Improving customer service quality management at tien phong commercial joint stock bank TPBank

The author collects the data from 140 Live Bank customers and they provided the assessment related to each aspect of customer service quality as well as their satisfaction and loyalty..

MASTER IN FINANCIAL MANAGEMENT

IMPROVING CUSTOMER SERVICE QUALITY MANAGEMENT AT TIEN PHONG COMMERCIAL JOINT STOCK

BANK - TPBANK

Graduate student: NGUYEN THI HONG Supervisor: DR NGUYEN THI HONG HANH

HANOI, 2021

Thesis Title:Improving customer service quality management at Tien Phong

Commercial Joint Stock Bank - TPBankPages: 81

University：International school - Vietnam national university, Hanoi

Graduate School：Master in financial management

Degree：Master

Graduate Student:Nguyen Thi Hong

Your advisor‟s name: Dr.Nguyen Thi Hong Hanh

The study is developed with the main objective of enhancing the customer service at TPBank‟s Live Bank The customer service quality is measured through five factors, namely tangibles, reliability, responsiveness, staff quality, and easy to use The author collects the data from 140 Live Bank customers and they provided the assessment related to each aspect of customer service quality as well as their satisfaction and loyalty

The author proposed 11 hypotheses and they validate the effects of these five factors

on customer satisfaction and customer loyalty as well as the effect of customer satisfaction on customer loyalty

The author performs multiple linear regression and it is identified that these five factors significantly explain for 45.6% of variance of customer satisfaction and 55.1%

of variance of customer loyalty However, the effect of each factor is different In the causal relationship between customer satisfaction and 5 factors, it is identified that all factors have positive and significant impacts on customer satisfaction However, reliability and easy to use do not have significant impact on customer loyalty

I would like to thank the Board of Directors, the training department of the

International Faculty, Hanoi National University for creating all conditions for me in the process of studying and completing this thesis

I would like to express my gratitude to the teachers and ladies who have dedicatedly taught MFM2 master class

I would like to express my deep gratitude to my teacher, D.r Nguyen Thi Hong Hanh who wholeheartedly helped and guided me during the process of writing this thesis

I would like to thank all my friends, colleagues and family who have always

supported, encouraged and created the best conditions for me to complete this thesis.

Thank you!

Author

TABLE OF CONTENTS

ABSTRACT 2

ACKNOWLEDGEMENT 3

TABLE OF CONTENTS 4

LIST OF TABLES 6

1 CHAPTER 1: Introduction 1.1 Background of the study 7

1.2 Rationales 7

1.3 Research objectives and research questions 9

1.4 Scope of the study 9

1.5 Significance of the study 10

1.6 Structure of the study 11

2 CHAPTER 2: Literature Review 2.1 Customer service 13

2.2 Service quality 14 2.3 Factors of customer servicequality affecting customer satisfaction and customer loyalty in banking services 15

2.3.1 Tangibles 16

2.3.2 Reliability 17

2.3.3 Responsiveness 18

2.3.4 Staff quality 20

2.3.5 Easy to use 21

2.4 Customer satisfaction and customer loyalty 22

2.5 Research model and research hypotheses 23

3 CHAPTER 3: Methodology

3.1 Research approach 25

3.2 Research method 26

3.3 Data collection 27

3.3.1 Primary data 27

3.3.2 Secondary data 30

3.4 Sampling procedure 31

3.5 Data analysis techniques 31

4 CHAPTER 4: Research Results 4.1 Overview of TPBank 34

4.2 Descritive analysis 38

4.2.1 Tangibles of Live Bank of TPBank 38

4.2.2 Reliability factor of Live Bank of TPBank 39

4.2.3 Responsiveness of Live Bank of TPBank 41 4.2.4 Staff quality of Live Bank of TPBank 42 4.2.5 Easy to use of Live Bank of TPBank 44 4.3 The evaluation of customer satisfaction and customer loyalty of Live Bank of TPBank 46

4.4 The reliability test analysis 49

4.5 The validity test analysis 52

4.6 Correlation analysis 54

4.7 Multiple linear regression analysis 55

5 CHAPTER 5: Conclusion and Recommendation 5.1 Conclusion 61

5.2 Recommendation 64

5.3 Limitations of the study 66

REFERENCES 67

APPENDIX 1: Survey of Questionnaire 79

LIST OF TABLES

Table 3.1: Items used in the questionnaire 28

Table 4.2: TPBank‟s Business Performance 34

Table 4.3: Evaluation of tangibles of Live Bank of TPBank 38

Table 4.4: Evaluation of reliability of Live Bank of TPBank 39

Table 4.5: Evaluation of responsiveness of Live Bank of TPBank 41

Table 4.6: Evaluation of staff quality of Live Bank of TPBank 42

Table 4.7: Evaluation of easy to use of Live Bank of TPBank 44

Table 4.8: Evaluation of customer satisfaction of Live Bank of TPBank 46

Table 4.9: Evaluation of customer loyalty of Live Bank of TPBank 47

Table 4.10: Reliability test of tangibles factor

49 Table 4.11: Reliability test of reliability factor 49

Table 4.12: Reliability test of responsiveness factor 50

Table 4.13: Reliability test of staff quality factor 50

Table 4.14: Reliability test of easy-to-use factor 51

Table 4.15: Reliability test of customer satisfaction factor 51

Table 4.16: Reliability test of customer loyalty factor 51

Table 4.17: EFA result for customer satisfaction 52

Table 4.18: EFA result for customer loyalty 52

Table 4.19: EFA result for tangibles, reliability, responsiveness, empathy, easy to use 53 Table 4.20: Pearson‟s correlation analysis 54

