The impact of service quality con customer satisfaction in electronic banking at viet nam prosperity bank ho chi minh city

THE STATE BANK OF VIET NAM

MINISTRY OF EDUCATION & TRAINING

BANKING UNIVERSITY HO CHI MINH CITY
-----------------------------------------------

LE THI YEN LINH

THE IMPACT OF SERVICE QUALITY ON CUSTOMER
SATISFACTION IN ELECTRONIC BANKING AT
VIET NAM PROSPERITY BANK HO CHI MINH CITY

GRADUATION THESIS
MAJOR: FINANCE – BANKING

CODE: 734021

HO CHI MINH CITY, JANUARY - 2021


THE STATE BANK OF VIET NAM

MINISTRY OF EDUCATION & TRAINING

BANKING UNIVERSITY HO CHI MINH CITY
------------------------------------------------

LE THI YEN LINH

THE IMPACT OF SERVICE QUALITY ON CUSTOMER

SATISFACTION IN ELECTRONIC BANKING AT
VIET NAM PROSPERITY BANK HO CHI MINH CITY

GRADUATION THESIS
MAJOR: FINANCE – BANKING

CODE: 734021

SUPERVISOR
NGUYEN THI MY HANH, PhD

HO CHI MINH CITY, JANUARY - 2021


ABSTRACT
Information technology advancements have been rapidly implemented in the
banking industry to increase bank performance and productivity. "Electronic banking",
with the help of information technology, allows conducting retail transactions at a high
and continuous speed. Banks are racing to modernize their information systems, and
launch a series of new services such as "phone banking"; "Internet banking", automatic
money transfer and withdrawal ... make banking services popular and widely available.
Therefore, for a bank to get closer to customers, the bank itself must improve and apply
e-banking to its obvious products and services. To serve the demands of customers
promptly, regardless of time and space, banks must constantly be updating consumer
reviews and improve products and services in the best way. Since VPBank recognized
the value of e-banking for its services and clients, it introduced an electronic application
(VPBank Online) to link banks and consumers. Besides, the society and the demands of
customers will be higher, the bank should pay attention to how satisfied customers are
when using VPbank Online. The author made the decision to investigate “The impact of
service quality on customer satisfaction in electronic banking at Viet Nam Prosperity

Bank Ho Chi Minh City” to find out factors affecting customer satisfaction. In terms of
the quality of e-banking services offered by VPBank in Ho Chi Minh City, there is a
foundation for the bank to steadily increase operational quality and customer satisfaction.
The structure of the thesis is divided into five chapters: Chapter 1: Introduction;
Chapter 2: Literature review; Chapter 3: Research methodology; Chapter 4: Research
results; Chapter 5: Conclusions and recommedations.
The research utilizes qualitative and quantitative approaches to assess the variables
impacting e-banking satisfaction, focusing on a database of surveys of 385 consumers
using power banking services using the service level assessment model that provided by
Sakhaei, et al. (2014). According to Sakhaei, et al. (2014) described 6 factors: reliability,
efficiency, responsiveness, fulfillment, security/privacy, and website design as internet
banking service quality dimensions were identified and proposed indicators to measure
customer satisfaction with service quality customer surveys confirmed.
Construction survey: developed from an analytical framework with a 5-level
Likert scale to evaluate the impact of service quality on customer satisfaction in
i


electronic banking at VPBank Ho Chi Minh City. (1) Strongly disagree, (2) Disagree, (3)
No idea, (4) Agree, (5) Strongly agree. Sample selection: Respondents are based on a
convenient, non-probabilistic method because this is an easy sampling method, which
means that clients who agree to be interviewed can be survey samples.
Methods of processing and analyzing data including descriptive statistics are used
for statistical purposes; Cronbach's Alpha's confidence coefficient method: to test the
reliability of the scale; Exploratory factor analysis (EFA): to determine observed
variables as well as test the scale based on the Extraction coefficient of the variables;
Multi- variable regression analysis: Evaluate the suitability of the model and explain the
effect of variables in practice. ANOVA analysis: The average bottle test of two separate
samples to compare the average outcomes of the variable age, gender, average monthly
salary, and time using personal Internet Banking service of VPBank customers.

