Factors influencing customer satisfaction with the international payment service the case study of the joint stock commercial bank for investment and development of vietnam (BIDV), binh dinh branch

MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF VIET NAM HO CHI MINH UNIVERSITY OF BANKING HUYNH THI LAM PHUONG Factors influencing customer satisfaction with the International payment service Th[.]

HUYNH THI LAM PHUONG

Factors influencing customer satisfaction with the International payment service: The case study of the

Joint Stock Commercial Bank for Investment and

Development of Vietnam (BIDV), Binh Dinh Branch

BACHELOR THESIS MAJOR: BUSINESS ADMINISTRATION

CODE: 7340101

HO CHI MINH CITY, 2022

HUYNH THI LAM PHUONG

Factors influencing customer satisfaction with the International payment service: The case study of the Joint Stock Commercial Bank for Investment and

Development of Vietnam (BIDV), Binh Dinh Branch

BACHELOR THESIS MAJOR: BUSINESS ADMINISTRATION

CODE: 7340101

SUPERVISOR PHAM HUONG DIEN, Ph.D

HO CHI MINH CITY, 2022

ABSTRACT

Customer satisfaction plays a pivotal role in driving the success and growth

of every business organization in the way that it helps generate repurchase from satisfied customers, forms strong brand loyalty as well as facilitates word-of-mouth marketing

In the context of gradual economy recovery after the 4th outbreak of

Covid-19 in Vietnam, there is huge pressure among banks to increase their charter capital

to enhance financial capacity and revenue diversification in new services Customer satisfaction is crucial because in banking industry where products are highly homogeneous, quality of service is primary factor that influence customer’s choice of bank

The thesis elaborates on “Factors influencing customer's satisfaction with the International payment service: The case study of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Binh Dinh Branch” with the aim of identifying factors behind customer satisfaction in a specific area

of service - International payment at a leading Vietnamese bank - BIDV, assessing level of current performance of BIDV Binh Dinh branch in each area of customer satisfaction determinants and proposing recommendations for improvement This will in turn supports the bank’s long-term growth and brand equity

I declared that all statements and information contained herein are true, correct and accurate to the best of my knowledge and belief

Ho Chi Minh City, May 2022

Name Huynh Thi Lam Phuong

ACKNOWLEDGEMENT

First and foremost, the author would like to express the deepest gratitude to the dedicated supervisor Dr Pham Huong Dien for her great guidance and meaningful advices without which the thesis would not be completed

In addition, throughout the process of doing research, the author has received a lot of attention and valuable support from teachers, friends and relatives Thus, the author would like to take this opportunity to send deep gratitude to:

- All lecturers from Business Administration Department of Banking University based in Ho Chi Minh city who have provided favorable conditions for the author to have the opportunity to enhance knowledge of business administration as well as banking industry and sharpen practical skills during the last four years

- All senior colleagues from the International payment service team at BIDV Binh Dinh for their enthusiastic help with providing necessary data for the thesis

- Parents, relatives and friends for their technical and mental support

Due to limited time, knowledge and research experience, the article can not avoid limitations Therefore, the author would like to receive comments from teachers to better complete her thesis next time

Ho Chi Minh City, May 2022

Name Huynh Thi Lam Phuong

TABLE OF CONTENTS

CHAPTER 1. INTRODUCTION 1

1.1 Research statement 1

1.2 Research Objectives and Questions 2

1.3 Research subject and scope 3

1.4 Research Methodology 3

1.5 Research significance 3

1.6 Structure of the thesis 4

Summary of Chapter 1 4

CHAPTER 2. LITERATURE REVIEW 6

2.1 Concept and Theory 6

2.1.1 Service 6

2.1.2 Service quality 7

2.1.3 Banking service and International payment service 8

2.1.4 Customer satisfaction 10

2.1.5 The relationship between service quality and customer satisfaction……….… 11

2.1.6 Customer satisfaction using international payment services 13

2.2 Previous studies on factors influencing customer satisfaction………13

2.3 Research model and hypothesis 15

2.3.1 Knowledgeable and experienced consultant team 16

2.3.2 Tangibles 16

2.3.3 Responsiveness 16

2.3.4 Convenience 17

2.3.5 Assurance 17

2.3.6 Competitive price 17

Summary of Chapter 2 20

CHAPTER 3. RESEARCH METHODOLOGY 22

3.1 Research process 22

3.2 Research design 23

3.2.1 Data collection 23

3.2.2 Designing questionnaire 23

3.3 Data analysis 26

Summary of Chapter 3 26

CHAPTER 4. DATA AND SITUATIONAL ANALYSIS 28

4.1 Overview of Bank For Investment and Development of Vietnam and Bank For Investment and Development of Vietnam, Binh Dinh branch ………28

