The factors affecting customer satisfation in retail banking at vietnam maritime commercial joint stock bank

Cohort 2016 – 2018

MASTER THESIS

“THE FACTORS AFFECTING CUSTOMER SATISFATION IN RETAIL BANKING
AT VIETNAM MARITIME COMMERCIAL JOINT STOCK BANK”

Advisor: PhD. DAO TUNG
Author: TRAN THI THAO

Hanoi, 05/2018
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ACKNOWLEDGEMENT
With the approval of the International Faculty of the National University, the
University of Nantes and my teacher, PhD. DAO TUNG, I have chosen the subject of the
research "THE FACTORS AFFECTING CUSTOMER SATISFATION IN RETAIL
BANKING AT VIETNAM MARITIME COMMERCIAL JOINT STOCK BANK”.
To complete this thesis, I would like to express my deep gratitude to all the teachers
were enthusiastic teaching and guidance during my study, research and training at the
department.
I would like to deeply thank our teacher - PhD. DAO TUNG who guided me access
to research topics and find out the best solution for this study. He has given us a very
sincere affection, warmth, an attitude to work very carefully, exemplary. I could not have
imagined having a better mentor than her my graduation topic.
Although my work is very busy, I always try my best to complete the thesis. However, the
first time doing an academic research brings me from this challenge to another one. So it
is impossible to avoid all difficulties in doing the research. So I would like to receive
valuable feedback from the teachers and colleagues to my study in order to get my thesis
completed.

Last but not least, I also would like to express my special thanks to my family for
their support during my two years studying in this program as well as during the last
highly intensive time for this thesis.
Sincerely thank with my best regards,
Hanoi, May, 2018
Author: Tran Thi Thao – FBA8

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TABLE OF CONTENTS
ABBREVIATIONS..................................................................................................................... 6
LIST OF TABLES ...................................................................................................................... 7
LIST OF CHARTS ..................................................................................................................... 7
LIST OF DIAGRAMS ............................................................................................................... 7
ABSTRACT ................................................................................................................................ 8
INTRODUCTION ...................................................................................................................... 9
1. Rationale for theResearch................................................................................................ 9
2. Overview of research situation ...................................................................................... 10
3. Research Objectives ....................................................................................................... 14
4. Research Subjects ........................................................................................................... 14
5. Research Scopes .............................................................................................................. 14
6. ResearchQuestions ......................................................................................................... 14
7. Research Methods .......................................................................................................... 15
8. Structure of the thesis .................................................................................................... 15
CHAPTER 1. LITERATURE REVIEW ............................................................................... 16
1.1. Banking services .......................................................................................................... 16
1.1.1. The concept of banking services ................................................................................ 16
1.1.2. Characteristics of banking services ............................................................................ 17
1.1.3. Types of banking services .......................................................................................... 18

1.2. Quality of banking services ......................................................................................... 20
1.2.1. The concept of quality of banking services ................................................................ 20
1.2.2. Criteria for measuring the quality of banking services .......................................... 22
1.3. Customer satisfaction .................................................................................................. 22
1.3.1. The concept of customer satisfaction ......................................................................... 22
1.3.2. The relationship between quality of service and customer satisfaction ..................... 23
1.3.3. Factors that affect customer satisfaction .................................................................... 23
1.4. Models of measuring the quality of banking services .............................................. 27
1.4.1. SERVQUAL Model ................................................................................................... 27
1.4.2. SERVPERF Model ..................................................................................................... 28
1.4.3. BANKSERV Model ................................................................................................... 28
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1.4.4. JOHNSTON Model .................................................................................................... 29
1.4.5. BSQ Model of Bahia and Nantel (2000) .................................................................... 31
1.4.6. Model of Sureshchander et al. (2001) ........................................................................ 31
1.4.7. SYSTRA - SQ Model of Aldlaigan and Buttle (2002)............................................... 32
1.4.8. CBSQ Model of Xin Guo et al. (2008) ....................................................................... 32
1.4.9. Model of Kumar et al. (2009) ..................................................................................... 33
1.4.10. BANQUAL-R Model of Tsoukatos and Mastrojianni (2010) ................................. 33
CHAPTER 2. THE STATUS OF THE QUANLITY OF BANKING SERVICES AT
MARITIMEBANK ................................................................................................................... 34
2.1. Overview of Vietnam Maritime Commercial Stock Bank ....................................... 34
2.2. Quality assurance services at Maritimebank ............................................................ 35
2.2.1. Training programs, communication and evaluation, quality control services at
Maritimebank ....................................................................................................................... 35
2.2.2. Current status of service quality at Maritimebank ..................................................... 37
CHAPTER 3. MODEL, HYPOTHESIS AND METHODOLOGY ..................................... 43
3.1. Research Model ........................................................................................................... 43