According to the findings of the report, there are six factors shaping individual
customer satisfaction with the current level of e-banking services at VPBank, and the
degree of impact of those factors varies. The scale in the building model illustrates 66.6
percent of customer satisfaction by using e-banking services. There are six factors: EF
(Efficiency), RE (Reliability), RES (Responsiveness), PR (Privacy/Security), WD
(Website Design), and FU (Fulfillment). In which the following regression equation is
used to measure the strength of the factors' influence:
CS = 0.427RE+0.354EF+0.208RES+0.202PR+0.089FU+0.080WD
Reliability has the strongest influence on satisfaction, followed by Efficiency,
Responsiveness, Privacy/Security. The element that has the least effect on satisfaction are
Fulfillment and Website Design. This result would serve as the framework for the author
to provide specific and realistic ways to boost customer satisfaction by using VPBank
HCMC's e-banking services.
From the above research results, the author also gives some suggestions for
administrators in completing policies to improve the quality of e-banking services at
VPBank the coming time.
(1) Recommendations for the element of Reliability
The number of customers signing up for VPBank's e-banking services is growing
everyday. New electronic banking products must still be checked, as there may be many
ii


errors during operation. VPBank must closely scrutinize the commodity before releasing
it to consumers. Information management teams and counter tellers can organize and
answer requests efficiently and easily.
(2) Recommendations for the element of Efficiency
VPBank should invest in its technological resources to help address the demands
of its customers. VPBank must adopt a long-term plan for investment and new
technology growth in order to achieve high efficiency and cost savings.
(3) Recommendations for the element of Responsiveness

VPBank should train and enhance bank employees' knowledge of psychology so
that services are continuously managed during the e-banking service delivery process.
(4) Recommendations for the element of Privacy/Security
VPBank must audit and refresh the IT system on a regular basis in order to find
security vulnerabilities. Customers should be informed as soon as possible, and
functional officials should still put their customers' needs first. VP bank should
strengthen its implementation of international security requirements such as ISO 27001
and PCI DSS. It is important to direct and encourage consumers to increase awareness
while using online services.
(5) Recommendations for the element of Fulfillment
VPBank need enhance the usability of mobile banking services so that they are
easy, safe, and fast, with reasonable transaction costs. VPBank should take more care to
upgrade network infrastructure, update and expand transmission lines. The management
department must create and perfect a legal document structure to solely administer
internet operations and facilities.
(6) Recommendations for the element of Website Design
Attracting consumers is still a high priority for banks in e-banking services since it
is the basis for increasing earnings. A tidy, elegant, and simple-to-use can put consumers
at ease and make their choices simpler. The bank's website interface should be built in a
stunning manner, gaining interest so that customers do not feel bored when surfing this
website. Services should be organized scientifically and easily, and each usage should be
simple and easy to understand.

iii


The research aided the VPBank Ho Chi Minh City in determining factors
influencing customer loyalty by using e-banking services. However, the analysis has
certain drawbacks, which are as follows:
To begin with, the analysis was only performed for individual customers who used

e-banking services at VPBank Ho Chi Minh City, so generalizability is restricted.
Secondly, since the analysis only reports on individual consumers using their own
satisfaction appraisal requirements, the test findings cannot be applicable to all customers
at the same time. Since business customers have different performance requirements than
andividual customers, this analysis cannot be used by corporate clients.
Thirdly, since the analysis was performed using a convenient approach (one of the
non-probability

sampling

methods),

the

representativeness,

uniformity,

and

generalization are poor.
Fourthly, the research did not investigate several groups of variables such as
gender, age, salary, and so on to decide if the above factors influence consumer loyalty
while using the service.
Keywords: Service quality, e-banking, Service quality model by Sakhaei, et al.
(2014), customer satisfaction, VPBank in Ho Chi Minh City.

iv

STATEMENT OF AUTHORSHIP
I hereby promise that the study is my original work, not replicated by others, with
the instructor's help is Ms. Nguyen Thi My Hanh, and that it was produced by my own
study, reading, translation, synthesis, and implementation. Theoretical material in the
study I drew from a variety of sources, which are mentioned in the references. The
records, software program, and findings in the thesis are accurate and have not been
published elsewhere.
HCMC, April 8th 2021
Author’s signature

Le Thi Yen Linh

v


ACKNOWLEDGEMENT
First of all, I would like to express my thanks to the teachers and Banking
University Ho Chi Minh City, for helping me to have basic knowledge of the banking
field. In particular, I would also like to thank Ms. Nguyen Thi My Hanh for her
continuous support of my study.
Besides, I want to sincerely thanks for customers that using the e-banking of
VPBank, for their enthusiastic cooperation in helping me complete the article in the best
way.
Finally, I am deeply grateful to my family and friends for supporting and
encouraging me to complete this thesis.

