THE IMPACT OF INFORMATION TECHNOLOGY ON BANKING SALES PERFORMANCE. CASE STUDY IN TECHCOMBANK

1.1.Rationale Banking can simply express as the business of keeping, lending, exchanging and issuing money. The Key business priorities of the banking and financial services industry are Efficiency, Growth and Resilience. The technology helps the sector to fulfill the requirements of the business priority areas. Implementation of information technology began in right earnest in the sector. Starting from back office automation, which was aimed largely at processing of voluminous data and automation of cheque clearing operations; the technology moved to the front desk in the form of total branch automation. At the same time, the development in communication technologies made technology implementation more widespread and it became cost effective to network bank branches. Investments in information technology also helped cut down operational costs drastically. Technology means application of knowledge or a technical process method or emerged as powerful tool to reduce operating costs, making it viable for financial institution to expand into rural and low-income areas. Technology plays an important role in Financial Services for monitoring and controlling of their services; currently some of the technology use by financial institutions (FSIs) These help FSIs to provide efficient, better customer service, greater product variety, shorter response time, enhanced product quality and better customization of products and services. There are about 4 billion unbanked people in the world which is more than two third of the population of low- and middle-income countries financial institution such as commercial bank is still unable to reach poor population, because of high cost for building and maintain branch network and developing. According to Nielsen''''''''s Insights 2017 Report, Vietnam thein Vietnam in 2017 was 84%, an increase of 6% from the previous year. More notably, in rural areas, 68% of the population now use smartphones. The above figures show an impressive trend – the ubiquity of smartphones and tablets. Habits and behaviors of people in all regions, of all classes and ages are changing. Online services, whether for shopping, making friends, exchanging information, or dating, are becoming more popular. The Banking sector is no different. Users expect to be able to access and use banking services at anytime, anywhere and on any device. Each bank has its own approach to digital banking, which focuses on the customer experience or the ability to provide online services. However, these options can only be successful when delivering the best value to the customer. Right from the start, Techcombank has focused on technology, believing it to be the best way to serve customers and promote business development. During 26 years of operation, Techcombank has continuously strengthened its systems and capacity to best meet the needs of customers. In recent years, Techcombank’s application of technology has delivered remarkable progress, creating breakthroughs to improve operational efficiency and customer satisfaction. The aim is to identify and understand the changes that ICT is causing on the banking sector, in order to examine in detail how the recent (and foreseeable) advances in ICT are affecting the sector and can affect its future evolution. As ICT is having a strong influence on the evolution of the banking, the study investigates the influence ICT has on the banking sector and the payments system. Therefore, the purpose of this study was to investigate the relationship between ICT and bank performance, and case study in Viet Nam Technological and Commercial Joint stock Bank (Techcombank) 1.2.Research objectives -To evaluate the status of technology implementation in banking sector. -To analyze the impact of Information technology adoption on the performance of banking sector. -To estimate the relative efficiency and productivity of banking sector in pre and post e banking revolution period. -To draw some policy implications based on the findings emanated from the study 1.3.Research questions -What is theoretical framework of information technology applied for the Sale Performance at Techcombank? -How is the impact of information technology factors influencing on Techcombank Sale performance? -What are the main factors which affect to Sale performance at Techcombank? -What should Techcombank do to improve Sale Performance via Information Technology?

-NGUYEN VAN HAI

THE IMPACT OF INFORMATION TECHNOLOGY

ON BANKING SALES PERFORMANCE

CASE STUDY IN TECHCOMBANK

MBA THESIS

HÀ NỘI-2020

NGUYEN VAN HAI

THE IMPACT OF INFORMATION TECHNOLOGY

ON BANKING SALES PERFORMANCE.

CASE STUDY IN TECHCOMBANK

MASTER OF BUSINESS ADMINISTRATION IN ENGLISH

MBA THESIS

SUPERVISOR: Associate Professor Ph.DVU DINH HIEN

HÀ NỘI-2020

ACKNOWLEDGEMENT

valuable time and preciuos comments to contribute much to my thesis.

Second, I send my sincere thanks to managers and colleagues atTechcombank Vietnam for catering me in collecting full and accurate data inresearch process

Finally, I also would like to thank my family and friends for their support in finishing this thesis

Thank you very much!

