861 research on factors affecting customer satisfaction on mobile banking service of military commercial joint stock bank – xuan thuy branch

BANKING ACADEMY BANKING FACULTYZ C l GRADUATION THESIS Research on Factors affecting customer satisfaction on Mobile Banking service of Military Commercial Joint Stock Bank - Xuan Thuy B

BANKING ACADEMY BANKING FACULTY

Z

C l

GRADUATION THESIS

Research on Factors affecting customer satisfaction on Mobile Banking service of Military Commercial Joint

Stock Bank - Xuan Thuy Branch

Author Name: Bui Ngoc Nam

Student Code: 20A4020548

Class: K20CLCB

Internship Unit: Military Commercial Joint Stock Bank

Xuan Thuy Branch

Instructor: Dr Nguyen Thi Quynh Huong

A completed study would not be done without any assistance Therefore, to be able

to complete the University program and this thesis, I would like to express mysincere thanks to the teachers of Banking Academy who wholeheartedly impartedvaluable knowledge to me during my four years of study at school Particularly, Iwould like to express my deep gratitude to my supervisor - Ms Nguyen Thi QuynhHuong for her guidance and support in completing this graduation thesis Withouther motivation and instructions, the thesis would have been impossible to be doneeffectively

I would like to thank the Management Board of MB Xuan Thuy - Tran Duy Hungbranch, especially Ms Tran Thi Thanh Xuan - Head of Personal CustomerRelations Department for enthusiastically guiding and giving me the opportunity topractice and experience the professional working environment at the bank and also

my colleagues in the Department of Personal Customer Relations for helping me to

be able to do this graduation thesis

Although I have tried my best to complete the thesis, due to my limited knowledgeand personal understanding, the thesis cannot avoid errors I look forward toreceiving your comments to improve the research paper

Thank you sincerely!

To conduct the thesis: “Research on Factors affecting customer satisfaction onMobile Banking service of Military Commercial Joint Stock Bank - Xuan ThuyBranch” I have researched on my own, applied the knowledge I have learnedbefore, discussed it with instructors, and friends, The data and results stated

in the thesis are honest and have not been published in other works

I hereby declare that this thesis is my own, that the secondary information used

in this thesis is original and clearly cited

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

UNDERTAKING ii

TABLE OF CONTENTS iii

LIST OF SYMBOLS, ABBREVIATIONS vi

LIST OF TABLES, DIAGRAMS vii

ABSTRACT 1

1 THE URGENCY OF THE SUBJECT 1

2 RESEARCH OBJECTIVES 2

3 RESEARCH SUBJECTS AND RESEARCH SCOPE 2

4 METHODOLOGY 2

5 OVERVIEW OF PREVIOUS STUDIES 2

5.1 Domestic Studies 3

5.2 Foreign Studies 3

6 KEY STRUCTURE 8

Chapter I: Theoretical basis for Mobile Banking and customer satisfaction with Mobile Banking 9

1.1 Overview of Mobile Banking 9

1.1.1 E-banking services 9

1.1.2 Mobile banking services 12

1.1.3 Benefits of mobile banking 13

1.2 Service quality 14

1.2.1 Overview of service quality 14

1.2.2 Some models of service quality assessment 17

1.3 Customer satisfaction when experiencing the service 18

1.3.1 Satisfaction concept 18

1.3.2 The relationship between service quality and customer satisfaction 19

1.4 Models related to customer satisfaction 21

1.4.1 SERVQUAL (Parasuraman,1988) 21

1.4.2 American Customer Satisfaction Index (ACSI) (Fornell, Johnson,

Anderson, Cha & Everitt,1990,1996) 22

THE CONCLUSION OF CHAPTER I 23

Chapter II: Research on factors affecting customer satisfaction on App MBBank Service of Military Commercial Joint Stock Bank 24

2.1 Overview of Military Commercial Joint Stock Bank - Xuan Thuy Branch and MB's e-banking service 24

2.1.1 Introduction about Military Commercial Joint Stock Bank - Xuan Thuy Branch 24

2.1.2 Overview of MB's e-banking service and Mobile Banking service 28

2.1.2.1 Background of MB’s e-banking services 29

2.1.2.2 Background of MB's Mobile Banking service 29

2.1.3 MB's business performance and development of e-banking services for the period 2017-2020 31

2.2 Research on factors affecting customer satisfaction on App MBBank Service of Military Commercial Joint Stock Bank 32

2.2.1 Conceptual Framework and Development of Hypotheses 32

2.2.2 Description and definition of variables in the model 34

2.2.3 Description of the survey form 36

2.2.3.1 Survey process: 36

2.2.3.2 Survey results 37

3.1 Evaluate the reliability of Cronbach's Alpha scale 49

3.2 Exploratory Factor Analysis (EFA) 52

3.2.1 EFA for the independent variable 52

3.2.2 EFA for the dependent variable 55

3.3 Correlation Analysis 57

3.4 Verify the research model and research hypothesis 59

3.4.1 Build regression model 59

3.4.2 Verify the regression hypothesisviolations 59

3.4.3 Verify the fit of the regression model 63

3.4.4 Regression Results 64

3.4.5 Research hypothesis test results 65

3.4.6 Discussion the research results 66

THE CONCLUSION OF CHAPTER II 68

Chapter 3: Conclusion and recommendations 69

3.1 Conclusion of the study 69

3.2 Solutions 69

3.3 Limitations and further researchdirections 75

THE CONCLUSION OF CHAPTER III 76

LIST OF SYMBOLS, ABBREVIATIONS

1 MB: Military Joint Stock Bank

2 EFA: Exploratory Factor Analysis

3 Sig.: Observed significance level

4 SPSS: Statistical Package for the Social Sciences

5 OTP: One Time Password

6 ACSI: American Customer Satisfaction Index

7 ECSI: European Customer Satisfaction Index

8 PLS-SEM: Partial least squares

9 ATM: Automated Teller Machine

10 POS: Point of Sale

11 IT: Information Technology

LIST OF TABLES, DIAGRAMS

Table 2.1: MB's e-banking performance in the period 2017 - 2020Table 2.2: Symbol of independent variables