Table 4.21: Multiple linear regression analysis (Model 1) 55

Table 4.22: Multiple linear regression analysis (model 1, model 2, model3) 58

Table 4.23: Multiple linear regression analysis (Model 3) 60

Table 5.1: Result of Hypothesis Test 61

Chapter 1 Introduction 1.1 Background of the study

Customers are considered as the key successful factor in every business, including banks and it is even more critical in case of the banks face poor customer database management, lack of sufficient infrastructure and technologies to improve customer experience (Amoako, 2012) By providing high-performance in customer service, the banks are able to achieve and to enhance customer satisfaction since the customer expectation is well-fulfilled (Sakwa & Oloko, 2014) Customer service is important context in banking and finance industry Modern and large banks today have millions of customers and they have to interact with different customers‟ requests and queries every day Understanding the importance of customer service, many banks in Vietnam have initiated their customer service process such as the establishment of call center with hotline services so that the customers are able to call and to meet the banks‟ staffs for a particular problem Behind of that, the banks in Vietnam also creates communication portals such as through email, social networking services (e.g Facebook) in order to create a quick connection with their customers Few banks such as Viet A Bank has adopted new technology to create a chatbot based on artificial intelligence and machine learning to provide the interest rate, exchange rate, product features, and banking service fees to the customers

1.2 Rationales

Customer service quality is important context in service area Given to the fact that, the commercial banks are providing services to the clients such as deposit services, lending services, payment services, customer service quality must be taken into account The study is about customer service quality at TPBank Live Bank Live Bank is a service initiated by TPBank since 2016 and now the bank successfully opens 150 transaction points nation-wide, with 2 million

customers Live Bank services which are offered by TPBank are innovative banking services in Vietnam It is described like a small bank‟s branch but without the employees Instead of that, the bank relies on the new technologies

to further improve customer experience and customer self-services Moreover, the customers who transact through TPBank‟s Live Bank are not able to complete banking transaction in 24 hours and it is not limited by normal working times A competitive advantage of TPBank‟s Live Bank is that it allows the customers to open new ATM card, current accounts immediately through the computer screen The customers are able to receive new physical ATM card after inputting all required information

Currently, TPBank‟s Live Bank has 2 million customers and it is continuously increasing in coming years Beside of that, the customers need to conduct the services by themselves In this context, customer service is important The bank needs to provide adequate customer service performance to assist the customers and therefore leveraging positive customer experience After more than 3 years

of doing business, TPBank does not develop any assessment of customer service performance and quality for Live Bank Behind of that, Vietnamese banking system consists of 31 commercial banks and the competition is happened not only in the area of competitive interest rate but also those who are able to deliver excellent customer service quality to the customers The banks with low customer service quality receives adverse impacts such as lowered customer satisfaction and loosing current customer base

Customer service is considered as important component in any business model and it gains increasing attention from the banks TPBank has been positioning its business and services based on the understanding of the customers‟ needs as well as building a strong portfolio that meets various demands from the customers In this context, the bank understands the importance of collecting information related to the customer satisfaction on the bank‟s services in

general and in Live Bank services as particular, contributing to the enhancement

of the banks‟ overall service performance and service quality to the customers

It is denoted that the nature of the customer service is about the customers‟ feeling and perception of the service performance Different customers may have different feeling and perception and therefore they have different assessment of customer service Customer service is the way that the organizations to meet the customers‟ needs and demands and the higher the customer satisfaction, the better the customer service In this context, the customer assessment of customer service is subjective matter and different services may have different customers‟ expectation of the service performance

1.3 Research objectives and research questions

Main objective of the study is to enhance customer service at TPBank‟s Live Bank This research objective is fulfilled by following research questions:

 What are the factors of customer service quality affecting the customer satisfaction and customer loyalty with TPBank‟s Live Bank services?

 Which factor of customer service quality has highest effect on customer satisfaction and customer loyalty with TPBank‟s Live Bank services?

To answer the main objective and the research questions, the study follows the R.A.T.E.R model with five components, namely reliable, assurance, tangible, enthusiastic, and responsive

1.4 Scope of the study

The study is developed within predefined timeframe It requires 2 months to fulfill the main part of the study, including the literature review, data collection, and data analysis This time also covers the process of receiving comments from the tutor and correcting the written statements The location of the study is in TPBank Live Bank located in Hanoi City

1.5 Significance of the study

By conducting this study, the responsible persons in TPBank understand current performance of customer service designed for Live Bank services Behind of that, they get update with the performance of factors represented for total service quality, including tangibles, reliability, responsiveness, assurance, and empathy The combination of these factors results the overall performance of customer service quality Other researchers can utilise the research results to make relevant discussions of their owned findings

Along with the development of the society, there are more and more enterprises

to be established To survive and to develop, the enterprises today need to identify the proper way to retain their customers It is denoted that the customers select and purchase a product and service from a company based on their own rationales and their choice is influenced by other competitors who have similar products and services Under this circumstance, the enterprises are hard to control the customers mindset but they attempt to retain their customers throughout better customer service quality or how the customers‟ requests are handled Thus, the enterprises must ensure that their customers must be treated superiorly and their services must be a touchpoint to generate the customers‟ satisfaction and happiness In fact, the marketing theory points out the importance of four traditional marking mix factors, including product, price, place, promotion However, the information transparency and the development

of the Internet makes the enterprises to access required information, leading to the fact that the marketing programmes are very similar Therefore, the enterprises who want to compete better with other competitors need to leverage the strength from their human resources that address the importance of people With high customer service brought by the enterprises‟ employees, it can bring uniqueness to them and create a competitive advantage against other competitors in the market In the case study of TPBank, this context is so-called

customer service In summary, customer service is very important to TPBank and it contributes directly to the bank development throughout better customer retention By keeping the customer service at high level in combination with attractive physical asset, the bank can keep the customers in using Live Bank services

1.6 Structure of the study

There are five chapters that are developed in this study

Chapter 1 Introduction

The first chapter provides a background information and rationales of developing this topic Research objective and questions are given along with scope and significance of the study

Chapter 2 Literature Review

The second chapter explores the concept related customer service and customer service quality Five factors of customer service quality (tangibles, reliability, responsiveness, assurance, and empathy) are put into the literature reviews A research model is developed to highlight the direct linkage between these factors and customer service quality

