1. SERVQUAL Model .............................................................................................. 23
1.4.2. SERVPERF Model ................................................................................................ 25
1.4.3. Model of Technical Quality /Functional Quality ................................................... 25
CHAPTER 2. DATA AND METHODOLOGY .................................................................. 27
2.1. Research Model ............................................................................................................... 27
2.2. Research process .............................................................................................................. 28
2.3. Data sources .................................................................................................................... 30
2.3.1. Primary data .......................................................................................................... 30
2.3.2. Secondary data ...................................................................................................... 31
2.4. Research Methods ........................................................................................................... 31
2.4.1. Qualitative research methods ................................................................................. 31
2.4.1.1. Expert Method ............................................................................................................. 31
2.4.1.2. In-depth interview Method........................................................................................... 32
2.4.2. Quantitative research methods ............................................................................... 33
2.4.2.1. Preliminary quantitative research ............................................................................... 33
2.4.2.2. Formal quantitative research ...................................................................................... 40
CHAPTER 3. RESEARCH RESULTS ................................................................................ 42
3.1. Overview of E-banking services in Vietnam ................................................................ 42

3.1.1. Card services ......................................................................................................... 42
3.1.2. InternetBanking ..................................................................................................... 43
3.1.3. MobileBanking...................................................................................................... 44
3.1.4. Electronic Wallet................................................................................................... 45
3.2. Situation of providing E-banking services at 5 commercial banks in Vietnam .............. 46
3.2.1. E-Banking service of Vietcombank ....................................................................... 46
3.2.2. E-Banking service of Techcombank ...................................................................... 47
3.2.3. E-Banking service of ACB .................................................................................... 48
3.2.4. E-Banking service of BIDV ................................................................................... 49
3.2.5. E-Banking service of Vietinbank ........................................................................... 49
3.3. Research results ............................................................................................................... 50
3.3.1. Results of demographic analysis ............................................................................ 51
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3.3.2. Results of measuring the scales ............................................................................. 52
3.3.3. Results of the Exploratory Factor Analysis (EFA) ................................................. 54
3.3.4. The results of Confirmatory Factor Analysis (CFA) .............................................. 54
3.3.5. The results of the test by the Structural Equation Model (SEM) ............................ 58
3.3.6. The results of test by the Bootstrap method ........................................................... 60
CHAPTER 4. CONCLUSIONS AND RECOMMENDATIONS ....................................... 61
4.1. Conclusions ...................................................................................................................... 61
4.2. Recommendations........................................................................................................... 62
4.2.1. Strengthening the investment in the electronic infrastructure ................................ 62
4.2.2. Strengthening the marketing of E-banking services ............................................... 63
4.2.3. Focusing on the training the staff of the bank ........................................................ 63
4.2.4. Minimizing the risks in E-banking transactions ..................................................... 64
4.2.5. Strengthening the links with organizations and enterprises .................................... 65
REFERENCES ......................................................................................................................... 66
APPENDIX 01 ......................................................................................................................... 70

APPENDIX 02 ......................................................................................................................... 71
APPENDIX 03 ......................................................................................................................... 72
APPENDIX 04 ......................................................................................................................... 76

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ABSTRACT
Research on service quality and service quality satisfaction has attracted a great deal of
attention from scholars over the past two decades and has provided many valuable findings to
society. This study was conducted to measure and determine the factors affecting the quality
of E-banking services based on SERVPERF model of Cronin and Taylor (1992) and the
impact of E-banking services to customers' satisfaction when using E-banking services at 5
commercial banks in Vietnam: VCB, BIDV, ACB, Techcombank, Vietinbank. Data were
collected by interviewing 337 individual customers who have been using E-banking services
at these five commercial banks for 1-3 years. Methods such as descriptive statistics,
Cronbach's Alpha coefficients, Exploratory Factor Analysis (EFA), Confirmatory Factor
Analysis (CFA), and the Structural Equation Model (SEM) were used in this study. The
results show that the quality of E-banking services is influenced by the six factors in the order
of importance: Reliability, Responsiveness, Empathy, Assurance, Tangibles, Accessibility. In
addition, the quality of E-banking services has also positively impacted the satisfaction of
customers in these five commercial banks.
Keywords: Quality of service, E-banking services, customer satisfaction.
TÓM TẮT
Nghiên cứu về chất lượng dịch vụ và sự hài lòng về chất lượng dịch vụ thu hút nhiều sự quan
tâm từ các học giả trong suốt hai thập kỷ qua và đã cung cấp nhiều phát hiện quý báu cho xã
hội. Nghiên cứu này được thực hiện nhằm đo lường và xác định các yếu tố tác động đến chất
lượng dịch vụ ngân hàng điện tử dựa theo mơ hình đo lường chất lượng dịch vụ SERVPERF
của Cronin và Taylor (1992) và sự tác động của chất lượng dịch vụ ngân hàng điện tử đến sự
hài lòng của khách hàng khi sử dụng dịch vụ ngân hàng điện tử tại 5 ngân hàng thương mại ở

Việt Nam: VCB, BIDV, ACB, Techcombank, Vietinbank. Số liệu được thu thập qua phỏng vấn
337 khách hàng cá nhân đã và đang sử dụng dịch vụ ngân hàng điện tử tại 5 NHTM này được
1-3 năm. Các phương pháp thống kê mô tả, kiểm định bằng hệ số tin cậy Cronbach’s Alpha,
phân tích nhân tố khám phá (EFA), phân tích nhân tố khẳng định (CFA) và mơ hình cấu trúc
tuyến tính (SEM) được sử dụng trong nghiên cứu này. Kết quả cho thấy chất lượng dịch vụ
ngân hàng điện tử chịu sự tác động cùng chiều của 6 yếu tố theo thứ tự quan trọng: Sự tin
cậy, sự đáp ứng, sự đồng cảm, năng lực phục vụ, phương tiện hữu hình, sự tiếp cận. Bên cạnh
đó, chất lượng dịch vụ ngân hàng điện tử cũng tác động cùng chiều với sự hài lòng của khách
hàng tại 5 Ngân hàng thương mại này.
Từ khóa: Chất lượng dịch vụ, dịch vụ ngân hàng điện tử, sự hài lòng của khách hàng.