October 2020

Nguyen Van Hai

TABLE OF CONTENTS

ABBREVIATION

LIST OF TABLES

LIST OF FIGURES

CHAPTER 1: INTRODUCTION 1

1.1.Rationale 1

1.2.Research objectives 2

1.3.Research questions 3

1.4.Research methodology 3

1.4.1.Research process 3

1.4.2.Data collection 4

1.4.3.Data analysis 5

1.5.Research scope 5

1.6.Thesis Structure outline 5

CHAPTER 2: THEORETICAL BACKGROUND ON INFORMATION TECHNOLOGY 6

2.1Definition of Information Communication Techonology 6

2.3 Challenges of integrating ict in banking operations 7

2.3 ICT tools used in banking 9

CHAPTER 3: CURRENT INFORMATION COMMUNICATION TECHNOLOGY AT TECHCOMBANK 17

3.1 Overview of Techcombank Vietnam 17

3.1.1 General introduction 17

3.1.2 Information and Communication Technology at Techcombank 20

3.2 Analyzing ICT and TCB Performance 27

3.2.1 Response Rate 27

3.2.4 Importance of Adoption of ICT in the Improvement of Bank Sale

Perfomance 31

3.2.5 Importance of Adoption of ICT in the Improvement of Bank Sale Performance 32

3.2.6 Extent Which the ICT Adoption has Improved the Bank Sale Performance of the Bank 32

3.2.7 Adoption of Various Technological Innovations in Carrying out Business Activities 33

3.2.8 Trend of Growth in Earnings 34

3.2.9 Findings of Exploration Factor Analysis and Regression Analysis to explore impact of ICT to Bank Performance 34

3.2.10 Regression Analysis 36

3.3 Summary of findings 36

CHAPTER 4: SUMMARY, CONCLUSION, RECOMMENDATIONS 39

4.1 Summary 39

4.2 Conclusions 39

4.3 Recommendations 40 REFERENCES

ICT: Information Communication Technology

Techombank: Viet Nam Technological and Commercial Joint stock BankCRM: Customer relationship management

EFA: Exploration Factor Analysis

FSIs: Financial institutions

ROA: Return on Asset

ROE: Return on Equity

Table 1.1 Response Rate 28

Table 1.2 Time works with current bank 29

Table 1.3 Adoption of ICT in the Improvement of Bank Sale Performance 31

Table 1.4 Importance of Adoption of ICT Innovation in the Improvement of Bank Sale Perfomance 32

Table 1.5 Extent to Which ICT Adoption has Improved the Sale Performance of the Bank 33

Table 1.6 Rating the Adoption of Various Technological Innovations 33

Table 1.8 Cronbatch’s Alpha 34

Table 1.9 EFA 35

Table 1.10 Regression Analysis 36

Figure 2.1: Oganizational structure of TCB 20

Figure 2.2 Working Experience in the Banking Industry 30

Figure 2.3 Position Held in the Organization 31

Figure 2.4 Level Education 32

Figure 2.5 Aspect of Performance 36

CHAPTER 1: INTRODUCTION

1.1 Rationale

Banking can simply express as the business of keeping, lending, exchangingand issuing money The Key business priorities of the banking and financialservices industry are Efficiency, Growth and Resilience The technology helps thesector to fulfill the requirements of the business priority areas

Implementation of information technology began in right earnest in thesector Starting from back office automation, which was aimed largely at processing

of voluminous data and automation of cheque clearing operations; the technologymoved to the front desk in the form of total branch automation

At the same time, the development in communication technologies madetechnology implementation more widespread and it became cost effective tonetwork bank branches Investments in information technology also helped cutdown operational costs drastically

Technology means application of knowledge or a technical process method

or emerged as powerful tool to reduce operating costs, making it viable for financialinstitution to expand into rural and low-income areas Technology plays animportant role in Financial Services for monitoring and controlling of their services;currently some of the technology use by financial institutions (FSIs)

These help FSIs to provide efficient, better customer service, greater productvariety, shorter response time, enhanced product quality and better customization ofproducts and services

There are about 4 billion unbanked people in the world which is more thantwo third of the population of low- and middle-income countries financialinstitution such as commercial bank is still unable to reach poor population, because

of high cost for building and maintain branch network and developing

According to Nielsen's Insights 2017 Report, Vietnam thein Vietnam in 2017was 84%, an increase of 6% from the previous year More notably, in rural areas,