Author’s signature

Le Thi Yen Linh

vi


CONTENTS
ABSTRACT .................................................................................................................................................. i
STATEMENT OF AUTHORSHIP ...............................................................................................................v
ACKNOWLEDGEMENT........................................................................................................................... vi
CONTENTS ............................................................................................................................................... vii
LIST OF ABBREVIATIONS ..................................................................................................................... ix
LIST OF TABLES ........................................................................................................................................x
LIST OF FIGURES ..................................................................................................................................... xi
CHAPTER 1: INTRODUCTION .................................................................................................................1
1.1 The necessity of the subject ................................................................................................................1
1.2. Research objectives ...........................................................................................................................1
1.2.1. Overall objectives ...........................................................................................................................1
1.2.2. Specific objectives .....................................................................................................................1
1.3 Research questions .............................................................................................................................2
1.4 Research subject and scope ................................................................................................................2
1.5 Research methods ...............................................................................................................................2
1.6 Research contributions........................................................................................................................2
1.7 Thesis structure ...................................................................................................................................3
CHAPTER 2: LITERATURE REVIEW.......................................................................................................4
2.1. Conceptual framework.......................................................................................................................4
2.1.1 Electronic banking ......................................................................................................................4
2.1.2 Some types of e-banking services ...............................................................................................4
2.1.3 Advantages and disadvantages of e-banking services ................................................................7
2.1.4 E-services quality ........................................................................................................................9
2.1.5 Customer satisfaction ................................................................................................................10
2.1.6 Relationship between Quality of Service and Customer Satisfaction .......................................11
2.2. Previous research models on factors affecting satisfaction .............................................................12

2.2.1 Model 5 service quality distance – SERVQUAL .....................................................................12
2.2.2 The model E-S QUAL ..............................................................................................................15
2.2.3 Other models .............................................................................................................................16
2.3 The results of previous studies .........................................................................................................17
CHAPTER 3: RESEARCH METHODOLOGY .........................................................................................20
3.1 Research model.................................................................................................................................20
3.2 Methods of data collection................................................................................................................21
3.2 Methods of processing and analyzing data .......................................................................................25
CHAPTER 4: RESEARCH RESULTS ......................................................................................................27
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4.1 Overview of Vietnam Prosperity Joint Stock Commercial Bank .....................................................27
4.2.Overview of electronic banking services at Vietnam Prosperity Joint Stock Commercial Bank .....28
4.2.1 VPBank Online .........................................................................................................................28
4.2.2 The results of e-banking at VPBank in 2019 ............................................................................30
4.3. Research results: The impact of service quality on customer satisfaction in electronic banking at
Viet Nam Prosperity Bank Ho Chi Minh City........................................................................................31
4.3.1. Sample description ...................................................................................................................31
4.3.2. Check the reliability of the scale with Cronbach Alpha ..........................................................33
4.3.3 Explore factor analysis EFA .....................................................................................................36
4.3.4 Pearson test of correlation coefficient .......................................................................................42
4.3.5 Multi-variable regression analysis method ...............................................................................43
4.3.6 Evaluation of customer satisfaction on e-banking services through the servey results ............48
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS...............................................................51
5.1 Conclusions ......................................................................................................................................51
5.2 Recommedations ..............................................................................................................................51
5.2.1 Recommendations for the element of Reliability......................................................................52
5.2.2 Recommendations for the element of Efficiency ......................................................................52
5.2.3 Recommendations for the element of Responsiveness .............................................................53

5.2.4 Recommendations for the element of Privacy/Security ............................................................53
5.2.5 Recommendations for the element of Fulfillment ....................................................................54
5.2.6 Recommendations for the element of Website Design .............................................................54
5.3 Limitations and future research directions........................................................................................55
REFERENCES ............................................................................................................................................57
APPENDIX: Survey questionnaires ............................................................................................................60

viii


LIST OF ABBREVIATIONS
ATM

Automatic Teller Machine

ATS

Automatic telephone system

CS

Customer satisfaction

e-banking

Electronic Banking

EF

Efficiency

EFA

Explore factor analysis

E-S QUAL

Model of service quality provided by Zeithmal et al. (2002) and
Parasuraman et al. (2005)

