MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIETNAM HO CHI MINH UNIVERSITY OF BANKING *********************** NGUYEN THI CAM PHUONG DEVELOPING THE ELECTRONIC BANKING SERVICE
The Importance Of Research Topic
In the context of the economy in the country, we are stepping up the 4.0 industrial revolution, promoting the application of information technology in the development of commercial bank's services products to demand, takes steps, in the current stage
The fourth industrial revolution 4.0 is happening, which is the automation trend and data exchange in manufacturing technology With the emergence of a series of innovative technologies such as virtual reality systems, artificial intelligence, artificial networks connected and cloud computing The proliferation of information technology has helped businesses change mindsets and business methods The banking sector of vietnam is witnessing a strong and fast change in which technology factors are focus Through the application of technologies creatively, banks can minimize costs, improve quality and time of service, and provide flexibility, convenience, quickly to customers For the economy, it contributes to increasing the flow of money and goods, modernizing the payment system and contributing to promoting the development of trade, especially e - commerce These factors are putting banks in the race for electronic banking services to apply high technology to products, services that provide customers with superior experiences and that brings benefits to customers, banks, and more
Vietcombank has always played a role in the banking system, in the top of commercial banks in the banking sector in Viet Nam Vietcombank has achieved certain successes, as of 2021, which has owned nearly 21 million users of electronic banking servces, including 8 million users of service users via VCB-SMS B@nking message, nearly 4.6 million users of VCB-iB@nking and more than 2 million mobile banking users There' s no stopping that Vietcombank always expanding, developing and improving the quality of electronic banking services to provide convenience for customers
The Viet Nam foreign trade commercial bank with the goal became a strong financial conglomerate also identified the development of electronic banking services as necessary and important But, the practice of the development of e - commerce banking services of joint stock commercial banks also shows difficulties, limitations The finding of measures to implement, develop a successful electronic banking service as well as help the joint stock commercial bank in foreign trade confirm the position, its brand is still a problem and is being set up fairly Coming from the reality and seeing the importance of the problem, the “ Developing The
Electronic Banking Services At Joint Stock Commercial Bank For Foreign Trade
Of Vietnam - Tan Dinh Branch ” has been selected by me to study for my graduation thesis in finance and banking with the hope of contributing to the development of e-banking services of the Joint Stock Commercial Bank for Foreign Trade of Vietnam in general and for the Tan Dinh branch in particular.
Research Objectives
General objective
The overall objective of this study is to evaluate the current situation of developing e-banking services at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch From there, appropriate measures are proposed to develop e-banking services of the branch, contributing to improving the operational efficiency of Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch in the locality.
Specific objective
- To synthesize the basic theoretical issues of e-banking services and developing e-banking services
- To analyze the current situation of e-banking products and services at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch in the period of 2017 - 2021
- To propose some solutions to help the branch develop e-banking services more effectively, enhance the brand equity at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch in the area.
Research Questions
- What is e-banking service? Which criteria to evaluate the development of e- banking services? What factors influence the development of e-banking services?
- What is the current status of e-banking service development activities at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch in the period of 2017 - 2021?
- What solutions are needed to develop e-banking services at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch?
Research Subjects and Scope
Research subjects
- Research subjects: Electronic banking products and services of Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch.
Research scope
- Time scope: The thesis focuses on researching e-banking products and services being deployed at Joint Stock Commercial Bank for Foreign Trade of Vietnam, Tan Dinh branch in the period of 2017 - 2021
- Spatial scope: The thesis focuses on researching e-banking products and services deployed in the area.
Research methods
The thesis uses qualitative research methods mainly, specifically as follows:
- Methods of data collection and statistics: includes information about research subjects over the years
- Comparative method: to determine the increasing and decreasing trend of the evaluation criteria over the years in order to draw conclusions and assess
- Methods of analysis and synthesis of data: On the basis of statistical data collected in the period 2017-2021, described by absolute numbers, relative numbers, development trends over the years, the author will implement calculate and analyze data
- The topic is based on selected information from business data in the period 2017-
2021 of VCB Tan Dinh Branch to analyze the advantages and disadvantages that banks are facing in developing e-banking services From the research results, the author has an assessment of the development of e-banking services and proposes some solutions to develop e-banking services at VCB Tan Dinh branch.
Contribution of the topic
- In terms of theory: Systematize a number of theoretical issues related to the development of e-banking services of commercial banks
- In practical terms: Assessing the current situation of developing e-banking services at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch, pointing out successes as well as limitations and weaknesses exist in the service development process at the branch From there, appropriate measures are proposed to develop e-banking services of the branch, contributing to improving the brand equity at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch.