Table 3.1: Cronbach alpha table of research concepts

Table 3.2: KMO and Bartlett's Test

Table 3.3: Total Variance Explained (independent variable)Table 3.4: Rotated Component Matrix

Table 3.5: KMO and Bartlett's Test (Dependent Variable)

Table 3.6: Total Variance Explained

Table 3.7: Component Matrix

Table 3.8: Correlations

Table 3.9: Model Summary

Table 3.10: Table of results for verifying the model test

Table 3.11: Coefficients

Table 3.12: Hypothesis test results

Diagram 2.1: Diagram of MB Xuan Thuy's departmentsDiagram 2.2: Conceptual Framework

Diagram 2.3: Sample characteristics by genders

Diagram 2.4: Sample characteristics by age groups

Diagram 2.5: Sample characteristics by Customer incomeDiagram 2.6: Sample characteristics by Occupation

Diagram 2.7: Sample characteristics by Customer’s fieldDiagram 2.8: Customer app usage time chart

Diagram 2.9: Distribution chart of services used by customersDiagram 2.10: Reliability

Diagram 2.11: Responsiveness

1 THE URGENCY OF THE SUBJECT

Entering the industrial era 4.0, the e-commerce field is growing day by day, sobanks apply high technology to their products and services to develop andcompete with other banks In addition, banks can access and expand anenormous customer base thanks to the increasing number of smartphoneproducts and the increasing number of internet users today That has contributed

to promoting banks to invest in the development of mobile banking services

Mobile banking service is developed to minimize time, saving costs, reducingtransaction risks for both banks and customers as well as bringing the bestcustomer experience Military Commercial Joint Stock Bank is one among thepioneer banks within the investment and development of Mobile Banking withmobile application products MBBank

Nowadays, many banks with strong financial and technological potential areparticipating in investment in the domestic market, many domestic bankingbrands are also constantly investing and developing their products, leading tofierce competition in the banking service sector Therefore, to be competitive,banks see customer experience as a measure of customer satisfaction to attractnew customer development and strengthen relationships with existingcustomers Many business strategies are designed to bring customer satisfactionwhen using the service so that banks can evaluate the factors affecting customersatisfaction to build the best service experience for customers

Based on previous studies and internship at MB Xuan Thuy transaction office,

Tran Duy Hung branch, the author decided to settle on the topic: “Research on Factors affecting customer satisfaction on Mobile Banking service of Military Commercial Joint Stock Bank - Xuan Thuy Branch” to focus on

evaluating the experience of customers who have been using App MBBank toprovide recommendations and solutions to improve customer experience

2 RESEARCH OBJECTIVES

The general goal of the topic is to identify the factors and measure the impact ofthe factors on customer satisfaction when experiencing Mobile Banking service,thereby offering reasonable solutions to improve the satisfaction of customerswhen using the service of Military Commercial Joint Stock Bank

The specific objectives of the topic:

• Measure customer satisfaction when experiencing the MBBank App service

• Discovering factors affecting customer experience when using MBBank Appservice and conducting analysis of customer satisfaction

• From research results, proposing solutions to improve customer satisfactionwhen experiencing the App MBBank service of Military Commercial JointStock Bank in the coming time

3 RESEARCH SUBJECTS AND RESEARCH SCOPE

Research subjects: Factors affecting customer experience when using App

MBBank

Research scope: The research topic collected information, data on the current

situation of the bank were taken between 2017 and 2020, the form of onlinecustomer survey via google form was conducted in April 2021

4 METHODOLOGY

The thesis uses qualitative and quantitative research methods: Analysis of thefactors affecting customer experience when using App MBBank through themethod of online survey via google forms and charting the proportion of theresults Based on the data collected from the survey questionnaire, using SPSSsoftware to produce data processing results, from which to evaluate the resultsand propose solutions to help the bank offer better experiences

5 OVERVIEW OF PREVIOUS STUDIES

There have been many scientific researches on researching factors affectingcustomer satisfaction when experiencing Mobile Banking and achieving certainachievements.

5.1 Domestic Studies

- “Factors affecting customer satisfaction when experiencing mobile bankingservices at Military Commercial Joint Stock Bank” by Nguyen Thi ThuHang (2019) This paper uses qualitative and quantitative research methods:Analysis of factors affecting customer experience when using APP MobileBanking through sampling and survey methods Based on data collectedfrom the survey questionnaire, using SPSS software to produce dataprocessing results, thereby evaluating the results and proposing solutions tohelp the bank improve customer experience The results show that, whenusing App mobile banking MB, customers in Vietnam are most concernedwith the effectiveness of mobile App, and then with functions, ease of use,reliability, and safety However, the research is only conducted in the Hanoiarea and customers will have different needs and satisfaction with AppMobile Banking from customers in other regions

- “Satisfaction of customers on the quality of mobile banking services in MBBinh Phuoc” by Lai Thi Nhat Vy (2020) This research used qualitativemethod of interviewing friends and relatives of the author who are usingmobile banking services at MB Binh Phuoc as well as officers andemployees at the branch, the results of the questionnaire were processed byquantitative method and analyzed data by SPSS software Research data ofthe thesis is not really reliable and does not cover the whole bank, but onlyencapsulates the Binh Phuoc branch

5.2 Foreign Studies

- Safeena et al (2011) have studied the factors affecting customer perceptionwhen using Mobile banking by banks in India with about 700 samples and

using a satisfaction scale model SERVQUAL with 4 main factors to researchthis market are reliability, responsiveness, service capacity, tangible means.The results of this study show that: The factor of “Reliability” - which hasthree variables (customer account information security, no possibility ofbankruptcy, and quick problems resolution) is the factor that has the greatestinfluence on Indian satisfaction perception Through Safeena's research, itcan be seen that in India - a country with a large population and a verydeveloped IT industry, problems about security, the leaking of accountinformation or banks' bankruptcy are what customers worry the most.Additionally, Research results are greatly influenced by the financialenvironment, and the development characteristics of this country.