4.1.1 Bank For Investment and Development of Vietnam 28

4.1.2 Bank for Investment and Development of Vietnam, Binh Dinh branch 29

4.1.3 Main business activities 30

4.1.4 Organization of apparatus at Bank For Investment and Development of Vietnam, Binh Dinh branch 31

4.2 International payment service at Bank For Investment and

Development of Vietnam, Binh Dinh branch 32

4.2.1 International payment services at Bank For Investment and Development of Vietnam, Binh Dinh branch 32

4.2.2 International payment operation process at Bank For Investment and Development of Vietnam, Binh Dinh branch 35

4.3 Performance of international payment department, at Bank For Investment and Development of Vietnam, Binh Dinh branch during 2017 – 2021 37

4.3.1 Market development 37

4.3.2 Financial performance 38

4.4 SWOT analysis of customer service of the international payment at BIDV Binh Dinh branch 42

4.4.1 Strengths 42

4.4.2 Weaknesses 42

4.4.3 Opportunities 44

4.4.4 Threats 45

4.5 Survey data analysis 46

4.5.1 Customer satisfaction 47

4.5.2 Factors influencing customer satisfaction 47

Summary of Chapter 4 52

CHAPTER 5. CONCLUSIONS AND RECOMMENDATIONS 54

5.1 Conclusions 54

5.2 Recommendations 56

5.2.1 Price 56

5.2.2 Assurance 58

5.2.3 Responsiveness 59

5.2.4 Tangibles 61

5.2.5 Knowledgeable consultant team 62

5.2.6 Convenience 63

5.3 Research limitation and futher study 64

REFERENCES 65

Appendix 1 69

Appendix 2 72

Appendix 3 75

LIST OF ABBREVIATIONS

LIST OF FIGURES

2.1- Factors influencing customer

satisfaction

14

4.1 - Organizational chart of BIDV

Binh Dinh branch

30

LIST OF TABLES

4.1 - Number of international payment

customers at BIDV Binh Dinh branch

36

4.2 - Import - export revenue at BIDV

Binh Dinh branch

37

4.3 - Number of international payment

transactions at BIDV Binh Dinh branch

38

4.4 - Number of international payment

transactions at BIDV Binh Dinh branch,

4.12 - Price competitiveness survey

results

75

CHAPTER 1 INTRODUCTION

1.1 Research statement

Customer satisfaction is critical to success and growth of every business organization in the way that it boosts revenue via repurchase from satisfied customers, forms strong brand loyalty as a fundamental springboard for new customer acquisition and facilitates word-of-mouth marketing Its widely observed that companies such as Amazon, Apple, Starbucks,…which consistently do their best to meet and exceed customer expectations reap sustainable business growth Sam Walton - the legendary founder of the world’s biggest retail chain Walmart once emphasized the importance of customer satisfaction to enabling companies’ competitiveness: “There is only one boss The customer And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

In the context of lockdown removal and gradual economy recovery after the 4th outbreak of Covid-19 in Vietnam, there is huge pressure among banks to increase their charter capital to enhance financial capacity Together with this, there is increasing need for revenue diversification, which is reflected in banks’ shift from deposit service as their primary traditional source of sales to other services including payment, insurance, securities as a new growth driver Within service sector, customer satisfaction plays a crucial role because satisfied customers are likely to stay loyal to their chosen banking services, to try new service offerings and to recommend the bank to other customers

Due to aforementioned reasons, the author decided to write a thesis on

“Factors influencing customer's satisfaction with the International payment

service: The case study of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Binh Dinh Branch” with the aim of

identifying factors behind customer satisfaction in a specific area of service - International payment at a leading Vietnamese bank - BIDV, assessing level of

current performance of BIDV Binh Dinh branch in each area of customer satisfaction determinants and proposing recommendations for improvement This will in turn supports the bank’s long-term growth and brand equity

1.2 Research Objectives and Questions

The thesis aims to achieve the overall objective is to investigate the current situation of the international payment services provided by BIDV Binh Dinh branch in oder to recommend necessary solutions to improving the customer satisfaction First, Thesis provides a brief explanation of customer satisfaction and its common measures, followed by the identification of key factors influencing customer satisfaction Then, present overall current process of customer service in international payment at BIDV Binh Dinh branch Based on that, make an assessment of performance level in each identified customer satisfaction factor As

a result, it points out areas of improvement in current customer international payment service practice at BIDV Binh Dinh branch and propose recommendations to help enhance level of customer satisfaction Specifically, the author aims at three detailed objectives as followed:

To discuss the internal and external factors that influence the satisfaction of the customers

To propose conceptual framework and some managerial implications to BIDV Binh Dinh Branch to improve their services in oder to level up the customer satisfaction

Based on the above objectives, the current study is to answer the following research questions:

How is the situation of the International payment service at BIDV Binh Dinh?