Review of related research
Review of domestic research
“Đánh giá các yếu tố ảnh hưởng đến quyết định sử dụng sản phẩm Internet Banking của Ngân hàng Agribank – Chi nhánh Lâm Đồng” - Thesis Doctor of Economics - University of Economics Ho Chi Minh City The thesis has presented general theories on customer behavior and the relationship between the bank's decision to use InternetBanking products, the author also gives some specific theoretical issues on determining factors affecting the decision to use Internet Banking products, including 5 factors: utilities, bank reputation, product price, product quality, service safety The author collects primary data from April 2018 to June 2018 with
260 research samples through questionnaires to customers who are transacting at Agribank - Lam Dong Branch Primary data is evaluated by the author through the SPSS 23.0 software, the multivariable regression results show that among the 5 variables affecting the decision to use, the variable “Bank reputation” has the largest influence with the coefficient “0,265, next is the variable “service safety” with the second largest influence with a coefficient of 0.258, the third largest influence variable is the “utilities” with a coefficient of 0.202 The author has proposed solutions to develop customer attraction for Internet Banking products at Agribank - Lam Dong Branch: Improving the reputation, upgrading banking technology and constantly integrating the product's utility (Nguyễn Thị Hoa, 2018)
“Mức độ ảnh hưởng đến quyết định sử dụng của khách hàng đối với sản phẩm Internet Banking tại Ngân hàng Maritime Bank Phòng giao dịch Gò Vấp” - Thesis Doctor of Economics - University of Economics Ho Chi Minh City The thesis has presented the general theories on the customer's decision making for Internet Banking products at the Bank The author has in-depth assessment of the influence on customers' decision to use Internet Banking products at MaritimeBank GoVap Transaction Office through the construction and evaluation with 6 variables: Service Price, Functional Integration, Responsiveness, Quality of Service, Security, Product Utilities The author used a survey with a research sample of 185 customers, primary data was obtained between May 2017 and June 2017 The primary data is evaluated by the author through the software SPSS23.0, the multivariate regression results show that in the 6 variables affecting the usage decision, the variable "Quality of service" has the largest influence with a coefficient of 0.283, next is the variable “Security” with the second largest influence with a coefficient of 0.281, the third largest variable is the “Product utilities” with a coefficient of 0.196 The author has proposed a policy function to attract more customers to use Internet Banking products of Agribank Lam Dong Branch: increase product quality, invest in security technology, improve service capacity (Nguyễn Hà Lê, 2017)
“Nghiên cứu mối quan hệ giữa chất lượng dịch vụ ngân hàng điện tử với mức độ thỏa mãn và mức độ trung thành của khách hàng ở Việt Nam” - Thesis Doctor of Economics - National Economics University The author surveyed 550 subjects using a questionnaire using 7-point Likert scale and using linear structural modeling (SEM) to run the model and test hypotheses The results of hypothesis testing show the relationship between overall quality of banking services with customer satisfaction and with customer loyalty has a very high correlation Research of the author has built a comprehensive new structural model to explain the relationship between service quality, customer satisfaction and loyalty in the field e-banking in Vietnam, while previous works mainly focused on the relationship couple (Thắng, 2015).
Review of foreign research
Research on Internet Banking perceptions and preferences among young people aged 20-25, studying at the Subcarpathian University in Poland In which, 95.65% of them have used e-banking services The ability to use internet banking is one of the most expected factors influencing the choice of a bank (88% men and 80% women); 53% of respondents used banking services more often and 34.7% of them once a week Common e-banking activities performed by respondents were checking account balances (98.72%) and account records (97.44%) They also pay their bills (90.44%), transfer money (88.34%) and recharge their mobile phones (84.96%) In the case of shopping, 61.8% of women pay online to shop more often compared to 49.5% of men (Miroslaw Soltysiak and Magdalena D Suraj, 2014)
E-banking awareness study among students of Karachi city, Pakistan The majority of students are in the 19-24 age group In which, 85.6% of sample students have information and knowledge about the electronic banking system; 83.2% of students are aware of ATM usage, benefits, importance and convenience of ATM; 72% of respondents know about the use of debit and credit cards; 64% know how to make transactions via mobile phones; 60% of respondents agree that the account can be easily accessed and operated through e-banking services; 77.2% of respondents are satisfied with the electronic banking system; 84% of respondents prefer the new electronic banking system to the conventional manual banking system (Muhammad Nadeem, 2015)
From the survey of the above studies, it can be seen that there has not been a specific research topic on the e-banking operation of a commercial bank, and has not been studied in a specific locality Therefore, the topic " Developing The Electronic
Banking Services At Joint Stock Commercial Bank For Foreign Trade Of Vietnam - Tan Dinh Branch " has inherited some problems in previous studies but does not overlap on the current situation and solutions due to specific research at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch
In addition to the introduction and conclusion, the thesis consists of 3 chapters: Chapter 1: Overview Of Electronic Banking Services Development
Chapter 2: The Situation Of Development Of Electronic Banking Services At Joint Stock Commercial Bank For Foreign Trade Of Vietnam – Tan Dinh Branch
Chapter 3: Solutions For Development Of Electronic Banking Services At Joint Stock Commercial Bank For Foreign Trade Of Vietnam – Tan Dinh Branch
OVERVIEW OF ELECTRONIC BANKING SERVICES
Overview of electronic banking services
1.1.1 The concept of electronic banking
Humanity is living in the 4.0 era, and the development of information technology has exerted a great influence on the banking system Banks have come closer to consumers thanks to the internet or telecommunications networks, the exchange of information between customers and the bank is simplified to just one mouse click or phone keyboard Computers and the internet have opened up for us a cashless, fast, accurate payment system, and most of all, it has wide connectivity all over the world
The term "e-banking" is probably not unfamiliar to us, now there are many different expressions According to "Electronic banking and electronic payment transaction facilities" - banking informatics magazine No 4/2003 has introduced the following concept: "E-banking is the ability of a customer to access remote access to a bank to collect information, perform payment and financial transactions based on depository accounts at that bank, and register for new services”
If we consider banks as a component of the electronic economy, the most general concept of e-banking is expressed as follows: “E-banking is a bank where all transactions between banks and customers (individuals and organizations) based on the processing and transfer of digitized data to provide banking products and services
E-banking can be understood as follows: banking services are provided through electronic technical means, customers do not need to go to the bank but can still perform transactions as well as capture information Or to put it more briefly, "E- banking is a form in which customers perform financial and banking transactions through electronic means and network technology"
According to Hoàng Nguyên Khai (2013), e-banking service is understood in the intuitive sense that it is a type of banking service that allows customers to perform financial transactions without having to go to a counter to meet a bank employee or any other intermediary In a broader sense, it is a utility tool that provides traditional products and services combined with new retail products through electronic means and other interactive communication channels
