(Luận văn thạc sĩ) improving customer service quality management at tien phong commercial joint stock bank tpbank

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

MASTER IN FINANCIAL MANAGEMENT

IMPROVING CUSTOMER SERVICE QUALITY MANAGEMENT AT TIEN PHONG COMMERCIAL JOINT

STOCK BANK - TPBANK

Graduate student: NGUYEN THI HONG

HANOI, 2021

Thesis Title:Improving customer service quality management at Tien Phong

Commercial Joint Stock Bank - TPBankPages: 81

University：International school - Vietnam national university, Hanoi

Graduate School：Master in financial management

Degree：Master

Graduate Student:Nguyen Thi Hong

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

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

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

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

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

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

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

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

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

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

I would like to thank all my friends, colleagues and family who have always supported, encouraged and created the best conditions for me to complete this thesis.

Thank you!

Author

1.3 Research objectives and research questions 9

2 CHAPTER 2: Literature Review

2.3 Factors of customer servicequality affecting customer satisfaction and

2.4 Customer satisfaction and customer loyalty 22

3 CHAPTER 3: Methodology

4 CHAPTER 4: Research Results

4.2.2 Reliability factor of Live Bank of TPBank 39 4.2.3 Responsiveness of Live Bank of TPBank 41 4.2.4 Staff quality of Live Bank of TPBank 42

4.3 The evaluation of customer satisfaction and customer loyalty of Live

5 CHAPTER 5: Conclusion and Recommendation

LIST OF TABLES

Table 4.3: Evaluation of tangibles of Live Bank of TPBank 38 Table 4.4: Evaluation of reliability of Live Bank of TPBank 39 Table 4.5: Evaluation of responsiveness of Live Bank of TPBank 41 Table 4.6: Evaluation of staff quality of Live Bank of TPBank 42 Table 4.7: Evaluation of easy to use of Live Bank of TPBank 44 Table 4.8: Evaluation of customer satisfaction of Live Bank of TPBank 46 Table 4.9: Evaluation of customer loyalty of Live Bank of TPBank 47 Table 4.10: Reliability test of tangibles factor

49

Table 4.11: Reliability test of reliability factor 49 Table 4.12: Reliability test of responsiveness factor 50 Table 4.13: Reliability test of staff quality factor 50 Table 4.14: Reliability test of easy-to-use factor 51 Table 4.15: Reliability test of customer satisfaction factor 51 Table 4.16: Reliability test of customer loyalty factor 51 Table 4.17: EFA result for customer satisfaction 52

Table 4.19: EFA result for tangibles, reliability, responsiveness, empathy, easy to use 53

Table 4.21: Multiple linear regression analysis (Model 1) 55 Table 4.22: Multiple linear regression analysis (model 1, model 2, model3) 58 Table 4.23: Multiple linear regression analysis (Model 3) 60

Chapter 1 Introduction 1.1 Background of the study

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

1.2 Rationales

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

customers Live Bank services which are offered by TPBank are innovativebanking services in Vietnam It is described like a small bank‟s branch butwithout the employees Instead of that, the bank relies on the new technologies

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

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

of doing business, TPBank does not develop any assessment of customerservice performance and quality for Live Bank Behind of that, Vietnamesebanking system consists of 31 commercial banks and the competition ishappened not only in the area of competitive interest rate but also those who areable to deliver excellent customer service quality to the customers The bankswith low customer service quality receives adverse impacts such as loweredcustomer satisfaction and loosing current customer base

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

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

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

It is denoted that the nature of the customer service is about the customers‟ feeling and perception of the service performance Different customers may have different feeling and perception and therefore they have different

assessment of customer service Customer service is the way that the

organizations to meet the customers‟ needs and demands and the higher the customer satisfaction, the better the customer service In this context, the

customer assessment of customer service is subjective matter and different services may have different customers‟ expectation of the service performance

1.3 Research objectives and research questions

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

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

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

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

1.4 Scope of the study

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

1.5 Significance of the study

By conducting this study, the responsible persons in TPBank understand currentperformance of customer service designed for Live Bank services Behind ofthat, they get update with the performance of factors represented for totalservice quality, including tangibles, reliability, responsiveness, assurance, andempathy The combination of these factors results the overall performance ofcustomer service quality Other researchers can utilise the research results tomake relevant discussions of their owned findings

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

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

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

customer service In summary, customer service is very important to TPBankand it contributes directly to the bank development throughout better customerretention By keeping the customer service at high level in combination withattractive physical asset, the bank can keep the customers in using Live Bankservices.