What are the influencing factors of customer satisfaction on the international payment services of BIDV Binh Dinh branch?

How does each factor influence customer satisfaction with the Internaional payment services at BIDV Binh Dinh branch?

What can BIDV Binh Dinh do to improve their customers’ satisfaction?

1.3 Research subject and scope

The subject of research is the customer satisfaction on the international payment service

The scope of research is BIDV Binh Dinh branch in terms of geography and from 2017-2021 in terms of time In 2017 the services was launched for the first time To serve the research, the customers who have been using the services will

be surveyed

1.4 Research Methodology

The research uses the secondary data with analysis and summarization of theories from trusted articles, reports and related studies Also, questionaires are built to survey customers’opinions

Almost all previous studies related to customer satisfaction in international payment service applied quantitative method as core method However, in this thesis, due to the scope of research is BIDV Binh Dinh branch where number of international payment customers is quite limited (only 39 customers), number of samples is small and not sizeable enough to apply quantitative approach Therefore, the author decided to apply qualitative approach for the thesis

1.5 Research significance

As majority of customers of international payment at BIDV Binh Dinh branch are B2B customers possessing high volume transaction, a huge amount of effort should be devoted to customer satisfaction improvement in order to retent these customers as a key source of revenue for this activity This research, via identifying factors that determine customer satisfaction and propose recommendations for service enhancement contribute to the customer retention and loyalty of the company

1.6 Structure of the thesis

The thesis is divided into five chapters:

Chapter 1 Introduction: This chapter provides background information of the reasons for choosing the topic, objectives, scope and methods of conducting the research

Chapter 2 Literarture review: This chapter compares previous studies on factors influencing customer satisfaction as well as introduces the International payment service in general Futhermore, the conceptual framework of factors is built based on the suitability in Vietnam context

Chapter 3 Research methodology: This chapter consists of the overview of the research process, research design and data analysis

Chapter 4 Data and situational analysis: In this chapter, there is the development history of BIDV in general and BIDV Binh Dinh branch in particular, along with the main business activities of this branch Moreover, the International payment operation process and performance of this service are also depicted in details This chapter is aimed at analyze and identify the current situation for each factor influencing the customer satisfaction with the International payment services

at BIDV Binh Dinh branch through survey results and department’s internal documents

Chapter 5 Conclusions and recommendations: This chapter sums up the overall perspective and gives recommendations associated with each factor to imrprove the level of customer satisfaction with the International payment service

at the branch

Summary of Chapter 1

In the context of increasing competitiveness and relatively high homogeneity of products in banking industry, there is the crucial need to create

and build outstanding customer service as a fundamental way to increase customer retention, grow revenue via cross-purchase and purchase up as well

as fuel new customer acquisition via improved brand reputation Therefore, the author would like to write the thesis on factors that determine customer satisfaction in international payment service at BIDV bank

The thesis applies secondary data which is based on multiple previous studies and research Data is collected and analyzed from surveys sent to customers at BIDV Binh Dinh branch during the period of 2017 to 2021 The thesis aims to figure out the situation of the international payment service at BIDV Binh Dinh, influencing factors of customer satisfaction on the international payment services at the branch, salience of impact of each factor

as well as recommendation for improvement

CHAPTER 2 LITERATURE REVIEW

2.1 Concept and Theory

According to Bui Nguyen Hung (2004), "Service is a process consisting

of after-sales activities and front-end activities, where customers and service providers interact with each other The purpose of this interaction is to satisfy the needs and wants of the customer in the way the customer expects, as well

as creates value for the customer.”

