In general, Vietnam is clearly a fertile ground for the development of electronic payment when ranking 13th in top 20 countries with the highest number of internet user www.internetworld
Background
The rapid evolution of technology is significantly transforming our world, with information technology playing a crucial role in this shift Both personal and professional activities are increasingly managed electronically, including banking and financial services The rise of ATM and Internet transactions highlights the growing popularity of electronic banking, which utilizes electronic communication channels to provide essential banking services and products As a result, electronic banking is now considered a necessity rather than just a luxury.
Vietnam ranks 13th among the top 20 countries with the highest number of internet users, highlighting its potential for electronic payment development However, a significant challenge remains, as 65% of Vietnamese adults still rely on informal money transfers and cash payments, according to the World Bank.
In today's banking landscape, many traditional banks are enhancing their electronic banking services to generate service fees In contrast, Techcombank stands out as the pioneer in eliminating all fees associated with electronic channels Initially viewed as a short-term marketing tactic to attract new customers, this fee exemption policy, implemented in September 2016, has evolved into a long-term strategy that benefits both the bank and its clients.
This research focuses on the innovative fee exemption policy in the Vietnamese market and its potential effects on the development of e-banking services Specifically, the study examines the impact of this policy on Techcombank's e-banking offerings, aiming to uncover new directions for growth in the sector.
Objectives and research questions
This research analyzes the impact of Techcombank's fee exemption policy on the development of its E-Banking services and the overall growth of the bank Additionally, it aims to provide solutions to enhance the effectiveness of this policy moving forward.
- Systematizing, synthesizing the basic theoretical issues related to the impact of E- banking on the operation of a bank, and fees to the development of E-banking services
- Evaluating the effectiveness of the fee policy to the booming development of e-banking services at Vietnam Technological and Commercial Joint Stock Bank
- Proposing solutions to maximize the effectiveness of this fee exemption policy in the next 5-year period
- What are the effects of fee exemption policy on E-banking services on the development of this service at Techcombank and to the overall development of the bank?
- Is the service fee crucial to this development?
- What is the appropriate fee policy in the next 5 years for E-Banking service at Techcombank?
Subject and scope of the study
- Research subjects: The effect of fee exemption policy on E-Banking services of Techcombank
This research examines the development of electronic banking at Techcombank from 2015 to 2018, highlighting the differences between the periods before and after the implementation of the fee exemption policy By analyzing the impact of this policy, the study aims to provide insights into the evolution of electronic banking services during these years.
Research Methodology
The study uses the qualitative and quantitative methodology based on data collected from a survey of 213 respondents:
4.1 Methods of analysis and synthesis theory:
This method is utilized to explore various materials, providing valuable insights into the subject matter The author has meticulously integrated all components of the information to develop a comprehensive and profound theoretical framework encompassing the topics and related issues.
4.2 Statistical methods, data collection and analysis method
To clarify research content, the author has combined primary and secondary data through collecting and processing internal information at Techcombank and other sources such as books, newspapers, mass media
Particularly important, using survey methods to confirm the correctness of the analysis and evaluation; in order to determine the practical basis and realism of the proposed problem.
Literature review
Benefits of electronic banking
E-banking offers banks significant advantages, including cost savings, enhanced efficiencies, access to new consumer segments, improved reputation, and superior customer service (Jayawardhena & Foley, 2000) A study by Booz-Allen and Hamilton (1997) indicates that establishing a specialized e-bank infrastructure requires an investment of around $1-2 million Additionally, the study reveals that traditional banks spend 50 to 60 percent of their revenues on operational costs.
Robinson (2000) highlights that online banking significantly lowers costs compared to traditional brick-and-mortar branches Sheshunoff (2000) emphasizes the importance of establishing strong customer exit barriers in e-banking, suggesting that once customers experience full-service e-banking, they are less likely to switch to other financial institutions This aligns with consumer behavior theory, which posits that high changeover costs, such as time and effort, deter customers from moving Ultimately, the implementation of e-banking in today's competitive banking landscape can provide banks with substantial competitive advantages.
Research by Mols (1998) highlights the significant role of e-banking in Denmark, emphasizing its potential to enhance cross-sales and price differentiation E-banking provides clients with a diverse range of services available 24/7, leading to improved customer satisfaction This convenience reduces price sensitivity among customers, fosters repeat purchases, enhances loyalty, and encourages positive word-of-mouth Supporting this, a 2014 McKinsey survey revealed that 40% of respondents were influenced by word-of-mouth recommendations, while half acknowledged that digital channels helped them discover credit card offers and evaluate options Notably, one in four participants changed their choice of credit card or bank based on their online research.