- In a study on the impact of Mobile banking on customer satisfaction inGermany by Moinuddin (2013) This study was conducted to survey over

500 customers who used the service at banks in Germany, the author usedthe official research method by Cronbach's Alpha reliability coefficient toanalyze reliability and use European ECSI satisfaction index model toexplore When applying the ACSI model, the author researched three mainfactors: expected quality, perceived quality, and brand image to discover thecorrelation and their influence on customer satisfaction The factor that hasthe strongest impact on customer perception is the brand image (brand logo,brand influence in the market, design of the App interface) This researchresult is incredibly specific and different from Sefeena's previous research inIndia because it was researched in the German market, a market with a highlevel of education and security, so the image factor is popular with customersand is the most interested This study has shown that: The higher perceivedvalue of customers on Mobile Banking products in Germany, the highercustomer satisfaction and customer loyalty

- “Apps for mobile banking and customer satisfaction: a cross-cultural study”

by Sampaio (2017) The surveys were collected in three different countries:

applied to analyze and test the hypotheses of this study The results indicatethat the advantages offered by mobile banking are positively associated withcustomer satisfaction Additionally, three consequences of customersatisfaction were analyzed: trust, loyalty, and positive word-of-mouth.

- “Understanding factors affecting trust in and satisfaction with mobilebanking in Korea” by Kun Chang Lee and Namho Chung (2009) Thisresearch focused on how the three quality factors associated with mobilebanking: system quality, information quality, and interface design quality -affect consumers’ trust and satisfaction The research model was based onDeLone and McLean’s model, which assesses how these three externalquality factors can impact satisfaction and trust The authors collected 276valid questionnaires from mobile banking customers, then analyzed themusing structural equation modeling Their results show that system qualityand information quality significantly influence customers’ trust andsatisfaction, and that interface design quality does not

- “Mobile banking service quality and customer satisfaction in Bangladesh:

An analysis” by A Rahman, M Hasan, MA Mia (2011) The researchers havechosen the SERVQUAL model and used customer satisfaction as thedependent variable, while five dimensions of the service quality model(namely- tangibles, reliability, responsiveness, assurance, and empathy) aretaken as independent variables The authors surveyed 166 customers usingSimple Random Sampling and the results were analyzed using descriptivestatistics, Pearson correlation, and multiple regressions Results showed thatthe four tangible variables, reliability, responsiveness, and empathy have asignificant positive relationship with customer satisfaction and assurancedoes not The results indicate that banks should focus on intangible factors,reliability, responsiveness, and empathy variable to improve customersatisfaction when using services

- Research by author Parvin in 2013 has shown that banks in Bangladesh arerequested by users for a variety of services provided through mobile banking

and the level of satisfaction is very high among the user population, almostone half of them described themselves as very satisfied while only 8.3% saidthey were very disappointed In the same year, in a Shohag study ofcustomer satisfaction for M-cash, a mobile banking service provided byIslami Bank of Bangladesh, it was found that the satisfaction level of users isaverage and they require mobile banking to be applied to more mobile phoneproviders.

- “Examining the role of consumer satisfaction within mobile eco-systems:Evidence from mobile banking services” by A Geebren, A Jabbar, M Luo(2021) This paper investigates customer satisfaction related to the use of e-banking services in mobile eco-systems, especially in a developing country,focusing on the mediating role of trust, by utilizing structural equationmodeling with partial least squares (PLS-SEM) to analyze the data of 659responses and obtained the results that trust has a significant positive impact

on customer satisfaction In addition to this, the author also found that trustpartially mediates the relationships between system quality, informationquality, task characteristics, and customer satisfaction

- “Impact of mobile banking services on customer satisfaction: A study onSri Lankan state commercial bank” by K Kahandawa, J Wijayanayake(2014) The major variable considered within the study consists ofusefulness, ease of use, relative advantages, perception of risk and user’slifestyle, and current needs The main variable considered in the studyconsists of usefulness, ease of use, relative advantages, perception of risk anduser’s lifestyle, and current needs The study used the primary data collectionmethod by surveying customers by questionnaire and obtained the resultsthat customer satisfaction in mobile banking services is affected byusefulness, ease of use, relative advantage, risk perception, and user'slifestyle, and current customer needs

=> From the above discussion, it is clear that the previous researchers found a

paper studies factors in a particular bank branch, or banking industry in adifferent region or country around the world However, many studies conductedanalyzes in urban areas and respondents were not included from all of themobile banking service providers.

With foreign research, the authors mainly choose to analyze according to themodels of satisfaction index, which have high reliability and practical relevance

in the markets of those countries However, the model is difficult to be accuratewhen evaluating in the Vietnamese market because the market and usage habits

of Vietnamese people are extremely different In Vietnam, most customers stillhave the habit of using cash, the view of using modern payment technologyservices such as banking App is not popular, additionally, in the Vietnamesemarket, transactions on Internet risk level is also lower than in developedmarkets such as in Europe or America

Currently, the author finds that researchers mainly study Factors affectingcustomers' adoption of mobile banking services, but the number of studiesevaluating and analyzing factors affecting customer satisfaction when MobileBanking service experience is still quite modest There are not many researcharticles by domestic authors on customer satisfaction when using App MobileBanking service, the research has only stopped at large state-owned joint-stockbanks, and there have not been many research papers on private joint-stockcommercial banks, banks that currently have a dramatical development in bothmodern technology and profits in the Vietnamese market

In addition, the Mobile Banking service is one of the services that are alwayschanged according to the advancements of technology day by day, so previousstudies may not be able to assess the most accurate quality of the service at thepresent time Therefore, on the basis of inheriting achievements from previousauthors' studies, this study seeks to make a substantial contribution in analyzingcustomer's feelings when using mobile banking of Military Bank - a joint-stockcommercial bank in Vietnam

