Measuring customer satisfaction using retail internet banking service a sacombank

NGUYEN THI HUYEN ANH MEASURING CUSTOMER SATISFACTION USING RETAIL INTERNET BANKING SERVICE AT SACOMBANK MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION PART TIME Tutor’s name: Dr...

NGUYEN THI HUYEN ANH

MEASURING CUSTOMER SATISFACTION USING RETAIL INTERNET BANKING SERVICE AT

SACOMBANK

MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION

(PART TIME)

Tutor’s name: Dr NGUYEN KIM THU

Ho Chi Minh City

(2010) 

I declare that this final project contains no material that has been submitted to any other program in other institutes, colleges and universities This work was done by author except where due reference is made in the text

Signature: NGUYEN THI HUYEN ANH _

Date:

First of all, I would like to acknowledge all professors and coordinators who provided me valuable knowledge and support at Solvay Business School and Ho Chi Minh City Open University

I would like to acknowledge my tutor, Dr Nguyen Kim Thu, for her assistance on

my research

I would like to express my huge thanks to my parents and my sisters who support

me and encourage me to complete this research

I would like to acknowledge Ms Nguyen Thi Thuy Trang and Ms Nguyen Thi Tra

My, Sacombank members, who help me to collect relevant information and database

I would like to thank my VB3 friends, who have been studying and sharing ideas together for the whole course In particular, I wish to acknowledge the support of the following people who without their assistance, this project would not finish Ms Duong Thi Kieu Chinh and Mr Dang Tran Hanh Thong for their encouragement and support, Ms Phan Xuan Binh for her great assistance, her value feedbacks help me to find out the way to complete the research Thank you so much for your kind assistance

And, I would like to send my thanks to all respondents

The Internet has revolutionized the way that businesses operate and the financial world has not been spared (Hoffman et al & Bateson et al., 2006) With the appearance of internet, bank has no longer boundary to time or geography Customers can catch their banking account operations 24/7 via internet In Vietnam, internet banking is still at the beginning stage To recognize that Vietnam

is potential market for internet banking (IB) with high internet users in Asia, Vietnamese bankers have launched this service to the market But in order to success in banking services, bankers should understand how satisfied their customers feel about their services Kotler said that customer satisfaction is associated with numerous positive business outcomes (1994) Until now, many researches had been conducted to find out the reaching of customer satisfaction for banks But fewer researches have addressed the measuring customer satisfaction in

IB service Hence, this empirical study aims to measuring customer satisfaction from retail IB service and Sacombank’s IB customers were chosen as the population

The objectives of this project are (1) to measure the relative customer satisfaction with retail IB service at Sacombank, (2) to identify the drivers of customer satisfaction with retail IB service at Sacombank, (3) to find out which are the most significant important in service and internet attributes impacting on customer satisfaction and (4) to contribute recommendations to improve customer satisfaction