1.6 Structure of the study

There are five chapters that are developed in this study

Chapter 1 Introduction

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

Chapter 2 Literature Review

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

Chapter 3 Methodology

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

in the chapter

Chapter 4 Research Results

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

Chapter 5 Conclusions and Recommendations

The last chapter summarizes the findings from previous chapters Somerecommendations are proposed to help TPBank further improves their customerservice quality in Live Bank services

Chapter 2 Literature Review 2.1 Customer service

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

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

in the way of integration between service innovation and customer valuecreation in order to maximize customer satisfaction with banking services Thebanks are required to provide simplified, standardized, and technology-ledcustomer service process for the higher provision of customer convenience,attracting new customers, retaining current customers and unlocking futurebanking profits (Amoako, 2012).In addition, the banks need to reduce waitingtimes for the customers through the avoidance of lengthy customer serviceprocess in order to achieve higher customer satisfaction (Sakwa & Oloko,2014) Behind of that, the banks need to leverage effective marketingcommunication strategies to further improve customer service performance(Zephaniah et al., 2020) Recently, a new wave of adopting new technologiesinto banking operations such as digital banking services and it dramaticallychanges the way of the banks contact with their customers (Mbama,

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

2.2 Service quality

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

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

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

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

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

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

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

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

2.3.1 Tangibles

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

is part of the firm‟s resources Kamasak, 2017) Tangibles are important element

in service sector since it is considered as the input of service production andservice delivery (Schönsleben, 2019) Compared to intangibles, tangibles allowpeople to have direct sensory (e.g taste and smell) and perceived functionalvalues (e.g utility, economic value) (Quest, 2019) Parasuraman et al (1985)considered tangibles as one of service quality dimensions and it was defined asthe physical evidence of a service that consisted of physical facilities, tools andequipment used in service delivery, and the appearance of service personnel

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

in Taiwan and confirmed that tangibles had positive and significant effect oncustomer loyalty Leninkumar (2016) obtained an empirical evidence oftangibles affected positively and significantly the loyalty of 300 customers whowere using the services provided by four leading commercial banks in SriLanka Siddiqui (2011) also found a strong interrelation between tangibles andcustomer loyalty after examining the data inclusion of 100 retail bankingcustomers in Bangladesh In addition, previous researchers also explored theeffect of tangibles on customer satisfaction Rahman et al (2017) found thattangibles had positive and significant impact on customer satisfaction withmobile banking services provided by commercial banks Alafeshat & Alola(2018) dictated that tangibles affected significantly and positively customersatisfaction Moreover, they confirmed that customer satisfaction significantlymediated the effect of tangibles on customer loyalty in banking industry.Customer satisfaction received significant and positive impact from tangibles

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

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

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

2.3.2 Reliability

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

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

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

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

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

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

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

2.3.3 Responsiveness

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

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

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

et al., 2020)

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

et al (2012) measured the customer loyalty in banking and they indicated thatresponsiveness had positive and significant influence on customer loyalty Inaddition, previous researchers also explored the effect of responsiveness oncustomer satisfaction For example,Iberahim et al (2016) found that customersatisfaction with ATM services of the banks was significantly influenced by thedependability and it is one of the characteristics of responsiveness Maleeha2015) informed that when the banks‟ staffs to be responsive to the customers‟needs, customer satisfaction was greatly improved Lau et al (2013) alsoconfirmed that responsiveness was a significant predictor of customersatisfaction with banking services after collecting the evaluation from 119 retailbanking customers in Hong Kong In case study of TPBank‟s Live Bankservices, it is denoted that the customers are able to perform certain bankingservices without the direct support from the employees However, the bankunderstands that Live Bank services are still very new in Vietnam so that a

customer support is established through the online video to be broadcastedbetween the customers and the bank‟s customer support personnel Herein,responsiveness is still required in the service delivery process and how theemployees‟ attitude to resolve the customers‟ problems or inquiries as quick aspossible becomes importance In addition, the responsiveness of performingcertain actions in the machines also decides the customer satisfaction andloyalty with the services Given to above discussion, the effect ofresponsiveness on customer loyalty and satisfaction is stated through twohypotheses below:

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

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

2.3.4 Staff quality

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

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

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

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

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

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

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

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

customer satisfaction through perceived usefulness from the customers In this context, two other hypotheses are developed:

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

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

2.4 Customer satisfaction and customer loyalty

Customer satisfaction is defined as “a feeling that appears on the results of a purchase evaluation which is a comparison between actual perception and expectation” Zaid & Patwayati, 2021, pp.985) Other researchers like Devi &

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

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

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

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

The relationship between the customer satisfaction and the customer loyalty hasbeen highlighted by many researchers in the past According to Supriyanto et al.(2021), customer loyalty is a result of customer satisfaction whether satisfiedcustomers are also loyal to the companies Darmawan et al (2017) provided anempirical evidence of which customer satisfaction had positive and significanteffect on customer loyalty Moreover, when the customer satisfaction level wasincreased by 1 unit, the customer loyalty level will be increased by 0.19 unit.

