The current situation of the development of electronic banking services at vietnam joint stock commercial bank for industry and trade,graduation thesis

STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty GRADUATION THESIS THE CURRENT SITUATION OF THE DEVELOPMENT OF ELECTRONIC BANKING SERVICES AT VIETNAM JOINT STOCK COMMERCI

STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty

GRADUATION THESIS

THE CURRENT SITUATION OF THE DEVELOPMENT OF ELECTRONIC BANKING SERVICES AT VIETNAM JOINT STOCK

COMMERCIAL BANK FOR INDUSTRY AND TRADE

Student : Tran Linh Trang Student ID : 16A7510261

Lecturer : Mrs Nguyen Thi Minh Hang

Hanoi, May 2017

STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty

GRADUATION THESIS

THE CURRENT SITUATION OF THE DEVELOPMENT OF ELECTRONIC BANKING SERVICES AT VIETNAM JOINT STOCK

COMMERCIAL BANK FOR INDUSTRY AND TRADE

Student : Tran Linh Trang Student ID : 16A7510261

Lecturer : Mrs Nguyen Thi Minh Hang

Hanoi, May 2017

DECLARATION

I hereby declare that my thesis entitled “The current situation of the development of Electronic banking services at Vietnam Joint Stock Commercial Bank for Industry and Trade” is entirely the result of my own work I have faithfully and accurately cited all my sources, including thesis, report and unpublished data, as well

as any other media, such as the Internet, letters or significant personal communication

ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my supervisor Mrs Nguyen Thi Minh Hang for her useful guidance, practical advice, and insightful comments on my work Without her support and encouragement, this thesis would not have been possible

I also wish to manifest appreciation to all of my lecturers at Banking Academy

of Vietnam, who have provided me such precious knowledge and gave me the golden opportunity to do this wonderful thesis