According to Nguyen Thuong Thai (2006), the theory of service marketing states that services consist of four basic characteristics: intangible, heterogeneous, inseparable and cannot be stored

First, most services are considered intangible products They cannot be measured in quantity nor test for quality before purchase Given reasons related

to intangibility, the company finds it very difficult to understand how customers perceive the service and assess the service quality

Second, services are heterogeneous, especially those with a high content

of human labor This is because the operation of the service often varies from service providers, from customers, and the quality of service provided is

consistently the same or in other words, subject to the skill of labor providing

it

Third, production and consumption for many types of services are inseparable The quality of the service cannot be produced in a factory and then delivered to customers For services with a high labor content, service quality

is reflected in the interaction between customers and employees of the service provider

Finally, because services are intangible, they cannot be stored, stored, or shipped by both providers and customers Service is a product that is used immediately after its creation and finished immediately, hence it is not possible

to check the quality before delivery, only possible to know after customer's experience and evaluation

Thus, from the above statements, it can be understood that in a general way service is a product of goods but immaterial, creating useful values for individuals or organizations through the capacity of service providers

2.1.2 Service quality

Unlike tangible products, which can be measured by durability indicators and the number of defects (Crosby 1979; Gavin 1983), service is an intangible Therefore, the assessment of service quality often has no specific standards and is generally defined in different ways depending on the research environment

According to Joseph M.Juran (2001), "Quality of service is the suitability of use, which is assessed by the user"

The definition and method of quality assessment that researchers often refer to in their research is the gap between customer’s expectations and perceptions after using the service (Parasuraman, Zeithaml and Berr, 1985, 1988)

In addition, the concept of service quality is the result of customer comparison, created between their expectations of the service and their perception of using that service (Lewis et al Booms, 1983; Gronroon, 1984; Parasuraman et al., 1985, 1988, 1991)

2.1.3 Banking service and International payment service

Currently, there are many different views on banking services, in the research content of the thesis, we can mention some of the following views:

According to Nguyen Chi Trung (2006) "Banking services are understood as banking operations in terms of capital, currency, payment in the way that banks provide activities to meet customers and business’ needs including profit generation, daily life function, high value asset storage as well as collect the difference in interest rates, exchange rates or charges through services"

Meanwhile, according to Ha Thach (2012), "Banking services include all banking operations such as capital mobilization, lending, payment, foreign exchange, etc commercial goods these services are supplied to the economy” And Nguyen Thanh Cong said: “Banking services are all intermediary activities in currency, credit, payment, foreign exchange, etc., of a bank to meet the needs of customers and generate profit”

From the above points of view, it can be seen that in Vietnam there is still no official concept of banking services, but there are still some commonalities Within the research scope of the thesis, we can understand banking services including activities related to money, credit, payment, foreign exchange that banks provide to customers This view is also consistent with that of the World Trade Organization (WTO) and is applied in many developed countries

International payments, also known as cross border payments or global payments, are transactions that involve more than just banks They connect

companies, individuals, banks, and settlement institutions operating in at least two different countries with different currencies that need to be paid (Ryan, 2019) International payment plays such a significantly vital role in a large number of economic activities, such as: export-import goods and services, foreign investment, foreign exchange and international finance Without international payment services, the foreign economic activities have considerable difficulty in existing and developing In contrast, if this services are conducted in quick, safe and accurate way, it will help the circulation of goods – money between buyers and sellers process more smoothly and efficiently There are four main popular international payment methods: advance payment, open account, collection of payment, and documentary credit

 Cash in advance is a payment method in which requires the buyer pays the seller prior the shipment of the goods (Edward, 2002) The cash payment is received before, and independently of, the shipment of goods This method of payment is made either by bank draft or check or through a wire payment to the bank account specified by the seller/exporter

 Open account is a payment method, in which the goods are shipped and delivered before payment is due in international sales The seller ships the goods and sends invoice together with the other documents to the buyer, who is invited to pay the agreed amount on the appointed date into the account indicated by the exporter (Jan, 2004)

 Collection of payment, according to The Uniform Rules for Collections, 1995 Revision, ICC Publication No 522 – URC 522 (Commerce, 1995), means the handling by banks of documents in accordance with instructions received, in order to obtain payment and/or acceptance; or deliver documents against payment and/or against acceptance; or deliver documents

on other terms and conditions In fact, there are two types of collection: clean collection and documentary collection

 Documentary credit, The Uniform Custom and Practice for Documentary Credits, ICC Publication No 600 – UCP 600 (ICC, 2006), credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honor a complying presentation