E-banking brings benefits not only to banks but also to customers Thanks to the the Internet, bank transactions have become time-and geographical no longer limited Consumers all over the world now can easily access to bank accounts, including from home privacy, 24 hours a day and seven days a week Customers can take advantage of a range of services including non-traditional banking services One of the main advantages of e-banking is that e-banking products are cheap or even free of charge, and customers save more money and time as they do not have to travel either to or from a branch of bank (Pham, 2010) However, certain people think that prices appear to be one
5 factor that prevents E-banking from spreading (Sathye, 1999) Price discussions focus on geographical differences between Internet connection costs and telephone calls.
Dimensions affecting Customers’ decision to use E-Banking services
a Banks’ Strategies and Internet Network
The strategies of Jayawardhena and Foley (2000), Gerrard and Cunningham (2003), and Wai-ching Poon (2008) have significantly influenced the growth of electronic banking, highlighting the importance of appealing website designs and effective branding in attracting customers While the visual elements of a bank's online presence are crucial, the content detailing products and services is vital for gaining customer trust and approval Gerrard and Cunningham (2003) emphasized that user-friendly website content facilitates easy access to essential banking features, such as credit additions and exchange rate conversions, benefiting both current and potential customers Hoffman and Novak (2008) noted a strong correlation between download speeds and customer satisfaction, which is affected by network stability and the performance of hardware and software Jayawardhena and Foley (2000) also acknowledged the use of downloadable content, though excessive file requirements may frustrate users, as suggested by Jun and Cai (2001), who warned that additional downloads could raise concerns about viruses and slow computer performance Furthermore, Wai-ching Poon (2008) pointed out that customers' decisions to adopt internet banking services are influenced by transaction fees, with lower costs enhancing the appeal of e-banking compared to traditional methods.
6 unreasonable online transaction costs, it clearly decreases the acceptance of e-banking in maintaining traditional approaches, which was based on Sathye (1997) 's finding b Perceived Benefits
A study conducted in the UK by Lockett and Litter (1997) highlighted a model that illustrates the awareness of the advantages of adopting online banking services available 24/7, while also identifying failures and risks as significant drawbacks This aligns with findings from similar research by Sohail.
Understanding online banking and its advantages significantly influences perceived utility and ease of use Research by Wai-Ching Poon (2008) examined the restrictive conditions affecting access to electronic banking, highlighting the importance of demographic factors such as age, education, employment, and income in fostering better acceptance Additionally, confidence and perceived risks play a crucial role in users' experiences with internet banking.
Confidence in electric banking is significantly influenced by the enhancement of consumer trust, particularly in India, where concerns about hacking and personal information security are prevalent (Aladwana, 2001; Black et al., 2001) Security and privacy are critical factors that can foster user confidence in Internet transaction systems Fedrizzi et al (2004) highlighted the importance of addressing transaction risks, especially as fraud issues have become more common with the rise of online banking In Slovenia, Sokolov (2007) identified three primary client mistrust exposures: strategic risk, business risk, and credit exposure, which further emphasize the need for government support in building consumer confidence in the banking sector.
Jaruwachirathanakul and Fink (2005) argue that government support enhances public awareness of Internet banking In developed economies like Japan and Singapore, Chong (2008) highlights significant investments in advanced technological infrastructure.
(1997) evoked a successful increase in Singaporean Government in the 1990's, by
The adoption rate of Electronic Data Interchange (EDI) can be enhanced by learning from successful experiences in other economies For instance, Malaysia's government has effectively utilized EDI to improve Internet services by developing more political and public websites, thereby facilitating easier access for citizens This initiative has fostered greater confidence and trust in online banking among customers, establishing a solid psychological foundation for their engagement with digital services.
Serkan Akinci and Safak Aksoy (2004) conducted a study on customer attitudes and behaviors in e-banking, utilizing statistical and empirical data to assess the usage and development of e-banking channels They specifically targeted customer demographics, with Akinci predicting that highly educated consumers would represent the largest segment of the banking sector The research analyzed the demographics of both highly educated Internet banking users and non-users, as well as various delivery channels Additionally, it compared behaviors between these two groups, highlighting similarities in their online banking interactions and service preferences.
Contribution of this research
By referring to the research related to the topic along with the remaining limitations, this topic will supplement and delve into the following issues:
- The effects of fee exemption policy on Techcombank's customer decision to use e- banking in particular and the development of E-Banking in general
From there, the research tries to make assessments and comments:
- Pointing out the specific benefits of E-Banking with banks, especially focus on analyzing changes in financial numbers before and after applying new fee policy
- Providing practical suggestions to the bank about the fee policy of e-banking service at Techcombank in the future
Structure of the thesis
In addition to the introduction, the content of the thesis is structured as follows:
CHAPTER 1: Theoretical framework of E-Banking services of Commercial bank in
CHAPTER 2: An overview of E-Banking services of Techcombank
THEORETICAL FRAMEWORK OF E-BANKING SERVICES OF
Overview of Commercial Banks
A commercial bank is a vital financial institution that accepts deposits, offers checking services, and provides various loans and essential financial products like CDs and savings accounts to individuals and small businesses These banks play a crucial role in fostering economic and social stability, as well as sustainable economic growth, by delivering a range of financial services Their offerings encompass basic needs, such as account management, and extend to more complex services like asset management This study focuses specifically on the primary services that commercial banks provide to individual customers.