According to Decision No 35/2006/Decision - State Bank of Vietnam dated 31/07/2006 of the State Bank of Vietnam, investment banking activities are banking activities carried out through electronic distribution channels Electronic distribution channel is a system of electronic means and automated transaction processing processes used by credit institutions to communicate with customers, provide products and services to customers
The State Bank has issued many normative documents guiding credit institutions and payment intermediaries in the implementation of e-banking services to ensure safety and security In Circular No 35/2016/Circular - The State Bank stipulates safety and security for the provision of banking services on the Internet Internet banking services are electronic banking services and payment intermediary services provided by entities through the Internet All financial transactions must be authenticated with at least two factors to secure customer information Ensure the availability of the Internet Banking system to provide services continuously Carry out inspection and assessment of security and confidentiality of the Internet Banking system to identify risks, and take measures to prevent and handle risks in service provision
Electronic banking services are banking services provided through electronic means In which, electronic method refers to the entire process and system of electronic transaction facilities such as personal computers, ATMs, PDAs, telephones, etc., systems for managing and processing transaction data at banks row; interbank communication and transaction processing system
1.1.2 Development stages of electronic banking
About more than a decade ago, many banks began to provide some software programs that help customers view their account balances and make a number of payment orders for public services such as electricity, water In the world, e-banking services were provided quite early, in 1980 this service was provided by a bank in Scotland (Tait, Fand Davis, 1989) However, this service was only officially provided by banks in 1990 (Daniel, 1998), and then it became more and more developed In
1995, e-banking was officially implemented through Quicken software of Intuit Inc with the 16 largest banks in the US participating Customers only need a computer, a modem, and Quicken software to be able to use this service Besides developing an electronic payment system, electronic transaction channels have also been expanded In the US, a pioneer in the development of e-banking, by 2001 there were over 14 million customers using online banking services According to a survey by technology transfer company BACS in the UK, the number of people using this service increased from 3.5 million to 7.8 million within 2 years Shows the outstanding progress of E-banking, opening up development prospects in the 21st century
In the process of formation and development today, the electronic banking system has undergone four basic forms as follows:
It is the simplest form of e-banking Most banks when starting to build e- banking follow this model The first thing is to build a website containing information about banks and products online to advertise, introduce, instruct, contact, etc., in fact, this is just a new advertising channel in addition to the information channels Traditional information (press, television, ), all banking transactions are still done through the traditional distribution system, which is the Bank's branches
With e-commerce, banks use the Internet as a new distribution channel for traditional services such as viewing account information, receiving the stock transaction information, etc The Internet only acts as an additional service to facilitate more benefits for customers Most of the small and medium banks are in this form
In this form, the basic banking processes both at the front-end and back-end are integrated with the Internet and other distribution channels This stage is distinguished by an increase in the bank's products and functions with product differentiation according to the customer's needs and relationship with the bank Moreover, the coordination and sharing of data between the bank's headquarters and distribution channels such as branches, Internet, wireless networks helps to process requests and serve customers quickly and accurately more precise The Internet and science and technology have increased the connection and sharing of information among banks, partners, customers, regulators Some advanced banks in the world have built this model and are aiming to build a complete e-bank
This is the ideal model of Online Banking in the electronic economy, a complete change in business model and management style These banks will take advantage of the true power of the global network to provide a full range of financial solutions to customers with the best quality From the initial steps of providing existing products and services through many separate channels, banks can use these many communication channels to provide different solutions for each specific customer
Internet banking appeared in Vietnam in 2004, since then this service has become more and more popular Grasping the rapid development as well as the benefits brought, Vietnamese commercial banks have been applying and deploying new technologies in business activities in general, payment services in particular, especially in banking services internet, mobile service, card service.
Criteria to measure the development of electronic banking services
The development of e-banking services in each different bank will be different because this development depends on the characteristics and development orientation of each bank Some criteria can be generalized to evaluate the development of e-banking services as follows:
1.2.1 The increase in the number of customers using e-banking services
This indicator is to analyze the growth of customers using e-banking services, showing whether the bank has focused on developing the market and attracting customers to use e-banking services The higher the growth rate, the better This indicator is calculated by comparing the number of customers over the years
1.2.2 Proportion of e-banking services used by customers
If the number of customers shows the growth of e-banking services in breadth, the proportion of using e-banking services is a very significant number when considering the development of e-banking services in depth It shows the level of interest of customers in services through the average number of e-banking services that customers use out of the total number of services provided by the bank The formula for calculating the proportion of e-banking services used is determined as follows:
1.2.3 The increase in revenue from e-banking products and services
This indicator is used to evaluate the effectiveness of e-banking service activities by assessing whether the service revenue has rised over the years, and whether it has increased annually or not The higher the growth rate, the more effectively the performance of e-banking products and services can be assessed This indicator is calculated by comparing service revenue over the years
This indicator is calculated as follows:
Income from e-banking services of a bank is the total amount of interest and fees that the bank collects from e-transaction fees such as: issuance fee (user fee, annual fee, loan interest) , credit card payment fees Income from e-banking services effectively reflects the process of implementing and providing e-banking services, reflecting the level of organization, management and implementation of these services; clearly indicate the source of the bank's income in the period, thereby assessing their importance, stability and growth in the future Therefore, this is considered as one of the leading criteria to evaluate the development of e-banking services of a bank The larger the income from e-banking service fees, the more e-banking services of that bank have developed compared to banks with lower incomes and received customer satisfaction and satisfaction service use At the same time, it also shows that the bank's e-banking services are being extended and vice versa.