Chapter 3 Methodology

The third chapter focuses on the research approach and the research method which are adopted in the study Data collection plan is proposed and a questionnaire is developed Sampling technique and sample size are presented

in the chapter

Chapter 4 Research Results

The fourth chapter provides the outcomes of data analysis The respondents‟ evaluations related customer service quality and five factors are provided The effects of these five factors on customer service quality are measured and discussed

Chapter 5 Conclusions and Recommendations

The last chapter summarizes the findings from previous chapters Some recommendations are proposed to help TPBank further improves their customer service quality in Live Bank services

Chapter 2 Literature Review 2.1 Customer service

Customer service is defined as organizational process which is initiated and implemented with the objective of achieving customer satisfaction and operational efficiency (Álvarez-García et al., 2019) By conducing customer service activities, the service providers expect that they will attract more entrepreneurial opportunities, increase profit, achieve timely market accessibility, and obtain more customer satisfaction and customer loyalty (Jahanshahi et al., 2011) When conducting customer service, the firms must ensure that their customers can understand how the efficiency of their products and services that is a source of increasing customer trust (Khadka & Maharjan, 2017) Herein, customer service aims to bring better customer experience with service encounters (Becker & Jaakkola, 2020)

In banking and finance industry, customer service is important activity According to Kanwal & Yousaf (2019), customer service should be established

in the way of integration between service innovation and customer value creation in order to maximize customer satisfaction with banking services The banks are required to provide simplified, standardized, and technology-led customer service process for the higher provision of customer convenience, attracting new customers, retaining current customers and unlocking future banking profits (Amoako, 2012).In addition, the banks need to reduce waiting times for the customers through the avoidance of lengthy customer service process in order to achieve higher customer satisfaction (Sakwa & Oloko, 2014) Behind of that, the banks need to leverage effective marketing communication strategies to further improve customer service performance (Zephaniah et al., 2020) Recently, a new wave of adopting new technologies into banking operations such as digital banking services and it dramatically changes the way of the banks contact with their customers (Mbama,

2018).Technology innovation such as artificial intelligence, machine learning, cloud computing allows the banks to timely address and predict the customers‟ needs and problems and enhance the way of interaction with the customers (Okoye et al., 2019)

2.2 Service quality

Service quality was conceptualized since 1980s and with the definition to be given by Parasuraman et al (1985, 1988) At this time, service quality refers to the customer perceived service quality given to their prior experience.In other words, service quality is equal to the discrepancy between customer expectation

of service performance and their perceived service performance (Puri & Singh, 2019) This terminology is used to describe how a service performance can meet the expectations set by the customers (Wang et al., 2020) Behind of that, the customers evaluate service quality through how the services are performed with unique advantages over other alternative services (Setiawan et al., 2020) Herein, a service and its quality are only evaluated directly via customer self-assessment (Albari, 2020) Generally, service quality is associated with customer satisfaction in case of superior service quality (Prakash & Mohanty, 2012)

By achieving outstanding service quality, the service providers achieve a lot of benefits Service quality is an explanatory variable of business performance or the higher service quality, the higher performance obtained by the firms G r, 2019) Akroush & Khatib (2009) submitted a research paper in which service quality dimensions had significant effect on financial performance, customer indicators, and overall banking performance To further explain the role of service quality on business performance, previous researcher supplemented its influence on customer satisfaction and customer loyalty For instance, Afthanorhan et al (2019) obtained the result of one unit increased in service quality led to 0.619 unit increased in customer satisfaction The positive effect

of service quality on customer satisfaction has been found in many industries, including banking and finance Khatab et al (2019) also found the positive and significant influence of service quality on the customer satisfaction with services provided by both private and public banks in Iraq Pakurár et al (2019) collected the data from 825 banking customers in Jordan and they confirmed the positive influence of service quality on banking customer satisfaction Similarly, Raza et al (2020) also identified a positive and significant impact of service quality on customer satisfaction with Islamic banking services Moreover, superior service quality results customer loyalty with the service providers Indeed, Boonlertvanich (2019) examined the data contained 400 valid samples of the customers of a large commercial bank in Thailand and found that service quality significantly and positively associated with behavioural and attitudinal loyalty of the customers Before that, Omoregie et

al (2018) found an evidence that supported the significant and positive impact

of service quality on customer loyalty among 565 customers of top performing banks in Ghana

2.3 Factors of customer servicequality affecting customer satisfaction and customer loyalty in banking services

Parasuraman et al (1985, 1988) developed a model to measure customer service quality through five factors, namely tangibles, reliability, responsiveness, assurance, and empathy In this study, this model is proposed to use In following sub-sections, the definition and the effect of each of service quality dimensions are put into the discussion and from that, relevant hypotheses are developed It is denoted that the hypotheses are derived from previous empirical evidences which were designed to identify the relationship between service quality dimensions and customer satisfaction and loyalty in banking services

2.3.1 Tangibles

Tangibles refer to the physical assets such as machinery, tools, equipment and it

is part of the firm‟s resources Kamasak, 2017) Tangibles are important element in service sector since it is considered as the input of service production and service delivery (Schönsleben, 2019) Compared to intangibles, tangibles allow people to have direct sensory (e.g taste and smell) and perceived functional values (e.g utility, economic value) (Quest, 2019) Parasuraman et

al (1985) considered tangibles as one of service quality dimensions and it was defined as the physical evidence of a service that consisted of physical facilities, tools and equipment used in service delivery, and the appearance of service personnel

The effects of tangibles on customer loyalty in banking and finance industry have been explored by different researchers over the time Liu & Wang (2017) collected the data from 250 valid questionnaires filled by the banks‟ customers

in Taiwan and confirmed that tangibles had positive and significant effect on customer loyalty Leninkumar (2016) obtained an empirical evidence of tangibles affected positively and significantly the loyalty of 300 customers who were using the services provided by four leading commercial banks in Sri Lanka Siddiqui (2011) also found a strong interrelation between tangibles and customer loyalty after examining the data inclusion of 100 retail banking customers in Bangladesh In addition, previous researchers also explored the effect of tangibles on customer satisfaction Rahman et al (2017) found that tangibles had positive and significant impact on customer satisfaction with mobile banking services provided by commercial banks Alafeshat & Alola (2018) dictated that tangibles affected significantly and positively customer satisfaction Moreover, they confirmed that customer satisfaction significantly mediated the effect of tangibles on customer loyalty in banking industry Customer satisfaction received significant and positive impact from tangibles

factor when Khan & Fasih (2014) explored a dataset of 270 banking customers.When TPBank delivered Live Bank, the bank decided to build a physical banking kiosk with the machines to support the customers‟ interaction Herein, the physical evidence of Live Bank services is visible and it may affect customer satisfaction and customer loyalty.In this context, two first hypotheses are proposed:

H1-1: Tangibles affect significantly customer satisfaction with Live Bank services provided by TPBank

H1-2: Tangibles affect significantly customer loyalty with Live Bank services provided by TPBank

2.3.2 Reliability

Reliability of a service is defined as the abilities of the firms to provide the services as promises or how the firms honor their promises related to the services offered to the customers (Parasuraman et al., 1985) This factor is also perceived as the firms‟ ability to perform their services accurately and dependably (Kheng et al., 2010) A reliable service is obtained in case of the service provider is able to fulfill promised services and adopts reliable operationalization to perform this service (Dawi, 2016) This factor is important

in servicing area since the customers expect that the services are performed accurately as promised (Agbor, 2011) In more detail, the services provided by the firms must be delivered in the way of without making mistakes, within agreed time, and effective resolution for the customers‟ problems (Kobbekaduwa et al., 2019)

The effects of reliability on customer loyalty in banking and finance industry have been explored by different researchers over the time Collecting the data from 70 large corporate banking customers, da Silva Fragata & Muñoz-Gallego (2010) found that customer loyalty was enhanced in case of the banks delivered the services at minimum level of errors Sagib & Zapan (2014) identified that

reliability was among significant predictor of customer satisfaction with mobile banking service, confirmed from the data of 216 customers Malik et al (2011) implicated that reliability of banking service and customer loyalty was inter-correlated with each other and the relation was statistically significant In addition, previous researchers also explored the effect of reliability on customer satisfaction Salihu & Metin (2017) collected the data from 46 electronic banking customers and they found that reliability had positive and significant effect on customer satisfaction Gobena (2019) surveyed 385 banking customers

in a region of Ethiopia and this researcher achieved the result that supported the positive and significant impact of reliability on customer satisfaction Before that, Al-Azzam (2015) selected 400 banking customers in Arab bank and confirmed the positive and significant effect of reliability of internet banking, phone banking, ATM services, and other banking services on customer satisfaction Live Bank services of TPBank are introduced to the customers few years ago and the bank had certain commitments of the service performance such as less time consuming to the customers and the customer self-services in term of opening account and receiving ATM cards instantly All of these commitments and how these commitments to be fulfilled represent for reliability aspect of Live Bank services and it affects customer satisfaction and customer loyalty Thus, another two hypotheses are proposed:

H2-1: Reliability affects significantly customer satisfaction with Live Bank services provided by TPBank

H2-2: Reliability affects significantly customer loyalty with Live Bank services provided by TPBank

2.3.3 Responsiveness

Responsiveness is the willingness of the firms to help their customers during the service delivery (Nambiar et al., 2019) Responsiveness is also reflected through the ability to deliver a prompt services to the customers (Pathirana, 2019)

Herein, the main characteristic of responsiveness is timeliness of a service and it

is measured by several items such as arranging customer appointment quickly, sending mail or call to the customers as quick as possible (Parasuraman et al., 1985) To keep responsiveness in the service delivery, the firms must take into account the employees‟ capabilities in which the employees need to be trained well in order to effectively deliver the services to the customers (Mosimanegape

et al., 2020)

The effects of responsiveness on customer loyalty in banking and finance industry have been explored by different researchers over the time Suharto & Ligery (2018) quantified the effect of responsiveness on the loyalty of the customers who were using electronic banking services and they confirmed significant and positive effect of this factor Before that Md Ariff et al (2013) identified that the responsiveness in customer contract significantly explained for customer satisfaction with Internet banking services in Malaysia Suleiman

et al (2012) measured the customer loyalty in banking and they indicated that responsiveness had positive and significant influence on customer loyalty In addition, previous researchers also explored the effect of responsiveness on customer satisfaction For example,Iberahim et al (2016) found that customer satisfaction with ATM services of the banks was significantly influenced by the dependability and it is one of the characteristics of responsiveness Maleeha 2015) informed that when the banks‟ staffs to be responsive to the customers‟ needs, customer satisfaction was greatly improved Lau et al (2013) also confirmed that responsiveness was a significant predictor of customer satisfaction with banking services after collecting the evaluation from 119 retail banking customers in Hong Kong In case study of TPBank‟s Live Bank services, it is denoted that the customers are able to perform certain banking services without the direct support from the employees However, the bank understands that Live Bank services are still very new in Vietnam so that a

customer support is established through the online video to be broadcasted between the customers and the bank‟s customer support personnel Herein, responsiveness is still required in the service delivery process and how the employees‟ attitude to resolve the customers‟ problems or inquiries as quick as possible becomes importance In addition, the responsiveness of performing certain actions in the machines also decides the customer satisfaction and loyalty with the services Given to above discussion, the effect of responsiveness on customer loyalty and satisfaction is stated through two hypotheses below:

H3-1: Responsiveness affects significantly customer satisfaction with Live Bank services provided by TPBank

H3-2: Responsiveness affect significantly customer loyalty with Live Bank services provided by TPBank

2.3.4 Staff quality

Staff quality is acknowledged as the firms‟ employees to provide adequate caring and individual attention to the customers (Parasuraman et al., 1988) According to Bove (2019), staff quality is a notion of effective human interactions and it represents for the ability to understand other people and to capture their viewpoints and to predict their future needs or actions This term is also described as an emotional response developed upon on the communication and interaction between people and also illustrated for the capabilities of communication and influences (Cuff et al., 2014)