6 KEY STRUCTURE

The thesis is presented in 3 chapters:

Chapter I: Theoretical basis for Mobile Banking and customer satisfaction with Mobile Banking

Chapter II: Research on factors affecting customer satisfaction on App MBBank Service of Military Commercial Joint Stock Bank

Chapter III: Conclusion and solutions

Chapter I: Theoretical basis for Mobile Banking and customer satisfaction with Mobile Banking

1.1 Overview of Mobile Banking

1.1.1 E-banking services

To function effectively and survive, organizations need to innovate (Damanpour,2016), one of the most important recent developments in the banking sector is thedevelopment of a newly implemented distribution channel system made possible byinnovative technology Electronic banking services (e-banking) have beenestablished by leading international banking institutions as independent operationsand as an integral part of a banking service upon its establishment (Hughes, 2003and Hilal, 2015) The advent of electronic banking has changed and redefined boththe way it works and the fundamentals of doing business (Berz et al., 2009).Internet banking has been accepted widely as a new distribution channel of bankingservices, has brought about increased global competition, constantly changingmarkets, and demanding continuous service quality changes on the part ofcustomers (Tushman et al., 2002) Technology is today considered a determinant ofsuccess and its ability to determine the success and competitiveness oforganizations (Kombe and Wafula, 2015) The integration of technologicalinnovation and virtual contact in the banking industry fueled by the strong spread ofthe internet and through innovation in the field of information and communicationtechnology has produced applications such as ATM, telephone banking (MobileBanking), and electronic banking (e-banking) (Sankari et al., 2015; Toufaily et al.,2009)

In essence, electronic banking or internet banking refers to the use of the Internetand open networks for remote banking services, such as transferring funds orcreating and closing deposit accounts For online banking services to exist, twomain requirements must be met, the first is access to these services, which means

the infrastructure, hardware, and applications that the bank must create, maintainand deliver to companies and individuals E-banking focuses on the security andtrust that users can give this channel as well as the performance of the system(Patriche and Bajenaru, 2010; Lee, 2008) There are many definitions of e-banking,Stamoulis (1999) said that e-banking is a low-cost, global distribution/distributionchannel of multimedia According to Toufaily et al (2009), e-banking is a term thatcovers the process by which consumers can manage a bank's electronic transactionswithout having to physically access the bank Thereby, the bank can provide variousservices through simple electronic applications, allowing customers to accessbanking services without the need for third-party intervention Thulani and Chitura(2009) defined, e-banking as a service that allows bank customers to access theiraccounts to receive the latest information about the bank, products, and services,perform all financial transactions anytime, anywhere using the bank's website.Thanks to this service, customers can access their accounts every day fromanywhere, transfer funds, receive bill payments online, and directly downloadstatements and transaction reports (Lioyd, 2007) In addition, e-banking allowscustomers to manage their financial activities flexibly 24/7 instead of beingconstrained by physical time Therefore, e-banking is a self-service service thateliminates time and space constraints in carrying out banking operations andensures customer comfort and availability (Hu & Liao, 2011; Aderonke, 2010) Ingeneral, electronic banking includes a wide range of banking transactions wherecustomers can conduct transactions electronically without having to visit branches.One advantage of electronic banking over traditional is the ability to automaticallyrecord transactions According to Angelakopoulos & Mihiotis (2011), e-bankingservices and technologies provide the banking industry with several opportunities tomeet the existing needs of customers and attract new potential customers; As amatter of fact, banks and customers (individuals or businesses) benefit from usingalternative channels and e-banking services In addition, Onay et al (2008)confirmed that internet banking services reduce operating costs and increase

costs and maximizing profits For customers, e-banking means that time and spaceare no longer important, as customers can access services day and night fromanywhere with internet access Due to the congestion in big cities due to trafficproblems, e-banking is an important solution to save time because customers do nothave to go to the bank but can transact directly from their personal computer(Angelakopoulos, 2011) For banks, thanks to online operations, banks will reducethe number of transaction staff and reduce traditional activities, which helps thebank reduce costs and increase personnel to focus more on higher value-addedservices In addition, banks can also save on material costs for traditional offices(Lee, 2008).

Types of e-banking services:

• SMS Banking: Bank transactions via SMS of mobile phones It is a servicethat allows customers to look up account information and register to receivethe latest information from the bank via mobile phone messages

• Internet banking: Transactions on banking website through the Internet

• Mobile banking: Transactions are performed via a mobile applicationdesigned by the bank Customer needs a smartphone, internet, mobileapplication, and mobile banking service enabled in his/her bank account

• ATM: Bank transactions are performed via an automatic teller machinesystem

• Point of Sale (POS): Bank transactions are performed via a system thataccepts POS cards

• Call Center: Answer questions, provide information and make bankingtransactions via telephone switchboard Customers call to a landline number

of the service center to be provided with general and personal information.Call Center can flexibly answer customer inquiries 24/7

switchboard and follow the instructions to get information about bankingproducts and services, personal account information.