3.2. Research process .......................................................................................................... 44
3.3. Data sources ................................................................................................................. 46
3.3.1. Secondary data ............................................................................................................ 46
3.3.2. Primary data ................................................................................................................ 46
3.4. Research Methods ....................................................................................................... 46
3.4.1. Qualitative research methods...................................................................................... 46
3.4.2. Quantitative research methods.................................................................................... 48
CHAPTER 4. RESEARCH RESULTS .................................................................................. 54
4.1. Results of qualitative research ................................................................................... 54
4.1.1. Results of expert interviews ....................................................................................... 54
4.1.2. Results of personal interviews .................................................................................... 55
4.2. Results of quantitative research ................................................................................ 55
4.2.1 Results of sample analysis ......................................................................................... 55
4.2.2 The results of the scale evaluation ............................................................................. 57
4.2.3 Analysis results .......................................................................................................... 61
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CHAPTER 5. CONCLUSIONS AND RECOMMENDATIONS ......................................... 67
5.1. Conclusions .................................................................................................................. 67
5.2. Recommendations........................................................................................................ 67
5.2.1. Enhancing the capacity of the bank staff .................................................................... 68
5.2.2. Ensuring the fee of service are reasonable ................................................................. 69
5.2.3. Ensuring credibility in the transaction ........................................................................ 70
5.2.4. Invest in upgrading facilities, equipment, dresses for employees .............................. 70
5.3 Limitation of reasearch ................................................................................................ 71
CONCLUSION ......................................................................................................................... 72
REFERENCES ......................................................................................................................... 73
APPENDIX 01 - CONTENTS OF EXPERT INTERVIEWS .............................................. 76
APPENDIX 02 - CONTENTS OF IN-DEPTH INTERVIEWS ........................................... 81

APPENDIX 03 - QUESTIONNAIRE FOR SURVEY .......................................................... 84
APPENDIX 04 - DATA RESULTS......................................................................................... 88

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ABBREVIATIONS

ATS

Access to Services

CFA

Confirmatory Factor Analysis

COM

Communication

CRE

Credibility

EFA

Exploratory Factor Analysis

FSE

Fee of the service

SAT

Customer satisfaction

SEM

Linear Structure Model

STC

Staff Conduct

WTO

World Trade Organization

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LIST OF TABLES

Table 3.1.

A summary of research hypotheses

Table 3.2.

Summary of encoded scales

Table 4.1.

Results of expert interviews

Table 4.2.

Statistics of demographic characteristics of the surveyed subjec

Table 4.3.

Results of the Exploratory Factor Analysis (EFA)

Table 4.4.

Summary of measurement results

Table 4.5.

Summary the average value of each scale

Table 4.6.

Pearson Correlation

Table 4.7.

Regression analysis

Table 5.1.

Summary the results of the research hypothesis testing

LIST OF CHARTS
Chart 2.1.

Comparison of service quality between banks in 2017

Chart 2.2.

Comparison of Brand image of Maritimebank in third quarter of 2016 and
third quarter of 2017

Chart 2.3.

Compare Maritimebank's favorite level of customer with other banks in
2017

Chart 2.4.

Compare the Maritimebank Brand image rating to other banks in 2017

Chart 2.5.

Score of service quality of Maritime Bank in 2016 - 2017

LIST OF DIAGRAMS
Diagram 1.1.

BANKSERV Model of Avkiran (1994)

Diagram 3.1.

Research Model of the Thesis

Diagram 3.2.

The research process of the Thesis

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ABSTRACT
Customers Satisfaction have a big influence on a bank’s development. In fact, there has
been a lot of researches that indicated the variety of factors effect on Customers satisfaction. So
in this study, author just mention some factors based on research model bankserv from Avkiran,
such as Staff conduct, Credibility, Communication, Access to services and some factors that can
directly impact on customers satisfaction at Maritime Bank, that is Fee of service. Research result
indicate that all above factors influence on Customers Satisfaction, but Access to services have
the most influence on individual customers satisfaction. I hope research result will help Maritime
Bank to improve service quality and individual Customers satisfaction.
Key words:
Banking, Customer service, Service quality, Customer Sactisfaction, Performance
measurement, Retail banking, Bankserv

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INTRODUCTION
1. Rationale for theResearch