2.1.4 Customer satisfaction

Kotler - the so-called father of modern marketing defined satisfaction as: “a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations” in his book “Marketing management” (2000) This definition has a lot in common with that by Rai (2012) who regarded customer satisfaction as the net difference between “Customer perception of the service received” against “Customer expectation from the service” In other words, customer satisfaction is a function of perceived performance and customer’s expectation Perceived performance is customer’s assessment of an offering after they experience it For example, in the case of banking service, it is assessment of employee attitude and skill, time, quality service, price, On the other hand, customer’s expectation maybe formed even before they experience

an offering, which is influenced by customer previous interaction with other offering by the same company or similar offering by competitor company, marketing, word of mouth,…

In the context of intensifying competition, customer satisfaction is of increasing significance to companies’ revenue, profit , brand equity and hence their long term growth This was highlighted by Coldwell (2001) in “Growth Strategies International (GSI) based on a statistical analysis of Customer Satisfaction data covering the findings of over 20,000 customer surveys conducted in 40 countries The study concluded that:

 A Totally Satisfied Customer contributes 2.6 times as much revenue

to a company as a Somewhat Satisfied Customer

 A Totally Satisfied Customer contributes 17 times as much revenue as

a Somewhat Dissatisfied Customer

 A Totally Dissatisfied Customer decreases revenue at a rate equal to 1.8 times what a Totally Satisfied Customer contributes to a business

This can be explained by the fact that highly satisfied customers are highly likely to increase their purchase of existing products, to cross purchase other products and to recommend the products to other people In this way, the company can not only enhance their revenue but other profit from satisfied customers because the cost spent on retaining existing customers is lower than acquiring new ones and positive word of mouth is free compared versus marketing campaigns to attract customers

2.1.5 The relationship between service quality and customer

satisfaction

The relationship between service quality and customer satisfaction has been a topic of constant discussion by researchers over the past decades Many studies on customer satisfaction in service industries have been carried out Some authors believe that there is an overlap between service quality and customer satisfaction, so these two concepts may be possible to be used interchangeably

However, through many studies, service quality and customer satisfaction are two distinct concepts Parasuraman et al (1993) said that there are some differences between service quality and customer satisfaction, the main difference lies in the matter of "cause and effect" Zeithalm and Bitner (2000) argued that customer satisfaction is affected by many factors such as product quality, service quality, price, situational factors, and personal factors

Service quality and satisfaction are two different concepts but closely related in service research (Parasuraman et al 1988) Previous studies have shown that service quality is the cause of satisfaction (Cronin and Taylor, 1992; Spreng and Taylor, 1996) The reason is that service quality is related to service delivery, while satisfaction can only be assessed after using the service

Customer satisfaction is a general concept that is achieved once customer’s needs are fulfilled Meanwhile, service quality only focuses on specific components of the service (Zeithaml & Bitner, 2000) Although there

is a relationship between service quality and satisfaction, there are few studies focusing on testing the explanatory level of service quality components for satisfaction, especially for a particular service sector (Lassar et al., 2000) Cronin and Taylor tested this relationship and concluded that perceived service quality leads to customer satisfaction Studies have also concluded that service quality is an antecedent of satisfaction and is a major factor affecting satisfaction

Thus, it can be viewed that service quality is a factor imposing considerable impact on customer satisfaction If a service provider offer customers services that are of high quality and satisfy customer’s needs, that service provider surely has made customers happy and satisfied Therefore, to improve customer satisfaction, it is crucial that service providers focus on improving service quality

In other words, service quality and customer satisfaction are closely related, in which service quality is the primary thing that determines customer satisfaction The causal relationship between these two factors is a key matter

in most customer satisfaction studies If the quality is improved but not based

on the customer's needs, the customer will never be satisfied

2.1.6 Customer satisfaction using international payment services

There are many different definitions of customer satisfaction when consuming a product or service, but in general, customer satisfaction is a emotional and/or cognitive response based on a subjective evaluation of a product or service in relation to prior expectations, actual experiences and outcomes after purchase, while consuming or after consumption International payment service is one of the traditional services of commercial banks This service helps to meet the need to fulfill monetary obligations, arising on the basis of economic and non-economic activities between organizations or individuals of one country and organizations or individuals of other countries,

or between a country and a national organization is usually through the relationship between the Banks of the countries concerned International payment services at commercial banks include many different professional fields such as: payment for import and export of goods, payment of remittances, payment for remittance abroad, payment of foreign loans, issuing foreign guarantees Combining the concept of satisfaction, service concept, international payment service of commercial banks, it is possible to define the concept of Customer satisfaction with payment services International math is

an emotional and/or cognitive response based on a subjective assessment of the relationship between prior expectations, actual experience, and results obtained during and after using an economic activity information provided by the commercial bank to the customer from the time the customer completes the transaction procedures to the time after the transaction is completed

