Luận văn improving the quality of retail banking services for individual customers at the pvcombank business center

Because of the above reasons and from practical activities in business the business ccritcr PVcombank, as Deputy Dircetor of the business the bustess center PVeornbank, Ï chose the the

PVCOMBANK BUSINESS CENTER

STUDENT: VU DINH THIN INSTRUCTOR: DAO TUNG

Hanoi, 01/2017

ACKNOWLEDGEMENT

‘This thesis would not have been possible without the supports of my colleagues in

Vietnam Public Joint Stack Commercial Bank, Mr Dan Ngoc Anh from Vietnam Public Joint Stock Commercial Rank, my

smales in Masler in Finance Banking

Insurance (South East Asia) program - cohort 7, and others

I would like to show my doopest gratitude towards my instructor — Mr Dao Tung, the lecturer from intemational school, Vietnam National University, whose full encouragement, guidance, and support from the initial lo the end of the thesis have enabled me to cultivate and understand clearly about the structure and activities in PVcombank in particular and in Vietnamese Banking system in general Plus, they

also provide me valuable advives to help me to continue my Turther study

T would also like to thank all of lectures and tutors at Vietnam National University in

general and intemational school in particular who not only have bestowed their

valuable knowledge, hands-on experience to me, but also have created the favorable opportunities for me lo complete the thesis on Gime

Lastly but nol leasl, T would especially like lo thank all of my friends in Master int

Finance Banking Insurance(South East Asia) program for all their motivation and

intellectual support that has made this thesis completed

ABBREVIATIONS

FSQ Functional Service Quality

PVcornbank | Vietnarn Public Joint Stock Commercial Bank

PVE PetoVietnam Finance Joint Stock Corporation Vietnam

LIST OF GRAPIIS, FIGURES AND TABLES

Table 2.1 Scale of data collection

Table 3.1 Exploratory Factor Analysis Result

Table 3.2 Cronbach Alpha values of scales

Table 3.3: Results of customers evaluation according to the seivice quality aspect

Table 3.4: Results of customers evaluation of Assurance/competence of staff

‘Table 3.5 Results of customers evaluation of service reliability

Table 3.6 Results of customers evaluation of empaihy in staif

‘Table 3.7 ‘The results of the assessment of service tangibles

‘Table 3.8 The results of the assessment of service responsiveness

Chart 1 Research model

Chart 1.1 Service quality model of Parasuraman et al (1988)

Chart 1.2 Service quality model of Gronroos (1984)

Chart 1.3 Gustomer perceptions of quality and customer satisfaction of Wilson et al

(2008)

Chart 3.1 Research sample description

Chart 3.2 Frequency of evaluated value of customers on assurance

Chart 3.3 Frequency of evaluated value of customers on service assurance

Chart 3.4 Frequency of evaluated value of customers on empathy in staif

Chart 3.5 Frequency of evaluated value of customers on service tangibles

Chart 3.6 Frequency of evaluated valuz of customers on service responsiveness

TABLE OF CONTENTS

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CHAPTER 1: THEORITICAL BACKGROUND OF THE RETAIL BANKING SERVICES AND

LU THR CONCEP”, CHARACTERISTICS ANT ROE OF RETAT RAN'CNG SERYICRS TH COMMERCTAL BANKS 10 L141 The concept of retail banking sertices nhi 4Ø 1.12 Characteristics of retail honking services 10 1.1.3 The role of retail banking services - 4 1.2 SERVICES ANT) SERVICE QUALITY INTHE RETAT BANETNG SF: 12

4.2.3 Two important models for quality of service Mt 1.3, SERVIC? QUALITY, CUSTOMER SRTISFACTION ANT: SERVIEP.AETTVERINS-