- Accepting cash for different types of deposit accounts:
A bank account allows the holder to deposit and withdraw money, with the bank recording these transactions as liabilities owed to the customer While some banks may impose fees, others offer interest on deposited funds.
Common individual loans include mortgages, automobile loans, household credit lines, credit cards, payment loans and payday loans
A checking account, also known as a current account, demand deposit account, or share draft account at credit unions, allows the account owner to access funds "on request." This type of account enables frequent and immediate access, which can be utilized by the owner or authorized users Access methods include cash withdrawals, debit card transactions, checks, and electronic transfers.
In performing banking functions like deposits, cancellations, and account enquiries ATMs have some key advantages: 24-hour access, work cost elimination, location convenience.
Overview of E-Banking Services of Commercial Banks
E-banking can be regarded as a structure with multiple channels of distribution It is a broader concept than Internet-driven banking E-banking, in its simplest way, is understanded by a bank as providing its customers with information or services on the basis of television, telephone, a computer, or mobile phone (Daniel, 1999) For example, the perspective of Jun and Cai (2001) shows internet banking as an electronic link between banks and clients in the preparation, management and control of numerous financial transactions E-banking is called transnational online banking in a more sophisticated sense because it encompasses the provision of facilities such as the access to accounts, transfer of funds and online purchasing of financial products or services (Sathye, 1999) The terms Internet Banking, E-banking and online banking are used interchangeably without loss of generality in this paper In many developed countries, E-banking is considered as the latest supply channel for banks and has a major impact on the banking market (Jayawardhena & Foley, 2000) Nehmzow (1997) argues that e- banking provides banks and non-banks organizations with many chances to add cheap distribution channels to their existing channels in order to better serve their customers
According to Xu et al (2009), Internet banking is a vital form of digital business that enhances online transactions between companies and individuals It allows customers to conveniently access a wide range of transactions with just a click of the mouse, as noted by DeYoung (2001), although it does not support withdrawals and deposits.
The table below provides a description of the different features and functions of alternative forms of online banking
Table 1.1: Features and functions of Electronic banking
Electronic Fund Transfer at Point of Sale (EFTPOS)
EFTPOS, or Electronic Funds Transfer at Point of Sale, is a digital payment system that allows for the direct transfer of funds from a payer's bank account to a seller's account using debit or credit cards During an EFTPOS transaction, the cardholder swipes their contactless card at an EFTPOS terminal, where authentication is provided via a serial number or Personal Identification Number (PIN) Customers can conveniently shop at various points of sale, such as grocery stores or gas stations, by passing their payment cards through a card reader This device processes the card's data and securely transmits it to a processing center, ensuring payment security throughout the transaction Ultimately, the information is sent to the cardholder's bank for verification, completing the payment process.
After the payment card is validated, the transaction can proceed through the processing center, utilizing a coded license transmitted from the cardholder's bank to the merchant (Sethi and Bhatia, 2012) This system allows retailers to minimize the funds held in-store, as customers make direct payments to their accounts, ultimately lowering operational costs and speeding up the checkout process (Lipis et al.).
The Automated Teller Machine (ATM) is a prominent electronic banking service that allows customers to perform cash withdrawals and routine transactions without the need for a bank representative By using a Personal Identification Number (PIN), customers can securely access their accounts To enhance security, cardholders can set daily withdrawal limits, which can be adjusted in case of a lost card or compromised PIN ATMs operate 24/7, enabling various banking activities such as deposits, fund transfers, and loan repayments While customers can use their bank's ATMs without incurring fees, transactions at other banks may involve a small charge In addition to cash withdrawals, ATMs offer features like balance inquiries, transaction history checks, and printed account statements Overall, ATMs not only streamline banking operations but also reduce costs for financial service providers, making them the fastest-growing segment of electronic banking.
Mobile banking is a service that is delivered by banks or other institutions, allowing customers to transact financially either via mobile or online Customers can check their
Telephone banking has significantly enhanced banking efficiency by allowing customers to manage their accounts and transfer funds via phone, reducing the need for in-person visits to bank branches and ATMs With many banks offering 24-hour telephone banking services, customers are increasingly dependent on this convenient method for their banking needs (Sethi and Bhatia, 2012).
- Monitoring bank account information (e.g balance, transactions history)
- Requesting Standing Orders and Direct Debits
- Ordering foreign currencies or traveller cheques
- Updating basic information: contact, address, and so on
Internet banking allows customers to conduct financial transactions through secure bank websites, providing 24/7 access from any location with internet connectivity This digital banking solution has significantly enhanced the efficiency of banking services while decreasing reliance on physical bank branches and ATMs.