2.2 Previous studies on factors influencing customer satisfaction

Given its importance, companies have made considerable effort to quantify customer satisfaction based on which to enhance their product and service A few common customer satisfaction metrics include Net Promoter Score (NPS), Customer Effort Score (CES), Review These metrics generally take the form of a survey with questions asking customers to rank either in score or level of

agreement with given statements related to the service provided Regarding factors that influence customer satisfaction, there are several typical research and study

There have been thousands of empirical studies about customer satisfaction

As a result, there has been a lot of approach to customer satisfaction as well as many ways to measure customersatisfaction In 2001, Bel and Chiao have stated that product quality, service quality and price are fatal factors that influence the customer satisfaction In the other hand according to Zeithaml and Bitner (2000) proved that customer satisfaction is influenced not only by product and service quality and price but also by situation factors and personal factors According to that theory Zeithaml and Bitner (2000) have developed a customer satisfaction model:

Figure 2.1 – Factors influencing customer satisfaction

Source: Zeithaml and Bitner (2000)

According to Zeithaml and Bitner model (2009), customer satisfaction drivers can be grouped into 02 areas: those controlled by the company and those not controlled by the company The former includes (1) Product quality, (2) Service quality and (3) Price The latter includes situational and personal factors surrounding the customers, which leads to the fact that customer analysis and

segmentation (in various criteria such as needs, income, age, consumption habits,…) are critical to better form a portfolio of target customers and tailor a company’s service packages to each customer group

In Hokanson (1995) study, besides service quality and competitive pricing that were also captured in Zeithaml and Bitner model, other drivers include:

2.3 Research model and hypothesis

In consideration of research and context of BIDV Binh Dinh branch, the author suggests the following factors influencing customer satisfaction with the International payment service The current model that is widely accepted is the SERVQUAL model and is also a reference basis for the author to come up with the research model of the thesis When setting up the model, the author considers the key factors affecting customer satisfaction such as: Knowledgeable consultant team, Tangibles, Responsiveness, Convenience, Assurance, Competitive price In the model, customer satisfaction is dependent variable that is influenced by six

independent variables: Knowledgeable consultant team, Tangibles, Responsiveness, Convenience, Assurance, Competitive price

2.3.1 Knowledgeable and experienced consultant team

Team lead who beyond standard process provides consultancy to customers end-to-end This refers to not only the understanding of customer needs and requirements but also the relationship building with customers as trusted partners This goes beyond following standard process and involves consultancy and partnership with customers end-to-end; from sales contract negotiation in customer’s favor, completion of document sets with high accuracy to avoid rework, selection of suitable payment methods and cargo providers at reasonable cost to resolution of ad-hoc issues

2.3.3 Responsiveness

The bank staffs’ willingness and readiness to provide services and help customers The essence of service is to satisfy customer’s needs Therefore,

customer focus should be the core of every service Given the intensifying competitive financial market that is evolving with more and more service packages and delivery methods, it is critical that service providers maintain razor focus on customers to understand their needs and expectations, based on

which to build quality service plan

2.3.4 Convenience

How convenient the services are presented and provided in terms of extensive correspondent network, bank’s transaction locations, and transaction procedure This includes every element that adds more ease to service users It can be reduced waiting time, flexible operating hours, diverse delivery platform (offline and online), simple process,…

2.3.5 Assurance

The trust in the bank’s services, employees’ specialized skills, and serving attitude as well This refers to trustworthiness which is built via professional staff, dedicated consultant team, bank equity and most importantly, high-level security processes that puts customer data at top priority

2.3.6 Competitive price

Equal or lower charging price for similar services with competitor banks Price is the moneytary reflection of service value It is defined by utility and customer perception of service provided Customers choose what suit them the most and do not necessarily choose the most expensive services Therefore, factors such as customer perception of cost does not impact service quality but does impact customer satisfaction When buying products and services, customers have to pay a certain cost in exchange for the value they need Thus, that cost is called the trade-off to get the desired value from the product

or service If the price is quantified in relation to the obtained value, the customer will have a sense of whether the price competitiveness is

satisfactory or not Only when the customer perceives the quality of the service to be more than the cost of use, the price is considered competitive and the customer will be satisfied On the contrary, customers will show dissatisfaction because they feel they have to pay more than what they get and the price in this case will have a negative impact on customer satisfaction This is the relationship between price quantity, value, and perceived value However, it is the perceived price that is the factor affecting customer satisfaction It is possible to estimate the price spent more than the value received, but customers feel that is reasonable, they will still be satisfied and vice versa These two factors interact with each other depending

on the customer's sensitivity to price as well as the relationship between service users and service providers