3.1 Daw COLLECTION INSTRUMENT

2.2 TATA SOURCES AND DATA COMRCTION

2.2.4 Daler SOUrCES ou _

2.2.3 Implementation of data collection

2.3 SAMPLING METHOD AND DATA ANALYSIS METHODS wwe

CTIAPTER 3: EVALIATION OT THE RETAIL SERVICE QUALITY OF INDIVIDUAT,

CUSTOMERS AT BUSINESS CENTER OF PVCOMBANK

3.1 INTRODUCTION Cr PVCOMBANK AND PVCOMBANE BUScNESS CENTER

3.1.1 Introduction to P¥combank

3.2.2 The formation and development ofthe ‘Business Center PYcombank

3.2 FINEINGS ON THE INLLYIDUAL CUSTOMERS’ EV ALUALIGN OF CANTER'S RETAIL SERVICE,

CIIAPTER 4: CONCLUSIONS AND PROPOSED SOLUTIONS TO IMPROVE SERVICE QUAY

OF BUSINESS CENTER PVCOMBANE

PYSOMBANK -

4.2.4 Orientation P¥combank and of Business Center P¥combank to 2020

4.2.2 Solutions to insprouve the service quality 1a

5

GENERAL INTRODUCTION

Reasons and need of the research

The urgency of the lopie

Vietnam's economy is increasingly integrated into the world economy poses many

challenges for the commercial banks, which is 1o compels with the multinational ñnaneial

groups having the strength of finance, technique technology Under these circumstances, the

development of retail banking services is an important objective of many commercial banks Retail banking markets in the Southeast Asian countries, including Viemam still have big

potentials to devclop As one of the pillars of the banking financial system Victnam, with

major brands and a broad network in Vietnam, to catch up and catch the trend of the region, and the world, the PVcomhank has been focusing on promoting the development of an array

of retail banking services with the ambition to become the leading retail bank in Victnam

The business center PVcombank is the first level branches, is the largest branch of

PVcombank, Formerly the Exchanges 1 of PVcombank, the business center PVcombank

ever had a long tiadition of scrving the individuals customers, corporations, companics, and

large erferprises across the country Retail activily of the business center PVcombank often neglected and not properly focused The proportion of revenue, profit from retail

opcrations is low, is not commensurate with the potential of the branch Besides the human

factor also impacts significantly on the satisfaction of our customers, which greatly affect the

quality of retail services

Because of the above reasons and from practical activities in business the business

ccritcr PVcombank, as Deputy Dircetor of the business the bustess center PVeornbank, Ï

chose the theme "Improving The Quality Of Retail Banking Services Vor Individual

Customers Al The Business Cenler PVcornbank" as uny orastcr’s Uhcsis

Overview of the research situation

In recent years, the subject development of rctail banking services has many scicntific research projects which are worth as the form of presentations, master thesis or research papers published in prestigious joumals domestically and internationally; such as: master's thesis "Devctopmant of retail bariking services in the PVcombank (2011, Nguyen Thi Quy, University of Hanoi National Economy, Thesis “Solutions developed retail banking services

in bank branches Investment and Development lla Thanh Branch "in 2012 by the author

Pham Thi Ha Giang fiom University Hanoi National Economics, Study "The solution

developed banking services in Vietnam today" by Associate Professor Ph.D Nguyen Thi Mui

- Financial institute; ‘Thesis " Development of Marketing Services Retail Bank at Bank of Agriculture und Rural Development, Hanoi branch "code LA2016 University af Hanoi National Economies

‘These projects, however, focus on the broad development of retail services or the

porfoction of overall markating offectivens

of retail Jnmking in this Cenler to serve as a basis for the services perfection

Objectives, Research objects und scopes

Objectives of the study

The study focuses on researching and analyzing the secondary dala to provide

overview of the basic theory of retail banking services and the factors affecting the retail service quality, incnding human factors aspect Based on that theoretical foundation, the

assessment was given about the performance of retail services branches of the business center

PVcombank according to the essentials of service quality from point of view of individual customers having experiences with the branches (Center), as well as providing solutions to help improve the service qualily of the business center PVeombank, thus facilitating ils

expansion and development of retail banking services To achieve this goal, the subject will

foons on addressing the following specific objectives

To systematize the theoretical basis of the retail banking service operations

To analyze, review and assess the situation developing retail banking services at the

business center of PVcombank

To assess the service quality bascd ơn custurncrs cvaluation

To propose solutions to improve the quality of scrviec of retail activitics at the