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ABBREVIATIONS
TCN

Accessibility

ACB

Asia Commercial Joint Stock Bank

ATM

Automatic Teller Machine

BIDV

Joint Stock Commercial Bank for Investment and Development of Vietnam

CFA

Confirmatory Factor Analysis

HL

Customer satisfaction

EFA

Exploratory Factor Analysis

DC

Empathy

KMO

Kaiser-Meyer-Olkin

OTP

One-Time-Password

POS

Point of Sale/Point of Service

TC

Reliability

DU

Responsiveness

PV

Assurance

SEM

Structural Equation Model

SMS

Short Message Service

PTHH

Tangible

Techcombank Vietnam Technological and Commercial Joint Stock Bank
VCB

Joint Stock Commercial Bank for Foreign Trade of Vietnam

Vietinbank

Vietnam Joint Stock Commercial Bank of Industry and Trade

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LIST OF TABLES
Table 1.1:
Table 1.2:
Table 1.3:
Table 2.1:
Table 2.2:
Table 2.3:
Table 2.4:

Measurement criterias of SERVQUAL Model – 1985
Measurement criterias of the SERVQUAL Model – 1988
Scales of the SERVQUAL Model – 1988
A summary of the research hypotheses
The scales of "Reliability”
The scales of "Responsiveness”
The scales of "Assurance”

Table 2.5:
Table 2.6:
Table 2.7:
Table 2.8:
Table 3.1:
Table 3.2:
Table 3.3:
Table 3.4:

Table 3.5:
Table 3.6:
Table 3.7:
Table 3.8:
Table 3.9:
Table 3.10:
Table 4.1:

The scales of "Empathy”
The scales of "Tangible”
The scales of "Accessibility”
The scales of "Customer satisfaction”
Organizations providing E-wallet services in Vietnam as of 31/12/2017
Sample size and survey results
Statistics of demographic characteristics of the surveyed subjects
Summary of measurement results
Results of the Exploratory Factor Analysis (EFA)
Correlation of observed variables with whole scale
Reliability assessment
Unnormalized coefficients of the SEM model
Normalized coefficients of the SEM model
Estimated results with sample size 500
Summary the results of the research hypothesis testing

Chart 3.1:

LIST OF CHARTS
Number of cards issued in the period 2012 – 2017

Chart 3.2:

Number of ATMs and POS machines in the period 2012 – 2017

Chart 3.3:

Number of banks deploying Internetbanking service

LIST OF DIAGRAMS
Diagram 1.1:

Model of Technical Quality/Functional Quality

Diagram 2.1:

Research Model of the Thesis

Diagram 2.2:

The research process of the Thesis

Diagram 2.3:

Qualitative research process

Diagram 3.1:

Results of CFA analysis

Diagram 3.2:

The results of the SEM model test
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INTRODUCTION
1. Rationale for the Research
Before the explosion of the 4.0 technology revolution, all economic sectors have to
rise to compete and integrate into the regional and world economy. In particular, in the
banking sector; commiting to open the banking and financial services in 2010 is a great
challenge for the system of Vietnamese commercial banks which have recently shifted from
centralized bureaucracy to a market mechanism in a short time, when faced with multinational
corporations with huge financial potential, modern technology and hundreds of years of
experience.
Vietnam is one of the countries with the highest number of internet users in the world
at 14th. The number of Internet users is high, the growth rate is strong which have created
favorable conditions for the development of E-Commerce in general and E-Banking in
particular. At present, the level of competition in E-Banking services in Vietnam is rapidly
increasing: In 2005, Vietnam had only four commercial banks providing E-Banking services;
In 2016, Vietnam had 45 commercial banks providing this service in various forms with high
technology to benefit both banks and customers. E-Banking helps reduce costs by reducing
the number of employees, branches, transaction offices and other facilities while maintaining
high customer service levels. This could facilitate commercial banks in providing services to
customers at lower cost and gaining higher returns than traditional banking services.
Therefore, in order to exploit the advantages of E-Banking services, most commercial banks
in Vietnam have invested heavily in electronic infrastructure and provide customers through
many modern distribution channels. However, up to now, commercial banks in Vietnam have
not met the needs and expectations of increasing customers and are facing many difficulties in
business. Therefore, in order to succeed in a highly competitive industry such as E-Banking,
commercial banks must provide high quality service to their customers. To do that,
commercial banks have to understand the criteria that customers use to evaluate the quality of