Customers are the decisive factor in the success of any industry and Banking is no
exception. In the increasingly competitive environment, banking services do not seem to be
specialized, leading the market, the quality of service is the way to bring customers closer to the
bank.
Vietnam's economy is developing strongly and actively integrating into the world economy.
The commercial banks system has also developed remarkably and along with the competition
between banks, between banks and other financial institutions. This competition requires banks to
have appropriate business strategies and constantly expand and improve the quality of services.
Developing retail banking is the trend of commercial banks around the world. Especially for
a booming economy like Vietnam to survive and develop in a sustainable manner, Today's
commercial banks are aiming at strengthening and developing their customers, especially
individual, household, small and medium enterprises. Retail banking is always considered as a
core activity, from which the bank can expand its business activities. Facing competition and
international integration requirements, commercial banks need to develop and improve their
competitiveness in terms of retail banking quality; This activity has become a core activity to
meet the increasing demand of society.
For Vietnamese commercial banks, despite the perceived importance of service quality and
most of commercial banks have applied many positive measures to implement this type of service
and the first step is quite positive. However, in general, the quality of services in most
commercial banks in Vietnam, including Maritime Bank, has not met the expectations, many of
these commercial banks are still largely formal, lacking in form, and not even rightly centered.
The issue now is to study the factors that affect customer satisfaction on service quality, thereby
clarifying the limitations and causes for practical action to improve the customer satisfaction. As
an officer of Maritimebank and directly operating in the field of service quality, with the
enthusiasm to improve the quality of this activity to benefit both customers and Maritimebank, I
chose the topic: “The factors affecting customer satisfaction in retaill banking at Vietnam
Maritime Commercial Joint Stock Bank” as my Master's thesis on Finance, Banking and
Insurance.
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2. Overview of research situation
So far, there have been many domestic and foreign studies on the quality of banking
services, customer satisfaction on the quality of banking services and the factors that affect
customer satisfaction on the quality of banking services. Such as:
Necmi Kemal Avkiran (2002) developed the BANKSERV banking service quality
measurement model with 27 initial observations of six factors: Staff conduct, Credibility,
Communication, Access to teller services, Responsiveness, Access management branch based on
the SERVQUAL model by Parasuraman et al. (1985) to measure the quality of retail banking
services at Australian bank branches. The results of data collection from 971 individual
customers have been using the services at the bank branches, The analysis shows that four factors
affect the quality of retail banking in Australia: (1) Staff conduct, (2) Credibility, (3)
Communication, (4) Access to teller services. Although research has identified four factors that
affect the quality of banking services, Avkiran's research has not yet revealed the importance of
each factor. At the same time, the author's research shows that the BANKSERV model has not
been expanded on the basis of segmentation of customers according to customer demand in
combination with other Socio-Economic factors.
Kamilia Bahia and Jacques Nantel (2004) developed a service quality measurement model
BSQ (Banking Service Quality) based on the combination of 10 service quality components of
Parasuraman et al. (1985) and the 7Ps Mixed Marketing methodology to measure the quality of
service experience for different types of banking services in Canada. By using the Exploratory
Factor Analysis(EFA) through a database of 225 French-speaking individuals using different
types of banking services in Canada, The results show that six factors affecting the quality of
banking services in Canada include:(1) Effectiveness and assurance, (2) Accessibility, (3) Fee of
service, (4) Tangibles, (5) Service portfolio, (6) Reliability. All six factors of the BSQ model are
more reliable than the SERVQUAL model. However, as the BSQ model was developed to
conduct a survey of French-speaking clients using Canadian banking services, it may not be
suitable for customers who are using the other languages. This is the limitation of the study.
Abdullah H. Aldlaigan and Francis A. Buttle. (2007) developed the SYSTRA-SQ model
based on the Nordic model of Gronroos (1982) to measure the quality of retail banking services

in the UK. Using the Exploratory Factor Analysis(EFA) and analysis of ANOVA variance by
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collecting data from 975 individual customers who have been using banking services in the UK,
the results show that: The SYSTRA-SQ model has four factors that affect the quality of banking
services: (i) SSQ - System Service Quality; (ii) BSQ – Behavioural Service Quality; (iii) MSQ Machine Service Quality; (iv) STA – Service Transactional Accuracy. The results also show that
the criteria and scales of the SYSTRA-SQ model are highly reliable and can be used to measure
service quality in the banking industry.
Xin Guo et al. (2010) also developed the CBSQ (Chinese Banking Service Quality) model
based on the SERVQUAL model and in-depth interviews with 18 bank managers to measure
quality of service of wholesale banks in China. Data were collected by surveying 259 individual
customers. Through the Exploratory Factor Analysis(EFA) and Confirmatory Factor Analysis
(CFA), The results show that four factors affect the quality of banking services: Reliability,
Human Resources, Technology, Communication. Compared to the Nordic model of Gronroos
(1984), the above four factors have two factors: "Reliability" and "Human resources" are part of "
Functional quality"; two factors “Technology” and “Communication” are part of "Technical
quality”. The results also show that the CBSQ model has only been developed for the context of
financial markets in China and may not be suitable for the context in other markets.
Noel Yee-Man Siu and Jeremy Chi-Wah Mou (2011) used the SERVQUAL model
developed by Zeithaml et al. (2000, 2002) to analyze factors affecting customer satisfaction in
quality banking services in Hong Kong as well as their intended use in the future. Five factors are
identified: Reliability, Effectiveness, Security, solving problems and safety. Results show that all
factors other than "Security" are important in determining overall service quality perception.
“Reliability, solving problems and safety” have a significant impact on customer satisfaction; Not
only that, but both "Safety" and "Effectiveness" are significantly related to consumer behavior in
the future.
Kari Pikkarainen et al. (2013) used the EUCS model to examine customer satisfaction when
using banking services in Finland. A survey was conducted with a sample size of 268
individual customers conducted using convenient sampling at over 40 commercial banks in