68% of the population now use smartphones The above figures show an impressivetrend – the ubiquity of smartphones and tablets Habits and behaviors of people inall regions, of all classes and ages are changing Online services, whether forshopping, making friends, exchanging information, or dating, are becoming morepopular The Banking sector is no different Users expect to be able to access anduse banking services at anytime, anywhere and on any device Each bank has itsown approach to digital banking, which focuses on the customer experience or theability to provide online services However, these options can only be successfulwhen delivering the best value to the customer Right from the start, Techcombankhas focused on technology, believing it to be the best way to serve customers andpromote business development During 26 years of operation, Techcombank hascontinuously strengthened its systems and capacity to best meet the needs ofcustomers In recent years, Techcombank’s application of technology has deliveredremarkable progress, creating breakthroughs to improve operational efficiency andcustomer satisfaction.

The aim is to identify and understand the changes that ICT is causing on thebanking sector, in order to examine in detail how the recent (and foreseeable)advances in ICT are affecting the sector and can affect its future evolution As ICT

is having a strong influence on the evolution of the banking, the study investigatesthe influence ICT has on the banking sector and the payments system Therefore,the purpose of this study was to investigate the relationship between ICT and bankperformance, and case study in Viet Nam Technological and Commercial Jointstock Bank (Techcombank)

1.2.Research objectives

- To evaluate the status of technology implementation in banking sector

- To analyze the impact of Information technology adoption on theperformance of banking sector

- To estimate the relative efficiency and productivity of banking sector in preand post e banking revolution period

- To draw some policy implications based on the findings emanated fromthe study

1.3 Research questions

- What is theoretical framework of information technology applied for the Sale Performance at Techcombank?

- How is the impact of information technology factors influencing on

Techcombank Sale performance?

- What are the main factors which affect to Sale performance at

Figure 1.1: Research process

(Source: author)

1.4.2 Data collection

Survey of data are collected both online questionnaire and hard copy form

Respondents are needed to answer all questions from questionnaire Questionnaire

was designed with Google form and distributed by sending attach file through

Email Moreover, hard copy of questionnaire is also distributed to respondents

Questionnaires was sent to 200 respondents and accepted respondents 170 for this

study are who have been working for Techcombank All questionnaire of survey

result was collected within 1 weeks and 100 respondents are received Email and

100 respondents are done with hard copy survey form All the hard copy surveys of

result data base are together collected with online data base into Google form with

manually typing Result of all data base are exported in excel file

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1.4.3 Data analysis

Findings data are systematically linked to the format of self-developedquestionnaire attached in the appendix Data are collected by using questionnaireand distributed with link through Email and also hard copies around the area of HaNoi Collected data are analyzed to identify, describe and test the impact ofInformation Technology in banking sector via survey TCB’employees The authoruse “Excel” and “Word” software to process the data

1.5 Research scope

This research studied the impact of Information Technology on banking sectorand case study in Techcombank and method of questionnaire was used as aninstrument of survey Population and sample of respondents are targeted the peoplefrom the area of the city of Ha Noi who have been working for Techcombank Totalnumber of 200 sample size was employed for this study using 5:1 ratio method ofHair, et al (1998) Research of questionnaire was done within one week around thearea of Ha Noi

1.6 Thesis Structure outline

The thesis includes 4 chapters:

Chapter 1: Introduction

Chapter 2: Theoretical background on IT

Chapter 3: Current Information Technology at Techcombank Vietnam

Chapter 4: Some solutions for TCB

CHAPTER 2: THEORETICAL BACKGROUND ON

INFORMATION TECHNOLOGY

2.1Definition of Information Communication Techonology

Information Communication Technology (ICT) is the use of any computers,storage, networking and other physical devices, infrastructure and processes tocreate, process, store, secure and exchange all forms of electronic data Typically,ICT is used in the context of enterprise operations as opposed to personal orentertainment technologies The commercial use of ICT encompasses bothcomputer technology and telephony

ICT IN BUSINESS

Information technology drives innovation and innovation is the path tobusiness success Innovation in business has the same impact that steam had on theindustrial revolution In fact, it’s hard to imagine any business that has not benefitedfrom the digital revolution Even something as hands on as agriculture usescomputers Farmers use computers for production records, financial planning,research on technical issues, and procurement