E-Banking services. Based on that, the banks have effective solutions to improve the quality
of E-Banking services, create customer satisfaction. From that reason, I chose the problem
“Research on Customer satisfaction on the quality of E-Banking services in Vietnamese
Commercial Banks” for my master thesis.
2. Overview of research situation
So far, there have been many domestic and foreign researches

on customer

satisfaction on the quality of E-banking services. Such as:
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Minjoon Jun and Shaohan Cai (2001) focus on factors affecting the quality of E-banking
services in the United States. Accordingly, the authors present 17 influential factors in
three groups: (1) Thecustomer service quality team consists of 10 factors: reliability,
responsiveness, bank capacity, courtesy attitude, banking credibility, access speed,
communication, customer understanding, cooperation and continuous improvement; (2)
The online quality system team consists of 5 factors: accuracy, ease of use, time,
aesthetics and safety; (3) The banking quality group consists of two factors: the diversity
of banking services, the features of banking products and services. The results show that
there is no significant difference between banks using E-banking services and traditional
banks when providing online banking services. The factors that have the greatest impact
on the quality of E-banking are reliability, responsiveness, access speed and accuracy. On
that basis, the authors also made some suggestions and recommendations to improve the
quality of E-banking services and improve customer satisfaction on the quality of Ebanking services for banks in USA.
Richard Selassie Bebli (2015) has empirically studied the factors affecting the quality of
e-banking services that lead to customer satisfaction in commercial banks in Ghana. Research
has served as a testimony to how the development of information and communication
technologies in Africa over the past two decades has changed the way commercial banks

in Ghana. Based on the factors in the SERVQUAL model of Parasuraman et al. (1988)
and SERVPERF model by Cronin and Taylor (1992), the author presents six factors
affecting the quality of E-banking: speed of access, ease of use, reliability, security,
enjoyment, control. In combination with the use of qualitative and quantitative methods,
the results show that all 6 factors have a positive and significant correlation at 1%, with
the exception of 2 factors are "Enjoyment" and "Control", the other 4 factors are
significant at 5%. Bussakorn Jaruwachirathanakul and Dieter Fink (2005) have studied the
needs of consumers when using E-banking services in Thailand to find out the cause of
customer dissatisfaction, then provides optimal strategies for Thai banks to maximize the
utilization rate of E-banking services.The authors conducted empirical research on a sample
size of 600 customers by submitting questionnaires to 15 people from 40 major Bangkok
companies. The study found that there are 5 factors that affect customer satisfaction
regarding the quality of E-banking services in Thailand include: the features of the Web,
the benefits of using the service, security, time and control. In addition, regulatory
variables such as gender, education level, income, internet experience, and E-banking
experience have had a significant impact. Noel Yee-Man Siu and Jeremy Chi-Wah Mou
(2005) also used the SERVQUAL model developed by Zeithaml et al. (2000,2002) to analyze
8


the factors that affect customer satisfaction on the quality of E-banking services in Hong
Kong as well as their future intentions. Five factors are identified: reliability, efficiency,
security, problem resolution and security. Analytical results show that all factors except
"security" are important in determining overall service quality perception. The "reliability,
handling and safety" factors have a significant impact on customer satisfaction, not only the
"safety" and "effectiveness" factors significantly related to consumer behavior in the future.
Kari Pikkarainen, Tero Pikkarainen, Heikki Karjaluoto and Seppo Pahnila (2006) used the
EUCS model to examine the satisfaction of E-banking users in Finland. A survey was
conducted on a sample scale of 268 individual customers conducted using convenient
sampling at over 40 commercial banks in Finland. The results show that there are three

factors: ease of use, accuracy, and safety that affect customer satisfaction in the quality of
E-banking services in Finland. The results show that the EUCS model can be used to
assess customer satisfaction in the quality of E-banking services, replacing traditional
models when evaluating service quality such as model SERVQUAL by Parasuraman et al.
(1988) and SERVPERF model by Cronin and Taylor (1992).
In Vietnam, there have been some researches on the quality of E-banking services and
the satisfaction of customers on the quality of E-banking services. These studies also selected
the model, identified criteria for assessing the quality of E-banking services and also used
quantitative methods to test the relationship between variables. Such as:
Le The Gioi and Le Van Huy (2012) study the relationship between service quality and
customer satisfaction and loyalty in the use of banking services. The study looked at the
relationship between factors and then adjusted those factors to fit the market data. Based on
the Exploratory Factor Analysis (EFA), Structural Equation Model (SEM), the authors have
obtained some results: develop a scale for the quality of banking services based on the
SERVQUAL scale and some additional scales suitable for the conditions in Vietnam; Identify
the factors that affect customer satisfaction on the quality of banking services including:
visibility, reliability of service delivery, trust in customer promise, sympathy and
responsiveness, branch network and ATM. Based on the results of the study, the authors also
provided some policy suggestions in the formulation of business strategies for commercial
banks in Vietnam.Tran Duc Thang (2015) has focused on developing a model of the
relationship between the quality of E-banking services and the satisfaction and loyalty of
customers under the influence of intermediaries as transforming costs, the trust of customers
in E-banking services in Vietnam. By using the Structural Equation Model (SEM), the results
show a very high correlation between the overall quality of E-banking services and customer
satisfaction and between satisfaction customers with loyalty of customers. Thus, it can be said
9


that in Vietnam, if the overall quality of E-banking services is high enough to meet the needs
of customers, the customer will be satisfied and will be loyal to the bank; that is, It will