Finland. The survey found three factors that affect customer satisfaction on the quality of
banking services in Finland: Ease of use, accuracy and safety. The results show that the
EUCS model can be used to assess customer satisfaction in terms of quality of banking
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services among individual customers rather than traditional models when evaluating service
quality as SERVQUAL model of Parasuraman et al. (1988) and SERVPERF model of Cronin
and Taylor (1992).
In Vietnam, up to now there have been a number of studies on the quality of banking
services, customer satisfaction on the quality of banking services or the factors that affect
customer satisfaction on quality of banking services.
Tran Hong Hai (2014) proposed a model of research by modifying the SERVQUAL scale
of Parasuraman and applying the theory of SERVPERF model by Cronin and Taylor (1992) to
study factors affecting the satisfaction of customers on quality of ATM card services at
Vietcombank - Vinh Long branch. Author have validated and modified the research model
through: Cronbach's Alpha coefficients, Exploratory Factor Analysis (EFA), Confirmatory
Factor Analysis (CFA), and the Linear Structure Model (SEM) with a sample size of 779
customers using ATM card of Vietcombank - Vinh Long branch by convenient sampling
method to build scale through AMOS22.0. The results show that customers' satisfaction about
the quality of ATM card services at Vietcombank - Vinh Long Branch is influenced by 4
factors: price, network, empathy and reliability.
Dinh Thi Hoa and Tran Thi Bich Ngoc (2014) used a combination of BANKSERV and
SERVQUAL models to study the quality of banking services in Bien Hoa City. The sample was
50 customer at Bien Hoa Agribank-Thong Nhat Transaction Office and 500 questionnaires were
distributed to customers of banks throughout the city. The study uses a variety of Linear
validation models, so the data is very convincing, and the authors also confirm the current state of
service quality of banks. Factors such as: Staff, convenience or service at the counter should be
improved. The authors have also proposed a number of highly applicable and feasible solutions.
However, research is lacking in pointing out that: customer loyalty is not only affected by quality

of service but also many other important factors such as: Barriers to change, consumer behavior,
competitive environment, marketing ...
Vo Thi Anh Tuyet (2016) uses qualitative research methodology, based on the opinions of
eight managers of the Bank for Investment and Development of Vietnam and 10 close customers
of this bank. The main research model used was BANKSERV, based on the development of the
SERVQUAL model variables. The author has pointed out that "Empathy" and " Staff conduct"
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have the greatest influence on customer satisfaction; However, individual proposals for
improvement of service quality are still theoretical, not suitable with the actual operation of
Quang Ngai branch. The data collected as the basis for analysis only in the random customers of
the Quang Ngai branch, the analysis index is not very accurate. In addition, the author uses a
qualitative analysis that is subjective, so the results of this study are not really practical.
Phan Thanh Hai and Mai Thi Thuong (2016) studied factors influencing customer
satisfaction with services at the Bank for Agriculture and Rural Development of Quang Nam. The
author has developed a model based on SERVQUAL model of Parasuraman et al. (1988),
combined with studies by AvKiran (1994), Zekiri (2011), Babakus and Mangold (1992),
Durvasula and Mehta (1999). The sample of 200 customers using the service at the bank recently.
The results show that: the ability to meet customer needs, security, facilities and reliability are
factors that have a positive relationship with the satisfaction of customers when using the services
at Agribank Quang Nam. Based on the results of the study, the author provides some suggestions
for bank managers in finalizing a number of policies that will further improve customer
satisfaction with banking services in next time.
Vu Phan Thu Giang (2015) studied the factors affecting individual customer satisfaction
on credit service quality at Thinh Vuong Commercial Joint Stock Bank - Ho Chi Minh. The
author also developed a model based on SERVQUAL model of Parasuraman et al. (1988) with 5
components and 23 scales, then collected data from 400 individual customers using credit
services at VPBank - Ho Chi Minh branch. By using the Exploratory Factor Analysis (EFA)
combined with the ANOVA covariance analysis, the results show that: among the five factors of

the SERVQUAL model, four factors were influenced positive to customer satisfaction: Empathy,
Responsiveness, Reliability and Assurance. At the same time, the results also show that there is a
difference in customer satisfaction with the quality of credit services among different age groups.
In summary, the review of research shows that: there were a lot of researches on "Quality
of banking services" and "Customer Satisfaction on the quality of banking services". These
studies focused on the development of models such as SERVQUAL, SERVPERF, EUCS, CBSQ,
SYSTRA-SQ, BANKSERV, BSQ to assess the factors affecting the quality of banking services
and customer satisfaction on the quality of banking services.Within the scope of this research, the
author will focus on the factors that affect customer satisfaction on the quality of banking
services at Vietnam Maritime Commercial Joint Stock Bank.
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3. Research Objectives
The objective of the researchis to assess the banking service quality at Maritimebank, and
to propose solutions that are feasible to further improve customer satisfaction with quality of
services for Maritimebank in the near future.
In order to achieve that objective, the topic is directed towards specific objectives:

 Analyzing and assessing the current status of the quality of banking services provided
at Maritimebank;

 Developing a system of scales and models to measure the factors affecting the
satisfaction of individual customers on the quality of banking services at
Maritimebank;

 Examining the impact of factors affecting the satisfaction of individual customers on
the quality of banking services at Maritimebank;

 Suggesting some solutions to improve customer satisfaction on banking services

quality for Maritimebank in the integration period.
4. Research Subjects
The thesis will focus on the factors that affect customer satisfaction on the quality of
banking services at Maritimebank.
5. Research Scopes

 About space: reseach at all branches and Head Office of Maritimebank.
 About objects:Individual customers (including internal customers and external
customers of Maritimebank) have been using the banking services of Maritimebank in
the past 1-3 years.

 About time: Secondary data collected from 2015 to 2017, primary data authors
surveyed from 11/2017 to 3/2018.
6. ResearchQuestions
To accomplish the above objectives, the thesis's research process enters into the following
questions:

 What are the factors that affect customer satisfaction on the quality of banking
services?
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 How do the customersassess the quality of banking services at Maritime Bank?
 What is the impact of factors on customer satisfaction on the quality of banking
services?
7. Research Methods
The thesis uses a combination of different research methods such as: descriptive statistical
methods; methods of synthesis, qualitative research methods and quantitative research methods.
8. Structure of the thesis
This thesis includes five main chapters:

Chapter 1: Literature Review
Chapter 2.The status of the quality of banking services at Maritimebank
Chapter 3: Data and Methodology
Chapter 4: Reseach Results
Chapter 5: Findings and Recommendations

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CHAPTER 1. LITERATURE REVIEW
1.1. Banking services
1.1.1. The concept of banking services
There is no uniform definition of banking services. The diversity, complexity and
invisibility of service types make it difficult to unify service concepts. Not only in Vietnam, but
in every country in the world, there are different ways of understanding the different services.
Therefore, the General Agreement on Trade in Services (GATS) of the WTO does not introduce
the concept of services but rather lists services into the twelve broad categories of 155
subdivision. Also in the encyclopedia of Vietnam explained: service is the service activities to
meet the needs of business production and living.
In the world, the problem of banking services is understood in the broadest sense, that is
the whole operation of monetary, credit, payment, foreign exchange ... of the bank for businesses
and the public.
In Vietnam, in the Law on Credit Institutions in 2010, the phrase "Banking services" is
mentioned in Clauses 1 and 7 of Article 20 but there is no specific definition. Some other articles
of the Law mention types of banking services such as treasury services (Article 67), insurance
services (Article 74), consultancy services (Article 75) and other services related to banking
operations (Article 76). Even the Draft Law on Credit Institutions (Article 4, Clauses 11) and the
draft State Bank Law (Article 8, Clauses 1) are as follows: “Banking services are services
provided by the bank regularly in the following forms: (a) Receiving deposits; (b) credit granting;
(c) Providing payment services”. According to the WTO definition: Financial services are any

financial service provided by a financial services provider of a member. Financial services
include insurance services, banking services and other financial services. As such, banking is a
component of financial services.
So in Vietnam, the clear distinction between banking services has not yet been
formalized. There are opinions that all professional activities of commercial banks (credit,
currency, foreign exchange ...) are considered as service activities. This view is shaped from the
viewpoint of the world when banking is broadly understood,that is the entire operation of
currency, credit, payment, foreign exchange ... of the bank for businesses and the public. But
there are also arguments that banking services are not part of credit operations (such as deposit
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and lending), in other words, non-performing loans that are lucrative to banks. In view of this,
service competition among banks does not take into account traditional activities such as
receiving deposits, lending, which any bank can do. When it comes to services people will
immediately think of the ability to provide pure services such as payment, card services, bill
payment services, online banking services ...
1.1.2. Characteristics of banking services
As the bank's operations exist in the form of services, the types of banking services also
have features such as all types of services such as:
1.1.2.1. Invisibility
Banking services have no specific shape, can not touch, weigh, measure as specifically as
tangible products. For general products, customers may require quality testing prior to purchase,
but for banking services it is not possible to do so. Because of the invisible nature, banking
services do not have "Samples" nor "trial" as physical products. Only through the use of the
service, customers can feel and evaluate the quality of service the best way.
1.1.2.2. Characteristics not stored
Banking is basically not specific, so it's easy to imitate. This makes the competition more
intense and that is the main challenge of service marketing.
1.1.2.3. Inseparable from origin