FU

Fulfillment

HCMC

Ho Chi Minh City

IPO

Initial Public Offering

KMO

Kaise – Meyer – Olkin

POS

Point of Sale

PR

Privacy/Security

RE

Reliability

RES

Responsiveness

SERVQUAL

Model of service quality provided by Parasuraman et al. (1988)

SME

Small and Medium Enterprise

SPSS

Statistical Package for the Social Sciences

USD

US Dollar

VIF

Variance Inflation Factor

VND

Viet Nam Dong

VPBank

Viet Nam Prosperity Joint Stock Commercial Bank

WAP

Wireless Application Protocol

WD

Website Design

ix


LIST OF TABLES
Table 3. 1: Summary of correlation between factors and customer satisfaction ...............21
Table 3. 2: Encoding the e-banking service standard scales for the independent variables
............................................................................................................................................22
Table 3. 3: Encoding the e-banking service standard scales for the dependent variables .24

Table 4.1: Characteristics of respondents ..........................................................................31
Table 4.2: The purpose of using e-banking service of the customer .................................32
Table 4.3: Income of customers .........................................................................................32

Table 4.4: Time of using VPBank Online .........................................................................33
Table 4.5: The number of Cronbach's Alpha variables. ....................................................33
Table 4.6: The number of Cronbach's Alpha variables after re-test ..................................35
Table 4.7: Cronbach’s Alpha of Customer Satisfaction ....................................................36
Table 4.8: KMO and Bartlett’s Test of independent factors (1st times) ...........................37
Table 4.9: Initial Eigenvalues of independent factors (1st times) .....................................37
Table 4.10: Rotated Component Matrix of independent factors (1st times) .....................38
Table 4.11: KMO and Bartlett’s Test of independent factors (2nd times) ........................39
Table 4.12: Initial Eigenvalues of independent factors (2nd times) ..................................39
Table 4.13: Rotated Component Matrix of independent factors (2nd times) ....................40
Table 4.14: KMO and Bartlett’s Test of dependent factors ...............................................41
Table 4.15: Initial Eigenvalues of dependent factors ........................................................41
Table 4.16: Component Matrix of dependent factors ........................................................41
Table 4.17: Pearson test of correlation coefficient ............................................................42
Table 4.18: Evaluation of model suitability.......................................................................43
Table 4.19: ANOVA analysis ............................................................................................44
Table 4.20: The statistical parameters of each variable in the regressive equation ...........44
Table 4.21: The results of descriptive statistics .................................................................47
Table 4.22: The results of descriptive statistics .................................................................48

x


LIST OF FIGURES
Figure 2.1:GAP model of Service Quality.........................................................................12
Figure 2.2: Model 5 factors of service quality ...................................................................14
Figure 2.3: The E-S QUAL scale .......................................................................................15
Figure 2.4: The E-S QUAL scale .......................................................................................16
Figure 2.5: Relationship between online service quality and customer satisfaction: a study
in internet banking .............................................................................................................17

Figure 3.1:The conceptual framework ...............................................................................20

Figure 4.1: Stock price volatility since the IPO .................................................................27

xi


CHAPTER 1: INTRODUCTION
1.1 The necessity of the subject
Advances in information technology have been quickly applied in the banking
industry to improve banks’ efficiency and competitiveness. The network system
eliminates space and time constraints. Banks can open multiple branches in different
countries while easily monitoring and managing branch operations. Nowsday, banks are
racing to modernize their information systems, and launch a series of new services such
as "phone banking"; "Internet banking", automatic money transfer and withdrawal, ...
make banking services popular and widely available. Therefore, for a bank to get closer
to customers, the bank itself must improve and apply e-banking to its obvious products
and services. To serve the demands of customers promptly, regardless of time space,
banks must constantly be updating consumer reviews and improve products and services
in the best way.
VPBank realized the importance of e-banking to its services and customers, so it
launched an electronic application to connect between banks and consumers. That is
VPBank Online, a smart application combining e-banking to create fast transactions and
high security as well as traditional transactions.
However, the society and the demands of customers will be higher, the bank should
pay attention to how satisfied customers are when using VPbank Online. That is why the
author decided to study the topic "The impact of service quality on customer satisfaction
in electronic banking at Viet Nam Prosperity Bank Ho Chi Minh City" to find out factors
affecting customer satisfaction in order to improve the quality of e-banking services.