continue to use the services of the bank in the future and may be good word of mouth for the
bank. These findings will serve as a basis for Vietnamese commercial banks to develop their
competitive strategies in the field of E-banking.
In summary, the review of research shows that: there were a lot of researches on
"Quality of E-banking services".These studies focused on building models such as
SERVQUAL, SERVPERF, EBAM, EUCS, TRA, TPB, TAM, TAM2, IDT, UTAUT to
evaluate the quality of E-banking services; factors affecting the quality of E-banking services;
customer satisfaction on E-banking service quality or the relationship between quality of Ebanking services and satisfaction and loyalty of customers. Within the scope of the topic, the
author will focus on the impact of factors on the quality of E-banking services and the quality
of E-banking services to the satisfaction of customers at commercial banks in Vietnam.
3. Research Objectives
The objective of the thesis is to research the customer satisfaction about the quality of
E-banking services at commercial banks in Vietnam; On that basis, it will propose feasible
solutions to further improve customer satisfaction on the quality of E-banking services for
commercial banks in Vietnam in the coming time.
In order to achieve that objective, the topic is directed towards specific objectives:

 Systematizing basic theoretical issues on E-banking, quality of E-banking services and
customer satisfaction;

 Analyzing and assessing the current status of the quality of E-banking services provided
at Vietnamese commercial banks;

 Developing a system of scales and models for measuring the quality of E-banking
services at Vietnamese commercial banks;

 Examining the impact of factors on the quality of E-banking services and the quality of
E-banking services to the satisfaction of customers at Vietnamese commercial banks;

 Suggesting some solutions to further improve customer satisfaction about the quality of

E-banking services for Vietnamese commercial banks during the integration period.
4. Research Subjects
The thesis will focus on the satisfaction of customers when using E-banking services
in Vietnam commercial banks.

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5. Research Scopes

 About space: Currently, the commercial banking system in Vietnam includes: 4 StateOwned commercial banks, 31 Joint Stock commercial banks, 6 banks with 100% foreign
capital, 2 Joint venture banks. Within the framework of this thesis, the author only limits
the study of 5 major commercial banks: Vietnam Joint Stock Commercial Bank of
Industry and Trade (Vietinbank), Joint Stock Commercial Bank for Foreign Trade of
Vietnam (VCB), Joint Stock Commercial Bank for Investment and Development of
Vietnam (BIDV), Asia Commercial Joint Stock Bank (ACB), Vietnam Technological and
Commercial Joint Stock Bank (Techcombank).

 About objects: Individual customers (including internal customers and external customers
of the bank) have been using E-banking services at the above 5 commercial banks for 1-3
years.

 About time: secondary datas are collected from 2012 to 2017, the primary datas are
surveyed in December 2017.
6. Research Questions

 What are the factors that Vietnamese commercial banks should consider when evaluating
the quality of E-banking services?

 How is the quality of E-banking services in Vietnamese commercial banks measured?

7. Research Methods
The thesis uses a combination of different research methods such as: descriptive
statistical methods; methods of synthesis, analysis and comparison; qualitative research
methods and quantitative research methods.
8. Structure of the thesis
This thesis includes four main chapters:
Chapter 1: Literature Review
Chapter 2: Data and Methodology
Chapter 3: Reseach Results
Chapter 4: Findings and Recommendations

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CHAPTER 1. LITERATURE REVIEW
1.1. Electronic Banking services
1.1.1. The concept of E-banking
So far, there are many different understandings about E-banking: E-banking is a
service where banks provide their customers with access to their accounts for business
transactions and information gathering via electronic communications channels such as cash
machines (ATM), home banking and internet banking (Pikkarainen et al, 2004). E-banking is
all transactions that can take place via an electronic system such as the web, the internet;
Helps all customers make transactions, access their accounts or to get information over the
internet (Azam Khurshid, 2014).
The State Bank of Vietnam defines: “E-banking services are modern and multifunctional banking services that are distributed to wholesale and retail customers quickly
(online, 24 hours a day, 7 days a week) through distribution channels (Internet and other
terminal equipment such as computers, ATM, POS, fixed telephones, mobile phones ...)".
According to Truong Duc Bao (2003, p.13) “E-banking is the ability for a customer to
remotely access a bank to collect information, perform payment transactions and finance
based on custody accounts at that bank”. With this understanding, E-banking service is a

computer software system that allows customers to learn or use banking services by
connecting their computer networks with banks. According to Tran Duc Thang (2015, p.22)
“E-banking services are banking services provided through electronic means and
telecommunication networks. Inside, electronic means are the means of operation based on
electrical, electronic, digital, wireless transmission, electronic or equivalent technology.
Telecommunication network includes internet, telephone network, wireless network, intranet,
extranet…”.
Thus, the above definitions define e-banking services through delivery services or
through electronic distribution channels. This definition may be true from time to time but it
is not possible to outline both the history of development and the future development of Ebanking. From the above concepts, the author can generalize as follows: “E-banking services
include all types of transactions between banks and customers (individuals and
organizations) based on digital data processing and transfer to provide banking products and
services.”.
1.1.2. The benefits and risks of E-banking
1.1.2.1. The benefits of E-banking (Tran Duc Thang, 2015)
For the Bank: It is characterized that transactions are entirely carried out through
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electronic equipment and telecommunication networks; E-banking has brought many practical
benefits to banks:
- The cost of dealing with E-Banking services is often much lower than traditional
services, thus saving the bank's costs and thus increasing the bank's revenue and profit.
- E-banking increases competitiveness and broadens the scope of operations for banks. EBanking also helps commercial banks to implement the strategy of "Globalization" without
having to open any other branches in the country and abroad.
- E-Banking also helps banks to increase efficiency of capital mobilization and use: when
customers use E-Banking service, they must open a payment account and maintain a certain
amount of money at the bank, so the bank also mobilizes some of its capital.
- The convenience of E-Banking services from application technology, from the software
used and from the network service provider and internet service has attracted and kept many

customers dealing with banks and become traditional customers of the banks.
- E-banking can provide a package service to customers: banks can link with insurance
companies, securities companies and other finance companies to provide integrated services
aimed at meet the needs of every customer in the market.
For customers: E-banking services not only bring about practical benefits to banks
but also to customers:
-