To access the service, customers must first enroll with their financial institutions, ensuring a secure verification process Each customer is required to create their own password for added safety, and they will receive a unique reference code for identification.
To access online banking services, clients must log in to their bank's website using their username and password While many banks have implemented additional security measures to enhance customer safety, these practices can vary significantly across different institutions (Sethi and Bhatia, 2012).
- Receiving information and data straight from the website
- Receiving monthly statement straight from the website
- Updating contact information and address
AN OVERVIEW OF E-BANKING SERVICES AT
Overview of E-Banking services in Vietnam
In 1997, the Internet was first-time launched in Vietnam, which was much late compared to other regions (Ketels et al 2010) However, Internet usage has rapidly increased In
In 2017, Vietnam was ranked 13th among the top 20 countries with the highest number of internet users, according to Miniwatts Marketing Group (www.internetworldstats.com) This significant ranking presents a valuable opportunity for internet services to expand their presence in the Vietnamese market.
Recent data from the State Bank of Vietnam indicates a steady increase in investment capital within the banking sector, particularly in electronic platforms In 2017, the Vietnam State Bank launched an IT infrastructure project valued at USD 70 million, approximately VND 1.5 billion, aimed at enhancing the overall banking industry.
The banking sector is currently engaged in a competitive race towards digitalization, focusing on both service delivery and operational efficiency By 2020, it was projected that around 40% of banking transactions would be conducted through mobile networks and devices, with nearly two-thirds of banking operations carried out via IT systems Embracing digital technology enables banks to boost profitability in the retail sector, as highlighted by the State Bank of Vietnam in 2017.
Vietnamese customers are increasingly embracing electronic trading channels, with digital banking usage experiencing remarkable growth Between 2011 and 2014, the average adoption of digital banking across the ASEAN region doubled, while Vietnam saw a staggering six-fold increase Specifically, the penetration of digital banking for transactions and services in Vietnam rose from 11% in 2011 to 44% in 2014, and this trend is anticipated to continue its upward trajectory in the coming years, according to McKinsey & Company.
Overview of E-Banking services in Techcombank
Techcombank provides electronic banking services for both individual and corporate customers However, within the scope of this study, E-Banking services are understood as services for individual customers
At present, Techcombank offers 3 Internet Banking services, HomeBanking, Fast Mobi Pay and F@st I-bank for individual clients
Some important mile stones as followed:
- 2003: Started to provideHome Banking service
- 2011: First time introduce F@st Mobile
On January 15, 2019, Techcombank launched the advanced Smart OTP transaction authentication method, enhancing security for its customers This innovative solution allows users to seamlessly switch to F@st Mobile using either SMS OTP or a hard token for secure transactions.
On April 1, 2019, the innovative SMART OTP authentication method, recognized as the most secure solution globally, will replace traditional OTP and Hard Token SMS systems.
In general, Techcombank provides a full range of e-banking services with full basic functions
F@st i-bank – Internet banking service
Customers can effortlessly conduct a wide range of financial transactions anytime and anywhere using a computer or smartphone with internet access Key features include convenience and accessibility for all financial needs.
- Check and manage current account, loan and saving account
- Request information of credit card and its transactions
Techombank offers a range of convenient online banking services, including proactive scheduling of automatic payments for future transactions, easy online loan requests, and the ability to open savings accounts effortlessly Customers can transfer money 24/7 between their Techombank accounts or to other banks, making transactions seamless Additionally, Techombank facilitates online payments for various services and products, along with providing online shopping services across multiple websites Users can also register for other banking services such as Homebanking and credit cards to enhance their banking experience.
F@st Mobile – Mobile banking service
The app only works with IOS and Android operating systems on smartphones
Some main functions: a Transfer money 24/7 between accounts inside Techombank or different banks
- Transfer of internal account from Techcombank,
- Transfer of funds via the card number of beneficiaries to other banks,
Techcombank offers convenient cash withdrawal services at its branches and allows users to transfer money without a card via ATMs Customers can also make online payments for a wide range of services and products Additionally, Techcombank provides efficient account management features, ensuring a seamless banking experience.
- Money without cards withdraws from ATM
- Provide information and locations for Techcombank ATM and Branch
- OTT balance alert, an additional channel for customers using F@st Mobile (customer would no longer be charged for homebank fees)
The bank has developed this services to help customers to quickly update banking information by notifying them by sending SMS messages
- Change of current-account notifications
- Receive new product and promotional information
- Information received concerning Techcombank products and services
Customers can easily carry out banking transactions on a mobile phone with F@st- Mobipay mobile banking by send an SMS by sending a message in a certain syntax Main function:
Mobile transactions can be conducted anytime and anywhere, but Techcombank has historically limited this service due to inefficiencies Currently, only a small fraction of over a thousand customers utilize the service, which is primarily restricted to paying prepaid and postpaid phone bills.