In most cases, banking services are created and consumed at the same time and are only
completed with the completion of consumer spending. If there are no customers, there is no
system to create services.
1.1.2.4. Instability
Since banking services are provided by different parts and people, at different times and
places, and with customer interference in the process of creating services that create instability of
the service. Therefore, it is difficult to check the quality of service and this makes it difficult to
manage the quality of banking services. Another very important feature is that service
coordination requires high aggregation and consistency, which is a rational structure consisting of
many interrelated services and interactions with each other, complement each other in the process
17


of creating benefits for customers. The coordination of these banking services at different levels
and structures will form different banking service arrangements. The problem is that banks need
to be skillful in combining these different types of services to create a complete set of services
that are tailored to their strengths; At the same time, it best meets the unique needs of each target
market. On the other hand, since the market is constantly changing, banks are required to design a
service structure that can be flexibly adjusted to changing needs and tastes of customers to avoid
cost wastage.
1.1.3. Types of banking services
1.1.3.1. Capital mobilization service
The business capital of the commercial bank consists of two main sources: own capital
and mobilized capital, of which mobilized capital accounts for a large proportion of total business
capital of the bank. This is a great influence on the bank's cost and scalability. This capital tends
to increase in line with the growth and stability of the economy. Therefore, capital mobilization is
the basic, first important business for a bank.
1.1.3.2.Deposit service
With the deposit service, banks will mobilize idle capital from individuals, enterprises and
economic organizations in the society through check accounts, current accounts, savings

accounts. Deposits at commercial banks include: Deposit for payment; Demand deposits; Time
deposits; Saved money.
1.1.3.3. Issuance of valuable papers
This is the source of capital that commercial banks have through the issuance of valuable
papers such as bank notes, bank bonds, certificates of deposit. Buyers may be organizations or
individuals in the economy, in addition to using idle capital or unused temporary income to buy,
this is also a direct investment channel. With this capital mobilization, the bank has the ability to
meet a large amount of capital in a short time and the bank actively uses.
1.1.3.4. Credit service
Loans are one of the main business operations, bringing a large income to the Bank.
Credit services perform well, the bank will be strong and developed, otherwise the bank will go
bankrupt. Along with the strong development of the economy with various types of economic
diversification and complexity, credit services are also growing, rich in variety of forms, types
18


and methods. We can summarize some of the main types of credit as follows:
(1) Short-term credit: are loans with a term of less than 12 months, banks provide short-term
loans to meet the demand for capital for production, business, services, service life of customers.
Short-term credit can be divided into different types: loans to supplement working capital or
consumer loans.
(2) Medium and long term credit: are loans with a term of more than 12 months. Medium and
long term credit to meet the needs of procurement of machinery and equipment, building
facilities, improve production technology, expand production to improve product quality so these
credits are usually loans under investment projects, financial leasing.
1.1.3.5. Payment service
Payment service is considered as a profitable business with high profit margin but not
enough attention. Common payment instruments include: checks, collection orders, payment
orders, letters of credit, cards ... On behalf of the customer, the bank performs the payment of
goods and services through clearing, wire transfer via the electronic payment network within the

banking system or other banking system; Or payroll services through personal accounts, payment
of electricity bill, telephone, water... Many commercial banks have joined, cooperated as agents
to receive money transfer and pay remittances to some international financial institutions such as
Wester Union, Money Gram...
1.1.3.6. Card service
Bank card is a multi-function personal financial product issued by the bank, bringing
many benefits to customers. Cards can be used to withdraw money, send money, and extend
credit, pay bills or transfer money. The card is also used for many non-financial services such as
querying account information ... Payment cards now come in many different types, but there are
basically two types of debit cards (domestic and international) and credit cards. Debit card uses
the existing balance on the individual account. Credit cards feature a "prepaid, postpaid" feature
based on a bank's credit limit.
1.1.3.7. Electronic banking services
In the context of the financial market - integration banking, Vietnam gradually opened the
door for foreign banks to integrate, products and services of domestic banks need to find
differences in form, internal solution. Among them are banking services with modern technology.
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Currently, SMS Banking, E-Banking, Mobile Banking ... are the services that many customers
choose. With these services, customers do not have to go to the bank, it does not take too much
time and can still carry out the necessary transactions such as: transfer, checking account, paying
bills, delivery deposit as well as loan ... This is really a convenient service, bringing customers
closer to the modern life. The application of E-banking services in business activities of
commercial banks is now a competitive advantage, and this is one of the important factors that
determine the success of the service development trend in future. Modern E- banking products
include:

-

Contact Center: Provide information and answer questions and complaints of customers.
At present, most banks have call centers such as 24/7 switchboard of Asia Commercial
Bank, Eximbank, Techcombank, Maritime Bank…

-

Phone Banking: is the type of service that a customer uses to make a phone call to a fixed
number of banks providing services to perform transactions or check account statements,
hear information about rates and interest rates ...