Saving time and money: Using E-banking services with electronic means allows

customers to carry out transactions with banks anytime, anywhere without having to go to the
bank, thus saving time and fuel costs, travel expenses for customers. In addition, transaction
costs of E-Banking services are often much lower than traditional ones, thus saving on service
costs for customers.
- Reducing transaction procedures at banks: If the traditional banking services,
customers have to complete the required information on the printed form of the bank and have
to move from one transaction counter to another; the E-Banking service, customers only need
to sit in one place and carry out specific instructions on the applications provided by the bank
that can carry out all transactions such as: electricity bill, card, pay tuition, transfer money ....
-

Customers will receive many incentives: when using E-Banking service, customers

will receive many incentives from banks, from service providers such as payment by bank
card will be discounted, online phone recharge will receive high discount plus value card
charge ...
For economy: Every year, the State Bank does not have to spend money on printing,
distributing and preserving, transporting cash, reducing the amount of money in circulation
and thus controlling inflation. E-Banking has created a new way of doing business,
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contributing to boosting economic, trade and tourist activities, creating conditions for
expanding trade and economic cooperation with the region and the world.
1.1.2.2. The risks of E-banking (Tran Duc Thang, 2015)
In addition to the benefits that E-banking offers to both banks and customers, E-banking
also has a number of risks:
-

Risk of security: If the access control of the banking system is not good, it can lead to

the fact that hackers have successfully committed illegal activities. For example, customers
who use personal information (passwords, credit card numbers, account numbers, etc.) are not
careful enough to make hackers have access to their accounts. As a result, banks face financial
losses due to transactions that are not made by unauthorized clients.
-

Risks of reputation: reputational risk can arise when customers encounter obstacles to

new banking services but are not provided with sufficient information about the use and
procedures for solving problems; Or because of the difficulties of the telecommunications
system that customers can not access their customer information or source of money,
especially when there are no alternative means. Even, reputational risk may also arise from
deliberate attacks on the bank that are "hackers" that illegally infiltrate the Website of the
bank, altering the falsification of the information on banking services.
1.1.3. Types of electronic banking services
1.1.3.1. Mobile Banking
It is an online service through the mobile phone network in parallel with the form of
Internet service was born in the 90s. With the development of science and technology, smarter
phones have more memory capacity. Users can install the applications provided by the bank,

so that the application on the phone acts as a client application on the computer if connected
to the Internet; or Telecom Developers are pre-installed on the SIM Toolkit that allows
customers to make transactions with any bank connected to the network without having to
connect to the Internet. The advantage of this form is the mobility of the phone that the
customer always carry with him. The downside is that the information provided to the
customer is simple and undergoes several small steps to complete any transaction. Therefore,
this form was created to address the need to pay the Micro payments or automated services
without a server. To participate in this service, customers must register to become a full
member in which the customer must provide his basic information such as mobile phone
number, personal account number. After that, the customer will be provided with an
identification code (ID) and will be converted into a bar code for posting to the mobile phone,
which will help to provide customer information when paying quickly and accurately. With
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the identification number, customers are also given a personal identification number (PIN) to
confirm the payment transaction when the payment service provider requests. After
completing the necessary procedures, the customer will be a full member and eligible to pay
via mobile phone. Mobile Banking services such as: View information about interest rates,
exchange rates; View balance of payment deposit account, card account; Receive a message
when the balance of payment account or card account changes; View the latest transaction
listings (up to 5 listed); Transfer money through card accounts; Check the receipt of identity
card or passport; Payment of electricity bill, water bill, Internet charge, mobile phone bill,
cable TV fee ….
1.1.3.2. Phone Banking
The banking service is provided through a system of server and management software
located at the bank, linked to customers through the service switchboard. This service gives
customers a new convenience that customers can use their phones anytime, anywhere to listen
to their banking information and personal account information. This is an automated
answering system that works 24 hours a day. Customers simply press the keys on their phone

keypads in accordance with the bank code required to request the system to respond to the
required information at any time including outside office hours. However, one limitation is
that the information updated via this service is only available at the end of the previous day.
The process of using Phone Banking is as follows: (1) Registration to use the service: the
customer must provide the necessary information and sign the contract using this service.
Then the customer will be provided with two identifiers which are customer code and system
access key; In addition, customers are provided with an account code to facilitate the
transaction as well as ensure security. (2)Transaction processing: When customers call the
operator, the system will automatically enter the customer code and service access code,
according to the customer's prompt will select the function key corresponding to the service
you need to transact. Customers can change or edit before confirming transactions with banks,
transaction documents will be printed and sent to customers when the transaction is finished.
Services provided through Phone Banking include: Check balance of payment deposit
account; Check information on interest rates, exchange rates, securities; Listen to the latest
deals (up to 5 transactions); Ask banks to fax transaction listings, savings interest rates, stock
quotes, exchange rates ...
1.1.3.3. Home Banking
HomeBanking is built on one of the two platforms: the Software Base and the Web
Base through the server, the Internet and personal computers. With this service, the customer
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deals with the bank via the network but is the internal network built by the bank itself
(Intranet). This service allows customers to perform most bank transfer transactions at home
or at the office without access to the bank by accessing the bank's network. This is a highly
secure product thanks to the operation of the local communications network between the
customer and the bank through the VPN system. The process of using HomeBanking services
for individual customers includes the following steps: (1) Connect and sign in: Customers
connect their computer to the computer system of the bank through the Internet (Dial-up,
LAN, WAN, Direct-Cable ...) and then visit the Website of the bank serves themselves. Once