Zero Fee – The fee exemption policy on E-Banking services
Launched on September 26, 2016, coinciding with its 23rd anniversary, the "E-banking Zero Fee" program by Vietnam Technological and Commercial Joint Stock Bank offers free transfers for all online transactions through its F@st service.
On September 24, 2016, Mr Nguyen Le Quoc Anh, CEO of Techcombank, highlighted the bank's commitment to online trading services amidst the rise of the Internet and mobile devices He emphasized Techcombank's goal to proactively develop unique strengths by offering the most advanced and modern products and services in the banking sector.
Table 2.1:Summary of E-Banking fees before and after the fee exemption policy
Annual fee collected by month
- Customer using OTP SMS method (VND 6,000 - 8,000/month)
- Customers use Token key method (VND 100,000/year)
1,000 VND/ transaction and 0.015%/Transaction amount with a large transaction amount of over 20,000,000 VND
0.03%/transaction amount (Minimum: 12,000 VND, Maximum:
24/7 Transfer Interbank 10.000 VNĐ/ transaction Free
Transfer money to mobile accounts 3.000 VNĐ/ transaction Free
/transaction amount with transaction amount of over 5,000,000 VND
Money transfer - receive money via ID card 5.000 VNĐ/ transaction Free
1,000 VND / transaction and 0.015% / Transaction amount with a large transaction amount of over 20,000,000 VND
Source: www.techombank.com.vn
Development of E-Banking services at Techcombank
This report examines the effects of the fee exemption policy on E-Banking development from 2015 to 2018, focusing on two key aspects: the growth in the number of Techcombank E-Banking users and the volume of transactions conducted through this platform.
The data presented in this section are taken from the annual report of Techcombank in the period 2015-2019
Number of E-Banking Techcombank users
The growth of Techcombank's E-Banking service is illustrated by analyzing user numbers before and after the implementation of a new fee policy, highlighting the policy's impact on service usage.
Figure 2.1:Total E-Banking users of Techcombank (From 2015 to 2018)
Source: E-Banking Techcombank report in 2019
From the actual results, it can be seen that, immediately after applying the new fee policy, the growth rate of users increased dramatically
From 2015 to 2018, the user base experienced significant growth, starting with an increase from 250,000 to 380,000 users in 2015, marking a 56% growth rate This upward trend accelerated, with a 100% increase from 2016 to 2017 and a remarkable 117% growth from 2017 to 2018 By the end of 2018, the total number of users soared to over 1.6 million, representing a staggering 6.8-fold increase compared to 2015.
Figure 2.2: Active proportion of E-Banking users at Techcombank (From 2015 to 2018)
Source: E-Banking Techcombank report in 2019
E- Ban ki n g u se rs (h u n d re d th o u san d )
Not only increase in quantity, but the level of customer use also changes the weaving thread
- Active user is a customer who has logged into one of two services (F @ st I-Bank and F@st Mobile) within 3 months to the date of the report
- Inactive user is a customer who does not log into any E-Banking service within 3 months of the date of the report
Following the implementation of the new fee policy, the rate of active customers surged from 32%-39% to 66% in 2017, representing a 1.7-fold increase compared to the previous year This upward trend continued into 2018, with the active user rate reaching 73%, more than double the figure recorded in 2015.
When determining the absolute number, the number of active users increased by 15.5 times in just 4 years from 2015 to 2018.
Banking transaction
This study aims to enhance user engagement by analyzing customer transaction levels on the bank's electronic channels, providing valuable insights into service usage.
Figure 2.3: Number of E-Banking Transaction per month (From 2015 to 2018)
Source: E-Banking Techcombank report in 2019
It can be seen that the amount of transactions increased suddenly from the beginning of
From 2015 to 2017, the monthly transaction volume surged from approximately 705,000 to 8.5 million, marking a remarkable 14-fold increase The growth rate accelerated significantly, with a 20% rise in transaction volume from 2015 to 2016, followed by an astounding 300% increase between 2017 and 2019.
The increasing volume of transactions highlights a clear shift towards mobile banking In 2015, transaction volumes for mobile and internet channels were comparable; however, by 2018, customers conducted transactions via mobile channels at a rate 8.5 times higher than those using the internet.
N u mb e r o f tr an sac io n s (h u n d re d th o u san d )
Transation in F@st Mobile Transation in F@st i-Bank
Figure 2.4: E-Banking transaction value (From 2015 to 2019)
Source: E-Banking Techcombank report in 2019
Techcombank has experienced remarkable growth in electronic transactions, with a monthly transaction value soaring from 45 trillion VND in 2015 to an impressive 810 trillion VND in 2018 This represents an astonishing 18-fold increase in just four years, highlighting the bank's significant progress in digital banking services.