2.5 Research model and research hypotheses

The eleven hypotheses are extracted from proposed research models:

Tangibles

Reliability

Customer loyalty satisfaction

Staff quality

Easy to use

Figure 2.1: Conceptual Research ModelH1-1: Tangibles affect significantly customer satisfaction with Live Bank

services provided by TPBank

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

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

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

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

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

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

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

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

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

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

Chapter 3 Methodology

3.1 Research approach

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

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

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

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

3.2 Research method

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

Given to that, this study employs quantitative method It is applicable due toquantitative method supports the deductive approach Moreover, quantitativemethod brings data-driven solutions to extract the findings and it reduces thebiases as often found in case of using qualitative method The direction ofquantitative method adheres that the data must be numerical and it drives theprocess of collecting the data In addition, quantitative method is the only option

in case of there are hypotheses and the need of hypothesis validation It is truesince quantitative method allows the researchers to employ mathematical orstatistical analyses and they enable the opportunity of verifying a hypothesiswhether it is accepted or rejected in line with relevant test statistics and the p-value Although, it is perceived that the employment of quantitative methodbrings a concern as it does not bring in-depth information since all findings areproduced from number-based process However, this cost is subtracted by thebenefit as quantitative method can provide quick research results compared toqualitative method and the findings are less biased

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

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

points These points are “strongly disagree”, “disagree”, “neither agree nordisagree”, “agree” and “strongly agree”, in which, “strongly disagree” receivesthe lowest point at 1 while “strongly agree” has the highest point at 5 It meansthe higher point provided by the respondents; the higher agreement level iscaptured When design the survey, the researcher also wants to collect theirdemographic characteristics such as gender, age, education, frequency of usingTPBank‟s Live Bank services, the length of the service relationship with thebank, and the most exciting product provided by TPBank‟s Live Bank services(See Appendix I) The main part of the survey is designed to capture therespondents‟ evaluation of tangibles, reliability, responsiveness, assurance, andempathy as key aspects of customer service quality In addition, this part is alsoused to capture their satisfaction and loyalty level with TPBank‟s Live Bankservices The detail items are highlighted in the table below:

Table 3.24: Items used in the questionnaire

Tangibles The assets used in TPBank‟s Live Bank

TAN1 Siddiquiare visually appealing

(2011),TPBank‟s Live Bank services are

Lau et al.delivered with up-to-date technological TAN2

(2013),equipment

Rasheed etThe statement issued by TPBank‟s Live

TAN3 al (2015)Bank is visually clear

Reliability TPBank‟s Live Bank services are

well-REL1recovered from the errors

I satisfied with the problem handling in

TPBank‟s Live Bank operates well in 24

28

Responsiveness TPBank‟s Live Bank has response

RES1servicing time

TPBank‟s Live Bank has short

The time to resolve my problem in

RES3TPBank‟s Live Bank is quickly

Staff quality TPBank‟s employees provides Live

EMP1 SiddiquiBank services to me best interest at heart (2011),The employees provide promptly notice

EMP2 Lau et al.

Rasheed etThe employees help me to get out of

EMP3

Easy to use It is easy to learn how to use TPBank‟s

ETU1Live Bank services

I do not need to put a lot of metal effort Al-Sharafiwhen interacting with TPBank‟s Live ETU2 et al

The instruction in TPBank‟s Live Bank

ETU3screen is clear and understandable

Customer TPBank‟s Live Bank was satisfying me CS1

satisfaction TPBank‟s Live Bank services are good

Customer I am likely to continue to use TPBank‟s

29

TPBank‟s Live Bank is the best interest

CL3

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

in which the questionnaire is distributed by hand to the customers who are usingLive Bank services To select the right respondents, the researcher stays in theTPBank‟s Head Office located at 57 Ly Thuong Kiet Street, Hoan KiemDistrict of Hanoi City Behind the head office building is the Live Bank counterand it is observed that there are many customers visit this counter to perform thebanking transactions and other banking services After the customers finish theirtransactions, the respondent reaches them and asks whether they are interested

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

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

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

be 20 x 7 or 140 respondents

3.3.2 Secondary data

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

TPBank and the bank‟s Live Bank services are also collected for the purpose ofvalidating the findings from primary data It means the researcher needs tocollect secondary data and it is the reports and the news about this bankingservices provided by TPBank.