From the fact that customers often transact online using internet banking on thebank's website, the bank's information technology (IT) team has developed mobilebanking products to improve the convenience for customers when transacting bycustomers downloading and logging in their accounts into the APP used on theirsmartphones As nowadays, almost everyone owns a smartphone, so this increasesthe convenience for customers

1.1.2 Mobile banking services

Nowadays, banks have developed mobile banking into applications used onsmartphones and are called App Mobile Banking Mobile banking is also known asM-banking M-banking is defined as "a form of banking transaction carried out via

a mobile phone" (Amin et al, 2007) Mobile banking is an application of commerce that enables customers to access bank accounts through mobile devices

m-to conduct and complete bank-related transactions (Kim et al., 2009) Bycomplementing services offered by the banking system, such as checkbooks,ATMs, voicemail/landline interfaces, smart cards, point-of-sale networks, andinternet resources, the mobile platform offers a convenient additional method formanaging money without handling cash (Karjaluoto, 2002) Mobile Bankingservice is one in all the categories of e-banking services, which is known as the use

of a mobile device (smartphone, tablet) through a telecommunications network toconnect with a banking and financial institution, helping customers to performtransactions Customers only need to own a smartphone with an internet connectionand perform a few simple steps, and that they can access all banking serviceswithout visiting a transaction counter These services can be accessed by customersvery easily at any time anywhere based on the availability of mobile networkservices

institutions to reduce traditional face-to-face banking transactions throughautomated services where ever possible Furthermore, when mobile phones becomemore popular, it is expected that whatever banking transactions that have been donethrough online fixed terminals should be migrated to mobile-based technologies.According to Lee and Chung, mobile banking would completely change the waythat customers do bank transactions when electronic banking systems startproviding efficient automated banking services through wireless networks Mobilebanking has the ability to redesign and also redefine the total area of the businessand business models of the financial services sector In the current business world,customers expect services twenty-four hours a day and three hundred sixty-fivedays per year All these will become a reality due to higher ownership of mobilephones than personal computers Hence, the majority of transactions between banksand customers will be through mobile phones in the near future.

According to Cruz and Laukkanen, the mobile phone would be a frontlinetechnology in banking as it provides consumers facilities to get done their bankingservices through electronic channels There are many different mobile bankingfacilities such as account balance retrieval, transaction history retrieval, transfer offunds between an individual’s own accounts or third party accounts, stock trading,portfolio management, and bill settlements, etc There are many advantages thatmobile banking brings to customers Among those benefits, ease of use, low cost,privacy, and convenience are the factors that lead to the fruitful implementation ofmobile banking requests It has also been said that mobile banking services can beaccepted as a powerful marketing tool to keeps close connections between thecustomer and management in financial institutions Nevertheless, research hasfound that the main reasons for internet banking users to switch into mobile bankingare processing power, screen size, speed, and security of mobile baking services

1.1.3 Benefits of mobile banking

• Time-saving: Rather than visiting the bank during office hours, waiting inline for procedures, customers only need to do a few simple steps on their

mobile phones with mobile banking installed to make transactions Mobilebanking can even help people avoid taking on in-person risks, especiallyduring Covid times.

• Strengthening security: Customers who want to access the application mustnot only log in with their account and password but also have to authenticatebiometrics such as face-id, fingerprint Besides, when customers maketransactions like transfer, payment, all will be provided with an OTP (OneTime Password) authentication code on the personal phone numberregistered to ensure safety for customers' bank accounts

• Cost savings: Currently, many banks apply no fee for the interior andexternal transfer, no fee for account management If a customer withdrawsmoney through the mobile banking application, he/she does not lose thewithdrawal fee

1.2 Service quality

1.2.1 Overview of service quality

Currently, the competition between commercial banks is increasing not only infinancial capacity and size but also in service quality In addition, service quality is

a prerequisite for determining success or failure since customers nowadays have aneclectic mix of choices and demand higher quality services

Across all service industries, service quality is the key driver of profitabilityperformance (Schoeffler, Buzzell, and Heany 1974) and an important issue as firmsstruggle to maintain a comparative advantage in the market (Kandampully andDuddy 1999) Since financial services, especially banking, compete in markets withoften undifferentiated products, service quality often becomes the primarycompetitive weapon (Stafford 1996) and the most important factor in the success ofnew financial services (Easingwood and Storey 1993) Bennett (2003) asserts thatcompetition in banking stems almost exclusively from service quality and isessential for success and survival in today's competitive banking environment

Researchers have shown that banks that excel in service quality have distinctmarketing advantages and improved service quality levels associated with higherrevenue, cross-selling rates increase and customer retention is higher (Bennett2003) Product and service quality has also been shown to enhance a bank'sreputation, improve customer retention, attract new customers, and increasefinancial performance and profitability (Julian and Balasubramanian 1994;Zeithaml, Berry, and Parasuraman 1996), and expand market share (Bowen, 1993).Despite its importance to the banking industry, limited research has been donelooking at customer requirements and service factors together although considerableresearch has been done exclusively on service quality (Bolton 1998; Parasuraman,Zeithaml and Berry 1985; 1991) and product quality (Garvin, 1988) Extending thisconcept, (Zeithaml et al., 2000) introduced the concept of e-service quality andcalled the model through the internet e-SERVQUAL This issue has also beenextensively studied by other scientists (Jun and Cai, 2001; Yang and Yun, 2002;Trocchia and Janda, 2003) Trocchia and Janda (2003) approached from a generalperspective to internet service quality has pointed out 5 influencing factors,including performance, connection, safety, feeling, and information Previously,Yang and Jun (2002) also confirmed that there are 6 factors, namely: reliability,accessibility, ease of use, personalization, security, and reputation that affect servicequality on the internet However, approaching from the perspective of customersatisfaction on the internet, Zeithaml et al (2000, 2002) have proposed an e-

SERVQUAL model that includes 7 factors: efficiency, synchronization, reliability,personal data protection, responsiveness, reimbursement, and contact On that basis,Gerrard & Cunningham (2015) have studied more specifically satisfaction with thequality of banking services on the internet including presence, ease of use,reliability, responsiveness, safety, service status, staff quality This result reinforcesthe study of Chu et al (2012) on the relationship between internet service quality,relationship quality, and customer loyalty, which has shown relatively specificfactors that impact internet banking

However, the above studies only approach from the perspective of servicesprovided by the bank through the website but have not entered the specific

application segment On the basis of the above analytical studies and on thepractical situation of deploying e-banking applications in Vietnam, theseapplications are focusing on the following aspects: ensuring reliability,responsiveness meets the needs of customers, equipped with modern facilities,improve service capacity when implementing e-banking, benefits for customers andthe attention and support of employees.