Techcombank has effectively promoted the use of electronic channels, resulting in a significant increase in customer transactions Over the past four years, the average transaction value has surged by 14 times, highlighting the bank's success in facilitating the transition of customers to digital platforms.
Transaction value (trillion) Average Transation value (thousand)
The study employs a questionnaire-based approach complemented by statistical analysis to ensure objectivity The author surveys real-world scenarios and validates findings against actual business data Below is a detailed overview of the two methods utilized.
The questionnaire, created on Google Forms, collected 213 valid responses from 497 individuals utilizing Techcombank's electronic banking services The following table summarizes the essential demographic information of the participants.
Group Number Group Number Group Number
20 – 30 169 Business 57 Less than or equal to 10
The questionnaire gathered responses from a diverse range of customers, reflecting a balanced distribution across various income segments, age groups, and industries This enables an objective and comprehensive evaluation of customer opinions regarding the Bank's electronic banking services.
THE EFFECTIVENESS OF FEE EXEMPTION POLICY ON E-
Results and Discussion
The development of E-Banking brings benefits to the Bank a Demand deposits
Figure 3.1: Average balance in the account of E-Banking customers
A recent data sheet reveals that 86% of customers maintain a balance in their accounts, with 33% reporting an average balance between 10 to 30 million This aligns with the bank's 2018 announcement, which indicated that individual customers using e-banking services had an average balance of 18.4 million, nearly six times higher than the lower range reported.
Not usually leave money in the account
27 higher than customers use electronic channels This can be considered one of the most visible benefits when customers use more online services
Figure 3.2: Average balance ratio of Techcombank customers (From 2015 to 2018) (percentage)
Source: E-Banking Techcombank report in 2019
Increasing the average customer balance is clearly demonstrated by the fact that E-Banking customers hold an impressive 86% of the total balance across all payment accounts, despite representing less than 20% of the overall customer base.
Figure 3.3: Number of using bank services of E-Banking customer
Customers utilizing e-banking services typically engage with multiple offerings from their banks, with 79% of respondents indicating they use between 4 to 6 services Notably, over 10% of customers reported using more than 7 services On average, customers access 5.3 bank products through e-banking, a substantial increase from the 2.4 products per customer reported in 2018.
In short, customers tend to be associated with more banks after using the service on electronic channels
Table 3.2: Other bank services used by E-Banking users
Other Services used by respondents Number of customers Percentage of respondents
Number of using bank services
Transfer money at the counter 68 32%
A recent survey highlights the banking services utilized by customers, revealing that the most popular options include accounts, debit cards, credit services, and savings These services primarily focus on account management and deposit mobilization, indicating that the rise in e-banking usage significantly influences customers' average balances and the overall capital of banks Notably, 72% of customers engage with savings services, suggesting that for every four individuals using e-banking, three also deposit savings In conclusion, the growth in e-banking adoption directly correlates with an increase in the utilization of banking services, particularly those that enhance deposit mobilization, thereby impacting bank capital positively.
30 c Tightening bank relationship with customers
Table 3.3: Other bank usage of Techcombank e-banking users
Customers utilizing e-banking services demonstrate a strong loyalty to Techcombank, with 30% relying solely on its offerings without the need for other banks Additionally, a significant 83% of surveyed customers consider Techcombank their primary institution for transactions, highlighting the bank's effectiveness in meeting their banking needs while also providing cost-saving benefits.
Table 3.4: Features of e-banking services used by customers
Transfer / receive money in the same bank 189
Payment of bills (electricity, water) 43
Customers using Techcombank as the main bank
Follow the promotion programs of the Bank 11
Survey results indicate that customers engage with numerous features on electronic channels, averaging 5.2 features per user In contrast, similar services offered at branches incur significantly higher operating costs.
According to Techcombank's 2018 capacity statistics, a successful counter transfer transaction requires 27 minutes of staff time With over 8 million online transactions occurring monthly, processing these at the counter would incur significant operational costs.
A recent survey of 213 customers revealed that while 65 still conduct transactions at the counter, a significant 189 prefer electronic channels for their banking needs This shift indicates that most customers are opting for online transactions rather than counter services, highlighting the transformative impact of E-Banking on customer behavior and its role in reducing operational costs for the bank.
In its year-end summary report, the Electronic Channel Development Division evaluated that Techombank's electronic channel initiatives resulted in significant cost savings, with VND 11 billion saved in operating costs in 2017 and VND 36 billion in 2018.
The fee exemption policy affect customer satisfaction with E-banking Services
In the scope of the study, the questionnaire also explored the level of customer survey with the Bank's e-banking service
Figure 3.4: Level of Satisfaction with E-banking services
Techcombank's e-banking service enjoys a high customer satisfaction rate, with only 6% of respondents expressing dissatisfaction Meanwhile, 63% of customers reported being satisfied or very loyal to the service, and 31% found it acceptable.