1.2. Research objectives
1.2.1. Overall objectives
From opinion surveys on customer satisfaction with e-banking, specifically,
VPBank Online to find out the factors that significantly affect customer satisfaction at
VPBank HCMC. Since then, proposing measures to advance and improve VPbank
Online's functions and business plans to satisfy customers in the future.
1.2.2. Specific objectives
Determining the factors that affect customer satisfaction.

1


Determine the impact level of factors on satisfaction and the relationship between
satisfaction and e-banking service quality.
1.3 Research questions
Which factors affect customer satisfaction through using VPBank Online?
What are the important factors contributing to customer satisfaction when
experiencing VPBank Online function?
What extent do those factors influence customer satisfaction when using VPBank
Online?
1.4 Research subject and scope
The subject of the research: Customer satisfaction with the service quality of ebanking at VPBank HCMC.
Respondents: Customers who have been using VPBank Online in Ho Chi Minh
City.
Research scope: Survey data of 400 customers using VPBank Online.
1.5 Research methods
Qualitative research method is used by sending survey questionnaires to each
customer of VPBank HCMC. From the answers of customers, the author have
synthesized factors that affect customer satisfaction.
Also, quantitative research method is applied. From the answers of the survey, the

data goes through the stages of factor analysis to explore EFA, check the reliability
coefficient of Cronbach's Alpha, under the support of SPSS16 software, to test the
hypotheses and find the most important determinant.
1.6 Research contributions
Scientific significance: The research contributes to an analysis of factors affecting
customer satisfaction with VPBank Online. Based on survey opinions of customers who
have been using VPBank Online services, the results will be objective.
Practical significance: When the research is successful, the topic will be a
reference source for VPBank to have policies to adjust functions or improve the quality
of VPBank Online to be more suitable to meet the demands of customers, ensure the
lowest risk.

2


1.7 Thesis structure
Chapter 1: Introduction.
Chapter 2: Literature review.
Chapter 3: Research methodology.
Chapter 4: Research results.
Chapter 5: Conclusions and recommedations.
References
Appendix

3


CHAPTER 2: LITERATURE REVIEW
2.1. Conceptual framework
2.1.1 Electronic banking

There are many definitions of electronic banking, Toufaily et al. (2009) identify
electronic banking as "the mechanism by which customers can handle their electronic
transactions without requiring physical access to the bank." As a result, a bank may
provide a variety of services through simple electronic applications, enabling customers
to access banking services without requiring the assistance of a bank employee.
According to Thulani & Chitura (2009), is a service that enables a bank's customers to
access their accounts and get the most up-to-date information about the bank, its goods,
and services. Using the bank's website, you can see all of your financial transactions at
any time and from anywhere. Customers who use electronic banking will handle their
finances at their leisure, 24 hours a day, seven days a week, rather than being constrained
by time. As a result, e-banking is a self-service choice that reduces time and space
constraints while maintaining customer convenience and readiness (Hu & Liao, 2011;
Aderonke, 2010).
In general, e-banking refers to a collection of banking transactions that customers
can complete using electronic means rather than visiting a physical location. This
combines traditional banking services with information technology, electronics, and
telecommunications. The ability to automatically record transactions is one advantage ebanking has over conventional banking. E-banking is a type of e-commerce that is used
in the banking industry.
2.1.2 Some types of e-banking services
2.1.2.1 Phone banking
This is an automated banking form performed over the phone; the bank can supply
customers with the switch board's phone number such that customers can contact
transactions such as looking up details and making transactions. Two ways of applying
telephone banking are: Call center and ATS (Automatic telephone system).
Call centers provide customer support via telecommunications, as well as handle
customer questions and inquiries. Since this is a centralized customer management
service based on the operation of the Customer Care and Consultation Center, customers
4