-

Mobile Banking: is a type of mobile banking service. Customers can check account
balance, list transactions, receive balance notices, exchange rates, automatic interest rates
via SMS Banking, pay bills of electricity, water, telephone, internet ...

-

Home Banking: is the type of service where transactions can be made at home through a
computer system connected to the bank's computer system, including services such as
money transfer, credit, debits, rates, interest rate…

-

Internet Banking: is the banking service that customers interact with the bank through the
Internet. Customers can find information about products or services of banks or access
information about personal accounts, balances, deposits, loans ...

1.2. Quality of banking services
1.2.1. The concept of quality of banking services

Quality of service is one of the determinants of the effectiveness of services as well as the
contribution of value to the economy of the country. Customers can only evaluate the quality of
service after purchase and use. Quality of service is assessed depending on the culture, the field
of business should have many different definitions. Throughout the literature review process, the
author has identified some of the notion of service quality as used by the author:

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Grönroos (1982) said that "Quality of service must encompass two aspects: technical
quality is what the customer receives; Functional quality reflects how the service is provided".
Grönroos (1984, p.37) said that "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 "; and in the study of Parasuraman et al.
(1988, p.17) “Quality of service is the difference between the expectations of customers on the
service and their perception of the outcome of the service".
In addition, in the Lehtinen & Lehtinen (1982) study: “Quality of service must be assessed
on two aspects: the service delivery process and the outcome of the service”. 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".
According to Feigenbaum (1991) "Quality of service is the customer's decision based on actual
experience with the product or service, measured on the basis of customer requirements, which
can be whether or not it is conscious or simply sensible, totally subjective or professional, and
always represents a dynamic target in a competitive market". 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”.
Derived from the definition of service quality in general and the characteristics of banking
services in particular, can generalize about the quality of banking services as follows: “The
quality of banking services is a set of characteristics of the products and services that the Bank

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provides to its customers, enabling them to satisfy their needs and bring satisfaction to their
customers.”.
1.2.2. Criteria for measuring the quality of banking services
Quality of service varies according to the needs of the user, but the needs of users are
constantly changing over time. Therefore, the measurement of service quality also depends on
many factors that affect the perception of the user and the nature of the service. From the early
80s and 90s there were many authors who studied this issue: Gronroos (1984, 1990),
Parasuraman et al. (1982, 1985, 1988), Cronin and Taylor (1992, 1994), Avkiran (1994),Sweeney
et al. (1997), Dabholkar et al. (2000). In order to measure the quality of banking services, the
authors used the popular model of BANKSERV of Avkiran (1994)consisting of 27 observation
variables in 6 components: Staff conduct, Credibility, Communication, Access to teller services,
Access to banking managementbased on the scale of the SERVQUAL model by Parasuraman et
al. (1985).After examining the toolkit measuring the quality of banking services by surveying
customers using retail banking services at branches of Australian commercial banks,Avkiran
(1994) proposed a BANKSERV model consisting of four components with 17 observed variables
to measure the performance of banks:
(1) Staff conduct: express the responsiveness, behavioral culture and professional image

of bank staff to customers.
(2)Credibility: express the ability to maintain customer credibility of the bank staff by
correcting mistakes and informing customers of the results.
(3) Communication: express the performance of the bank's needs with its customers by
communicating successful financial announcements and timely delivery of information.
(4) Access to teller services: Bank staff must be present throughout the work period, even
during peak hours.
1.3. Customer satisfaction
1.3.1. The concept of customer satisfaction
There are many different definitions of customer satisfaction as well as quite a lot of
debate about this definition. According to Fornell (1995), satisfaction or despair after
consumption is defined as the customer's response to the perceived value of the difference
between expectation before consumption and actual perception. Product after consuming it.
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Hoyer and MacInnis (2001) argue that satisfaction can be linked to feelings of acceptance,
happiness, help, excitement, joy. According to Hansemark and Albinsson (2004), "Customer
satisfaction is a customer's overall attitude towards a service provider, or emotional response to
the difference between what the customers expects. Before and what they receive, for the
fulfillment of certain needs, goals or desires". Kotler (2000) defines "Satisfaction as a feeling of
satisfaction or despair of a person as a result of actual comparison of the product (or result) in
relation to their expectations".
Customer satisfaction is the customer's knowledge of a product or service that forms
subjective judgments. It is a kind of psychological feeling after the needs of the customer are
satisfied. Customer satisfaction is formed on the basis of experience, especially accumulated
when shopping and using products or services. After purchasing and using the customer's
product, there will be a comparison between reality and expectation, from which satisfaction or
dissatisfaction is assessed.
Thus, it can be understood that customer satisfaction is a pleasant feeling or can be