Finally, I would also like to thank my parents and friends who helped me a lot

in finalizing this project within the limited time frame

TABLE OF CONTENTS

INTRODUCTION 1

CHAPTER 1: LITERATURE REVIEW 3

1.1 Electronic banking overview: 3

1.1.1 Electronic banking definition: 3

1.1.2 Characteristics of Electronic banking: 3

1.1.3 Classification: 4

1.1.3.1 Automatic Teller Machine – ATM: 4

1.1.3.2 Internet banking: 4

1.1.3.3 Telephone banking: 5

1.1.3.4 Mobile banking: 5

1.1.3.5 Home banking: 6

1.1.3.6 Kiosk banking: 6

1.1.3.7 Call center: 6

1.2 Developing Electronic banking services at commercial banks: 7

1.2.1 The definition of developing E-banking services: 7

1.2.2 The need of developing E-banking services at commercial banks: 7

1.2.2.1 The role of E-banking services: 7

1.2.2.2 The growth of Internet and electronic transactions: 7

1.2.3 Criteria to evaluate the development of E-banking services: 8

1.2.3.1 Criteria to assess the development of quantity: 9

1.2.3.2 Criteria to assess the development of quality: 9

1.3 Summary: 10

CHAPTER 2: THE CURRENT SITUATION OF ELECTRONIC BANKING SERVICES AT VIETINBANK 11

2.1 Overview of VietinBank: 11

2.1.1 The history of VietinBank: 11

2.1.2.The mission, vision, core values and business philosophy: 12

2.1.3 Organizational structure: 13

2.2 VietinBank’s business results in recent years: 14

2.2.1 The process of increasing charter capital at VietinBank: 14

2.2.2 VietinBank’s business results in period 2012-2016: 15

2.3 The current situation of the development of E-banking services at VietinBank: 16

2.3.1 The process of adopting information technology at VietinBank: 16

2.3.2.Types of E-banking services provided at VietinBank: 17

2.3.2.1 Internet Banking: 18

2.3.2.2 Mobile Banking: 19

2.3.2.3 Momo electronic wallet: 20

2.3.2.4 Contact Center: 20

2.3.3 Assessment of the current situation of the development of electronic banking services at VietinBank: 21

2.3.3.1 Assess the development of quantity: 21

2.3.3.2 Assess the development of quality: 25

2.4 Achievement and limitations in the process of developing the electronic banking services at VietinBank: 30

2.4.1 Achievements: 30

2.4.2 Limitations and causes: 31

2.4.2.1 Limitations: 31

2.4.2.2 The cause of limitations: 32

2.5 Summary: 34

CHAPTER 3: SOLUTIONS FOR DEVELOPING ELECTRONIC BANKING AT VIETINBANK 35

3.1 Solutions for developing the electronic banking service at VietinBank: 35

3.1.1 Enhancing product promotion: 35

3.1.2 Improve the quality of products and service: 36

3.1.2.1 Simplify the interface of the website and the use of services: 36

3.1.2.2 Diversify product categories: 37

3.1.2.3 Improve the quality of customer service: 37

3.1.3 Enhance personnel quality: 38

3.1.4 Advancing security systems and risk management systems: 39

3.2 Summary: 40

CONCLUSION 41

LIST OF ABBREVIATION

VietinBank Vietnam Joint Stock Commercial Bank for Industry and Trade

E-Banking Electronic Banking

ATM Automatic Teller Machine

ID Identification

PGBank Petrolimex Group Commercial Joint Stock Bank

BIDV Joint Stock Commercial Bank for Investment and Development of

Vietnam Agribank Vietnam Bank for Agriculture and Rural Development

MHB Mekong Delta Housing Development Bank

NPL Nonperforming loan

POS Point of Sale/ Point of service

GSM Global System for Mobile Communications

VCB Joint Stock Commercial Bank for Foreign Trade of Vietnam

EVN Vietnam Power Group/ Vietnam Electricity

ACB Asia Commercial Bank

IT Information Technology

IDG International Data Group

IPS Intrusion Prevention System

VIP Very Important Person

ASEAN Association of South-East Asian Nations

IR Interest rates

LIST OF FIGURES

Figure 1.1: Vietnam Internet users in 2011-2016 8

Figure 2.2: Organization chart of VietinBank 13

Figure 2.3: VietinBank’s Charter Capital in 2011-2016 14

Figure 2.4: VietinBank’s total assets in 2012-2016 15

Figure 2.5: VietinBank’s Profit before taxes in 2012-2016 15

Figure 2.6: VietinBank’s turnover from E-banking service in 2014-2016 22

Figure 2.7: Transaction volume via VietinBank E-banking Channel in 2010-2015 23

Figure 2.8: The number of transactions on E-Banking channel (VietinBank eFAST) 24

LIST OF TABLES, PICTURE Table 2.1: Income from E-banking service fee in 2015-2016 22

Table 2.2: My banks’ favorite E-banking chart 26

Picture 2.1: Things that make customer disatisfied with banking services 27

Picture 2.2: Information Website authentication when access to the correct address 30

INTRODUCTION

1 Rationale of the study

The invasion of information technology, electronics, and telecommunications

in the banking and finance sector has created many products, new services with high technological content, including E-banking services The introduction of E- banking is seen as a breakthrough in the banking industry, bringing numerous benefits to both customers and banks The benefits that electronic banking bring are markedly huge thanks to its accessibility, accuracy, and swiftness At the present, banks around the world have been focusing on improving services of E-banking in order to meet the society’s demand Therefore, the development of E-banking commercial banks in Vietnam is an inescapable trend in an era of international economic integration

Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) is one of the leading commercial banks in adopting E-banking services Compared to the other banks in the area, E-banking services of Vietinbank are quite diverse However,

in the present conditions, coupled with the incessant improvement of science and technology and social needs, competitors are also targeting this segment and constantly increasing service utilities for their electronic banking service As a result, seeking for measures to develop electronic banking services so as to help VietinBank

to continue to affirm its position and its brand is still considered as an urgent problem

2 Research question:

The content of the thesis is in focus of the answers to these questions:

• What is Electronic banking?

• What are the criteria to assess the development of an E-banking service?

• How is the development of Vietinbank E-banking services?

• What can be done to enhance the quality of E-banking service at

Vietinbank?