The proposed factors and their influences on customer satisfaction with the International payment service at BIDV Binh Dinh are presented in Figure 2.2 below:

Figure 2.2 – Conceptual framework Source: Author’s illustration

This study only focuses on testing the theoretical model, the hypothesis about the relationship between the components of service quality, the price component of the service and the satisfaction of customers using international payment service of at BIDV Binh Dinh branch The topic uses the SERVQUAL scale built by Parasuraman and Wilson as a foundation for the research model

The author hypothesizes the following hypotheses:

H1: When customers evaluate the level of customer understanding of international payment service increases, their satisfaction with that service also increases and vice versa

Customer satisfaction with the International payment service

at BIDV Binh Dinh

H2: When customers evaluate the tangible of international payment service increases, their satisfaction with that service also increases and vice versa

H3: When customers evaluate the quality service of international payment service increases, their satisfaction with that service also increases and vice versa

H4: When customers evaluate the convenience of international payment service increases, their satisfaction with that service also increases and vice versa

H5: When customers evaluate the assurance of international payment service increases, their satisfaction with that service also increases and vice versa

H6: When customers evaluate that the price competitiveness of international payment services increase, their satisfaction with that service also increases and vice versa

Summary of Chapter 2

Based on above-mentioned studies and research, customer satisfaction generally refers to the difference between customer expectation versus perception of products or services It is influenced by such common factors as service quality, convenience, price, good staff, customer expectation,…

International payment service is one of traditional core services of commercial banks It is built to fulfill payment-related requests which include but not limited to money transfer, collection of payment, letter of credit, trade finance,…

Besides, it is worth highlighting that in the area of this service, customer perception can only be assessed during or after service delivery Therefore, customer satisfaction is beyond providing specific service as per customer request and primarily about the manner the whole service fulfillment process takes place

Combining the theory foundation and business context of international payment service, the author identified the list of relevant factors that influence customer satisfaction in international payment area as follows:

CHAPTER 3 RESEARCH METHODOLOGY

3.1 Research process

In fact, there are a lot of study approaches This study will be based on previous case studies to analyze specific situation of International payment services at BIDV Binh Dinh branch In this research, the authors researched through one – on – one interview method Customers’ opinions are collected

in the form of notes as well as audio transcript through completing questionnaires

Firstly, the process starts with secondary research which is based on

multipprevious studies and models to identify factors that influence customer satisfaction Next, the author summarized, compared and created a list of common factors that are predominantly underscored across studies that the

author referred to

Secondly, the process moved to survey to customers who used to and are using international payment service at BIDV Binh Dinh branch The intent

of the survey is to identify what are factors that influence customer satisfaction based on the ranking and detailed feedbacks on each factor by surveyed respondents

Thirdly, the author proceeded with the collection, processing and analysis of data from surveys responded Finally, based on analysis of data together with findings gained from previous studies, the author identified factors that influenced customer satisfaction, how each factor makes an impact

on customer experience and hence, how to improve quality of each factor in international payment service at BIDV Binh Dinh branch

3.2 Research design

3.2.1 Data collection

This thesis research includes secondary data source For this data type, the author has the data collection method to get the most honest and reliable data source for the research

Secondary data is the available and widely known form of data, namely internal secondary data and external secondary data Internal secondary data means data collected by each company for financial purposes or for reporting marketing activities External secondary data is described as data collected by external sources such as government publications, company websites, books, articles… The secondary data is found through the Internet sources or available information in annual reports via commercial banks’ websites, banking review journals

Part 3 are open questions that require customers to provide personal recommendations to improve the international payment service quality at BIDV

In this questionnaire, Part 2 consists of 28 variables in total Scale is used to measure observed variables, from 1: Completely agree; 2: Agree; 3: Neutral; 4: Disagree; 5: Strongly disagree Based on the theoretical basis,

previous studies combined with preliminary research and official research, the author proposes the components of the official scales used to measure specifically as below:

+ The scale of assurance includes 4 observational factors:

As 1 BIDV gives customers peace of mind when transacting

As 2 The behavior of international payment staff creates more and more trust for customers