PYcombank Business Center

Research ohjects and scope of the study:

Research objects: the prescnt rescarch investigates the quality of the retail banking serviees of PVcombank Center, limited to services provided to individual customers

Scope of study : ‘Topics within the limits of the actual center’s individual customer

Research Model and Research methods Overview

Research model

Reliability

Chart 1: Research model

Research methodology overview

Thosis using some rescarch methods, this includes

Secondary data analysis: data collected from books and academic journals in economics, finance and banking In provide theoretical backgrounds on the retail banking sarviees and especially on the quality services, Data also collected from the anual reports of the business center PVcombank, financiat reports, the annual report of PVcombank and some banks commercial, to provide information about the sitnation of retail banking services

activitics af Ihe business ecnicr PVeornbank.

Primaiy đam collcetion: using questionnaire to collect information from customers regarding the main aspects of the quality of retail banking services at the business center PVcombank

Methorts of amwlysis of primary data: the study will use the descriptive statistics to assess the evaluation of customers about the service quality of the center, based on that the other will state the situation of the service quality of the Center

Expected results

This study is carticd out with the author's desire to understand the cvaluation of

individual customers conducting transactions with the Business Center PVeombank with

respect lo the service quality Specifically, the author will collect information of the customers in terms of 5 aspects of the service quality including Reliabihty, Responsiveness,

‘Tangible, Assurance and Empathy

“The results obtained will help the author evalnate the current status of service quality

in the center allached to various factor: s and infrastructures of the

ch as human, process

Center in serving customers in an objective manner Strengths and limitahons will be

specifically demonstrated from research results

From this current slalus, on the basis of the objectives and oricnlalions of PVcombank

and Business Center PVcombank, a number of important solutions will be drawn in order fo

improve the service quality of the Center for the individual customers using retail banking

sarviec in Hanoi

Structure of the thesis

Rosidas the inlreduetion, conclusion, list of referoneas and appendices altached, the main content of the thesis is structured in four chapters:

CHIAPTER 1: THEOIRITICAL BACKGROURD OF THE RETAIL

BANKING SERVICES AND SERVICE QUALITY

1.1 The concept, characteristics and role of retail banking services in

commercial banks

1.1.1 The concept of retail banking services

Thore are a munbor of different views and defirsitions of ratail banking However, the most general way agreed by many authors is that the retail banking services include a wide range of financial services such as: installment loans, housing mortgage loans, credit loans, deposit sorvices, and personal pension accounts, credil cards, ola

According to the WTO, retail banks focus on developing and trading services and products to individual customers; by which the individual customers can make transactions at various transaction offices to joint many types of services such as making a savings account deposit, account opening and management, checking account, mortgage loan, crcdit card service, debit card and many other services

According to Pederic S Mishkin (2011), retail banking services include banking sarviees provided by the bank to individuals, small and medium enterprises, through a network of branches, transaction offices, or the customers can access directly to banking products and services via etectromic and/or internet

To distinguish retail banking services, it is necessary to distinguish the concept of wholesale bank Wholesale banks are often referred fo as banks for enterprises When comparing on a professional basis, retail banks often carry a large volume of work due to many servicos for cuslomers, mahly individual custorners Currently, some t2lail banking services, such as credit cards, intemet banking, etc., are considered services which can bring more profit for the financial institutions However, the banks are also facing fierce compctition among financial institutions in this ficld

1.1.2 Characteristics of retail banking services

On the customer side, retail banks aim to serve the needs of individual customers and spall and mediurn eulerprises Therefore, in term of Iransactional profession, the retail banks have a large nminber of transactions under the small values In contrast, the wholesale banks

offen target to large credit institutions and business organizations, multinational companies,

and serve the needs of the large investment of government and zconomic organizations The wholesale banks may not have many transaction but their transactions are often of large -

customers, the retail banks also build their owen aulomated banking service points andor