Table 3.5: Comparison of customers on Techcombank's e-banking service with other banks
Compare E-Banking of Techcombank to other banks Percentage
Very satisfied Satisfied Normal Unsatisfied
To evaluate customer satisfaction, the author surveyed 148 customers utilizing e-banking services from various banks, asking them to compare the service quality of Techombank with their current providers.
The results indicate a strong customer satisfaction with Techcombank, as nearly 70% of clients believe its service quality surpasses that of other banks In contrast, only 7% reported a superior e-service experience with a different bank, while the remaining 25% view the services of their current banks as comparable.
Figure 3.5: Factors that make customers decide to use E-Banking services at Techcombank
A recent survey conducted at Techcombank reveals key factors contributing to customer satisfaction with their online banking services The top three aspects that customers appreciate are "free services," "multiple utilities," and a "friendly interface," all of which enhance the user experience Notably, 83% of respondents indicated that the service fee policy significantly influences their decision to use the platform Interestingly, speed and security received the lowest ratings, suggesting that as the quality of services across banks improves, these elements may become less critical to customers.
34 for customers to compare between banks is the price factor This is also the reason why free service is a factor determining the satisfaction of Techombank's customers using E- banking services
Figure 3.6: Customer's decision if the bank stops fee exemption policy
A recent survey revealed the critical impact of fee policies on customer behavior regarding Techombank's services Only 22% of respondents indicated that potential fee changes would not influence their usage In contrast, 15% stated they would discontinue using online services if fees were implemented, while 63% acknowledged that changes in the fee structure would significantly affect their usage intentions This highlights the essential role that fee structures play in customer decisions when utilizing banking services.
Use as normal use, do not care Still use, but less transactionsStill use but not for transaction Do not use anymore
CONCLUSIONS AND RECOMMENDATION
This study highlights the strong correlation between the advancement of E-banking services and the overall growth of Techcombank, emphasizing the significant impact of the fee exemption policy on this development.
The development of E-banking services offers several key benefits, including the acceleration of demand deposits, enhanced cross-selling rates of products and services, reduced operating costs, and improved customer relationships Notably, E-banking plays a crucial role in increasing demand deposits, as its frequent use for payments and transfers encourages customers to maintain higher cash balances in their accounts This trend provides banks with a stable and low-cost capital source to support their lending activities.
This study highlights the positive impact of the fee exemption policy on the growth of E-banking services, demonstrating that this policy enhances customer satisfaction and boosts the level of service usage.
Techcombank has maintained its dominance in the market for over three years as a pioneer in the free service trend, despite other commercial banks following suit The effectiveness of its fee exemption policy, coupled with advancements in E-Banking, underscores the bank's overall growth Given the author's predictions on market trends, it is recommended that Techcombank uphold this policy for the next five years This strategy is expected to leverage its recent advantages and serve as a significant competitive edge in the future.
This study is subject to several limitations that encourage consideration for future research
The thesis examined a diverse array of variables, and while most participants were not provided with guidance on completing the questionnaire, there is a possibility that some may have misinterpreted certain items.
This study enhances understanding of customer experiences with electronic banking by utilizing survey responses for data collection and analysis Future research can focus on the demographic profiles of organizations, considering factors such as age, revenue, education, and electronic banking usage For instance, customers in higher income brackets may be less influenced by service charges associated with electronic banking, indicating that stable operations could significantly impact customer intent.
The fee exemption policy at this bank has been in place for nearly three years, yet its long-term effectiveness remains unverified Future research should focus on analyzing the policy's impacts over an extended period, particularly as competing banks begin to adopt similar initiatives.
This research gathered data from specific provinces in Vietnam, limiting its coverage due to cultural differences across regions To enhance the representation of customer experiences in Vietnam, future studies should aim to collect data from a wider range of provinces and regions.
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PHIẾU KHẢO SÁT DỊCH VỤ NGÂN HÀNG ĐIỆN TỬ CỦA NGÂN HÀNG
TMCP KỸ THƯƠNG VIỆT NAM - TECHCOMBANK
Xin kính chào anh/chị,
Tôi là Lê Công Minh, sinh viên năm 4 chuyên ngành Tiếng Anh – Tài chính Ngân hàng tại Học viện Ngân hàng, Việt Nam Hiện tại, tôi đang thực hiện luận văn tốt nghiệp với đề tài nghiên cứu về ảnh hưởng của chính sách miễn phí đối với sự phát triển dịch vụ ngân hàng điện tử tại Techcombank.