Service quality is the extent to which customers' perceptions of service meet and/orexceed their expectations (Zeithaml et al, 1990)

Service quality is also known as attitude which is formed on the basis of long-termevaluation of the service quality and attitudes considered as parallel constructs(Bitner and Hubert, 1994) By defining service quality, companies will be able todeliver services with higher quality level presumably resulting in increasedcustomer satisfaction (Ghylin et al., 2008)

Service quality has been identified as the decisive factor for customer satisfactionwith banking operations (Naceur et al., 2002; Ghost and Gnanadhas, 2011)

According to Parasuraman (1988): “Service quality is the degree of differencebetween the consumer's expectations of a service and their perception of the serviceoutcome”

Leisen and Vance (2001) said that: “Service quality helps create the necessarycompetitive advantage because it is an effective differentiating factor”

Cronin and Taylor’s (1992) view of satisfaction was that: “Customer satisfactionshould be assessed in a short time, while service quality should be judged on thecustomer's attitude about that service over a long period of time”

Through the aforementioned comments, we realize that service quality is the result

of a long cumulative assessment of the customer, decided by the customer It can besaid that service quality is always compared with the level of customer satisfactionafter using the service

1.2.2 Some models of service quality assessment

• The S ERVQUAL model: SERVQUAL is the most often used approach formeasuring service quality has been applied to compare customers'expectations before a service encounter and their perceptions of the actualservice delivered (Parasuraman et al, 1985) Berry, Parasuraman, andZeithaml (1988) are the creators of this instrument that is used to measurethe customer perceptions of service quality This service evaluation methodhas been proven consistent and reliable by some authors (Brown et al.,1993) The original study by Parasuraman et al (1988) presented tendimensions of service quality

At first SERVQUAL model had come up with 22 pairs of Likert-type items,where one part measured the perceived level of service provided by aparticular organization and the other part measured the expected level ofservice quality by the respondent (Kuo-YF, 2003) After refinement andfurther investigation, Zeithaml et al (2006) proposed five dimensions of the

SERVQUAL model

- Tangibles: Tangible means are what the customer can see directly with theeyes and senses such as the external image of the facility, the staff behavior,documents, and bank communication system

- Reliability: Reliability refers to the ability to provide accurate, on-time,reputable service This requires consistency in delivery and respect forcommitments and promises to customers

- Responsiveness: Responsiveness is the level of response from the serviceprovider to what the customer wants, like the ability to quickly solveproblems, effectively handle complaints, and be ready to help customers andrespond to customer requests

- Assurance: Factors that create trust for customers are felt throughprofessional service, good expertise, polite demeanor, and good

communication ability, so customers feel secure anytime they use theservices of the bank.

- Empathy: Empathy is caring for customers, giving customers the mostthoughtful treatment possible, helping customers feel like a "client" of thebank, and always warmly welcomed anywhere, anytime The more a bank'sinterest in a customer, the more empathy will increase

• The S ERVPERF model: Based on The SERVQUAL model, Cronin andTaylor launched the SERVPERF model in 1992 The SERVPERF modelonly measures the customer's perceptions and thereby determines the quality

of service, instead of measuring both perceptions and expectations like the

SERVQUAL model Due to the development of the SERVQUAL model, the

SERVPERF model also uses five factors of service quality: tangible means,service capacity, reliability, empathy, responsiveness and 22 observedvariables to measure

1.3 Customer satisfaction when experiencing the service

1.3.1 Satisfaction concept

When a customer is contented with either the product or services it is termedsatisfaction Satisfaction can also be a person's feelings of pleasure that result fromcomparing a product's perceived performance or outcome with their expectations(Kotler and Keller, 2009) Customer satisfaction is the consumer's response to theevaluation of the perceived discrepancy between prior expectations and the actualperformance of the product or service as perceived after its consumption (Tse andWilton, 1988)

Customer satisfaction is the emotional response to the entire customer perception ofthe service provider on the basis of comparing the difference between what theyreceive and what they expect (Oliver 1990) Kotler (2000) argues that satisfaction isdetermined on the basis of comparing the results received from the service andcustomer expectations are considered on three levels:

• Dissatisfaction: When the perceived level of the customer is lower than expected

• Satisfaction: When the level of customer perception is equal to expectations

• Very satisfied: When the perceived level of the customer is greater than expected

=> From my point of view, service experience and customer satisfaction are closelyrelated After customers use the product, they will have their feelings and viewsabout the quality of the product Customers with a good experience will havepositive satisfaction Customers who have a bad experience will have an expression

of dissatisfaction If customers feel satisfied, have a good impression of the product,they will be able to continue using the product in the future or recommend tofriends and relatives to use the service

1.3.2 The relationship between service quality and customer satisfaction

Regarding the relationship between customer satisfaction and service quality,Fornell et al (1993) first suggested that service quality would be antecedent tocustomer satisfaction regardless of whether these constructs were cumulative ortransaction-specific Some researchers have found empirical supports for the view

of the point mentioned above (Anderson & Sullivan, 1993; Fornell et al, 1996);where customer satisfaction came as a result of service quality McDougall andLevesque (2000) showed that Perceived quality is an important predictor and thekey determinant of customer satisfaction and loyalty Cronin et al (2000) examinedthe relationship between service quality, service value, satisfaction, and behavioralintentions in six industries including spectator sports, participant sports,entertainment, fast food, healthcare, and long-distance carriers The results showthat service value and quality influence customer satisfaction and behavioralintentions (in all industries except health care)

Aghdaie and Faghani (2012) in a study on mobile banking customers found thatfour factors of SERVQUAL which are reliability, responsiveness, tangibility, andempathy have a positive relationship with mobile banking customer satisfaction.However, the assurance factor does not show any significant relationship with

customer satisfaction Nupur (2010) showed that reliability, responsiveness, andassurance have a significant positive relationship with customer satisfaction in E-banking service of Bangladesh However, she does not find any significantrelationship between tangibility and responsiveness.