Multiple channels of distribution such as call center, branch, automates,

internet banking, mobile banking

Multiple customer groups such as consun

_ and corporat 1.1.3 The role of retail banking services

According to experts on the development trend of retail banking products and sorviees, the individual consumers and small and medium enterprises arc an important souree

of customers of many banks at present not only in developing countries but also in developed countries such as the United Slates (Tirnothy Clark el al., 2007)

On one hand, the large number of customers is an important source of deposits for banks fo create the source of eredit activities - the most important revenue-creating operation

of almost all banks On the other hand, the individual customers are also an important source

of credit products and services consumption lo the market Along with thai, the increase in

living conditions of the customers also increases their demand for many other banking

products and services - especially consumer credit

With the increasing competition among the banks, retail banking products and

services targeting individual customers and small and medium enterprises always play an important role in ensuring the survival and development of each retail bank

1.2 Services and service quality in the retail banking services sector

121 the concept of service

Since service is a common concept in marketing and business, there are many definitions about this term With Annstrong & Kotler (2004), service covers a wide range of activities or benefits created and provided by the enterprises to customers to establish, consolidats, and exlend long-Lerm parlnerships with customers, Simikaty, Zeithaml and Biter (2000) argue that service covers any behaviors, processes and ways of performing a task that create value for the customers to satisfy their needs and expectations

The characteristics of service

Tho sorvice has some different particularities and chamolerislics compared to

conventional products, Several charac

intangibility, heterogeneity inseparability and perishability (Loverlock, 2005)

s lo distinguish the sorvies with goods include

A further important feature of the service is that the process of creating and supplying the service requires direct interaction between the sellers (creating and supplying the service) and buyers (using the service), Thersfore, the human Laclor plays a very important role in determining the service quality and customer satisfaction

The above characteristics of the service make it difficult to quantify and fail to be identified by the naked eyes

Intangible

The service docs not have any specific shape, could not be touched, weighed, measured and counted directly as other tangible physical products With physical products, the customers can control and fest the quality before buying, however, only when they decide

to buy and participate in the proc

1.2.2 Quality of service and ihe influencing factors

‘The concept of quality of service

Actually, there is no single and unified defizuition among the authors of the nature and

measurement of quality of service

Depending on the research subject and research environment, the service qualily is defined differently Wisniewski & Donnelly (1996) argue that service quality is the

extent fo which a service can meet the needs and expectations of customers, or the

ability to meet expectations and satisfy the needs of customers With Parasuraman et al (1988), the service quality can be assessed based on the distance between customer

expectations and their actual perception when using the service

The inf ing factors

Many rescarch projects have becn carricd out to identify variables that influence the

quality of service

The research project by Sureshchandar el al (2001) identifies five key factors thal

affect customer perception of service quality These factors inckude (1) core service; (2)

human element; (3) tangihtes, (4) social responsibility; and (5) technical elements

One of many rescareh projects uscd by many scholars in their stndics is Parasuraman

et al (1988) They studied and indicated 5 aspects of service fo base when the customers make any evaluation Such aspects include

Reliability: rlalss to the way the company performs nd perfeets the scrviec committed fo its customers in terms of quality and accwacy in agreernent with the customers Reliability plays an important role because any customers would also concem whether 4

sorvieo provider can offer a

satistied,

vice (hal mecls their requirements and make them fecl

Responsiveness relates to the company’s willingness to support the customers through

the company's rcadiness lo provide fast, high quatily and oxcellent services This s 4n

important criterion because the customers will fecl appreciated when the company is ready to provide them with the best things in the service supply process,

Tangibies relates to the appearance of elernenis supporting transaction and service provision and use, including rooms, tables, chairs, computers, printed vouchers, employees’ dress code, and the way to communicate with customers ‘the tangibles factor plays an important role in ercating an originally positive

ing aboul the quality of service

Assurance relates to employees of the service provider to see whether they have the

necessary skills and confidence to perform services as committed or not, whether the customers feel comfortable when working with employees or not If they do not feel confident and satisfied when working with the employccs, they arc unlikely to return to make

any transactions with the company

Empathy demonstrates how the company takes care and pays attention to its

customers with cach detailed cloment, makes the customers fecl respected and are of

particular interest ‘I/his criterion can be understood as the expression at the higher level than

the criterion 2, 3 and 4 mentioned above A customer who (eels the care and understanding of

the service staff will want to retum to using the service

It can be seen from the above studies that in the course of service quality evaluation,

the customers not only focus on the core service elements created and provided but they also

pay much allention to contextuat factors and supporting faclors during the service delivery process, Social thetors are also of high interest to constuners and as an important factor affecting the customer perception of service quality