at any branch of a bank can still call a center's landline number to receive general
information and personal information. The contact center will provide information and
address consumer questions in a number of ways. The drawback of the call center is that
the bank must have a workforce on call 24 hours a day, seven days a week.
The bank's automated response system is referred to as an ATS. Customers can
trade with the bank without having to go straight to the bank by calling the bank's
switchboard number and clicking the key on the phone keypad according to the code, 24
hours a day, seven days a week. The bank instructs the device to automatically react to
the required details. ATS provides public utilities such as receiving consultation on
information on goods and services; information on interest rates, rates, and promotions;
question account information; and listing account transfers.
2.1.2.2 Mobile banking
This is another kind of electronic banking service in which consumers use cell
phones to search details and conduct transactions with banks. SMS banking, GSM SIM
Toolkit, and WAP are all examples of mobile banking.
SMS banking is a kind of e-banking service that is carried out via SMS on mobile
phones. After the customer finishes the distribution conversion on your account, the
message will be immediately sent to the phone number that the customer has registered
with the bank. Customers may also send messages using the bank's syntax to look up
facts such as interest rates, rates, account balances, and so on.
GSM SIM Toolkit: This approach enables consumers to query details and conduct
transactions on their accounts using a cell phone equipped with a SIM card that is
compatible with banking applications. In this situation, the bank and the mobile service
provider must partner to provide customers with a specific SIM card that is integrated
with banking services. Account details request, value transfer operation, payment of
power, water bills, telephone... are all typical transactions conducted in this format.
Customers must log into the system to complete these transactions.
WAP (Wireless Application Protocol): This is an automated banking program that
allows consumers to use their cell phones to access the bank's website and conduct online
transactions. The bank's website must have two viewing modes: machine and cell phone.

Customers can now access their bank accounts via the bank's program, which is installed
5


on the operating system of smartphones. After log in to this application, customers can
conduct a range of transactions such as querying account information, exchanging
money, and paying bills.
2.1.2.3 Home banking
Home-banking is an e-banking service delivery platform that enables users to
conduct the entirety of the services. Money transfer transactions (where clients open
accounts) can be completed at home or at the business office without going to the bank.
Home-banking application and growth is a fortunate move for Vietnamese commercial
banks in the South, which are under extreme pressure from the global banking integration
process. On the consumer side, home banking has brought in practical benefits such as
speed, security, privacy, and convenience. Home banking services are provided by one of
two platforms: software-based or web-based, which are available via a server system, the
Internet, and a client computer. A bank and a customer can create, encrypt, share, and
verify financial information.
2.1.2.4 Internet banking
This is a common form of e-banking service; it is a product delivery platform.
Bring the bank to your house, office, or college, wherever and at any time. With a device
linked to the Internet, or you can send questions to the bank, make recommendations to
the bank, and get answers after a certain amount of time. Customers can log in to their
personal accounts and use the bank's website to conduct a variety of transactions such as
querying records, making money transfer transactions, paying bills, opening accounts,
and delivering to customers.
Customers must first register with the bank in order to receive login information.
However, since the protection is not as good as that of home banking or Kiosk-banking,
Internet-banking service is still constrained and necessitates a more complex transaction
confirmation process, such as security by using a static password and a dynamic

password: To ensure consumer protection, a token code and authentication password are
sent via phone message or mobile device.

6


2.1.2.5 Mail banking
This is a system of banking that interacts with customers by email. Banks usually
issue email updates to consumers about their goods and services, as well as their policies
and deals, such as account statements, debit alerts, or introductory notices.
2.1.2.6 ATM banking
This is a supplier bank's system of automated transaction machines (ATMAutomatic Teller Machine). Customers may use this program to make financial transfers
such as cash withdrawal, transfer within the same banking system, account inquiry, and
so on. The ATM machine is used via customer authentication via ATM card (debit card,
credit card). From its inception, the ATM infrastructure has been actively built and
extended by banks in order to provide the best possible service to customers.
2.1.2.7 POS banking
This is the card acceptance system used in card-accepting institutions such as
shops, shopping malls, and supermarkets, etc., are similar to ATM systems, POS systems
(Point of Sale) that enable customers to use domestic ATM cards, international credit
cards (Visa, Master, JCB, etc.) to pay for products and services upon issuance of the card.
POS systems have the advantage of being lightweight, taking up little room, and being
simple to mount in a variety of locations such as stores, shopping centres, supermarkets,
and restaurants.
2.1.2.8 Kiosk banking
This is customer service that is both high-quality and comfortable. On the path,
there will be workstations with high-speed internet connectivity for consumers to make
purchases or order services; all they need to do is access the service, enter their personal
certificate number and password, and use it. This is a trend that Vietnamese commercial
banks are focusing on in order to reduce the burden on the ATM system; the development

of a comprehensive kiosk system would provide consumers with a non-cash transaction
process.
2.1.3 Advantages and disadvantages of e-banking services
2.1.3.1 Advantages
Firstly, the most apparent advantage of e-banking systems for consumers is their
ease and comfort. You can use the e-banking app to make direct deposits at any time and
7