3 Methodology:

The thesis is employed with quantitative method focus on the collection and analysis of numerical data and statistics

Secondary data will be collected from newspapers, reports and documents related to E-banking, and public report of Vietinbank

4 The scope of the study:

The thesis focuses on the clarifying some basics issues related to E-banking service and the current situation of Electronic banking services at VietinBank for the period 2014-2016

5 Structure:

The thesis is structured as follow:

Chapter 1: Literature review

Chapter 2: The current situation of Electronic banking services at VietinBank

Chapter 3: Solutions for developing electronic banking servicesat VietinBank

CHAPTER 1 LITERATURE REVIEW

1.1 Electronic banking overview:

1.1.1 Electronic banking definition:

According to en.wikipeida.org, “Electronic banking is an electronic payment

system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website The online banking system will typically connect to or be part of the core banking system operated by a bank and is in contrast to branch banking which was the traditional way customers accessed banking services”

In addition, (Allen H Lipis et al, 1986)supported the view that E-banking is the use of a computer to retrieve and process banking data and to initiate transactions directly with a bank via a telecommunications network In another point of view by Tan Minh Ching (1993), E-banking was described as a repackaging, delivery, and processing of traditional banking financial services such as cash withdrawals, fund transfers, placement of deposits through an electronic on-line medium as compared to customary paper based, off-line system

Hence, E-banking can be considered as a computer software system that allows customers to use banking services by connecting their computers or mobile phone to the bank With e-banking, customers can have the ability to access remotely to conduct transactions such as withdraw,transfer or deposit money at any time

1.1.2 Characteristics of Electronic banking:

The very first characteristic of E-banking is the convenience and speed Customers can trade and query information anywhere, anytime They can also make transactions 24/24 hours a day regardless of time and place This has helped banks to approach customers better, reduce transaction costs, manage cost, and so on Furthermore, users can see their accounts in details online, set up standing orders, check their direct debits, and view statements they have made by week or month for the previous six months

Secondly, making transactions through E-banking is very cheap Most of these transactions are free of charge or have a really low fee which included all costs related

to transaction activities, payments, tallying costs

Thirdly, the bank's capital is used more effectively Thanks to E-banking, disbursement plan and requests of customers are made promptly, assisting the flow of money capital Thus, accelerate the circulation of goods and currencies, improve the efficiency of capital use This is the advantage that traditional banking services can hardly seize at a flashing and precise rate compared to E-banking

1.1.3 Classification:

Electronic banking can be divided on the basis of the instruments used: telephone connection, personal computers, means of payment [bank cards] and self-service zones[6] Below is the detailed classification:

1.1.3.1 Automatic Teller Machine – ATM:

An automated teller machine (ATM) allows customers to conduct transactions without the support of bank’s staff People with a credit card or debit card can access most ATMs

With ATM, customers can connect to their bank deposit in order to make a variety of transactions such as cash withdrawals, check balances, money transfer, account balances inquiries, and so on Nowadays, most foreign travelers adore using ATMs because it can offer the best possible exchange rates for them

1.1.3.2 Internet banking:

Internet banking service can automatically deliver products information and banking services through the Internet This is a wide channel for distributing banking products and services to users at anytime, anywhere This service grants users to abridge their payment and online transactions, and control the account's activities without going to the bank With internet-accessed computers, customers can get into the bank's website to be provided with full information and instructions for products and services Moreover, with personal passwords and codes given by the bank, users can also see their account balances, print statements Internet banking can also be considered as a useful channel for receiving feedbacks from customers However, banks need to have a sturdy security system to handle the perils on a global scale This

is a colossal obstacle for most Vietnamese banks since investing in security is very expensive

Internet banking services provide:

- View current account balance

- Transaction history

- View exchange rates, interest rates savings

- Pay electricity, water, telephone bills

- Customers can send all inquiries, comments on products and services of the Bank and be resolved quickly

1.1.3.3 Telephone banking:

Telephone banking service enables users to make transactions over a phone without visiting the bank's branch, or automated teller machine Telephone banking’s operating time is extended compared to branch, some financial institutions even present this kind of service on a 24-hour basis With this system, customers can save times since they do not need to go to the bank, but still, can be informed if any new transaction occurred even out of working hour

The kinds of business that customers can do through phone banking include checking account balances, a list of 5 latest transactions, electronic bill payments, and funds transfers between a customer's or other's accounts