Experience in developing of electronic banking services at commercial banks
1.3.1 Military Commercial Joint Stock Bank
Military Commercial Joint Stock Bank, abbreviated as Military Bank, abbreviated as MB, an enterprise directly under the Ministry of National Defense As of 2018, the bank's charter capital was VND 21,605 trillion, and the total assets of the bank in 2018 were VND 362,325 trillion The main shareholders of Military Bank are Viettel, State Capital Investment Corporation, Vietnam Helicopter Corporation, and Saigon Newport Corporation In addition to banking services, Military Bank also engages in securities brokerage services, fund management, real estate trading, insurance, debt management, and asset exploitation by holding controlling shares of the Bank several businesses in this field Currently, Military Bank has a nationwide network with over 100 branches and over 190 transaction points spread across 48 cities and provinces The bank also has a representative office in the Russian Federation, with branches in Laos and Cambodia
Regarding package banking services, MB currently offers two separate service packages for corporate and individual customers: Business Vantage Banking package for individual customers - MB Premier - a comprehensive package of banking services connected on a global scale About linked banking services: MB provides customers with a series of linked services between its banking services and the products of its partners: the home & away program, and insurance services
Thus, through the two product groups of MB, MB's experience can be seen in diversifying the service portfolio and increasing convenience for customers in two ways: First, offering service packages including a group of customers banking services and facilities are complementary and mutually supportive On the one hand, it encourages customers to use many banking services at the same time, and on the other hand, maximizes customer satisfaction by increasing utilities and incentives for customers Secondly, linking with external partners, offering preferential programs and services that both benefit customers and benefits MB and the partners themselves
These two activities of MB are the two main contents in the activity of "Cross- selling of services", a relatively new concept in banking activities in Vietnam that VCB as well as other domestic banks need to learn It can be said that to be successful, cross- selling services must have the convergence of 3 factors: customer, service, and seller Therefore, banks must develop their cross-selling service strategy, which must clarify issues related to the selection of target customers, the selection of services, to service packaging, and not can skip the training of professional sales staff
1.3.2 Asia Commercial Joint Stock Bank
Asia Commercial Joint Stock Bank is one of the commercial joint-stock banks with rich e-banking services, called ACB Online, allowing customers to make transactions with ACB quickly, anytime, anywhere The services are simple to use, safe, secure, save time and costs for customers when they do not have to go directly to the counter ACB Online includes the following specific services:
- Internet Service: is a service that allows customers who have a current deposit account at ACB to conduct transactions with the bank anytime, anywhere through a device that is a desktop computer or a laptop with an Internet connection
- Mobile Service: is a service that helps customers transact with the bank anytime, anywhere through handheld peripheral devices such as mobile phones, and tablets with Wifi, GPRS, and 3G connection
- SMS Service: is a service that allows customers who have a payment deposit account at ACB to conduct transactions with the bank by using a mobile phone to text according to the bank's sample syntax and send it to number 997 to execute
- Phone Service: is a system to automatically answer 24/24h information about banking products and services, through personal accounts, customers press keys on the keypad of landline or mobile phones according to the code specified by the Bank to request a response from the system
In addition to the above services, ACB's 24/7 Customer Service Center (CallCenter 24/7) operates very efficiently, promptly responding to customers' needs anytime, anywhere In addition to being equipped with a modern switchboard system, most of ACB's consulting staff are under the age of 30, dynamic, enthusiastic, professionally trained in customer service, and can handle difficult situations situation The difference between these services is that in addition to advising and guiding customers to use ACB's products and services, and receiving and resolving complaints, customers can also use ACB's modern services such as money transfer, pay bills, pay insurance premiums, register for a card, activate a card, quickly and promptly
1.3.3 Tien Phong Commercial Joint Stock Bank
Tien Phong Commercial Joint Stock Bank is one of the major banks, providing an extremely rich and diverse service system for individual and corporate customers Operating in Vietnam since 1994, TP is now one of the leading banks with branches in Hanoi, Ho Chi Minh City, and many online transaction points throughout Vietnam During its operation in Vietnam, TP is known as one of the pioneer banks in the field of modern banking technology with a series of important domestic and international milestones and awards To achieve these success, TP bank has learned from the business of developing e-banking services, which are:
E-banking services due to a long tradition of operation: Being the first bank to launch an online banking system in 2000, launching an online payment gateway in
2005, and winning the title of Bank with a Commercial Platform Best Electronic of
2009 awarded by Asiamoney Magazine This shows that the city has oriented very early to invest in modern technology infrastructure to create pioneering products for other commercial banks
Making a difference in e-banking services: TP always has a very different approach to customers compared to competitors New services are created based on understanding and grasping the needs of customers, so TP bank designs very creative, flexible, and completely tailored services to customers' needs TP excels with e- banking services, and online banking services that support customers to perform most banking transactions in the most convenient, safe, and easiest way 24/7 through transaction channels such as Internet Banking, Mobile Banking, and Phone Banking
- TP Online service with a lively and scientific interface with many new and useful features such as fast payment, and display of cross-border accounts