from any place. Paying utility bills, recharging cards, shopping, exchanging money,... are
very easy and fast transactions. This is especially important for customers who don't have
time to go to the transaction points directly with the bank, as well as for individual
customers whose transaction volume with the bank is low and the amount of money per
transaction is small. This is a benefit that conventional transfers cannot match in terms of
pace and precision as opposed to e-banking.
Secondly, e-banking using new technologies will both save time and greatly lower
service prices for users to use because processing rates for e-banking services are
currently perceived to be at a low level as opposed to conventional transactions.
Furthermore, if more consumers enrol and use the app, it would lead to a rise in sales for
banking operations.
Thirdly, e-banking services are a fantastic way for banks to boost both quality and
productivity results, thus increasing the bank's competitiveness. All at the same, it assists
the financial sector in best executing the globalization policy without the need to open
new branches at home or abroad. E-banking is a medium for effectively and creatively
advertising the bank's name.
Fourthly, purchase requests and consumer queries are easily executed by ebanking systems, providing optimal conditions for money currency to be exchanged as
quickly as possible. As a result, the circulation of goods and money is accelerated.
Fifthly, e-banking services with a modern and multi-functional business model
would provide consumers with the highest quality care services, allowing customers to be
satisfied and trusting.

Sixthly, banks will cooperate with insurance providers, brokerage firms, and
finance firms to provide integrated utility solutions to satisfy a customer's needs for
banking-related services, insurance, investment, securities, and so on.
2.1.3.2 Disadvantage
One of the disadvantages of electronic banking is the system's safety and security.
Customers can lose their password to access their accounts because it has been
compromised using advanced technologies by hackers. As a consequence, there is a risk
that the money in the customer's account will be spent without customers’s being aware
of the loss or the bank's responsibility.
8


Secondly, higher standards of e-banking service efficiency are unsatisfactory.
They would go direct to the transaction at the bank branch to register to use the service.
Thirdly, low service quality is caused by poor network quality, transmission
speed, technological problem, or terminal quality.
Fourthly, electronic banking networks emerged independently, with no near and
long-term correlation.
Fifthly, the use of electronic signatures and electronic certificates has not been
widely disseminated and has not proven a strategic edge over traditional signatures. New
threats, such as cyber attacks and computer viruses, continue to worry consumers and
cause them to lose faith in the service.
2.1.4 E-services quality
Service quality is a concept that has been studied quite a lot around the world,
must include the studies of Hurbert (1994), Zeithaml et al. (1996). Although there are
numerous definitions of service quality, Cronin and Taylor (1992) explained that in
general, service quality definitions are related to determining customer experience and
perceptions response of the service to their expectations.
Researchers have discovered that excellent banks in terms of service quality have
distinct marketing advantages, as well as a higher level of service quality correlated with

higher earnings, improved cross-selling potential, and greater consumer satisfaction row
higher held up (Bennett, 2003). E-service quality has been defined as consumers' overall
assessment and judgment of the excellence and e service quality offerings in the virtual
marketplace (Santos, 2003). According to Lehtnen and Lehtinen (1982), service
efficiency must be measured from two perspectives: the service delivery process and the
service outcome. According to Parasuraman, Zeithaml, and Berry (1985), “Service
quality is the customer's experience of a service in reaction to their previous expectation,
expectation of service quality is the customer's expectation that the provider would
perform. The discrepancy between service expectations and customer experience when
using the service is referred to as service quality”.
Because each customer has different influences and needs, their expectation of
service quality differs. By identifying differences between consumer perceptions and
expectations, management or strategists will be able to resolve weaknesses or make
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consistent improvements in the service they offer. In this review of e-banking services,
each client should be viewed as a customer, and they must be comfortable with the
service quality.
It may deduce from the general principles of service quality that the quality of ebanking services (according to Zeithaml et al., 2002) is the degree of the website's ability
to promote the purchase, request, and distribution of the service beneficial and powerful.
The quality of e-banking service is interpreted as the product of a comparison of
customers' expectations of e-banking service and their experience of e-banking service
while using it.
The ability of websites to establish favorable and efficient environments for
customers to conduct services is the issue of using this concept to determine the quality
of e-banking services at VPBank in Ho Chi Minh City. The survey subject only considers
service quality e-banikng at VPBank in terms of consumer experience, not the
expectation aspect. Since assessing consumer preferences for services on the Internet,
according to Cox and Dale (2001), is difficult due to a lack of customer awareness of a