To use telephone banking service, customers must register first They are then sent a customer code and might be given a password, or they can set up their own for user verification If customers use Internet banking service, they can use the same code and password for Telephone banking

1.1.3.4 Mobile banking:

Mobile banking service enables users to conduct transactions by using a mobile device such as a mobile phone, or a tablet The service uses a software, normally called an app, made by the bank Mobile banking is commonly available for 24 hours

a day

To use this service, customers must register to become official members At the first step, they have to provide their basic information like cell phone number, personal account used in payment After that, users will be given a personal

identification number to confirm the transaction when requested by the bank After finishing the required steps, customers will become an official member and be able to pay via cell phone

Service that mobile banking provide include checking account balances, list of latest transactions, bill payments, and money transfers Some apps also empower users

to download and print statements Mobile banking cannot deal with transactions involving cash, as a result, customers have to go to the bank, or an ATM to withdraw money or deposits

1.1.3.5 Home banking [3]:

With home banking, customers can make transactions with the bank through an internal network (Intranet) built by the bank Transactions are made through a computer system that is linked to the bank's computer system By using this service, customers can transfer money, listing transactions, view interest rates, exchange rates, debt notification To use home banking, customers only need to have a computer connected to the bank's computer system through a modem For corporations, the process of payment via home banking is more complicated since it requires a more sheltered procedure

1.1.3.6 Kiosk banking:

Kiosk banking is a banking service that can serve customers with the best quality and most advantageous Workstations will be placed with internet access on the street When customers need to conduct transactions or ask for services, they just have to connect and provide personal ID number and password to use this service

Kiosk Banking uses touch screen technology, which may be valid in many fields such as sales, banking service developing and non-cash utilities With Kiosk, cardholders can make transactions such as: withdrawing cash, printing statements, transferring money and so on

This is a significant development direction for Vietnamese commercial banks

to reduce the load on the ATM system

1.1.3.7 Call center [3]:

Due to unify data supervision, customers with accounts at any branch of a bank can call a fixed phone number to this center to be provided with individual

information Different from Telephone banking, which only delivers limited data, Call Center can provide information, and reply to customer inquiries The flaw of Call center is that they have to be online for all day Call center delivers information on banking products and services such as payment, savings, loans, money transfers ; introduces bank's services through phones ; receive inquiries, feedbacks, and complaints from customers when using banking services

1.2 Developing Electronic banking services at commercial banks:

1.2.1 The definition of developing E-banking services:

The growth of E-banking is the increasing of the figure and superiority of the services with the aim to fulfill customer's demand in a more thoroughly way so that the bank's goal can be well assured

1.2.2 The need of developing E-banking services at commercial banks:

1.2.2.1 The role of E-banking services:

E-banking services make the payment process easier, faster As a result, making the use of funds become more efficient in order to meet the capital needs of the economy Electronic payments will turn a cash, a hand-made economy into a transfer, and a modern economy

Investment projects will no longer need to advertise on traditional media such

as invitations and advertisements, it can be delivered directly over the internet, through mail boxes in larger quantities and at a lower cost In addition, businesses can easily track and exchange information about the project without being limited in time or space Moreover, the information network can continuously update the evolution of interest rates, exchange rates, stock prices will help credit institutions to grasp the movement of the market

The development of E-banking services will enable the Bank to control most of the cash flows, which can also limit money laundering, illegal transfers, corruption…via electronic banking system This is indispensable for Vietnam - a country with an alarming corruption situation with extremely high rates of corruption

1.2.2.2 The growth of Internet and electronic transactions:

In Vietnam, the favorable factor for online services of banks to grow is the popularity of the Internet as well as smartphones Vietnam has the fastest growth of

Internet user in Asia and consistently ranks among the top 20 countries has the most internet users

Figure 1.1: Vietnam Internet users in 2011-2016

According to the data published by Internetworldstats, as of 3/2107, Vietnam has 49.7 million internet users, equivalent to 52% of the total population of Vietnam With this figure, Vietnam currently ranks 7th in Asia The number of users mentioned above includes internet users in all supported media (PC, laptop, phone )