Nowadays the formula for business success is simple: drive innovation withinformation technology So, the first thing startups in any industry try to figure out

is how to make smart IT recruiting choices Without a backbone of informationtechnology, a business is not going to go far

2.2 Significance of information communicationtechnology (ict) in the banking industry

The revolution in ICT has distorted the normal banking culture and createdthe avenue for banks to emerge into various markets thereby creating value wherecustomer needs are sorted into various categories for prompt attention (Aliyu andTasmin, 2012) Through this means, the banks are able to sell other products such as

insurance and securities together with the banking products they already sell whichare all unique to the particular firm (Delgado and Nieto, 2004) However, the basicreason for making use of the internet and other ICT tools as delivery channels is itspower to reduce operational expenses by eliminating the cost of running physicalbranches This becomes relevant in the Spanish banking system which has too manybranches across Europe since the banks using the internet and other ICT tools asdelivery increase their income drastically than those using normal distributionchannels DeYoung (2005) and Delgado et al (2006) Haq (2005) posits thatfinancial institutions are able to survive by maximizing income through thereduction of operational costs The unit cost of using IT tools in banking reducerapidly than the cost associated with physical branch deliver as income grows.Thus, Internet banking has become the only innovation that can substitute physicalbranches in the service delivery of banks (DeYoung et al 2007) Birch and Young(1997) posit that expectations of consumers are about comfort ability, prompt andquality service delivery and transactional security The introduction of ICT tools inbanking has raised the awareness of customer to the existence of a fast and efficientcustomer service delivery.

2.3 Challenges of integrating ict in banking operations

Information Communication Technologies has proved to be a cvaluable tool

to business for that matter banking Notwithstanding, implementing ICT has notbeen without challenges The following are some reviewed papers in relation to thechallenge’s banks encounter with the integration of ICT Related literatures on thechallenges of integrating IT in banking operations were reviewed extensively in thisparticular section Kevin et al (2013) investigated into the impact and Challenges ofInformation Communication Technology Adoption in the Tanzanian BankingSector Descriptive research design was employed as it facilitated collection ofinformation from various categories of bank managers i.e Customer relationsmanager who informed the study on how customers use technology to relate with

the bank, Cash manager who informed the study on how cash flows usingtechnology and the IT managers who informed the study on technical issues andchallenges and allow them to state their perceptions on impact and challenges on ITadoption in the banking sector Their research instrument captured under themethodology was categorized into two sections; that is the first part comprising thedemographic characteristics/profile and the second part exploring positive impacts

of IT adoption in banking sector, bankers‟ and banker’s opinions on the need, whatencouraged them to adopt IT and section two which consisted of 10 questions onchallenge’s facing IT adoption The main data collection they adopted wasquestionnaire From the empirical findings, they discovered that majority of therespondents agreed that ICT has a major impact in banking .Other findingsincluded; information communication technologies like mobile banking products,internet banking products help customers and bankers have remote access ofbanking solutions; ICT related online banking products like digital financialservices saves time in making transactions and can be accessed from any anywhere

at any time; ICT has a positive impact where by it enables ;wider networking andlinks banks globally therefore enhancing smart banking solutions and services to thecustomers and also enabling wider networking, global links of banks Theytherefore outlined a number of challenges in their study in including; slowing down

of IT systems and equipment’s, network communication errors; ignorance bymajority of the customers about ICT usage especially online services and they don’town ICT gadgets which can enable them access online services; Sonja (2010)investigated the effects of computerization on savings and credit cooperatives inUganda They found out that, majority of the respondents agreed that informationcommunication technology has really promoted microfinance sustainability,reaching the poor people and Management information systems However, one ofthe challenging aspects of the usage of ICT revealed as lack of human resourcecapacity in the banks in Uganda to man the administration of the computingservices They therefore suggested that more training should be required to ensure

human resource capacity Information communication technology has become theengine block of every banking institution worldwide and Viet Nam bankinginstitutions are not exempted They adopted the historical and survey researchmethods Data were collected from both primary and secondary sources using chi-square and regression analysis were used in the aspect of formulated Hypothesistesting They discovered that, banking system is not in line with global trends andthat the application and usage of information technology in the banking system isnecessary for efficient service delivery They also realized that, the usage ofelectronic banking contributes to significantly revolutionizing service delivery toimprovecustomer satisfaction through the various electronic fund transfer andpayment services such as the automated teller machine (ATMs) The studyrecommends that, banks and other financial institutions should embark upontraining program for all operational staff of all banks and public awareness should