The effects of staff quality on customer loyalty in banking and finance industry have been explored by different researchers over the time.Islam (2015) measured the effect of staff quality on customer loyalty with commercial banks

in Bangladesh and the effect of this factor was positive and significant Wang & Chaipoopirutana (2014) confirmed that staff quality was significant influencer

of customer loyalty in Agricultural Bank of China This factor also had

significant correlation with customer loyalty in the research paper published by Sadiq et al (2013) after they examined the dataset of 137 banking customers in Maybank Berhad In addition, previous researchers also explored the effect of empathy on customer satisfaction Collecting the data from 645 general and VIP customers of Internet banking services, Lee & Lee (2020) found that empathy had positive and significant effect on customer satisfaction Khan & Fasih (2014) also collected the data from 270 customers in different banks and they confirmed the significant effect of staff quality on banking customer satisfaction Yadav & Rai (2015) concluded that assurance was important dimension of banking service quality and it resulted customer satisfaction with banking services In case of TPBank‟s Live Bank, the bank‟s staffs often make

a contact with the customers after the transaction is finished Depending on the result of transaction either successful or unsuccessful), the bank‟s staffs check with the customers in term of what they think and how they evaluate the overall experience with Live Bank In this context, two other hypotheses are developed: H4-1: Staff quality affect significantly customer satisfaction with Live Bank services provided by TPBank

H4-2: Staff quality affect significantly customer loyalty with Live Bank services provided by TPBank

asserted that when the customers perceived that banking services are easy to use, they felt the convenience of using and it resulted customer satisfaction Banu et al (2019) found an empirical evidence of easy to use affecting customer satisfaction through perceived usefulness from the customers

In this context, two other hypotheses are developed:

H5-1: Easy to use affects significantly customer satisfaction with Live Bank services provided by TPBank

H5-2: Easy to use affect significantly customer loyalty with Live Bank services provided by TPBank

2.4 Customer satisfaction and customer loyalty

Customer satisfaction is defined as “a feeling that appears on the results of a

purchase evaluation which is a comparison between actual perception and expectation” Zaid & Patwayati, 2021, pp.985) Other researchers like Devi &

Yasa (2021) considered the customer satisfaction as the satisfaction level of the customers towards the products and the services that are offered to them Razak

et al (2016) viewed the customer satisfaction as their feedback or their evaluation of purchased goods and services in the comparison with the customers‟ needs and demands

Customer loyalty refers to “the tendency of customers to become repeat customers based on their past experiences and future expectations” Arslan,

2020, pp.12) Customer loyalty is also viewed as a business concept or business philosophy whereby the companies try to develop intensive relationship with the customers in order to increase the customer trust and positive customer behaviour (Yajid et al., 2020) In fact, customer loyalty has multiple attributes whether it is categorized into affective and cognitive loyalty, in which affective loyalty refers to the pleasure fulfillment towards a product or service while cognitive loyalty refers to the customer preference towards a product or service upon on available information and options in the market (Dickinson, 2015)

The relationship between the customer satisfaction and the customer loyalty has been highlighted by many researchers in the past According to Supriyanto et al (2021), customer loyalty is a result of customer satisfaction whether satisfied customers are also loyal to the companies Darmawan et al (2017) provided an empirical evidence of which customer satisfaction had positive and significant effect on customer loyalty Moreover, when the customer satisfaction level was increased by 1 unit, the customer loyalty level will be increased by 0.19 unit

2.5 Research model and research hypotheses

The eleven hypotheses are extracted from proposed research models:

Figure 2.1: Conceptual Research Model H1-1: Tangibles affect significantly customer satisfaction with Live Bank services provided by TPBank

H1-2: Tangibles affect significantly customer loyalty with Live Bank services provided by TPBank

H2-1: Reliability affects significantly customer satisfaction with Live Bank services provided by TPBank

H2-2: Reliability affects significantly customer loyalty with Live Bank services provided by TPBank

H3-1: Responsiveness affects significantly customer satisfaction with Live Bank services provided by TPBank

H3-2: Responsiveness affect significantly customer loyalty with Live Bank services provided by TPBank

H4-1: Staff quality affects significantly customer satisfaction with Live Bank services provided by TPBank

H4-2: Staff quality affect significantly customer loyalty with Live Bank services provided by TPBank

H5-1: Easy to use affects significantly customer satisfaction with Live Bank services provided by TPBank

H5-2: Easy to use affect significantly customer loyalty with Live Bank services provided by TPBank

H6: Customer satisfaction with Live Bank services provided by TPBank affects significantly customer loyalty

Chapter 3 Methodology

3.1 Research approach

Research approach addresses the researcher‟s attempt to achieve the research objectives throughout a clear process (Sileyew, 2019) This process is either deductive or inductive (Azungah, 2018) In which, deductive approach refers to

a process of finding and adopting suitable theories in a real studying context and from that several hypotheses are developed and the researchers need to validate these hypotheses and come up with a conclusion of acceptance of rejection (Woiceshyn & Daellenbach, 2018) Inductive approach, however, has different process whether it is matter in case of the researchers do not have any relevant theories to rely on and they must develop a new one based on their actual observation of real case studies (Pearse, 2019) The difference between deductive and inductive is recognized from the purpose of the researchers to apply or to create new theories (Tie et al., 2019) In addition, when selecting the most suitable approach, the researchers need to take into account the data availability and the secondary data sources for referencing (Collins & Stockton, 2018)

Given to these differences, the study is designed with deductive approach It is employed because of the theoretical model which is proposed in the second chapter is not actually new In fact, it is generated from the perceived service quality theory provided by Parasuraman et al (1985, 1988) From that, five factors are put into the evaluation process, including tangibles, reliability, responsiveness, assurance, and empathy These factors are put into the direct relation with customer satisfaction with TPBank‟s Live Bank services and indirect relation with customer loyalty with this service A lot of empirical evidences in the past confirmed the effects of these five factors on customer satisfaction and customer loyalty These empirical evidences are highlighted in

of adopting a theory, developing hypotheses, and validating these hypotheses are the signs of deductive approach