verified, the customer will be set up a secure transmission (https) and login to the computer
network of the bank. (2) Transaction: after login, customers can use a variety of E-banking
services depending on their transaction needs such as querying account information,
transferring money, paying electronically... (3) Check, confirm transaction and exit the
network: When the transaction is completed, the customer must check the transaction then
exit the network. The necessary documentation will be managed, stored and sent to customers
upon request.
For business customers, the process of using the HomeBanking service is more
complicated. Normally, when registering for this service, the enterprise must register two or
three User access: User input, User control and User browsing. The User input is the
accountant, the User Control is the chief accountant or the authorized person and the User
browsing is the account holder or the authorized person. HomeBankinng services include:
Transfer within and outside the banking system; Payment of bills such as money, water, cable
television, Internet charges, telephone charges ...; Funds transfer through ID card or passport;
Currency conversion through bank deposit account; Look up information on payment account
balance, card account; List the most recent transactions on your account (up to 5 listed).
1.1.3.4. Internet Banking
A type of E-banking on the browser, also known as online banking. This is a broad
distribution channel for banking products and services to customers anywhere and at any
time. To use this service, customers only need to sign up for a service with a bank and one of
the devices such as a tablet, laptop or desktop computer with an Internet connection is
available for use. The advantage of this service is that it does not require customers to have
complex settings and does not have to install client applications so customers do not have to
spend maintenance fees; The user interface is very eye-catching, clear layout, large size on the
Web browser platform. The downside is the inconvenience of scrolling due to the size of the
computer.

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With a computer connected to the Internet, through the access code and password is
provided, customers can access the website of the bank to be provided with information and
fully instructions on the use of all products. the bank: View your account balance at the
current time; view transaction history; View information about exchange rates, interest rates
and securities; Transfer within and outside the banking system; Send all inquiries, comments
on products and services of the bank and be resolved quickly; Payment of bills such as
electricity, water, cable television, telephone charges, Internet charges ...
1.1.3.5. Call Center
Call Center is the banking service through the central telephone, customers with
accounts at any branch can still call a phone number of this center for all information. Unlike
the PhoneBanking service that provides only pre-programmed information, this service can
flexibly provide information or answer customer inquiries. Therefore the limitation of this
service is always to have people 24/24. Services provided by the Call Center include:
Introduction to the telephone card products of the bank; Consult card use, register card for
telephone; Apply for voice loans (for individual customers); Providing information on
payment deposit accounts, savings accounts and card accounts; Payment of bills such as
electricity, water, cable television, telephone charges, Internet charges; Remittance within and
outside the banking system; Receive telephone complaints and inquiries from customers when
using products and services.
1.1.3.6. Kiosk Banking
Kiosk Banking is an electronic banking service that uses touch screen, customers just
touch the screen lightly to be able to perform transactions such as: deposit savings; transfers
within and outside the banking system; pay taxes or pay bills of electricity, water, cable
television ... On the streets there will be stations or centers that are connected to the Internet at
high speeds. When customers want to transact, they only need to enter the personal
identification number and password to confirm that they can use the product banking services.
With this service, banks will reduce the number of ATMs and reduce the amount of cash in
circulation; Customers will be served with the highest quality and most convenient but now
this service is less bank provided.
1.1.3.7. Electronic Wallet

E-wallet is a service that provides customers with an electronic account created on a
carrier (such as electronic chip, mobile phone sim, electronic data ...), allowing customers to
store a monetary value is guaranteed by the amount of cash equivalent to the amount
transferred from the customer's payment deposit account or other forms into the deposit
account of banks for the execution of transactions. E-wallet service providers are responsible
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for managing E-wallet accounts of customers and processing transactions arising on the
system when the activities of loading, withdrawing money, trading goods, services of
customers; calculate the obligation and notify the bank to debit and credit the relevant real
money accounts of the parties involved.
1.1.4. The technical means for the use of E-banking services
 Mobilephones: Currently, most of the large mobile phones with GPRS or network
connections are able to install software and use E-banking.
 Electronic payment equipment (POS, EDC): Electronic devices with electronic readers
connected to the bank's network can transmit and track information from credit cards,
smart cards of shoppers at point-of-sale current payment transactions. Through credit
cards that customers can purchase, pay for non-cash services, the bank replaces the
paying customer for the point-of-sale and the bank receives a certain fee from the funds
themselves.
 Computers: Through a networked computer, customers can access the Website of any
bank to use the E-banking services provided by the bank.
 Website and Internet: The Internet is a wide area network, which brings together
thousands of computer networks around the world connected to each other. Web is a
hypertext made on the internet. Via the internet, customers can access the information
posted on the Bank's Web site and can conduct E-banking transactions provided through
the Bank's website.
 ATM Card: An ISO card that includes debit and credit cards. Debit card used to perform
transactions such as checking accounts, withdrawing money, transferring money, paying

bills ... For debit cards, customers using the amount of money already on the card can
withdraw money at a negative level or withdraw overdraft. Credit card used to pay at
the point of sale or to withdraw cash at ATMs. Credit cards are based on the credit line,
depending on the type of card and the type of customer that the bank will provide to the
customer a certain amount of credit. Customers can withdraw the amount issued by the
bank within a certain period and be forced to pay when maturity. If the credit limit is not
paid in time, the bank will charge interest rates as high as prescribed. These two types of
cards are accepted as a non-cash payment at card acceptance points.
1.2. Quality of E-banking services
1.2.1. Definition of service quality