be instituted to improve the knowledge of information communication technologyand for performance adequacy to support the much-needed efficiency andoperational effectiveness and also to control the regular system failure thatcustomers face They used both qualitative and quantitative approaches in gatheringthe relevant information for the study In order to address the challenges faced bythe TCB based on the adoption of ICT, a survey was conducted on some of the staff

of the banks A cross sectional comparative analysis approach was adopted throughsampling a cross section of workers in TCB

2.3ICT tools used in banking

The following include some of the major impacts of information technology

in Techombank’ system:

 GSM Banking (Mobile Banking)

This mode of e-banking makes use of the Global System for Mobilecommunication (GSM) phones as the primary electronic device GSM has improvedthe operational efficiency of many banks in the country The mobile banking

services basically allow customers to operate their accounts with the operatingbanks from mobile phones to a large extent as long as their phones and networksupport SMS (short messaging service) The user could be able to check accountbalance up to his two last transactions.

 Automated Teller Machines (ATMs)

ATMs are a computer-controlled device that dispenses cash, and mayprovide other services to customers who identify themselves with a PersonalIdentification Number ATM dispenses cash at any time of the day and night, unlikethe traditional method where customers have to queue for a very long time in order

to withdraw cash or transfer funds

 Adoption of the ICT Integrated Project

Techcombank has successfully completed information and communicationtechnology integration project which enables them to communicate easily across asmany employees as possible within the country to deliver radically-enhancedcustomer-centric services

 On-Line Banking

With the aid of information technology, online banking provides theopportunity of paying bills and performing transactions of any kind electronically.Electronic payments can be credited or debited the same day Customers can makepayments for goods or services without necessarily coming in contact with physicalcash and running the risk of handling a large amount of money

 Electronic Mail

Information technology has given rise to electronic mail which improvescommunication between individuals, external parties and the bank within or acrossvarious geographical regions or boundaries The availability of online informationprovides bankers and customers with a powerful vehicle for research

2.4 The information communication technology and bank performance

Worldwide, in the last few years, a massive investment has been done in thebanking sector and its impact on performance is still a paradox Numerousstudies, using alternative methodologies, have been done on different countrybanking systems Following section is a synoptic view of some representativebanking sector related studies

Negative/No relationship in profitability and ICT

Beccalli (2006) used data from 737 banks covering the period from 1993through2000 to study the impact of increased information technology investment ontheprofitability performance of banks in France, Germany, Italy, Spain and UnitedKingdom The study used balance sheet and income statement data, giving apooled total of 4414 observations ROA and ROE have been used asperformance variables and hardware cost, software costs and services cost asthe investment variables The study found no significant relationship betweentotal information technology expenditure and improvement in profitability Carlson(2001) reached the same conclusion after investigating the same issue in the USbanking market by regressing a bank's ROE on a set of controlled variablesincluding an explanatory binary variable for the presence or absence of internetbanking Shirley and Mallick (2008) tested the cost effect and network effect of ICT

by applying a differentiated model in 68 US banks using 20 years data andconcluded that bank profits decline due to adoption and diffusion of ICTinvestment, reflecting negative network effects in this industry Mittal andDhingra (2007) evaluated the impact of computerization on the performance ofIndian banks using Data Envelopment Analysis (DEA) and found that the benefits

of computerization in boosting productivity and performance of banks is difficult

to quantify Some researchers have used correlation to study the impact of ITexpenditure on the banking sector performance (Dos Santos et al 1993) andfound that ICT spending is unproductive Another researcher also found the sameinsignificant contribution of ICT expenditure to the output in banks (Loveman,

1994) Similarly, Prasad & Harker (1997) studied US retail banking sector toassess the effect of ICT and concluded that no real benefits have accrued due toadditional investment in ICT.