1.2.3 Two important madels for quality of service

SERVQUAL model (Parasuraman et al, 1988)

This is a relatively popular service quality model applicd in mmany research projcels

about the quality of service It was built on the basis that the perceived service quality is any

difference between customer's expectations and perceptions of service provided

Gap 1: Gap one expresses the difference between actual customers’ expectations and

management’s perception of customers ‘a overcome this gap, the service provider needs to

fully understand the charactoristics Uhal make up the sorvice quality and understand, evaluate

the customers’ expectations as well

Gap 2: Gap two is the difference management’s perceptions of customer expectations

and the translation into service procedures and specifications ‘his gap appears when there is

a large range of service necds (possibly low or high leading the ineffective serving of the

enterprise}

Gap 3: Gap three is the difference between service quality specifications and the serviee actually delivered It appears when employees fail to correctly perform the

commitments and quality criteria that the company put out,

Gap 4: Gap four is the difference between service delivery intentions and what is communicated to the customers The content of a media message can increase the customer's expectation which also means the decrease in customers’ satisfaction when they are not ddlivered the servie as promised

Gap 5: If the customers find that there is no difference between their expectations and their perceptions when using a service, the quality of the service provided is perfect, that means the gap shell be zero

In terms of measurement, the author uses 22 evaluation criteria for the service quality and such criteria are associated with five basic aspects of the service Such basic aspects include Reliability, Responsiveness, Tangible, Assurance and Trmpathry

ESQ and 18Q model (Gronroas, 1984)

Gronroos looked al the qualily of service on bwo criteria, namely Functional Service Quality - FSQ and Technical Service Quality -TSQ: and paid attention to the role of corporate image in the customers’ evaluation and perception about the quality of service

Expected Service

Aaaditivusl usuxeting activities fadvert ficld selling PR prising:

and ex:enual influence by madlnicns, ideology and word-cf-mouth,

Three factors that affect the quality of servioc in the modof arc the functional service quality, technical service quality and corporate image, ‘This model is often referred to as the

FTSQ model

In tormn of the tachnical scrvice quality, il is the resull of tha intzraction pracass between the service provider and the customer, The five criteria to assess the technical serviee quality include: Problem solving skill, professional competence, professional qualifications, modern equipment and information storage

In term of the functional service quality, it shows the process of creating and supplying service to the customers It is believed to play more important role than the

ious factor and shown on the 7 crilcria’ Conv:

attitude, Business organization, Customer contact, Service style and high spirit of customer

service

In tenn of corporate image, il is meant to be the general perception, image oar

impression of the customers about the enterprise If the enterprise creates a good image in the customers' mind, they can easily ignore the shortcomings during the use of service in the past und vico versa Corporate image also haps tho customcrs fel more confident into the

1.3.1 Service quality and Customer Satisfaction

Meny studies have shown the intimate relationship between the service quatity and salisfaction In theary, when the satisfaclion is assumed to be influenced by the expericnec factor with a particular service, it allows the perception that the service quality is the cause of satisfaction,

Eshehi ct al (2008) have shown that the service quality is a decisive factor in the level of customer satisfaction regardless of the perception of service quality comes from the accumnlation of customer experience or fiom the initial use of customer service with any specific serviee

1.3.2 The human factor in providing retail banking services

According to the analysis mentioned above, service in general and retail banking serviees in particular are highly influenced by the human element as the processes of producing (creating) aud consuming of service are taken place in parallel There is always a direct interaction between the service statts and customers using the service The quality of this interaction in particutar and the capacity and attitudes of bank stafiés play a decisive role

in the custorner perception and customer satisfaction

According to Philip Worsfold (1999), many studies have indicated that there is a closely related relationship between the human element (staff) and quality of service; therefore, the banks can use this element as an imporlanl source lo crealz competitive advantage over other banks