- Electronic statement service helps customers view information quickly, securely, and safely
- International money transfer service helps customers transfer money quickly and reduce costs
- Mobile service with many utilities to help customers transact quickly and conveniently
Network system equipped with modern technology: In 2010, the city started to launch retail branches in Hanoi, while promoting technological innovation and improving the banking experience Branches are equipped with modern systems such as Media Wall, Interactive Sales Kiosks, and Work Benches that allow customers to access a wealth of information, learn about financial products and services, and trade
Designing consumer-oriented e-banking products and services: Through the list of online banking utilities, TP bank's e-banking can be seen that they have fully exploited the most modern information technology facilities to develop services such as pagers, and landlines, mobile phones, internet For each type of vehicle, TP bank also seeks to fully exploit the features to provide customers with simple but effective banking methods and features so that customers can satisfy their needs to the fullest extent…
Information security and safety: Not only focusing on the number of transactions through modern technologies, but TP also always focuses on ensuring the safety and confidentiality of customer information during the implementation process transaction Because of the pioneering application of online banking technology, TP bank can meet the maximum needs of customers, and overcome limitations in the network of branches and transaction offices in Vietnam Maximize customer transaction time while minimizing personnel and operating costs
1.3.4 Lessons for Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh Branch
Joint Stock Commercial Bank for Foreign Trade of Vietnam is a versatile bank operating in many fields, providing customers with a full range of leading services in the field of international trade However, this is still not enough because, in a fiercely competitive environment, VCB needs to consider the development of e-banking services as a sustainable development strategy for the bank Summarizing lessons learned from major banks in the world and some domestic banks as a premise for the VCB Tan Dinh branch to develop e-banking services:
THE SITUATION OF DEVELOPMENT OF ELECTRONIC
Overview of Joint Stock Commercial Bank for Foreign Trade of Vietnam – Tan
2.1.1 Introduction to the history of establishment and development of Joint Stock Commercial Bank for Foreign Trade of Vietnam – Tan Dinh branch
January 2001, Joint Stock Commercial Bank for Foreign Trade of Vietnam – Tan Dinh branch was established, located at 72 Pham Ngoc Thach, Ward 6, District 3, City Ho Chi Minh VCB Tan Dinh is one of nearly 100 first-level branches of Vietcombank Initially, Vietcombank Tan Dinh was a transaction office under Vietcombank Ho Chi Minh City On November 26, 2006, officially became the first level branch of Vietcombank On July 1, 2008, officially changed its name to Vietcombank Tan Dinh
Since its establishment, VCB Tan Dinh has actively contributed capital to the economy, providing a variety of products and services that contribute to economic development in District 3 in particular and HCMC in general VCB Tan Dinh is constantly growing in the scale of operations, improving service quality, and renewing equipment to meet the increasing demands of customers Vietcombank Tan Dinh is also a center for international payment, foreign currency trading, credit, and card payment, always been a bank with a long history of business activities in the Ho Chi Minh city
With the motto "Always bring success to customers", VCB Tan Dinh with a team of dynamic, enthusiastic, and highly qualified staff always improves, improves quality, and diversifies products and services products and services, expanding the network of activities to serve customers better, to realize the common goal of Vietcombank in particular and commercial banks in general
2.1.2 The organizational structure of Joint Stock Commercial Bank for Foreign Trade of Vietnam – Tan Dinh branch
Vietcombank Tan Dinh allocates each department to do a specific and separate function and task, but there is still close contact and mutual support between the departments It is this association that helps departments to fulfill their roles well and serve customers in the best way In addition, this organizational structure also helps the Board of Directors to control the Bank's operations more effectively, and employees are also more aware and responsible in their work In general, Vietcombank Tan Dinh has an organizational structure that serves its business well
Joint Stock Commercial Bank for Foreign Trade of Vietnam - Tan Dinh branch includes 01 Board of Directors, 08 departments, and 5 transaction offices
The Board of Directors of Vietcombank Tan Dinh consists of 01 Director and 02 Deputy Directors, which is the place to organize, direct, manage and decide all business activities of the bank At the same time, he is responsible for the business results of the bank
Management of information systems in the bank, information circulation Control all activities of departments to create a clean and honest environment It is a place to provide necessary documents for inspection agencies when required
Figure 2 1: Organization chart of Vietcombank Tan Dinh Branch
(Source: Administration and Human Resources Department)
Maintain official documents, legal documents, and decisions of leaders Proposing ideas to the Board of Directors on personnel management, human resource management, recruitment, and training Prepare statistical reports on salary, number of employees, and human resource management by Vietcombank's regulations
Monitor daily arising accounts, closely check capital activities and ensure effective use of capital Synthesize accounting data, prepare financial statements for each month, quarter and year
There are 5 transaction offices: Transaction Office Tran Quoc Toan, Mac Dinh Chi, Nguyen Dinh Chieu, and Hai Ba Trung, Pham Ngoc Thach Each transaction office is arranged with 8 people: 6 full-time employees and 2 apprenticeship contracts
Carrying out transactions of payment of receipts and payments, SIFT, money transfer by electricity, remittance Foreign exchange trading, an announcement of the SAP exchange rate, forward rate, import and export related operations
Management of import and export is safe, cash collection and payment and valuable papers must be quick and accurate Detect and handle counterfeit money, fake checks lost checks according to regulations Monitor import and export, preserve collateral and valuable documents according to regulations
Corporate Client Room, Retail Client Room