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Quality of service is assessed depending on the culture, the field of business should
have many different definitions. Through reference to the literature, the author recognizes
some of the notion of service quality used by the author:
Grönroos (1984, p.37) "Quality of service is the difference between the quality of service that
customers expect with the quality of service that customers actually feel". This concept has
been reaffirmed in Parasuraman et al. (1985, p. 42) as follows: “Quality of service can be
defined as the comparison of customers between the quality of service they expect and the quality
of service they receive. Quality of service is determined by the difference between the customer's
expectations for the service and the actual perception of the service and can be expressed by the
formula: Quality of Service = Perception - Expectation". According to Woodside et al. (1989):
“Quality of service is understood by the answer to the question: Is customer service what they
expect or different from what they expect? The services that customers receive are almost
what they expect or better or worse than what they expect". In the opinion of Philip Kotler et
al. (2005) "Quality of service is defined as the ability of a service to include overall durability,
reliability, accuracy, ease of use and ease of repair. and other valuable attributes to perform its
functions. In addition, due to the different cultural environment, consumers in different

countries may perceive different quality of service in different types of service".
Thus, although there are many different views but the same can be understood “Quality
of service is the response to the needs and expectations of customers, in other words the
quality of service is the difference between the customer's expectation and the perceived
service provided”.
1.2.2. The concept of quality of E-banking services
The concept of quality of E-banking services is no stranger to people because it is a
matter of concern to managers in today's technology. So far, there are many different views
on the quality of E-banking services, and different studies have come up with different
concepts of E-banking service quality. Such as:
According to Jun and Cai (2001, p.8) "The quality of E-banking services is assessed on
all three aspects: quality of customer service, quality of banking services and quality of online
system". Yang et al. (2004, p.11) "The quality of E-banking services is assessed on three
aspects: quality of online customer service, quality of banking services and quality of system
online information". According to Richard (2015) "Quality of E-banking services is assessed
by customer satisfaction when they use E-banking services". In line with Richard (2015),
some authors argue that the quality of E-banking services is the satisfaction of customers
about how banks provide E-banking services (Doan Thu Thuy, 2012) and (Le Thi Bich

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Nguyet, 2015). At a higher level, Tran Duc Thang (2015,p.25) said, "The quality of Ebanking services is not only reflected in customer satisfaction but also in customer loyalty".
From the analysis of the concept of "E-banking" and the definition of "quality of
service" we can understand “The quality of E-banking services is the perception of
customers that the gap between the expectations of E-banking services will be provided
with their perception when using E-banking services”.
1.2.3. Criteria for measuring the quality of E-banking services
The measurement of E-banking service quality depends on many factors that affect
the perception of the user and the nature of the service. There were many authors who studied

this issue: Parasuraman et al. (1982, 1985, 1988); Cronin and Taylor (1992, 1994); Gronroos
(1984, 1990); Dabholkar et al. (2000)... The authors have developed analytical frameworks
for assessing service quality with a variety of components and applications in different areas,
but the most common are the five of service quality assessment criteria by Parasuraman et al.
(1988) included “Reliability, Responsiveness, Tangibles, Assurance, Empathy”:
(1) Reliability: Reliability demonstrates the ability to deliver consistent and timely
service right from the first time. This indicator is important for services in the field of rail,
bus, banking, freight... For E-banking services, this indicator is measured by the following
scales: (i) The level of safety and security of E-banking, (ii) The stability and accuracy of the
transaction. Indeed, E-banking is a service based on modern technology. Customers do not
have to go to the bank to make transactions, so the safety and security are always put on top
by customers. From the customer's point of view, the security and confidentiality here
includes such factors as the confidentiality of information for customers, authentication of
customer information,.. to avoid risks such as loss of money, disclosure of customer
information when bad guys take advantage.
(2) Responsiveness: Responsiveness is expressed through the availability of service
personnel when providing timely service to customers. In order to measure the responsiveness
of E-banking, we can use rating scales for the degree of willingness to introduce, guide
customers to use, guide customers to make complaints; answering customer inquiries, the
ability to provide services at all times that customers need.
(3) Tangibles: Tangibles are represented by a system of facilities, equipment, personnel,
materials and media for service delivery. These factors are used at different levels for services
to take place, sometimes the underlying factor is hidden, so the user is less visible. For Ebanking services, customers only have to go to the counter to register or deposit into their
payment account for use at every transaction, so the criteria for tangible means are perceived
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by customers through: service manual; registration form for using the service; the form of
deposit into the account; devices that support access to E- banking.
(4) Assurance: Assurance is demonstrated by the expertise, ability to meet the current