3.2 Research method

Research method reflects the way of processing and analysing data before generating a conclusion given a studied topic (Buchholtz, 2019) Quantitative and qualitative are two research methods and they are selected and utilised in different research contexts Quantitative method is adopted in case of collected data is numerical and the entire process of generating the findings is based on numerical evaluation such as employing math or statistics (Apuke, 2017) Qualitative method is possibly to use in case of the data is non-numerical and the findings are based on the text analysis, the content analysis, and the application of self-arguments of the researchers (Jameel et al., 2018)

Given to that, this study employs quantitative method It is applicable due to quantitative method supports the deductive approach Moreover, quantitative method brings data-driven solutions to extract the findings and it reduces the biases as often found in case of using qualitative method The direction of quantitative method adheres that the data must be numerical and it drives the process of collecting the data In addition, quantitative method is the only option in case of there are hypotheses and the need of hypothesis validation It

is true since quantitative method allows the researchers to employ mathematical

or statistical analyses and they enable the opportunity of verifying a hypothesis whether it is accepted or rejected in line with relevant test statistics and the p-value Although, it is perceived that the employment of quantitative method brings a concern as it does not bring in-depth information since all findings are produced from number-based process However, this cost is subtracted by the benefit as quantitative method can provide quick research results compared to qualitative method and the findings are less biased

Survey is also useful research strategy It is a process of collecting data through the questionnaire or interview setup with the relevant respondents (Maymone et al., 2018) The benefit of using survey is that it enables the chance of collecting relevant data in order to capture the findings that support research objective and/or research questions Survey was widely used by other researchers in the past when they evaluated customer perceived service quality in banking services, their satisfaction, and their loyalty The choice of survey is relevant because it supports the deductive approach and quantitative method They are both in demand of the numerical data and this data is obtainable through a structured survey with the customers of TPBank‟s Live Bank services

The survey requires the questionnaire and it is designed in structured way and the respondents must provide their evaluation given to a Likert‟s scale of 5

points These points are “strongly disagree”, “disagree”, “neither agree nor disagree”, “agree” and “strongly agree”, in which, “strongly disagree” receives the lowest point at 1 while “strongly agree” has the highest point at 5 It means the higher point provided by the respondents; the higher agreement level is captured When design the survey, the researcher also wants to collect their demographic characteristics such as gender, age, education, frequency of using TPBank‟s Live Bank services, the length of the service relationship with the bank, and the most exciting product provided by TPBank‟s Live Bank services (See Appendix I) The main part of the survey is designed to capture the respondents‟ evaluation of tangibles, reliability, responsiveness, assurance, and empathy as key aspects of customer service quality In addition, this part is also used to capture their satisfaction and loyalty level with TPBank‟s Live Bank services The detail items are highlighted in the table below:

Table 3.24: Items used in the questionnaire

Tangibles The assets used in TPBank‟s Live Bank

are visually appealing TAN1 Siddiqui

(2011), Lau et al (2013), Rasheed et

al (2015)

TPBank‟s Live Bank services are delivered with up-to-date technological equipment

TAN2

The statement issued by TPBank‟s Live Bank is visually clear TAN3 Reliability TPBank‟s Live Bank services are well-

recovered from the errors REL1

Iivari (2005)

I satisfied with the problem handling in TPBank‟s Live Bank REL2 TPBank‟s Live Bank operates well in 24

Responsiveness TPBank‟s Live Bank has response

servicing time RES1

Iivari (2005)

TPBank‟s Live Bank has short

The time to resolve my problem in TPBank‟s Live Bank is quickly RES3 Staff quality TPBank‟s employees provides Live

Bank services to me best interest at heart EMP1

Siddiqui (2011), Lau et al (2013), Rasheed et

al (2015)

The employees provide promptly notice

in case of operational errors EMP2 The employees help me to get out of

problem quickly EMP3 Easy to use It is easy to learn how to use TPBank‟s

Live Bank services ETU1

Al-Sharafi

et al (2017)

I do not need to put a lot of metal effort when interacting with TPBank‟s Live Bank screen

ETU2

The instruction in TPBank‟s Live Bank screen is clear and understandable ETU3 Customer

satisfaction

TPBank‟s Live Bank was satisfying me CS1

Finn (2011)

TPBank‟s Live Bank services are good

I felt comfort when using TPBank‟s Live Bank services CS3 Customer

TPBank‟s Live Bank is the best interest

After the questionnaire is developed, it is embedded into a survey-based process

in which the questionnaire is distributed by hand to the customers who are using Live Bank services To select the right respondents, the researcher stays in the TPBank‟s Head Office located at 57 Ly Thuong Kiet Street, Hoan Kiem District

of Hanoi City Behind the head office building is the Live Bank counter and it is observed that there are many customers visit this counter to perform the banking transactions and other banking services After the customers finish their transactions, the respondent reaches them and asks whether they are interested

to join the survey If they are not, the survey is stopped and vice versa It means the selection of the respondents is based on convenience method and the choice

of the respondents is random The target sample size for this survey is derived upon on the subject-to-variable ratios of 20:1 It means the sample size must be

20 times higher than the number of variables in the research model (Goretzko et al., 2019) Table 3.1 shows that there are 7 factors so that the sample size must

be 20 x 7 or 140 respondents

3.3.2 Secondary data

Second data type is called secondary data since it is not extracted from a data collection processing initiated by a researcher but from other data sources which have been processed and published by other researchers (Martins et al., 2018) Key benefit of secondary data is that it is collected in small time frame although key downside of secondary data is that the data processing and the result of data analysis are unable to validate Secondary data which is used in the study is the piece of information collected in the Internet and it is about customer perceive service quality, related empirical evidences about the effect of tangibles, reliability, responsiveness, assurance, and empathy on customer satisfaction and customer loyalty with banking services Beside of that, the information about

TPBank and the bank‟s Live Bank services are also collected for the purpose of validating the findings from primary data It means the researcher needs to collect secondary data and it is the reports and the news about this banking services provided by TPBank