In the service delivery process, the service staffs and related people are not merely the

alors and providers bul they are also the critival factor lo determine the quitity of

vì

the service provided,

As pointed bout by Lovelock (2005), the human element primarily determines the outcome of any service provided because the service differs fom commodity at four major points, including intargibility, heterogeneity or variability, perishability of output, no

inventory, and simultaneity of production and consumption

Of the four characteristics mentioned above, the intangibility is considered the attribute with the most important rale ‘The service intangibality shows that the service delivery/production process is even more important than the other processes, In fact, the

consumers arc experiencing "one prot

yather than one oulpul (Gronrons, 1990)

Their perception and evaluation of any service delivery process is critical to their perception of quality ‘This shows that the human element plays a decisive role in providing any high qualily sorviee, The graaler tho sorviee quatity the providers wish to dstiver to the customers, the more important the role of the service statis (Batt & Moynihan, 2006)

customers about the efficiency of the service delivery process This perception of service

quality depends on a number of factors, in which the human element (service staffs) plays a

tolally important role

Among the service quality measurement models, the SERVQUAL model has been applied in evaluating the service quality in general and the quality of banking services in

particular By applying this model, the rescarchers will understand the customers’ cvaluation

of a number of important service elements such as Reliability, Responsiveness, Tangiblas, Assurance and Empathy On that basis, the administrators can have an effective impact on cach aspoet of the scrviec lo improve ovaralt service qualily,

Due to its usefulness, this model was used by the author within the thesis to analyze

the customers! evaluation of the retail banking service quality at the PVcombank Business

Center,

CHIAPTER 2: DATA GATIIERING AXD RESEARCII

METHODOLOGY

2.1 Data collection instrument

In order to obtain the customers’ evaluation of five aspects of the service quality as desoribed in the research model in the Chapter 1, the author uses the seate of Parasuraman et

al, (1988) for measurement and zvaluation

‘This scale consists of 22 questions, which evaluates 5 aspects of the service mentioned in the research model The scales was translaled into Vietnamese with the help of language experts, and then adapted to the terminology to match the research context, ie, the research on the retail banking service quality at the PVcombank Business Center under the customicrs! evaluation

Prior to the data collection, the author sent a questionnaire to 05 customers who read and avaluated the vocabulary and the manner in the questionnaire to ensure casy understanding, easy answering and correctness to the research implication ‘The comments were updated aud adjusted by the aulhor Lo get the Gat questionnaire

The table below provides detailed questions used in the research project

3°) REL? PVcombank Business Center provides services at

the time they promised 3°) RELS PVcombank Business Center performs accurate

services withoul any mistakes 4) RELA PVeombank Business Center performs accurate

ight from the start

3 | RELS In case of problems,PVcombank Business Center

20

1s always paying allention lo timely resolution

P¥combank “Business” Center “stati” always satisfactory resolve the questions, complaints by

customers

PVcombank Business Center announces when the

services are performed

PVeumbark Business Conter stalls provide timely and fast services

PVeurnbark Business Center staffs respond positively to the requests of the customers

P¥eornbank Business Center has a beauliful location with convenient and scientific layout for

PVcombank Business Center staffs arc

professional and in polite costumes

P¥combank Business Center staffs serve the

customers in a courteous, modest style

Customers feel safe when making transactions

with the staffs of PVcombank Business Center

Parasuraman et

al (1988)

21

16 ASS3 PVcurnbank Business Center staffs creale trust

‘with the customers

17 | ASS4 PVcurnbank Business Contor stuffs have expertise

for clear and correct answer to the questions of the customers

Empathy

is) EMI P¥coubank Business Center staffs concem in the

customers

is) MP3 PVcombank Business Centar “staff “give” their

coneern about the customers 267) EMS PVcombank Business Genter staifS understand

what customers care about at most

21 EMP4 PVcombank Business Center have convenient

opening hours for all customers

22 EMPS P¥combank Business Center staffs understand

The audien

s answering the questionnaire were the customers who make lransactions

at the Conter for any products and scrvices of the retail banking field in the Center