Establish customer relationships and maintain unceasingly open customer relationships across all business activities Developing customer policies, building target markets, target customer segments, and customer care policies Deploying Banking Marketing Strategies
VCB Tan Dinh arranges staff evenly throughout the branch, assigns and assigns tasks according to appropriate professional expertise, and complies with Vietcombank's regulations, meeting management needs and ensuring for the branch's business operation apparatus is conducted efficiently and quickly
2.1.3 Overview of the business performance of Joint Stock Commercial Bank for Foreign Trade of Vietnam – Tan Dinh branch in the period 2017 - 2021
Table 2 1 Business products at VCB Tan Dinh Products for individual customers
Account Corporate accounts Correspondent banks
Card Payments and currency management
Foreign exchange and capital markets
Personal loans International payments Trade finance
(Source: Tan Dinh branch sales department)
E-banking services on mobile phones:
VCB service - SMS B@nking is a banking service via SMS mobile phone, helping customers to transact with the bank 24 hours x 7 days by texting according to the prescribed syntax via the 6167 switchboards
The VCB SMS-B@nking service has 3 main groups of features:
Customer support 24/7 to look up the following information via text messages with the syntax sent to call center 6167: Account balance, the limit of all credit cards, information of the last 5 transactions and details of each transaction, information on exchange rates, interest rates, ATM locations, transaction points of VCB
Top-up for prepaid mobile subscribers (VCB-eTopup): applied to Vinaphone, Mobifone, and Viettel mobile networks via text messages sent to the 6167 switchboards
Receive proactive messages (active SMS): receive notifications from VCB whenever there is a change in account balance Debit transactions to the current account by the customer: withdrawal, money transfer, payment, and transactions automatically collected by VCB such as service fee collection, loan interest collection, loan principal, collection by collection order, … Transactions that credit the current account are transferred by the customer from his other payment account to or by another individual/organization that transfers money to the customer's account and credit card spending transactions
Analyzing the situation of developing e-banking services at Joint Stock
2.2.1 Number of customers using electronic banking services
Table 2 3 Number of customers using e-banking services at VCB Tan Dinh
(Source: Vietcombank Tan Dinh's annual report)
After 21 years of operation, Vietcombank Tan Dinh has actively contributed investment resources to the district's socio-economic development programs and goals, providing a full range of payment products, services, and utilities, modern banking for the residence there The number of new customers at the branch has increased steadily over the years, ranging from 3% to 8% Through the above figure, it can be seen that VCB Tan Dinh is increasingly creating trust in customers The branch implements preferential policies for new customers such as free card opening, no account management fees, free e-banking services for the first 3 months of use, and programs for customers savings Of the total number of new customers, customers with CIF opening a demand account for 65%, and the rest are customers opening a savings book With its efforts, VCB Tan Dinh has increasingly affirmed its position in the locality as well as in the whole system, retaining old customers with long-term association with VCB, and attracting a large number of new customers over the years
Table 2 4 Number of cards issued at VCB Tan Dinh branch
Domestic card 8.652 12.968 14.455 17.456 20.789 Growth (%) (3,52%) 49,88% 11,47% 20,76% 19,09% International Debit
(Source: Vietcombank Tan Dinh's annual report)
In general, the number of issued cards is constantly increasing over the years In
2017, the number of domestic cards decreased slightly by 3.52% compared to 2016 But by 2018, the number of these cards reached 12,968 cards with a sudden growth rate of 49.88% From 2017 to 2021, the growth rate of domestic cards is 11.47%, 20.76%, and 19.09%, respectively Domestic cards account for a relatively large proportion (over 80%) of the total number of cards issued, showing that residents in District 3 still prefer to use this card compared to other cards because in addition to the withdrawal function At the ATM, it can also make online payments, transfer money to other account numbers, and especially without card management fees, low withdrawal fees at other banks' ATMs The number of domestic debit card sales at VCB Tan Dinh increased mainly among individual customers from high schools and companies with salary payments via accounts Issuing cards in the form of salary payments via an account is quite fierce competition among commercial banks because this is a highly effective product and service due to taking advantage of cheap mobilized capital and VCB Tan Dinh is facing strong competitors such as Agribank, BIDV, Vietinbank
2.2.2 Proportion of using products of e-banking services
Vietcombank Tan Dinh is in the general trend of the storm of e-banking development Most of the e-banking services have been deployed at the branch and received very positive results in recent years E-banking products including Internet Banking, Phone Banking, Mobile Banking, SMS Banking, VCB Money, VCB eTopup, VCB BankPlus bring many conveniences to customers when using these e-banking services
Table 2 5 Proportion of using products of e-banking services at VCB Tan Dinh
(Source: Vietcombank Tan Dinh's annual summary report)
With the data in Table 2.5, we can see that the indicators of e-banking services: SMS, Mobile banking (including VCB mobile, Mobile Bank plus), and Internet banking have grown strongly over the years With SMS service from 2017 to 2021, the growth rate is quite stable at 20%-25 But in the last two years, the development speed of this service seems to slow down, specifically in 2020 reaching 17,049 targets, equivalent to 12.14%, in 2021 only slightly increased compared to the number achieved in 2020 is 0.90% The growth rate for Internet banking is similar to that of SMS banking, which is quite stable from the period of 2017 -to 2020, but the growth rate is higher, ranging from 25% to 39%, and in 2021, it will reach 6,867 growth targets slightly 4.73% compared to 2020
Because of the pressure to fulfill the central target, the substance of whether this growth will bring 100% efficiency to customers using the service is an issue that needs to be answered by the Branch soon This problem poses a real effective and sustainable development and a problem that needs to be directed to commercial banks in general and Vietcombank Tan Dinh in particular