3.4 Sampling procedure

After the questionnaire is developed, it is embedded into a survey-based process in which the questionnaire is distributed by hand to the customers who are using Live Bank services To select the right respondents, the researcher stays in the TPBank’s Head Office located at 57 Ly Thuong Kiet Street, Hoan Kiem District of Hanoi City Behind the head office building is the Live Bank counter and it is observed that there are many customers visit this counter to perform the banking transactions and other banking services After the customers finish their transactions, the respondent reaches them and asks whether they are interested to join the survey If they are not, the survey is stopped and vice versa

It means the selection of the respondents is based on convenience method and the choice

of the respondents is random

The target sample size for this survey is derived upon on the subject-to-variable ratios of 20:1 It means the sample size must be 20 times higher than the number of variables in the research model (Goretzko et al., 2019) Table 3.1 shows that there are 7 factors so that the sample size must be 20 x 7 or 140 respondents

3.5 Data analysis techniques

By collecting the data from the survey with structured questionnaire, quantitative method or quantitative assessment is utilised Frequency analysis is employed to capture the demographic characteristics while descriptive statistics enables the evaluation of the respondents‟ central tendency Mean or average value of each item is used to capture the central tendency in the respondents‟ evaluation Behind of that, the researcher needs to evaluate the data quality in term of internal consistency and checking whether the items listed in the questionnaire can be reduced in term of number Internal consistency requires

the calculation of “Cronbach‟s alpha” as well as two additional checks of

“Corrected Item-Total Correlation” and “Cronbach‟s alpha if item deleted” of each item (Hoekstra et al., 2018) Before analysing the internal consistency of each factor, the researcher expects that each factor has “Cronbach‟s alpha” from 0.7 to above and belonging items pass two additional checks The researcher also needs to conduct exploratory factor analysis (EFA) EFA is only utilised with sizable sample and it is validated by “Kaiser-Meyer-Olkin” and “Bartlett‟s test of Sphericity” Amilani et al., 2020) The final output of EFA is a reduced number of items or the components that are still able to explain for significant total variance of the data Koyuncu & Kılıç, 2019) The next data analysis is ANOVA or analysis of variance It is employed with the input of both demographic variables and the factors after reducing in EFA “Independent sample T-test” and “One-way ANOVA” are two types of variance analysis (Schober & Vetter, 2019) Finally, multiple linear regression is adopted It measures the effects of tangibles, reliability, responsiveness, assurance, and empathy as independent variables on customer satisfaction and customer loyalty

as dependent variables Some statistical items are extracted from the output of multiple linear regression, including R-square, T-test, F-test, unstandardized/standardized coefficients (Armstrong, 2019) When evaluating the performance of the regression, R-square implies for the percentage of the variance of the dependent variable explained by the independent variables According to Ostertagov 2012), when R-square is between 0.00 and 1.00 and when R-square is less than 0.5, only 50% of the variance of the dependent variable to be explained by independent variable and it is considered as a poor explanation level Also, any value of R-square greater than 0.8 indicates for good goodness of fit and any value of R-square between 0.6 and 0.8 indicates for acceptable goodness of fit (Ostertagov , 2012) The F-test is a statistical test which involves all the coefficients of the independent variables at once while

the T-test concerns individual coefficient and any significant value of the test statistics implies for the rejection of the null hypothesis whether the coefficient

is equal to zero (Goldstein, 2015) In this study, the author also expects that all the coefficients of the independent variables are not subjected to zero The author utilises these two test statistics in order to validate this null hypothesis

Chapter 4 Research Results 4.1 Overview of TPBank

TPBank was established in 2008 and the bank inherits the financial strengths and the technological expertise from domestic and foreign groups such as DOJI Gold, FPT Group, Mobifone, IFC International Finance Company, etc The vision of the bank is “to become the leading commercial banks in Vietnam with cutting-edge products and services, to contribute to the prosperity of Vietnam” (TPBank, 2021) To support this vision, the bank has set three core missions of providing high quality banking products and services to the customers that are based on strong technological foundation, creating good working environment and benefits to the employees, and highly committing to the corporate social responsibilities (TPBank, 2021) TPBank also achieved some remarkable awards such as the best working place in Asia in 2020, the best digital banking

in 2020, the best saving account in 2020, the leading partner in Vietnam by Asian Development Bank in 2019, etc (TPBank, 2021) Key products and services of the bank are retail banking, corporate banking and premier banking During 2016-2020, the business performance of the bank is summarized as in the Table 4.1 It is observed that the bank suffered a decrease in ROA and ROE

in 2020 due to the COVID-19 pandemic Before that, the bank had gone through four consecutive years when both ROA and ROE were continuously increased

Table 4.25: TPBank‟s Business Performance, 2016-2020

Indicators 2016 2017 2018 2019 2020 Total asset,

Source: TPBank (2021) Live Bank was one of the banking services that has been offering to the customers since February 2007 It is automated banking service model whether the customers are able to perform banking services by themselves When the customers go to Live Bank counter, they can open banking account, check account balance, withdraw money, make bill payment, etc This banking service model does not require the employees to be interact directly with the customers

so that the customers can perform banking services even after normal working time e.g., after 5 pm To better support the customers, each Live Bank counter has a monitor and it allows to connect the customers with the bank‟s supporting staffs For example, when the customers face up with a problem, they can push the button to connect with the bank‟s staffs online TPBank also upgrades Live Bank every year In 2018, the bank deployed finger print technology in Live Bank counter In 2020, the bank continued to deploy face recognition technology in Live Bank and it significantly reduces the time required to key-in the PIN code for the customers It is denoted that total time required for facial recognition is only 3 seconds In the end of 2020, TPBank has about 300 Live Bank nationwide and the average transaction per Live Bank counter is about 10,000 every month

TPBank‟s goal is to satisfy customers anytime, anywhere In which, the bank is positioning LiveBank as a 24/7 automatic banking model that allows the customers to conduct banking transaction by themselves or even to deal with the tellers via integrated screens Therefore, the management of customer service quality is very important TPBank chose to focus on investing and strongly developing its technology platform and digital banking services, considering this as one of the strategic areas to improve competitiveness and attract customers TPBank LiveBank also applies latest technologies such as AI, which

is understood as the application of machine to reduce the turnaround time and to reduce the human errors