Positive relationship in profitability and ICT

A lot of studies have found positive impact of ICT on the performance ofbankingsector Shaukat (2009) examined the impact of ICT investments onprofitability andemployee productivity in Pakistani banking sector over a period of1994-2005.They found that ICT has a positive impact on performance of thebanking sector.Parsons, Gotlieb and Denny (1993) reached at the same conclusionafter

studying the impact of ICT on banking productivity in Canadian banking industry.Using data from 1974-1988, a trans-log cost model has been estimated Theresearch found a 17-23 percent increase in productivity with the use of IT Cooke(1998) studied some new and fast-growing financial innovations linked to ITinvestment, e.g., assets securitization and derivatives in US banking sector Thestudy found that ICT has enabled the banks to offer new products, expand intonontraditional areas, operate more efficiently and minimize risks Deyoung, R.(2006), analyzed the impact of investment in information technology (IT) systems

on bank’s profitability in UK Using panel data, the study supported the view thatICT has a positive impact on bank’s profitability through several factors such asreducing the labour costs and transactions costs Claudia et al (2002),empirically examined Italian banks based on univariate and multivariateregression models and found a significant relationship between offering ofinternet banking activities and bank’s profitability Betterymarch (2003) used apanel of 600 Italian banks over the period 1989-2000 and stochastic cost andprofit functions have been estimated The results show that both cost and profitfrontier shifts are strongly correlated with ICT capital accumulation Banksadopting

information technology capital intensive techniques are also more efficient

Nurwani Amaratunga and Mukrima (2003) examined Sri Lankan banks and foundthat the strategic use of ICT plays a vital role in retaining the existing customersand attracting new customers Jun, S (2006) investigated the impact ofinformation technology expenditure on business performance in Korean bankingusing a BSC model The results indicated a significant association between thelevels of information technology adoption and the financial performance of thebanks Eyadat and Kozak (2005) investigated the impact of ICT on the profit andcost efficiencies in U.S banking sector during 1992-2003 They found a positiveand significant correlation between the levels of implemented ICT and both,profitability and cost savings Hung Viet Ngugen (2005) studied Vietnamesecommercial banks in terms of their efficiency change, productivity growth andtechnological change during the period 2001-03 The Study used DataEnvelopment Analysis (DEA) and Malmquist Index with four inputs (labour,capital, technology and deposits) and two outputs (interest income andnoninterest income) It shows that total factor productivity increased by 5.7percent in 2003 relative to 2001 Aghdassi, M (2008) analyzed the strategicvalue of e-banking for Iranian banks and revealed that bank manager’sperformance through e-banking is quite positive and effective They alsoconcluded that information technology stock contributes to value added growthsignificantly and use of information network shows positive impacts on TFP.Rahman, I.U (2007) analyzed the financial statements for 26 banks from 1991through 2001 They used ROA, ROE and net profit as performance variables,and computer budget ratio and capital budget ratio as the information technologyinvestment variables The results revealed the strongest relationship betweencomputer budget ratio and ROE/ROA Similarly, Malhotra and Singh (2006), M.Chandrasekhar (2010) analyzed the implications of internet banking for theIndian banking industry for the period 1998-2005 and found that internet banksare larger banks and have better operating efficiency and profitability ascompared to non-internet banks Casolaro and Gobbi (2007) analyzed the

relationship between information technology investment and productivity in Italianbanking industry using unbalanced panel data from 618 banks collected for 1989through 2000 With information technology use and total factor productivity asoutput, the researcher employed stochastic cost and profit frontier techniques.They used hardware capital stock, software capital stock, information technologycapital stock for an employee, and the number of ATMs as the informationtechnology investment measures For the performance measures, the authorsused the ratio of services to gross income and capital, and the ratio of reserves

to total assets The results revealed that banks with higher informationtechnology investment were more efficient Agboola (2007) used Likert-typeratings to measure and analyze the degree of utilization of identified technologiesand the variations in their adoption rate in Nigerian banks The study revealedthat the adoption of ICT in banks has improved customer services, facilitatedaccurate records, provided home and office banking services and enhancedfaster services Illyas-Ur Rahman (2007) examined the role of informationtechnology in banks and studied the perception of bank employees towards theimplementation of information technology The study considered differentinformation technology variables like net banking, credit cards, mobile banking,electronic funds transfer, phone banking, card to card funds transfer The studyfound a positive relation between implementation of information technology anddelivery of services Ahmad Mashnour (2009) investigated the way in whichinformation technology investment created value in the Jordanian banks Thestudy measured some variables which determine financial information systemperformance i.e (a) IT integrated in IS; (b) software quality; (c) investment intraining; (d) customer services; (e) productivity; (f) user satisfaction; and (g) costbenefit analysis The study concluded that information system provides acompetitive advantage to the banking industry and the effectiveness ofinformation systems has a positive impact on Jordan banks Ombati and Magutu(2010), analyzed the relationship between technology and service quality in the