2.2.3 Revenue from transactions of e-banking services
Income from modern banking services of VCB Tan Dinh can be seen the table below, we can see how much revenue from e-banking services as compared to total income from modern banking services In there:
- Over-the-counter payment services: Domestic money transfer with the same system and other non-cash systems, remittances, international payments
- Other services include guarantee services, treasury services (cash deposit and withdrawal services, cash counting services, overtime fees ), insurance services
- Services from technology devices: SMS, Mobile Banking, Internet Banking, Mobile Bank plus
Table 2 6 Revenue from non-cash payment services at VCB Tan Dinh
Payment service at the counter
(Source: Vietcombank Tan Dinh settlement report)
Contributing to the growth of total service revenue were mainly thanks to over-the- counter payment services and e-banking services (card services, SMS banking services, mobile banking, Internet banking) Specifically, the total revenue from the two payment channels at the counter and electronically from 2017 to 2021 has a growth rate of 30.83%, 45.69%, and 68.84%, respectively In 2019, income from these two payment channels reached VND 11.35 billion, an increase of 32.59%, a slight increase of 18.15% in 2021 We see that the income of the over-the-counter payment channel has a proportion of 21%-23% in 5 years, not much change For card services and e- banking services, there have been quite positive changes With the proportion of 10.40% and 9.78% respectively in 2017, by 2018 the proportion of income from cards increased to 15.01%, income from e-banking services is 16.94% Meanwhile, income from other services, including treasury services, accounted for a fairly high proportion in 2017 at 56.93%, and this rate decreased to 46.70% in 2018 And in 2021, revenue from e-banking services is gradually contributing significantly to the branch's total service revenue with a proportion of 28.44% From the above figures, we can see the shift of profits from traditional banking services to e-banking services Besides the growth in sales of Internet banking, Mobile Banking, SMS Banking, money transfer, and payment activities at ATM and POS systems also achieved good results, reflecting the rather positive development of banking services electronic goods at Tan Dinh branch In 2018, 2019 VCB launched e-banking products and services with many modern and high utilities and applications 2020, 2021 is the year that VCB is gradually improving, providing more utilities for customers to use e-banking services Promote advertising and product marketing, attract many new customers, cross-sell products to existing customers, so many e-banking products and services have free policies or very low fee rates This explains why the number and value of non-cash payment transactions in 2021 doubled compared to 2020 but the branch's income from this service in the year only increased slightly by 6.53 % With the new fee schedule issued at the beginning of March 2018, it is expected to direct customers to use e- banking services more, gradually change the habit of paying in cash among the population, contributing to boosting income from e-banking services at the branch increase in the coming years.
Evaluation of the current situation of developing e-banking services at Joint
Figure 2 2: Achievements in developing electronic banking services
(Source: Vietcombank Tan Dinh's annual summary report)
The development of e-banking at the branch in the past 5 years from 2017 to 2021 has grown steadily over the years The number of new customers using e-banking services at the branch increased from 11,448 customers in 2017 and 14,304 customers in 2021 The average number of customers increased by 5% a year with major customers increasing sharply in 2019, during the outbreak of the epidemic and social changes affecting the demand for e-banking services at the Branch In the period from
2017 to 2021, there is a clear strong growth in customers using Mobile Banking from
924 customers in 2017 to 6495 customers in 2021 The number of customers increased by 703% compared to 2017 on average The annual growth rate of 140.6% shows the outstanding development in the digital transformation in the aspect of Mobile Banking Internet Banking marked a good growth over the years from 2017 with 3,080 customers increasing to 6,867 customers growing at 223% in 5 years, the average growth rate of 44.6% annually In 5 years of implementing new spearhead services of the branch, it has achieved stable growth over the years, showing the effectiveness in
Achievements in developing electronic banking services
New customers using E-Banking service Mobile Banking Internet Banking implementing and implementing digital transformation with the foundation of building customer habits, using services such as Internet Banking, Mobile Banking from the bank for customers to experience and form new service usage habits
In recent years, the achievements of the Industrial Revolution 4.0 have been strongly and widely applied to core banking services (payment, credit, savings), payment on mobile devices has grown strong yearly; Many banks have over 90% of transactions on digital channels In addition, banking services have crept into every corner of life, combined with fields and industries to build a comprehensive and intelligent ecosystem The application of digital technology helps to change the bank's face, creating many new values such as better service quality, many innovative and safe services, providing a better customer experience; reducing operating costs for banks, creating breakthroughs in banking business At Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Tan Dinh Branch has continuously grown in terms of the number of customers and the quality of digital banking products has improved continuously over the years Accordingly, in July 2020, Vietcombank launched VCB Digibank application for individual customers as well as completed the implementation of Digital Banking for corporate customers VCB Digibank has helped provide seamless, unified experiences for customers on electronic means such as computers (PC/Laptop) and mobile devices (phone/tablet) with millions of transactions per day brings quick convenience to customers as well as business efficiency for branches in the context of COVID-19 pandemic restricting direct transaction channels Responding to the requirements of distance and blockade due to the COVID-19 epidemic, in June 2021, Vietcombank Tan Dinh continues to deploy the online account opening service with an online identity solution (EKYC) to help customers open accounts account at any time, anywhere, not limited by space and time Customers can open an account, choose an account number, register to use the application, issue a card in just a few minutes on the application Withdrawal by QR code at ATM is a service that allows customers to take out cash at some ATMs of Vietcombank by scanning QR code using VCB Digibank application without using a card The bill payment utilities that have been deployed before continue to be expanded by Vietcombank, customers can pay bills for electricity, water, telephone, internet, hospital fees, tuition fees, insurance , money transfer securities, train tickets, plane tickets, movie tickets