and future needs of customers as well as the courteous manner of employees to customers. In
order to measure the "Assurance" indicator, E-banking uses the scales of professional
expertise of bank staff, transaction processing, transaction processing descriptions, the speed
at which transactions are handled, how complaints handling is handled.
(5) Empathy: Empathy is expressed through attention, care to each customer. For Ebanking services, this criterion is reflected in the bank's empathy for customer needs based on
the transaction value, frequency of use of services and utilities that customers regularly use,
from which the orientation for customers in using the service. Empathy is felt by the
customers through the scale of ease of use, the ability to meet the diverse needs of the type of
banking services that customers need ...
1.3. Customer satisfaction
1.3.1. The concept of customer satisfaction
Customer satisfaction is seen as the foundation of the concept of marketing. There are
many studies of customer satisfaction and the fact that there are many different
understandings of customer satisfaction. According to Kotler (2000,p.86) "Customer
satisfaction is the level of feeling that is the joy or frustration of the customer from comparing
the results they receive from using the service with their expectations". Or "customer
satisfaction is their reaction to the perceived difference between known experience and
expectation" (Parasuraman et al. 1988).
Tse and Wilton (1988) argue that "Customer satisfaction is the response of customers
to the difference between desire and perception after using products or services". According
to Oliver and Bearden (1995,p.48) "Customer satisfaction is a business task expressed by the
relationship between the value of the product or service and the expectations of the customer”.
Zeithaml and Bitner (2000) argue that "Customer satisfaction is the customer's perception of a
product or service that meets their needs and expectations”. According to Kotler & Keller
(2006,p.62) "Customer satisfaction is the level of sensation derived from comparing the
perception of a product to the expectations of that person. Accordingly, satisfaction is divided
into three levels:
- If customer perception is smaller than expected, customers feel dissatisfied.
- If expectations are met, customers feel satisfied.
- If the perception is bigger than expected, the customer will feel satisfied".

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In Vietnam, the satisfaction of customers has been studied by a number of authors in
different fields such as in the field of mobile telecommunication by Thai Thanh Ha and Ton
Duc Sau (2007); banking sector by Duong Thi Ngoc Phuong (2013), Tran Duc Thang
(2015)… In any field, the authors have a general view of customer satisfaction is the
emotional state of the customer when comparing the results received from the service
compared to their expectations. Today, in the context of fierce competition, customer
satisfaction can be viewed as a significant success for the organization because customer
satisfaction can lead to customer retention (Jamal and Kamal, 2002).
In summary, from the point of view, the author gives the concept as follows:
“Customer Satisfaction is the emotional state in which the needs and desires of the customer for
the value / benefit of the service are lower, equal or higher than expected, leading to customer
loyalty to the bank's services".
1.3.2. The relationship between service quality and customer satisfaction
The relationship between service quality and customer satisfaction has been the
subject of much debate among researchers over the last decade. There have been many studies
of customer satisfaction in different service sectors and generally concluded that quality of
service and customer satisfaction are two distinct concepts but they have a close mutual
relationship. Indeed, in the service sector, the concepts of "quality of service" and "customer
satisfaction" are fundamentally different based on the analysis of causal relationships between
them. According to Zeithalm and Bitner (2000), customer satisfaction is influenced by many
factors such as: quality of service, price, personal factors, environment ... As such, customer
satisfaction is a broader concept than quality service. With this view we can see the quality of
service as a factor in the impact on customer satisfaction. There have been many practical
studies on the relationship between quality of service and customer satisfaction. Cronin and
Taylor (1992); Spreng and Mackoy (1996); Jamal and Naser (2002) examined this
relationship and concluded that service quality leads to customer satisfaction, which is the
premise of satisfaction and also the factors that affect customer satisfaction. Therefore, to

improve customer satisfaction, service providers must improve service quality. In other words,
quality of service and customer satisfaction are closely interrelated in that quality of service is
what is created first and determines customer satisfaction. Therefore, we can use customer
satisfaction to measure service quality.
1.4. Models of service quality measurement

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1.4.1. SERVQUAL model
The Servqual model is one of the tools for measuring service quality; It has been so
popular ever since not only in marketing but also in other fields such as: health care, banking,
retailing, hotel services, commercial services... In 1985, Parasuraman and his colleagues set
out 10 criteria for measuring service quality:
Table 1.1. Measurement criterias of SERVQUAL Model – 1985
Measurement criterias

Description

Accessibility

Measure to create easy conditions for customers to access
services such as: shorten the waiting time of customers, places
of service and convenient opening hours for customers.

Competence

Measure the expertise of the staff when performing services,
the ability to research to capture the relevant information
necessary for customer service.

Measure communication, communicate it to customers in a

Communication

Courtesy

language they understand easily and listen to customer-related
issues such as: explaining the service, cost, resolving
complaints, or answer questions ...
Measure the style of hospitality, courtesy and customer
friendliness of the staff.

Reliability

Measure the ability to perform the right service on time, right
from the first time.

Responsiveness

Measure the availability of service staff when providing service
to customers.

Credibility

Measure the ability to create trust for customers, make
customers trust in the bank.

Security

Measure the ability to ensure the safety of customers, expressed

through the safety of material, financial as well as information
security.

Tangibles

Measure the system infrastructure, equipment for service, staff
service.

Understading/knowing
the customer

Measure the ability to understand the needs of customers by
understanding the requirements of customers, taking care of
them personally and identify the customer regularly.
Source: Parasuraman et al. (1985)

A model of 10 service quality measures has the advantage of covering almost every
aspect of the service. However, this model has the disadvantage of being complex in
measurement and this model is theoretically possible, even though many components of the
service quality model fail to achieve distinctive values. Therefore, these researchers have
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