typical website, most web users are trapped concepts in their attempts to provide an
expected standard for the website they communicate with (Li et al., 2003; Yang et al.,
2004).
2.1.5 Customer satisfaction
According to Kotler and Keller (2006, p.144), “Customer satisfaction is the
person’s feeling of pleasure or disappointment which resulted from comparing
a product’s perceived performance or outcome against his/ her expectations”. However,
according to Parasuraman et al. (1991), customer satisfaction is divided into two things:
desire and completeness. Customer satisfaction is the state of service that the customer
wants to receive, while the customer feels satisfied at the adequate level is the level of
service that the customer can only "accept" without being too satisfied with it.
Consumer satisfaction, according to Hansemark and Albinsson (2004), is an
overall customer attitude toward a service provider, or an emotional reaction to the
difference between what a customer predicts before and what they get, for the fulfillment
of any need, purpose, or desire. According to Brown, Churchill, and Peter (1993),
consumer satisfaction is described as a condition in which what consumers require,
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desire, and expect from goods and service packages are achieved higher, resulting in
repeat sales, loyalty, and the importance to spread by word of mouth.
Customer satisfaction, according to Zeithaml et al. (1990), is focused on a balance
between consumers' preferences and their interactions with the goods and services.
Customer loyalty is the secret to a company's productivity and can be called the root of
profitability in today's intensely dynamic market environment, according to both
theoretical and scientific viewpoints (Bitner and Hubbert, 1994).
According to any of the concepts above, consumer satisfaction is the comparison
of real benefits achieved and desires based on their perception of a customer product or
service, which constitutes individual decisions or judgments. It is a psychological
sensation that occurs after the customer's desires are satisfied. Customer loyalty is created

on the basis of impressions acquired by buying and using a certain product or service
over a specific period of time, from which consumers can review and make suggestions is
the contrast of your perception and your anticipation.
2.1.6 Relationship between Quality of Service and Customer Satisfaction
Many experiments have shown that quality of service and satisfaction are two
distinct but inextricably linked terms. Customer satisfaction, according to Zeithaml and
Bitner, is a general term that communicates their satisfaction while purchasing a service,
even when service quality is associated with the different elements of the service. Oliver
believes that the standard of customer satisfaction is affected by service quality. That is,
the level of service is determined by a number of variables that are part of the satisfaction
determining factor. Cronin and Taylor (1992), Spreng and Mackoy (1996), and Ruyter,
Bloemer, and Peeters (1997) discovered that service quality is a requirement for customer
satisfaction, and is an important element in achieving pleasure.
According to Parasuraman (1988), the aspect influencing customer satisfaction is
service quality. If the service provider provides consumers with high-quality goods that
meet their needs, the bank will initially please the consumer. Service quality and
satisfaction are inextricably linked, with service quality being the primary determinant of
customer satisfaction. In most customer satisfaction research, the causal relationship
between these two variables is critical.

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In conclusion, service quality is regarded as an important approach in business
management for ensuring customer satisfaction while also the the competitiveness and
efficiency of the industry (Arun Kumar G., Manjunath S. J., and Naveen Kumar H.,
2012). The higher the quality of the service, the higher the level of customer satisfaction,
which is also an important factor in the long-term. In contrast, if the service is weak, the
customer will never return for a second time; a poor first experience will influence the
customer's decision to use the service later on.

2.2. Previous research models on factors affecting satisfaction
2.2.1 Model 5 service quality distance – SERVQUAL
Figure 2.1:GAP model of Service Quality
Word of mouth

Expected Service

Personal needs
GAP5
Customer

Past experience

Perceived

GAP1

Provider

Service delivery

External communications to

(including pre and post contracts

customers
GAP4

GAP3
Transaction of perceptions into

service quality specifications
GAP2
Management perceptions of
consumer expectations

(Source: Parasuraman et al. ,1985)
GAP 1: This occurs where there is a mismatch between the consumer's
perceptions of service quality and the service manager's view of customer expectations.
The fundamental difference is that the service provider does not completely comprehend
what constitutes the quality of its service and how it is provided to its clients in order to
meet their needs.
GAP 2: Appearance occurs when a service provider faces challenges, both factual
and emotional, in translating their interpretations of consumer preferences into concrete
quality requirements and delivering on their expectations. Criteria is the customer's
marketing message. The skills of the service personnel, as well as the overwhelming
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