Along with the growth in the number of Internet users, E-banking has also become more popular In Vietnam, the proportion of online shopping accounts for 58%, and the percentage of internet users with electronic or mobile phone transactions accounts for 70% Also, there are currently about 45 banks providing SMS banking, Internet Banking, and 25 mobile banking applications

Obviously, the potential for banks to promote online services in Vietnam is tremendously huge

1.2.3 Criteria to evaluate the development of E-banking services:

A service can be considered to be well-developed or has the potential to grow with equal development in terms of both quantity and quality of service According to (Phạm Thu Hương, 2012)quantitative indicators may include the number of products and utilities provided by the bank, the number of customers using the service, the quantity and value of transaction, and the turnover of the service

In terms of quality, a service’s quality is measured by a variety of factors and precise identification of these factors depends on the nature of the service and the research environment Many authors have studied this problem but the most common

and well known are the criteria for assessing service quality of(Pasuraman et al, 1985) Parasuraman and his colleagues first set the service quality indicators in 1985 with a total of 10 indicators However, in 1988, he and his collaborators generalized into five specific factors including reliability, responsiveness, tangibles, assurance, and empathy Measurement of service quality varies widely depending on the field of study Therefore, the research literature outlined above is a reference basis for specifying service quality scales in the banking sector

Based on the above studies, the following criteria will be used to evaluate the development of E-banking:

1.2.3.1 Criteria to assess the development of quantity:

 Diversity in E-banking services:

Banks should develop various types of products and services so that they can meet the increasing demands of most customers The more diversified the bank services, the easier for the bank to meet the needs of their customers

 The number and type of customers served:

A large number of customers represent a potential E-banking market and the ability to provide excellent service Customers of commercial banks are not only enterprises but also households, individuals, cadres, civil servants, businessmen, and even students The increase in the number of customers using E-banking services proves that the service has met the needs of customers and can flourish well

 Revenue from E-banking:

This is an important factor in evaluating the development of E-banking

services According to vi.wikipedia.org, "Revenue of an enterprise is the total amount

of money that will be earned by selling products, providing services, financing, and other business activities" Thus, revenue from E-banking services can reflect the development of E-banking services The better developed of the E-banking service, the greater the revenue from this field

1.2.3.2 Criteria to assess the development of quality:

 Reliability: When performing the E-banking transaction, customers always want the bank to have a good transmission network in order to avoid network congestion or any problems in the system to ensure that transaction will be

made accurately, safely and quickly Meeting the above condition means that the bank can give their customers a sense of security and trust when using E-banking services

 Responsiveness: Responsiveness can be assessed on how staffs serve customers Customers are those who pay to use the service, as a result, they have the right to enjoy the best service If the quality of service does not match the amount of money that they spend, they will feel dissatisfied and may stop using it Moreover, in E-banking services responsiveness can also be understood as convenience such as easy connection or login, log out of personal account with fast access speed, simple software theme, and no time-consuming

 Assurance: Security technology is constantly improving and changing In the harsh business environment and the growing of information technology, stealing personal information and cash through the Internet are also increasing

As a result, security technology must always be upgraded and changed to enhance the security of E-banking services Thereby, gives customers feel more secure and comfortable when using E-banking

1.3 Summary:

Thus, in chapter 1, the basic concepts, characteristics, classification, the role of E-banking services and also criteria for assessing the development of E-banking services has been described clearly It can be seen that with the trend of using the Internet and electronic transactions nowadays, the development and completion of E-banking services is ineludible

These theories are also the basis for the analysis and evaluation of the development of electronic banking services at VietinBank which will be presented in chapter 2 of the thesis

CHAPTER 2 THE CURRENT SITUATION OF ELECTRONIC BANKING SERVICES

AT VIETINBANK

2.1 Overview of VietinBank:

2.1.1 The history of VietinBank:

Figure 2.1: VietinBank’s milestones

Source: www.vietinbank.vn

Vietnam Joint Stock Commercial Bank for Industry and Trade was established

on March 26th, 1998 with the name “Vietnam Commercial and Specialized Bank” after being separated from the State Bank of Vietnam under the Decision No.53/HĐBT issued by the Ministerial Committee On November 14th, 1990, Vietnam Commercial and Specialized Bank was renamed into the Industrial and Commercial Bank of Vietnam (Incombank) In April 2008, Incombank was changed to Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank)