banking industry in Kenya The research is a cross-sectional survey and therespondents of the study are customers of banks using e-banking services(internet banking, mobile banking and ATM) The findings revealed that ebanking has improved the service quality of banks Madume Stella (2010)analysed the impact of information and communication technology on theproductivity of the Nigerian banking sector using CAMEL and the transcendentallogarithmic production function also called Translog The study found that bankoutput such as loans and other assets increase significantly due to increase inexpenditure on information and communication technologies Leckson andLeckey (2011) ascertained and documented the extent to which investment ininformation technology may affect profitability in Ghana banking sector Thestudy used an enhanced Balanced Scored Card (BSC) approach proposed byKaplan and Norton and used the extensive panel data set of 15 banks over a 10year period (1998-2007) The study found that higher IT level banks have thetendencies of increased profitability Alpar and Kim (1990) studied 759 US banksduring 1979-1986 to analyze the impact of IT on economic performance.Applying cost function approach they found that IT was able to reduce operatingcosts, increase capital expenditures of banks, save personnel costs, reducedemand deposits, and increase time deposits Ekata, G.E (2012), examinedtechnological change, its relationship to firm size, and its impact on the efficientscale of output and product mix for large US commercial banks The resultssuggest that technological change lowered real costs by about 1 percent peryear, increased the cost minimizing scale of outputs, and affected product mix.

To study the efficiency and productivity of banks, many researchers used DEAmodel Das et al., (2000) used DEA approach for all the three types ofownership— public, private and foreign Kamakura & Ratchford, (1996) usedDEA with translog cost function to measure efficiency of multiple retail stores.While applying DEA, different ICT related input specifications have been noticed.Some studies used computer (hardware) as input measure (Oral and Yolalan,

1990; Vassiloglon & Giokas, 1990) whereas some others have taken Number ofATMs (Zenios et al., 1999) Choudhari & Tripathy, (2004) used DEA with a lot ofvariables like profitability, financial management, growth, productivity, andliquidity Many other users of this approach were Mukherjee et al 2002; Kumar &Verma 2003; Sathye 2003; Gunjan M Sanjeev; 2006; Gupta et al., 2008;Rezvanian et al., 2008; Awdeh & Moussawi, 2009; Sunil & Rachita, 2010 etc.Review of studies is indicative of the fact that the relation of informationtechnology input and performance is a tricky one It needs proper metrics orquantification of the two prime variables, the ICT and performance There are veryfew studies that quantitatively indexed both the information technology and theperformance of banks This work is a step ahead to fill this

CHAPTER 3: CURRENT INFORMATION COMMUNICATION TECHNOLOGY AT TECHCOMBANK

3.1 Overview of Techcombank Vietnam

Certificate of Business: The State Bank of Vietnam (SBV) issued us with

Banking Licence # 0038/GP-NHNN on 6 March 2018 (replaced # 0040/NH-GP issued 6 August 1993)

ninety-Address: Techcombank Tower – 191 Ba Trieu Street, Le Dai Hanh Ward,

Hai Ba Trung District, Hanoi, Vietnam

 MISSIONS:

- To be the preferred and most trusted financial partner of our customers,providingthem with a full range of financial products and services

through a personalized/customer centric relationship

- To provide our employees with a great working environment where

they have multiple opportunities to develop, contribute, and build a successfulcareer

- To offer our shareholders superior long term returns by executing a

fast growth strategy while enforcing rigorous corporate governance and riskmanagement best practices

 CORE VALUES:

Techcombank’s “corporate culture” is based on 5 core values which createstrength for Techcombank and is the foundation for the organization’s sustainabledevelopment, as well as bring greater success for customers

Customer centricity:

"Because we only succeed when customers succeed"

Techcombank always put ourselves in customers’ position in every thoughtand action to bring the best benefits and experience for customers TCB protect ourcustomers' interests by always complying with the laws and the Bank’s regulations

Innovation & Creativeness:

“To always lead" All Techcomers are always ready to lead the change to

create new results with new working ways, and great results with breakthroughways

Collaboration for common objectives:

To form a collective strength for a sustainable development and greatersuccess with the Bank" Techcombank's strength is created from a collective with thefoundation of unity in thinking, in action

Self-development:

To be able to grasp the opportunity of development with the Bank"Techcomers always actively learn to improve their capabilities and to continuallyset higher goals for themselves along with the development and success of theBank Techcombank also creates conditions and opportunities for the staff todevelop and to succeed.