3.4 Sampling procedure

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

of the respondents is based on convenience method and the choice of the respondents is random.

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

subject-to-3.5 Data analysis techniques

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

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

“Corrected Item-Total Correlation” and “Cronbach‟s alpha if item deleted” ofeach item (Hoekstra et al., 2018) Before analysing the internal consistency ofeach factor, the researcher expects that each factor has “Cronbach‟s alpha” from0.7 to above and belonging items pass two additional checks The researcheralso needs to conduct exploratory factor analysis (EFA) EFA is only utilisedwith sizable sample and it is validated by “Kaiser-Meyer-Olkin” and “Bartlett‟stest of Sphericity” Amilani et al., 2020) The final output of EFA is a reducednumber of items or the components that are still able to explain for significanttotal variance of the data Koyuncu & Kılıç, 2019) The next data analysis isANOVA or analysis of variance It is employed with the input of bothdemographic variables and the factors after reducing in EFA “Independentsample T-test” and “One-way ANOVA” are two types of variance analysis(Schober & Vetter, 2019) Finally, multiple linear regression is adopted Itmeasures the effects of tangibles, reliability, responsiveness, assurance, andempathy as independent variables on customer satisfaction and customer loyalty

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

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

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

Chapter 4 Research Results 4.1 Overview of TPBank

TPBank was established in 2008 and the bank inherits the financial strengthsand the technological expertise from domestic and foreign groups such as DOJIGold, FPT Group, Mobifone, IFC International Finance Company, etc Thevision of the bank is “to become the leading commercial banks in Vietnam withcutting-edge products and services, to contribute to the prosperity of Vietnam”(TPBank, 2021) To support this vision, the bank has set three core missions ofproviding high quality banking products and services to the customers that arebased on strong technological foundation, creating good working environmentand benefits to the employees, and highly committing to the corporate socialresponsibilities (TPBank, 2021) TPBank also achieved some remarkableawards such as the best working place in Asia in 2020, the best digital banking

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

in 2020 due to the COVID-19 pandemic Before that, the bank had gonethrough four consecutive years when both ROA and ROE were continuouslyincreased

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

so that the customers can perform banking services even after normal workingtime e.g., after 5 pm To better support the customers, each Live Bank counterhas a monitor and it allows to connect the customers with the bank‟s supportingstaffs For example, when the customers face up with a problem, they can pushthe button to connect with the bank‟s staffs online TPBank also upgrades LiveBank every year In 2018, the bank deployed finger print technology in LiveBank counter In 2020, the bank continued to deploy face recognitiontechnology in Live Bank and it significantly reduces the time required to key-inthe PIN code for the customers It is denoted that total time required for facialrecognition is only 3 seconds In the end of 2020, TPBank has about 300 LiveBank nationwide and the average transaction per Live Bank counter is about10,000 every month.

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

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

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

The standard system for evaluating Customer Experience at TPBank LiveBankincludes:

Standard of Machine Room Facilities

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

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

： Ensure information: Complete and update information in accordance withregulations

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

System performance standards

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

： Ensure transactions performed on the machine quickly, accurately,

without errors during the execution

： Ensure smooth, uninterrupted operation of the machine

Criteria for Consultants:

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

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

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

Standards for connection of support switchboards

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

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

Standards of Telephony:

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

： Surrounding area: ensure image, clean

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

Standard of Protection

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

to support normal operation

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

： Duties: comply with working time, ensure the safety of the engine room, activelywelcome customers and consciously preserve the image of the engine room.

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

enthusiastic

4.2 Descritive analysis

4.2.1 Tangibles of Live Bank of TPBank

At first, the author conducts the frequency and the descriptive statistics for three

variables of the tangibles of Live Bank of TPBank Obtained result is presented

below:

Table 4.26: Evaluation of tangibles of Live Bank of TPBank

The assets used in

visually clearSD: Strongly Disagree; D: Disagree; N: Neutral; A: Agree; SA: Strongly Agree

Source: Survey‟s data

When asking the customers about how the visually appealing level of the Live

Bank asset, 26 respondents stated that they strongly disagreed and disagreed and it

is equivalent to 18.5% There were 59 respondents who have neutral attitude and it

consumes 42.1% of total sample size Also, 55 remaining respondents strongly