Vietinbank is one of the four largest State-owned commercial banks of Vietnam with the total assets account for over 20% of the market share of the whole Vietnamese banking system[7] Since 1996, VietinBank’s capital has been substantially rising with the annual average growth rate is 20%.Vietinbank is the very first bank in Vietnam to be ISO 9001: 2000 certified Also, this is the first bank in Vietnam to open a branch in Europe, marking the significant development of Vietnam's financial market in the regional and world markets

In 2002, VietinBank successfully implemented the ATM card service Until now, VietinBank has developed an operations network comprising of 155 branches, andover 1.000 transaction offices; established a correspondent relationship with 900

11/1990

Successfully implemented ATM card service

2002

Renamed into VietinBank 04/2008

banks, financial institutions of 90 countries and territories all over the world The Bank has a total of 7 independent accounting subsidiaries: VietinBank Leasing Company, VietinBank Securities Company, VietinBank Asset Management Company, VietinBank Insurance Company, VietinBank Fund Management Company, VietinBank Gold and Jewellery Company, VietinBank Global Money Transfer Company;and 3 non-profit making units: VietinBank Information Technology Center,

VietinBank Card Center and VietinBank Training Center.[7]

Vietinbank is also known as a pioneer bank in the application of modern technology and e-commerce in Vietnam, meeting the requirements of business management In the present, with the aim to meet the highest demands of customers, researches are still being done to improve the bank’s products and services

2.1.2 The mission, vision, core values and business philosophy:

 Mission:

Vietinbank’s mission is to become the No.1 bank of the Vietnamese banking system in providing modern banking products and services that conform to international standards

 Dynamic, innovative, professional, and modern: Leaders, officers, and workers at Vietinbank are always creative, energetic, professional, and modern in every transaction, relationship with customers, partner and co-workers

 Honesty, integrity, transparency, professional ethics: Vietinbank’s staff always act to ensure integrity, fairness

 Workers have the right to make their best effort and contribution – they have the right to receive rightful compensation – they have the right to pay homage to outstanding individuals and workers

 Sustainable development and responsibility to the community and society: Innovation is the motivation; The growth, development, efficient and sustainable business is the target That implementing the responsibility of the community, the society is the honor and pride of VietinBank

 Business Philosophy

 Safe, effective, sustainable, and in compliance with international standards;

 Customer’s prosperity is Vietinbank’s success

 Slogan: Improving the values of life

2.1.3 Organizational structure:

Figure 2.2:Organization chart of VietinBank

Source:www.vietinbank.vn

The organizational chart of VietinBank is set up as a functional model The top

of the organizational system is the board of directors, board of manager, councils and departments According to this structure, the authorities do not have the authority to order directly to other functional departments Functional departments only advise the board of directors when making decisions or suggestions to find optimal solutions to complex problems Implementing functional modeling will push the specialization and functional departments to advise the entire online system, not just the level of governance to which they belong

2.2 VietinBank’s business results in recent years:

2.2.1 The process of increasing charter capital at VietinBank:

Figure 2.3:VietinBank’s Charter Capital in 2011-2016

Unit: Billion VND

Source: www.vietinbank.vn

According to the second registration certificate registered on 20/10/2010, the charter capital of Vietinbank is 15.172 billion VND As of 31/12/2011, the charter capital was 20,230 billion VND In April 2012, the charter capital increased to 26,217 billion VND On 6/9/2013, it continued to be increased to 37,234 billionVND, becoming the commercial bank with the largest charter capital in Vietnam

In August 2015, VietinBank planned to increase its charter capital from 37,234 billion VND to 49,000 billion VND by the end of 2015 The charter capital raising plan originated from the merger of PGBank into VietinBank

However, the merger was delayed due to the change in the merger (Circular 04/2010 / TT-NHNN was replaced by Circular 36 / 2015 / TT-NHNN) Therefore, the

Mergent Scheme and the Merger Agreement should be updated and amended by the two banks in accordance with the new regulations As a result, the plan to increase charter capital in late 2015 of VietinBank has not been implemented