Through analyzing the current situation of the development of e-banking products and services at the VCB Tan Dinh branch in the period of 2017 - 2021 as well as the time of the product and service provision process It can be commented that e- banking products and services of the VCB Tan Dinh branch have had positive changes in both width and depth, growing in both quantity and type, coupled with increased service quality However, the development of e-banking services at the branch still has limitations that need to be overcome:
Firstly, it has not yet made a clear difference in e-banking products and services The quantity and quality of e-banking products and services of VCB have been improved, creative, and diversified But these services do not really guarantee long- term competitiveness The market for e-banking products is becoming more and more saturated when most banks are aware and understand the importance of applying science and technology in product development Card products, Internet banking, SMS banking, Mobile banking are all researched and developed by commercial banks The most obvious difference is not only reflected in the quality of products and services (product features, transaction processing speed ) but also in service fees, solutions for product promotion, and marketing
Secondly, e-banking services at the Tan Dinh branch develop unevenly In the years 2017 - 2021, the VCB Tan Dinh branch is quite favorable for ATM Banking service, reflected in the strategy of issuing free ATM cards with many promotions It was not until 2021 that Mobile banking, Internet banking, and Mobile bank plus services were focused on marketing by the Branch, losing the number of customers because they had switched to using other banks' services
Thirdly, service quality is not high: Service quality is reflected in the utility that e-banking services bring The withdrawal limit is 5 million VND/time, ATM transfer limit is 100 million VND/time… Although the introduction of limits aims to enhance the safety of e-banking transactions, low limits are also annoying for customers when using the service because they have to repeat the withdrawal and payment many times for the same transaction and each time will cost an extra fee
Service quality is also reflected in the transaction time, although Internet Banking and Mobile Banking services are fast and convenient, interbank transfer transactions are limited in time transaction time Out-of-network transfers are before 4 pm, transfers after this time must be carried over to the next business day The processing time of the system at the end of the day is relatively long, and congestion and system failures occur frequently, which also affects the quality of e-banking services
The bank staff's ability to answer and advise not in time to use the service is still limited When customers contact the hotline, many cases are not answered, consulted, or guided, but cannot grasp the information provided by the bank staff
Payment with domestic cards is still more inconvenient than with international cards such as transmission errors, a password must be used, etc There is still a situation where the unit accepts tolls, so customers are afraid to pay via card Card payment does not have a strong enough policy to encourage The processing time for complaints in card transactions is long, making customers unhappy
Fourthly, the limitation in the distribution channel of e-banking: The system of branches, transaction offices or ATMs, and POS points of the VCB Tan Dinh branch, although it has been significantly invested and developed in recent years, is still mainly focused on the development concentrated in neighboring districts but not widely distributed in all districts of the city Therefore, people in rural areas or sparsely populated areas have little opportunity to contact banking services or customers of the VCB Tan Dinh branch and also face a lot of inconveniences when coming to areas the population as above
Fifthly, customers are still concerned about the security and privacy of e- banking: So far, many banking websites have been hacked and faked, and online payment systems are still in a research project on the level of danger when mobile devices suffer from many vulnerabilities, leading to insecurity and information safety And according to the author's research in the media, the VCB website is currently being faked the most, confusing customers In addition, the ATM system of some banks such as Dong A, Agribank has been fitted with devices to scan information on cards and cameras to scan customers' access passwords with small sizes, making it difficult for customers to receive them know It is these things that have affected the psychology of customers when using e-banking services
E-banking transactions still rely heavily on traditional archival documents, and it is not possible to digitize all transaction documents In addition, the use of electronic signatures and electronic certificates has not been widely disseminated and has not shown any advantage over conventional signatures
Firstly, the legal environment: The Law on Electronic Transactions along with the decrees guiding the law has created a legal framework governing electronic transactions in general and electronic banking transactions in particular However, when there is a dispute or complaint between the bank and the customer, although the consumer protection law has been enacted, when a dispute arises, most customers are disadvantaged The reason is that the newly enacted law has not come to life, besides, the rights and obligations, responsibilities of banks, customers, and third parties as well as dispute settlement processes and procedures have not been regulated clearly yet and specifically limit the development of e-banking services
Secondly, the economic environment: The economic growth rate in Ho Chi Minh City has always remained at a good level, but the development is not uniform