TPBank LiveBank does not need any papers since everything are processed digitally Moreover, this service still assures that all the financial transactions of the customers are processed accurately For example, TPBank LiveBank is integrated the technology that allows to recognize a customer in millions of people in just 3 seconds It also can release the card after 5 minutes, etc

The standard system for evaluating Customer Experience at TPBank LiveBank includes:

Standard of Machine Room Facilities

Equipment room facilities: including identification boards outside the engine room and equipment, space inside the engine room needs:

 Guaranteed Image: Clean, no scratches, stains, peeling, neat, tidy

 Ensure information: Complete and update information in accordance with regulations

 Ensure good operation: Normal, correct operation, no damage/error

System performance standards

 System operation: including central system, transmission line, VTM machine, hardware, software

 Ensure transactions performed on the machine quickly, accurately, without errors during the execution

 Ensure smooth, uninterrupted operation of the machine

Criteria for Consultants:

 Appearance: professional, adhere to the dress code, apply makeup in accordance with regulations

 Working area: neat, clean, proactively manage the machine room's CSVC, promptly notify information when there is a problem in the machine room, and the quality of service is not guaranteed

 Process of dealing with customers: standard, polite, elegant style; warm attitude, listen, care, respect customers

Standards for connection of support switchboards

Connecting support switchboard is used when the customer makes a call to connect to the online switchboard for transaction support and answer questions

It is necessary to ensure that the customer's calls to the online support center are connected successfully, quickly and easily, the connection process is uninterrupted

Standards of Telephony:

 Appearance: professional, adhere to the dress code, apply makeup in accordance with regulations

 Surrounding area: ensure image, clean

 The process of dealing with customers: follow all steps, polite and elegant standard style; warm attitude, listen, care, respect

Standard of Protection

 Appearance: comply with the regulations on dress, appearance, full tools

to support normal operation

 Behavior: standard, do not do private work, smoke, doze during working hours

 Duties: comply with working time, ensure the safety of the engine room, actively welcome customers and consciously preserve the image of the engine room

 Communicating - dealing with customers: polite, respectful, friendly, enthusiastic

4.2 Descritive analysis

4.2.1 Tangibles of Live Bank of TPBank

At first, the author conducts the frequency and the descriptive statistics for three variables of the tangibles of Live Bank of TPBank Obtained result is presented below:

Table 4.26: Evaluation of tangibles of Live Bank of TPBank

Variables Description Mean SD D N A SA

TAN1

The assets used in TPBank‟s Live Bank are visually appealing

3.24 10

7.1%

16 11.4%

59 42.1%

41 29.3%

14 10.0%

TAN2

TPBank‟s Live Bank services are delivered with up-to-date

technological equipment

3.34 9

6.4%

16 11.4%

53 37.9%

42 30.0%

20 14.3%

TAN3

The statement issued by TPBank‟s Live Bank is visually clear

3.29 3

2.1%

23 16.4%

60 42.9%

39 27.9%

15 10.7%

SD: Strongly Disagree; D: Disagree; N: Neutral; A: Agree; SA: Strongly Agree

Source: Survey‟s data When asking the customers about how the visually appealing level of the Live Bank asset, 26 respondents stated that they strongly disagreed and disagreed and

it is equivalent to 18.5% There were 59 respondents who have neutral attitude and it consumes 42.1% of total sample size Also, 55 remaining respondents strongly agreed and agreed and it is equivalent to 39.3% of total sample size In

overall, the mean score for this item is 3.24 which is not so high and not so low score

The author also measures how the tangibles of Live Bank is equipped by date technologies or not Obtained result shows that only 25 respondents who strongly disagreed and disagreed with this statement while 62 respondents who strongly agreed and agreed and 53 respondents provided neutral assessment Since the number of the respondents who had neutral assessment is high, the mean score of this item is 3.34 which is not so high and not so low score

up-to-The last item of the tangibles factor refers to the quality of the banking statement printed in Live Bank counter after the customers successfully perform the transaction There were 26 respondents who strongly disagreed and disagreed, 60 respondents who shared neutral assessment, and 54 respondents who strongly agreed and agreed with the last statement The mean score of this item is 3.29 which not so high and not so low score

In overall, the mean scores for TAN1, TAN2, and TAN3 are 3.24, 3.34, and 3.29 that are not so high value It means the respondents had a central tendency

of neither agreed nor disagreed with three statements of Live Bank‟s tangibles The author considers that the respondents may not take into account the quality

of tangible assets used in Live Bank counter or the bank‟s tangible asset quality

is only at the normal level and it may not impressive to the customers

4.2.2 Reliability factor of Live Bank of TPBank

Then, the respondents perform the frequency analysis and the descriptive statistics analysis for the reliability factor of Live Bank Obtained result is presented as below:

Table 4.27: Evaluation of reliability of Live Bank of TPBank

Variables Description Mean SD D N A SA

REL1 TPBank‟s Live

Bank services are 3.36

3 2.1%

13 9.3%

63 45.0%

52 37.1%

9 6.4%

70 50.0%

40 28.6%

13 9.3%

42 30.0%

44 31.4%

30 21.4%

SD: Strongly Disagree; D: Disagree; N: Neutral; A: Agree; SA: Strongly

Agree Source: Survey‟s data The first aspect of the reliability in Live Bank services is how they are recovered from the errors Obtained result from the survey‟s data shows that there are 26 respondents who strongly disagreed and disagreed and 63 respondents who had neutral assessment and 61 respondents who strongly agreed and agreed The mean value of this variable is captured at 3.36 which is neither high nor low score

The second aspect of the reliability is how the problems related to Live Bank services are handled The number of the respondents who strongly disagreed and disagreed is 17 people while 53 others strongly agreed and agreed The number of the respondents with neutralized assessment is 70 The mean value of the second aspect is 3.34

The third aspect of the reliability refers to the capacity of Live Bank to support the customers to perform banking transactions in 24 hours per day In fact, Live Bank is designed to serve the customers anytime However, there are 24 respondents who strongly disagreed and disagreed with 24 hours operation of