22

2.23 Implementation of data collection

A lotal of 200 questionnaires were prepared and sent to Lhe customers to reply in

Apuil 2017 The questionnaires were directly delivered by the staffs of any departnent in direct contact with the customers in the Center to the customers when they went to the hank

lo mike any Iransactions The quostionnaires aflor being completed wore rolumned to the bank statis

“The valid questionnaire used for the analysis data were any questionnaires that were answered fully wilhoul any abnormality in the answer (snl as responding lna quickly, focusing on a certain choice for the majority of questions, etc,) There werel73 valid questionnaires obtained to be used for the data analysis

2.3 Sampling method and Data Analysis Methods

23.1 Sampling method

In this

arch projeel, the author uscs @ convenient sampling method based on the

shaping customer groups by age and gender to ensure the representation nature of the

research sample

On the scale of the sample, according to Krejeic and Morgan (1970), the sample size

is considered appropriate when the numiber of observations (respondents) is five times the

number of study variables, i.e the number of questions in the questionnaire The research

modl included in this thesis consists of 5 factors, 22 observed variables, so the ininimumn

sample size required to ensure the reliability of the research data is 5 x 22 110 observed variables

2.3.2 Data Analysis Methods

The following data analysis mcthods were used by the author with the aim of achieving the research objective:

Exploratory Factor Analysis-EPA and Alpha Cronbach analysis were used lo assess the reliability of the scale

‘The Exploratory factor analysis-KKA is often used fo identify factor structure of a scale, or to gather specific questions in cach group to summarize and identify data structures more clearly, Regarding the goal of identifying the scale structure, EFA is often used to

23

explore the latent factors or variables When performing factor analysis, the rescarchor should make decisions regarding the number of factors to be extracted, basis for holding and/or removing an item, and criteria for evaluating the overall EKA model

The number of cxtracted factors was dovided based on any scparale valuo (Figen value) created for each factor The total eigen value of all the generated factors would be equal to the total number of observed variables (or questions, called items) used in the scale Bigenvalue valuos arc usually lowered froma Inigh to low For oxample, a stutly thal usos 1 questions (commonly called items) to run EFAs can result in 1S thetors where each factor has one or more items associated with it The eigen value of each factor will be specified in

descending order, The total value oŸ the cigen values will be equat lo the lolal ders used, ic

15 factors with scparate valuc groator than or equal to 1 will be retained (extracted)

“The loading value of the item with the factor can be used to remove an item A factor wilh a low loading (less than 0.5) with factors or a high loarting (grealer than 0.5) with more than one factor will be removed from the model The factors having loading, at least 0.5 with

a single factor among the formed factors will be retained

G ria for cvaluating the quality of a scale using ile RFA method include ¢1)

vatianve ratio of the data explained by explained values, and (2) loading value of items being retained on extracted factors For the total variance of the extract, if the cumulative variance

of the extracted factors is between 50 and 60% or more it is considered acceptable ‘The

belter the extracted variance, the higher quality EFA models is On 1

retained on the factors, the loading value trom 0.5 or more is considered acceptable, from 0.7

and above is considered good (loading values from -I to 1)

The Alpha Cronbach is a method used to evaluate the scale rehiability of a scale The

Alpha Cronbach coefficient allows the evaluation of convergence degree of the measurement

loading value of iter

criterion (measisement question) with the same variable or actor used in the study The greater the value of Cronbach, the ereater the degree of convergence of measurement question in the same vaniable/tactor, the greater the reliability of the scale, and vice versa

Alpha Cronbach values usually change ftom 0 to 1 The closer the value to 0 is, the lower the

studies to assess the reliability of a soale (Hoang Trong - Chu Nguyen Mong Ngoc, 2008)

‘To obtain information about the customer's evaluation of service aspects, the author

CONCLUSION CHAPTER 2

Chapler 2 delaited the dala collection methods and data analysis mthads to help the author achieve the research objectives