Work efficiently:

To bring about greater success with suitable resources" With the goal of "Allactions are directed towards specific and clear results", TCB always work with aplan and discipline in implementation, as well as ensure resources are allocatedoptimally

3.1.1.2 History of Techcombank Viet Nam

- 1993: Vietnam Technological and Commercial Joint Stock Bank(Techcombank) was established with an initial charter capital of VND 20 billion;

- 1996: Charter capital was raised to VND70 billion;

- 2005: Charter capital was raised to VND555 billion;

- 2006: Raised the charter captial to VND1.500 billion;

- 2007: Became a public company, implemented internet banking system;

- 2008: Charter capital was raised to VND3,642,014,710,000;

- 2009: Rewarded in the list of Top 500 largest enterprises in Vietnam 2009(VNR500);

- 2010: Charter capital was raised to VND6,932,183,710,000;

- 2011: Charter capital was raised to VND8,788,078,710,000;

- 2012: Charter capital was raised to VND8,848,078,710,000;

- 2013: Charter capital was raised to VND9,578,078,710,000;

- 2014: Launched mobile banking application F@st Mobile;

- 2015: Acquired and renamed Vietnam Chemical Finance Joint StockCompany as Techcom Finance Co., Ltd (TechcomFinance);

- 2017: Charter capital was raised to VND11,655,307,200,000;

- Early 2018: Divested its capital from Techcom Finance Co., Ltd(TechcomFinance);

- 22/05/2018: Listed on Hochiminh Stock Exchange (HOSE);

- 04/06/2018: Traded on Hochiminh Stock Exchange (HOSE);

- 10/08/2018: Charter capital was raised to 34,965,921,600,000;

3.1.1.3 Oganizational structure of Techcombank Vietnam

Figure 2.1: Oganizational structure of TCB

3.1.2 Information and Communication Technology at Techcombank

Digital transformation is taking place in Vietnam’s financial servicesindustry, with a host of non-bank innovators offering both customer-facing andback-office fintech products and services While banks are applying “Mix n Match”strategic models in their digitization process, Vietnamese fintechs are offering pointsolutions in product areas such as payments, remittances, savings, personal financialmanagement, small and medium-sized enterprises (SMEs), lending, and insurance

With a large population of young smartphone users, a high level of internetpenetration, high consumer growth, a low unemployment rate, and a low ratio ofbanked citizens, Vietnam is becoming a promising market for digitaltransformation There exist huge opportunities and bright prospects for thecountry’s digital banking and financial services development TCB having foreseenthe trend, have embarked on the application of digital technologies and themodernization of business models.

GSM: Global System for Mobile communication

- Mobile Banking- Fast Mobile

Techcombank F@st mobile is a wireless Internet-based service (3G, GPRS,wifi) that allows safe -convenient banking-anytime, anywhere on the go throughyour smart phone device

Customers who have registered for F@st i-bank service of TCB only need todownload and install F@st Mobile App, using the Log-in name and password ofF@st i-bank to log in Mobile App

Features & Benefits

 Quick money transfer (free transaction fee):

 Quick money transfer

 Internal Techcombank account transfer

 External transfer to beneficiaries whose accounts are opened at other banks

 Money transfer to Mobile subscribers (Money withdrawal from ATM without Card)

 Money transfer via ID card number of beneficiary and cash withdrawal at any Techcombank branch

 24/7 account transfer

 Bill payment:

 Topup prepaid card

 Monthly bill payment

 Techcombank credit card payment

 Vietnam Airlines, Vietjet Air, Air Asia, VNR ticket payment

 Vinhomes service fee payment

 Internet ADSL FPT/VTC Digital/ VTC Games

 Internet ADSL/ Homephone VNPT

 Internet ADSL/Homephone Viettel