By mid-2016, at the Annual General Meeting of VietinBank’s shareholders in

2016, VietinBank once again planned to raise charter capital from 37,234 billion VND

to 49,209 billion VND by the end of 2016 Moreover, it is expected that after the merger of PGBank, VietinBank will continue to increase its charter capital to more than 64,000 billion VND However, according to VietinBank's report for the fourth quarter of 2016, the charter capital of the bank still stood at only 37,234 billion VND

2.2.2 VietinBank’s business results in period 2012-2016:

Figure 2.4: VietinBank’s total assets in 2012-2016

Unit: Billion VND

Source:VietinBank’s Annual Report 2012-2016

Figure 2.5: VietinBank’s Profit before taxes in 2012-2016

2013

2014

2015

2016

The charts clearly illustrate the performance indicators of VietinBank have increased steadily over the years, except for pre-tax profit The pre-tax profit dropped sharply in 2013 is partly due to impact from 2012 2012 is considered as a gloomy year for the banking industry with low credit growth, soaring NPLs, unstable gold prices, employee’s jobs loss Another reason for the decreased in VietinBank’s profit before taxes in 2013 is that they decided to reduce the figure In 2014, VietinBank’s pre-tax profit continued to fall due to the increased in operating costs

However, VietinBank has overcome difficulties, challenges and keep its pace Business performance indicators from 2014 have all grown In specific, total assets in

2014 reached 661,241 billion VND, increased by 14% compared to that of 2013, and

by 2016 the figure reached 948,699 billion VND, 22% higher than that of 2015 This impressive growth affirms VietinBank as one of the leading commercial joint stock banks in the market Moreover, VietinBank's profit before taxes in 2016 reached 8,569 billion VND, the highest among Vietnamese banks, maintaining its position as the No.1 bank of profit in Vietnam's banking system by 2015 with 7,345 billion VND At the same time, VietinBank continues to be among the top enterprises performing budget obligations This result reaffirms VietinBank's leading role in the banking system of Vietnam

2.3.The current situation of the development of E-banking services at VietinBank:

2.3.1.The process of adopting information technology at VietinBank:

VietinBank was the first bank in Vietnam to complete the largest area network since 1995 Computer platforms and end-user applications at VietinBank branches are standardized and united throughout the system

VietinBank also successfully implemented the ATM card service in 2002, and CoreBank INCAS in the period 2003 - 2006 Furthermore, VietinBank has completed the development of information technology (IT) strategy for 2010-2015 with 15 projects divided into four main groups:

- Core group to provide a platform for providing products and services to customers and support banking management which includes projects such as Replacing Corebanking, Treasury

- The customer-oriented group provides customers with modern and advanced products and services which includes Corebanking projects, Internet Banking, Trade Finance, CRM, loan origination (LOS)

- The group of administrators and executives to strengthen governance, and risk control for VietinBank which includes projects such as Data warehouse, Basel

II risk management, credit risk management, ERP

- Technology group to enhance technology capabilities, ready for rapid expansion of standard and consistent products, services, and networks which include projects such as Middleware (SOA), enterprises security monitoring, centralized application management

VietinBank was also the first bank in the financial and banking sector to set up

a reserve center in accordance with the regulations of the State Bank of Vietnam.VietinBank is one of the pioneer units in Vietnam to introduce and provide advanced and neoteric card VietinBank has developed a network of nearly 2,000 ATMs, roughly 30,000 POSs nationwide, approximately 14 million debit cards and 700,000 international credit cards

In addition, VietinBank also spreads out Internet Banking and SMS Banking services with extreme and modern services such as payment services for telecommunication, online transportations, SMS VietinBank provides mobile applications VietinBank iPay that helps customers to access services quickly, safely and securely Extensive services such as iPay money transfer, iPay online savings and Mobile Banking can be made faster and more convenient

From 02/02/2017, VietinBank officially put into operation the new CoreBanking system called Core SunShine This is a state-of-the-art technology system that promises to bring new experiences and innovative products and services to customers With Core SunShine, VietinBank is proud to be the pioneer in the Vietnamese market using US technology solutions - the integrated multi-channel solution, providing the market products and professional services

2.3.2 Types of E-banking services provided at VietinBank:

Although E-banking services include card services, VietinBank has now separated its card business as its own service called Card Center Therefore,