frustrated resulting from the buyer's comparison between the actual benefits of the product and
their expectations. The customer satisfaction with the purchase depends on whether they compare
the actual benefits of the product and their expectations before buying.
1.3.2. The relationship between quality of service and customer satisfaction
The relationship between quality of service and customer satisfaction has been the subject
of continuous discussion among researchers over the past decades.Much research on customer
satisfaction in service industries has been made.Some authors argue that the quality of service
and customer satisfaction are coincidental so that these two concepts can be used
interchangeably.However, many studies show that quality of service and customer satisfaction
are two distinct concepts.Parasuraman et al. (1993) argue that there are some differences between
quality of service and customer satisfaction, the main difference being the "cause and
effect".Zeithalm and Bitner (2000) claim that customer satisfaction is influenced by many factors
such as product quality, service quality, price, situational factors, personal factors.According to
Gronroos, customer satisfaction is influenced by factors such as: technical quality and functional
quality.
1.3.3. Factors that affect customer satisfaction

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1.3.3.1. External factors
(1) Macroeconomic environment: These include factors affecting income, payment,
spending, and the need for capital and deposits. Factors of economic environment such as:
Average income, export-import ratio, growth rate and economic development, inflation rate,
stable economic policy, investment policy ... The economic environment has a strong impact on
the demand and usage of banking products of customers. Thus, it dominates the bank's operations
such as capital mobilization, the ability to satisfy capital requirements and financial services for
the economy. Since then, the bank's customer service quality management must have effective
solutions to attract customers. The situation and change of economic environment factors have a
great impact on the economic development in general and business activities of banks in

particular. The economic environment provides the bank with business opportunities while also
creating challenges for banking business. The success or failure of a bank's customer care
program depends very much on the situation of the domestic, regional and global economy:
development, recession or crisis.
(2) Technical and technological environment: Technological change has a strong
impact on the economy and society; change the mode of production, the way of consumption and
the mode of exchange of society in general as well as of banks in particular. The mode of
exchange between customers and banks in the market is very sensitive to technical advances in
technology, especially in the information technology. Banking is one of the most important areas
for applying information technology in business. Today, banking is inseparable from the rapid
development of information technology. In fact, the changes of information technology have a
strong impact on banking business. The new technology allows the bank to innovate not only in
the business process but also in the way of distribution and development of new products and
services, such as the development of a network of computers allowing the bank to provide 24/24
banking services.
The study of the technical and technological environment affects the ability to innovate
new products and services, as well as communication between banks and customers, in order to
exploit market opportunities to offer key suitable books. Technology are the strongest strengths
of banking business. It has brought miracles to the banking business such as fast money transfer,
automatic teller machine, automatic payment, electronic card, automatic bank, internet banking...
Therefore, the attitude of customers to a bank depends very much on the techniques that banks
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use, the level that the bank satisfies the needs and expectations of customers.
(3) Legal and political environment: Banking business is one of the business sectors
subject to strict supervision of the law and the authorities. The bank's operations are often tightly
regulated by law. The legal environment will give the bank new opportunities and new
challenges. As such, the legal environment creates the legal basis that constrains and influences
the formation, existence and development of each bank. That is why managers need to know the

laws to carry out banking operations properly, and more importantly to find out what is not
prohibited by law to make the right decisions to improve the efficiency of banking business.
(4) Socio-Cultural environment: The behavior of customers and competitors of the bank
is dominated by many cultural factors. also affects the demand for banking products and services.
The level of culture, consumption and habits of people will affect the behavior and demand for
using banking products and services. For example, in Vietnam, people have a habit of spending
cash, so the development of non-cash payments in the population is difficult; Or people in
Vietnam have the habit of buying goods in small markets near the road, so the demand for card
services is slow to develop. The study of Socio-Cultural factors not only to determine their
impact on customer behavior of banking products, but also to help bank managers actively build
policies, regulations and procedures in the profession and design of organizational models
suitable to the cultural characteristics of each region and market area both in the country and in
the world.
(5) Competitive environment: In the economy, competitive markets are common and
objective phenomena. Banking is one of the highly competitive and increasingly complex sectors.
In recent years, the financial market has become more and more active due to the involvement of
many types of banks and non-bank financial institutions. Currently the number of licensed banks
is increasing, while the demand for quality products and customer service is increasing.
1.3.3.2. Internal factors
(1) The staff of the bank: Man is the direct and decisive factor in quality of service.
Customers evaluate banks through their trading staff. Because, at the bank, the customer deals
directly with the banker, through the gesture, manner, and attitude of the employee to evaluate
the bank. Quality of service depends largely on the expertise, attitudes, experience, sense of
responsibility and the spirit of co-operation between all members and the department in the bank.
The strength and spirit of the bank staff, the value of human resource policies set in each bank
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