Parvin (2013) in 2011 showed that most of the users of mobile banking inBangladesh would like banks to extend the services offered through this channeland that the level of satisfaction was very high among the population of users,almost half of them describing themselves as very satisfied while only 8.3% statingthat they are very disappointed Shohag (2013) in a study on the customers'satisfaction with m-cash, a mobile banking service offered by the Islami Bank ofBangladesh, found that users had average levels of satisfaction and that theyrequired the extension of the network of banking agents and the availability of theservice through more mobile telephony providers

Many studies have shown service quality and customer satisfaction are twocompletely different concepts According to Parasuraman et al (1993), the keydifference between service quality and customer satisfaction is the "cause andeffect" issue Some other studies have similar views when saying that servicequality is the cause of satisfaction (Cronin and Taylor, 1992; Spreng and Taylor,1996) The reason is that service quality is related to service provision whilesatisfaction is assessed only after using that service

Meanwhile, Zeithalm and Bitner (2012) said that customer satisfaction is not only amatter of service quality, product quality or price, but it is also affected by manyfactors such as situation factors, individual factors

The close relationship between service quality and customer satisfaction isundeniable Because customer satisfaction with a service is based on whether theservice meets the customer's needs and expectations or in other words, whether thequality of the service is good or not It can be said that the cause-and-effectrelationship between service quality and customer satisfaction is a key factor inservice research

In this relationship, service quality is seen as the cause, customer satisfaction as theresult, service quality is an ideal standard while satisfaction is predictable anddesirable Service quality is objective, while satisfaction is based on the user'ssubjective feelings and emotions Therefore, the measurement of customersatisfaction refers to the criteria that the customer feels, while evaluating the quality

of a service focuses on the specific components of the service (Zeithalm and Bitner,2000)

1.4 Models related to customer satisfaction

1.4.1 S ERVQUAL (Parasuraman,1988)

The model was introduced by Parasuraman et al in 1988 with the nameSERVQUAL to evaluate the factors affecting customer satisfaction, including thefollowing five key factors:

- Reliability: Demonstrates ability to perform appropriate, accurate, and on-timeservice for the first time with customers

- Responsiveness: Expressing the desire and willingness of employees to providecustomers promptly

- Assurance: Showing professional qualifications and polite and welcoming service

=> SERVQUAL has been widely used in companies around the world, in a variety

of contexts and cultures, and is found to be relevant It has gradually become thedominant measurement scale in the field of service quality SERVQUAL modeltends to find out the factors affecting customer satisfaction

1.4.2 American Customer Satisfaction Index (ACSI) (Fornell, Johnson, Anderson, Cha & Everitt,1990,1996)

The ACSI model is a customer evaluation index of the quality of goods and servicesfor the United States people used since 1994 It is the only uniform, cross-industry,and government measure of customer satisfaction It produces indices ofsatisfaction, its causes, and effects, for seven economic sectors, 39 industries, 200private sector companies, two types of local government services, and the U.S.Postal Service The model consists of three questions and the questions areanswered on a 1 - 10 scale and converted to a 0-100 scale for reporting purposes tomeasure: Overall Satisfaction, Satisfaction versus Expectation, and Satisfactionwith an ‘ideal’ organization The survey and modeling methodology quantifies thestrength of the effect of customer expectations, perceived quality, and perceivedvalue to the impact on customer complaints and customer loyalty

=> The three ACSI core questions were used to find out about Overall CustomerSatisfaction (OCS), Expectation Disconfirmation (ED), and Desire Disconfirmation(DD)

THE CONCLUSION OF CHAPTER I

Chapter 1 of the thesis has systematized the theoretical basis related to service,customer satisfaction, and customer experience From the above theoretical basis,the author will expand to explore the status of customer satisfaction when using the

MB App Mobile Banking service by the appropriate method in the followingchapter

Chapter II: Research on factors affecting customer satisfaction on App MBBank Service of Military Commercial Joint Stock Bank

2.1 Overview of Military Commercial Joint Stock Bank - Xuan Thuy Branch and MB's e-banking service

2.1.1 Introduction about Military Commercial Joint Stock Bank - Xuan Thuy Branch

Bank name: MB Military Commercial Joint Stock Bank

Military Commercial Joint Stock Bank is a joint stock commercial bank in Vietnam,

an enterprise directly under the Ministry of Defense Military Commercial JointStock Bank was established under Decision No 00374 / GP-UB dated December

30, 1993 of the People's Committee of Hanoi and operated under License No 0054/ NH-GP dated November 4, 1994 As of 2018, the bank's charter capital is 21,605trillion VND, the bank's total assets in 2018 are 362,325 trillion VND The mainshareholders of Military Bank are Viettel, State Capital Investment Corporation,Vietnam Helicopter Corporation, and Saigon Newport Corporation In addition tobanking services, Military Bank also engages in securities brokerage services, fundmanagement, real estate business, insurance, debt management, and assetexploitation by holding dominant shares of a number of businesses in this sector.Currently, Military Bank has a nationwide network with more than 100 branchesand over 190 transaction points spreading across 48 provinces and cities The Bankalso has representative offices in the Russian Federation, branches in Laos andCambodia As of 2018, the bank's charter capital is 21,605 trillion VND, the bank's

Corporation, and Saigon Newport Corporation In addition to banking services,Military Bank also engages in securities brokerage services, fund management, realestate business, insurance, debt management, and asset exploitation by holdingdominant shares of a number of businesses in this sector Currently, Military Bankhas a nationwide network with more than 100 branches and over 190 transactionpoints spreading across 48 provinces and cities The Bank also has representativeoffices in the Russian Federation, branches in Laos and Cambodia.