As 3 International payment staff demonstrate proper courtesy to customers

As 4 International payment staff have solid professional knowledge and skill

+ The scale of responsiveness consists of 4 observed factors:

Res 1 BIDV staff always serve customers quickly and on time

Res 2 BIDV staff are always ready and enthusiastic to help customers

Res 3 BIDV staff always notify customers when the service is performed and completed

Res 4 BIDV owns a portfolio of international payment products that meet most of the needs of customers

+ The scale of Convenience includes 3 observational factors:

Con 1 Time on transaction and document processing as requested Con 2 Convenient transaction location

Con 3 The staff always create the most favorable conditions for customers to transact

+ The scale of Knowledgeable consultant team consists of 4 observable factors:

Ct 1 The Bank always listens to your comments

Ct 2 International payment service staff regularly contact customers to understand their needs and requests

Ct 3 BIDV regularly organizes diverse loyalty programs for customers

Ct 4 BIDV regularly organizes seminars and business meetings to share information and listen to customers' opinions on their services

+ The scale of tangibles includes 7 observational factors:

Ta 1 BIDV's facilities are modern and fully equipped

Ta 2 BIDV staff dress code is neat, polite and professional

Ta 3 BIDV's working time is very convenient for customers to come and transact

Ta 4 BIDV's offices are located at central locations, with large street frontages, which is makes it highly accessible to all customers

Ta 5 BIDV has a wide network of branches

Ta 6 BIDV’s process and procedures of international payment services are very simple and fast

Ta 7 Forms are presented with great clarity, simplicity and ease to understand

+ The scale of price competitiveness includes 3 observational factors:

Pc 1 Reasonable international payment service fee

Pc 2 Competitive trade finance lending rates

Pc 3 Good exchange rate for foreign currency

The target of survey is old and existing B2B customers using international payment services at BIDV Binh Dinh branch The reason for aiming at B2B customers is due to their lion share of customer group (90%) of international payment department

3.3 Data analysis

The author based on collective results from surveys to explore the situation: Firstly, which factors are ranked highest by customers, as per collective percentage of respondents agreeing to strongly agreeing

Secondly, which factors are ranked lowest by customers, as per collective percentage of respondents disagreeing to strongly disagreeing

Thirdly, within factors that are ranked the highest, which areas are the best and which ones have room for improvement, as per level of agreement/disagreement from customers

Finally, within factors that are ranked the lowest, which areas are lowest as per level of agreement/disagreement from customers

Summary of Chapter 3

The research adopts secondary data based on previous studies on customer satisfaction, service quality and factors that influence customer satisfaction Research design takes place through three following steps:

Data collection: This begins with the design of questionaire The author bases on selected customer satisfaction determinants to build questions for customer assessment This is followed by release of surveys via email and

direct transfer by international payment staff to around 39 business customers

who used to or and are using international payment service the branch

Data processing: Then, the collected data will be input to an Excel model for calculation

Data analysis: Finally data is presented in a way that shows weighted average score of each factor Based on this, the author can summarize the situation geared to customer satisfaction with each factor

CHAPTER 4 DATA AND SITUATIONAL ANALYSIS

4.1 Overview of Bank For Investment and Development of Vietnam and

Bank For Investment and Development of Vietnam, Binh Dinh branch

4.1.1 Bank For Investment and Development of Vietnam

BIDV was founded on 26 April 1957 under the initial name of Bank for Construction of Vietnam The Bank for Construction of Vietnam allocated capital for building industrial facilities and construction projects to serve national welfare and people’s livelihoods, contributing to changing the face of North Vietnam The Bank and the Vietnamese people worked together to complete the tasks of construction in wartime, supplied capital for air defense projects, traffic projects and relocation of important industrial factories

In the period 1975 – 1981, the Bank joined to renovate economic facilities in the South and develop new infrastructure after the war The bank provided capital for industrial, agricultural, transportation, public welfare projects, and key projects critical for the national economy

On 24 June 1981, the Bank for Construction of Vietnam was transferred from the Ministry of Finance to the State Bank of Vietnam under the new name

Bank for Investment and Construction of Vietnam In the period 1981 - 1990,

the Bank for Investment and Construction of Vietnam improved operational mechanism for continued development This was also the period when the bank made strong movements in line with the national renovation in general and the banking sector in particular, progressively becoming one of the leading specialized banks in the country The bank also directly provided loans to businesses, progressively transforming into a commercial bank according to market mechanism BIDV made significant contributions to the country’s innovation during this period The bank ensured working capital for