Bảng khảo sát dưới đây là một phần quan trọng trong nghiên cứu của tôi Tôi rất mong anh/chị dành chút thời gian để hoàn thành khảo sát này Xin lưu ý rằng mọi ý kiến và thông tin cá nhân của anh/chị sẽ được bảo mật hoàn toàn và chỉ được sử dụng cho mục đích nghiên cứu.
Cám ơn anh /chị rất nhiều!
Mức thu nhập trung bình tháng:
II Nội dung khảo sát
1 Anh chị đã bắt đầu sử dụng dịch vụ Ngân hàng điện tử tại Techombank từ bao giờ?
2 Số dư trung bình trên tài khoản của anh/chị:
• Không thường để tiền trong tài khoản
3 Những dịch vụ khác của ngân hàng anh chị đang sử dụng (Chọn những dịch vụ đang sử dụng):
▪ Chuyển tiền tại quầy giao dịch
4 Mức độ hài lòng của anh chị về dịch vụ Ngân hàng điện tử của
5 Anh chị thường sử dụng tiện ích nào của dịch vụ này (chọn những tính năng thường sử dụng)
▪ Theo dõi các thông tin tài khoản
▪ Xem lịch sử giao dịch
▪ Chuyển/nhận tiền trong cùng ngân hàng
▪ Chuyển/ nhận tiền liên ngân hàng
▪ Thanh toán hóa đơn (tiền điện, tiền nước)
▪ Theo dõi các chương trình khuyến mại của Ngân hàng
6 Những yếu tố khiến anh chị quyết định sử dụng dịch vụ Ngân hàng điện tử của Techcombank là gì?
▪ Nhiều tính năng tiện ích
▪ Giao diện đẹp/thân thiện
▪ Được người thân giới thiệu
7 Anh chị có đang sử dụng dịch vụ Ngân hàng điện tử của Ngân hàng khác không?
Trường hợp chọn 7.a Trường hợp chọn 7.b
7.a.1 Techcombank có phải ngân hàng chính của anh chị? a Có b Không
7.a.2 Anh chị đánh giá như thế nào về chất lượng dịch vụ Ngân hàng điện tử của
Nhiều khách hàng không sử dụng dịch vụ ngân hàng điện tử của ngân hàng khác vì chưa có thời gian dùng thử, đã từng trải nghiệm nhưng không hài lòng, hoặc cảm thấy hài lòng với dịch vụ của Techcombank nên không muốn thử nghiệm dịch vụ khác.
So với các ngân hàng khác, dịch vụ E-Banking của Techcombank có những ưu điểm nổi bật Đầu tiên, E-Banking Techcombank được đánh giá là tốt hơn hoặc tương đương với những ngân hàng khác, mang lại trải nghiệm người dùng vượt trội Đặc biệt, dịch vụ E-Banking của Techcombank hoàn toàn miễn phí, giúp khách hàng tiết kiệm chi phí Tuy nhiên, khách hàng không được giới thiệu dịch vụ của ngân hàng khác, điều này cần được lưu ý Ngoài ra, lý do khác có thể ảnh hưởng đến sự lựa chọn E-Banking của khách hàng cũng cần được xem xét.
Nếu Techcombank tăng phí trong tương lai, khách hàng có thể phản ứng theo nhiều cách: một số sẽ tiếp tục sử dụng dịch vụ mà không quan tâm đến phí tăng, trong khi những người khác có thể giảm tần suất giao dịch Một số khách hàng có thể vẫn sử dụng dịch vụ nhưng không thực hiện giao dịch nữa, trong khi một bộ phận sẽ quyết định ngừng sử dụng dịch vụ hoàn toàn.
SURVEY FORRM FOR ELECTRONIC BANKING SERVICES OF VIETNAMESE TECHNICAL COMMERCIAL BANK – TECHCOMBANK
Le Cong Minh, a fourth-year student majoring in English - Banking and Finance at Vietnam Bankers, is currently focusing on his thesis, which explores the impact of the fee exemption policy on the development of E-banking services at Techcombank.
I kindly request your assistance in completing the questionnaire below, which is an essential part of my research Rest assured that all your feedback and personal information will remain confidential and will solely be utilized for research purposes Thank you for your valuable contribution.
1 When did you start using Internet Banking at Techombank?
• Not usually leave money in the account
3 Other banking services you are using (tick all services used):
▪ Transfer money at the counter
4 Level of Satisfaction with E-banking services at Techcombank:
5 Which utility(s) do you usually use for this service (tick all the commonly used features)?
▪ Transfer / receive money in the same bank
▪ Payment of bills (electricity, water)
▪ Follow the promotion programs of the Bank
6 Factor(s) that make you decide to use the service:
7 Are you using other Bank's electronic services??
For those who choose 7A For those who choose 7B
7.a.1 Is Techcombank your main bank? a Yes b No
7.a.2 How do you rate Techcombank's e- banking service quality compared to other banks you are using? a) Very satisfied b) Satisfied c) Normal d) Unsatisfied