On data collection, the data collection was conducted through the questionnaire form

wilh 170 customers al the P¥Vcornbank Business Center

On the data collection tool, there was 2 22 - questionnaire scale used to measure the five dimensions of service quality of the SERVQUAL model in the study ‘The seales had

been translated into Victnarnesc, adapled to the res

arch subject (rctail bankirys scrvices of PVcombank Center) and checked for content and style betore the data collection was conducted

On data analysis methods, slalistical methods were ascd to (1) evaluate the reliability scale, and (2) analyze data to meet research objectives The method used to evaluate the seale included EFA analysis and Alpha Cronbach analysis Data analysis methods included descriptive statistics (Mean and Standard Deviation, Frequency) and charts,

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CHAPTER 3: EVALUATION OF TIIE RETAIL SERVICE QUALITY

OF INDIVIDUAL CUSTOMERS AT BUSINESS CENTER OF

PYCOMBANK

3.1 Introduction uf P¥combank and PVcombank Business Center

3.1.1 Introduction to PVcombank

The formation and development of PVeonthank

Vietnam Public Joint Stock Commercial Banik (PVconibank) was established under Decision No, 279/GP-NHNN dated 16 September 2013 of the Stafe Bank of Vietnam on the basis of the merger of PetroVietnam Finance Joint Stock Corporation Vietnam (PVEC) and Westum Connncreial Iuint Stack Bank (WeslomBank) On 91/10/2013, P¥eornbank ix officially opsrating on the basis of the certificate of enterprise registration of the jeint slock company, business code 0101057919 issued by the Department of Planning and Investment

With the slogan "Bank of No Distance", PVcombank aims to build a close, friendly and devoted bank image for the success of ils customers, We are comanitted lo striving lo become a standard bank in service delivery, with a friendly style, take the benefit of

customers - partners as action targets

Now, over 97% of PVcombarik’s employees has possessed the umversity degrees, postgraduate education, and has professional proficiency Plus, PVcombank is one of the first commercial banks has successfully implemented the core banking system software T24 (Core Banking) provided by ‘Temenos in Switzerland with the ability to process over 10,000 transactions per second which can meel most of cnslorners’ requirements and improve the

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viec quality On 25” November 2015, PVcombank was ranked for 864 on the top 500

largest private enterprises in Vietnam which was a great result evaluated basing on the

sai

ctiteria of revenne and profitability, total assets, growth, and number of employees all of above-rnentioned shows thal, the business performmmec of PVeombank in 2015 had a big breakthrough, contributing to strengthening the position of the bank despite the bank just shifted its form of raming business from 2013

PVcombank has possessed strengths and certain advantages ttom the most powerful corporation, Petro Visinam, known as a stralegic shareholder of the hank With compact

shucture, professionalism, highty trained staff, PVcombank promises to became one of

potential commercial hanks in the Vietnamese banking field

Fision and strategy

or the statement of the vision, PVcombank has determined not to be the first but to

be the best bank with priority objective is to become one of the tup conmnercial banks of

‘Vietnam

Interm of strategy, the Bank aims

To maintain the financial situation at a high level of safety, to optimize the usage of equity capital — ensuring the rights of customers, the bank, and shareholders

‘To achieve high growth by creating a difference on the basis of understanding customers

needs and following custorner-based orientation,

To build a risk management system synchronization, efficiency, and professionalism in

order to onsure a sustainable growth and development,

And to achieve this objective, there is a strategy to prepare human resources, to train professional labor force, and also to construct “Culture of PVeambank” to become spiritual elements to amount the entire system

3.1.2 The formation and development of the Business Center P¥combank

PVcombank Business Center is based af 22 Ngo Quyen, Hoan Kiem, Hanoi

Same features of the establistiment and development of the Cenler include

‘The Business Center was founded on: Jume 01, 2015

‘The purpose of establishment: to develop core banking products, including credit loan products, deposit mobilization products, and crodit card issus The Center serves the necds af

both institutional and individual customers in which the latter is considered the main subject

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