Maintaining the operation motto "STEADY - RELIABILITY", over 20 years ofbuilding and maturing Military Commercial Joint Stock Bank has made steadydevelopment steps and become a reliable address for financial activities for all types

of customers at home and abroad With the ceaseless efforts, the MilitaryCommercial Joint Stock Bank has continuously been ranked A by the State Bankand awarded many certificates of merit for its excellent achievements, it receivedinternational payment awards from prestigious international banks such as HSBC,Standard Chartered Bank, UBOC,

MB's business areas include:

• Doing banking business following the regulations of the Governor of the StateBank of Vietnam;

• Supply derivative products under the law;

• Insurance agent and other related services as prescribed by law;

• Trading in bonds and other valuable papers following the law;

• Buying, selling, processing, and processing gold;

• For conditional business lines, banks only do business when they meet allconditions as prescribed by law

MB is developing under the model of a financial group with effective membercompanies including: Military Insurance Corporation (MIC), MB Securities Joint

Stock Company (MBS), and MB Investment Fund Management Joint StockCompany (MB Capital), MB Debt Management and Asset Exploitation Company(MB AMC), MB Ageas Life Insurance Company Limited (MB Ageas Life) and

MB Shinsei Finance Company Limited (MCredit)

Currently, MB is a pioneer in applying information technology (IT) to businessactivities Since 2017, MB has promoted the development and launched manydigital banking applications to catch up with the world's new trends such as MBFacebook Fanpage, App MB Bank with many outstanding features and utilitiesfor users and is developed based on digital technology, ensuring simplicity, speed,and safety

With a safe development vision, oriented to a modern bank, shifting users to digitaltechnology, MB is currently one of the leading banks in the Vietnamese market interms of technology and reputation with customers

General information and organizational structure of Military Commercial Joint Stock Bank - Xuan Thuy Branch

- MB Xuan Thuy Transaction Office - Tran Duy Hung branch has a convenientlocation for transportation as well as a densely populated area After four years ofoperation, MB Xuan Thuy has continuously developed and continuously improvedits products as well as quality to optimize advantages as well as serve the needs oftoday's customers

- The current organizational model of MB Xuan Thuy is a modern model, includingdepartments such as Director's Department, Deputy Director's Department,Accounting and Banking Service Department, Treasury Department, PersonalCustomer Relations Department, Corporate Customer Relations Department,Human Resources Department, International Accounting Department, InternalInspection Team, Transaction Office, etc with more than 55 employees

Diagram 2.1: Diagram of MB Xuan Thuy's departments

Major areas of activity of the bank

* Fundraising activities

- Receive deposits in Vietnam Dong, foreign currencies of all individuals andorganizations domestically and overseas, with diverse interest rates, operatingforms, meeting all needs of customers

- Distributing valuable papers: certificates, bonds, bills, promissory notes,

* Lending activities

- Short-term, medium-term, and long-term loans to economic organizations,individuals, and households

- Loans for officials and employees, loans for export workers, international

+ Service of collection and payment

+ On-site cash collection and payment service

+ Remittance payment agent

+ Foreign currency trading

+ Guarantee services

* ATM service

- Issuing card

- Receiving and depositing money into ATM accounts at all transaction points

- Accepting payment by all bank cards

2.1.2.1 Background of MB’s e-banking services

MB Internet Banking (eMB) is a banking application with security features,allowing customers to access their accounts to perform banking and financialtransactions such as payment, money transfer, calendar query, etc transactionhistory quickly, conveniently, through an internet connection MB Bank alwayswants to bring a full range of services and utilities to users

MB Internet Banking service is deployed exclusively for those who already have abank account at MB bank, or customers can also open an MB bank account and MBInternet Banking account at the same time if they need to use it

In addition, to be able to use MB Internet Banking service, customers must meet afew basic conditions as follows:

• An individual who is 16 years of age or older, and is responsible for his/heractions

• Have a national identity card

• Have a personal phone number

Customers can register for Internet Banking MB in the following ways:

“https://online.mbbank.com.vn/retail/EstablishSession” To register forInternet Banking via the online website, customers need to provide personalinformation and receive a username and password to operate the account

• Customers bring identification documents to any MB transaction officenationwide to register for the service directly with the transaction staff

Currently, MB Internet Banking service provides customers with basic servicessuch as balance inquiry, transaction statement, bank transfer within the bank orinterbank, e-wallet features, online payment, stock payment,

2.1.2.2 Background of MB's Mobile Banking service

MB’s Mobile Banking service is operated on App MB Bank - the bankingapplication of Military Bank (MB) on mobile phones, allowing customers toperform most financial transactions such as receiving money, transferring money,

paying bills, and saving online, borrowing money online, mobile phone recharge,daily financial investment with simple manipulation, can be done anytime,

anywhere

Service features:

- Open a beautiful online account: Customers can open a beautiful online accountdirectly on App MBBank, authenticate, and sign an online contract Customers donot need to go to the bank to sign a transaction contract

- Receive money transfer payment

- Free money transfer: Internal, interbank, 24/7 transfer

- Withdraw cash via App without an ATM card

- Online financial investment: Corporate bonds

- Online loan: Superfast loan from savings book, super-fast loan from credit card,unsecured loan online

- Online savings: Accumulated savings or interest at the end of the period (Depositonline, preferential interest rate 0.2% higher / year compared to the counter)

- Bill payment: Top-up and pay bills of more than 70 suppliers (electricity, water,air tickets )

- Manage personal account information with balance inquiry, transaction historysearch

- Security features Digital OTP MBBank: Digital OTP is an advanced onlineauthentication method and is integrated right into App MBBank

This authentication method is different from other authentication methods such asSMS OTP or Token OTP:

Target 2017 2018 Growth

compared

to 2017

compared

In the form of using Digital OTPs security code, people are safe with many layers,

so they will be more secure when making transactions, especially in case theaccount is hacked, account information is revealed

2.1.3 MB's business performance and development of e-banking services for the period 2017-2020.

In recent years, MB has paid great attention to the development and application oftechnology in its operations Developing and improving the quality of e-bankingservices is the central priority of the bank

Table 2.1: MB's e-banking performance in the period 2017 - 2020

(Sources: Annual Report and Financial Statement of MB 2017, 2018, 2019, 2020)