CHAPTER 1 INTRODUCTION

1.1 INTRODUCTION 1

1.2 RESEARCH BACKGROUND 2

1.3 RESEARCH PROBLEM 6

1.3.1 RESEARCH OBJECTIVES 11

1.3.2 RESEARCH QUESTIONS 11

1.3.3 RESEACH MODEL 11

1.3.4 RESEARCH HYPOTHESIS 13

1.4 METHOD OF STUDY 13

1.5 SCOPE AND LIMITATION OF STUDY 14

1.6 FRAME WORK OF STUDY 15

CHAPTER 2 LITERATURE REVIEW 2.1 INTRODUCTION 17

2.2 INTERNET BANKING 17

2.3 SERVICE QUALITY AND INTERNET QUALITY 18

2.3.1 SERVICE QUALITY 18

2.3.2 INTERNET QUALITY (WEBSITE QUALITY) 21

2.4 CUSTOMER SATISFACTION 22

2.5.2 MEASUREMENT OF INTERNET QUALITY 25

CHAPTER 3 RESEARCH METHODOLOGY 3.1 INTRODUCTION 27

3.2 DESCRIPTION OF RESEARCH METHOD 28

3.2.1 QUALITATIVE RESEARCH 28

3.2.2 QUANTITATIVE RESEACH 30

3.2.3 MEASUREMENT OF VARIABLES 32

3.2.4 DATA COLLECTION 36

3.2.5 MEASUREMENT OF INSTRUMENTS 37

CHAPTER 4 FINDING ANALYSIS 4.1 INTRODUCTION 40

4.2 BRIEF INFORMATION ABOUT IB SERVICE AT SACOMBANK 40

4.3 DESCRIPTIVE FINDINGS OF THE RESEARCH 42

4.3.1 DESCRIPTIVE GENERAL INFOMATION 42

4.3.2 IB SERVICE 43

4.4 RELIABILITY ANALYSIS 45

4.5 FACTOR ANALYSIS 46

4.6.2 EVALUATING AUTHOR’S MODEL 51

CHAPTER 5 CONCLUSION & RECOMMENDATIONS 5.1 INTRODUCTION 56

5.2 RESEARCH SUMARY 56

5.2.1 SUMMARY RELATED TO RESEACH QUESTIONS 57

5.2.2 SUMMARY RELATED TO HYPOTHESES 58

5.3 RECOMMENDATIONS 59

5.4 IMPLICATIONS FOR FURTHER RESEARCH 61

ACB Asia Commercial Bank

Sacombank Sai Gon Thuong Tin Commercial Joints Stock Bank

Table 1.1: Vietnamese Internet users 4

Table 3.1: Number of IB customers on HCMC area 33

Table 3.2: Numbers of chosen customers in HCMC 34

Table 3.3 Coding variables 36

Table 4.1: Cronbach Alpha value of each factor 45

Table 4.2: Corrected Item-Total Correlation 46

Table 4.3: Correlation matrix 47

Table 4.4: KMO & Bartlett’s Test of Sphericity summary 49

Table 4.5: Pearson correlation (r) 51

Table 4.6: Model summary 52

Table 4.7: Anova (b) 52

Table 4.8: Coefficients (a) 53

Table 4.9: Hypothesis Assessment result 54

Figure 1.1: Internet Penetration in Asia in 2009 (% of population) 4

Figure 1.2: IB’s users at Sacombank 10

Figure 1.3: Relationship of loyalty and satisfaction 10

Figure 1.4: Author’s research model 12

Figure 2.1: Factors impact on customer satisfaction 23

Figure 3.1: Research process of the study 28

Figure 4.1: Charter Capital in recent years 41

Figure 4.2: Total Asset in recent years 41

Chart 4.1: Gender 42

Chart 4.2: Education 42

Chart 4.3: Frequency of using IB 44

Chart 4.4: Satisfaction 44

Chart 4.5: Service satisfaction 44

Chart 4.6: Internet satisfaction 44

CHAPTER ONE:

INTRODUCTION

1.1 INTRODUCTION

This chapter draws the overall picture of the research It show the way of the project

by mentioning the problem statement, research objectives and questions The objectives of this chapter are (1) demonstrate research background, (2) explain the research problem and research objectives and base on (2) to (3) develop research questions and research model

1.2 RESEARCH BACKGROUND

At the beginning, the primary activities of banking are keeping safe money with interest and making liquidity for the economy by loaning the money Bank is an intermediated financial institution and plays a key drive in any national economy and global economy as well In scenario of competition, each bank has tried to serve their customers more than their expected value Internet has brought the new entrants for banking to change the structure of banks (Laura & Kate, 2003) in general and banking service in particular The wide application of internet promoted producers and entrepreneurs to sell their products and service online Taking the advantages of this technology, internet banking was born to provide added values to

customers Internet banking is predicted to transform and revolutionized banking industry (Mols, 1999; Daniel, 1999)

In 80’s decade, four banks include Citibank, Chase Manhattan, Chemical and Manufacturers Hanover launched home banking service through a videotext system

to New York market Home banking service, however, had never penetrated banking segment (Mary J C) After that, online banking service was introduced in Oct 1994 The service was developed by Standford Federal Credit Union, which is a financial institution

Internet banking was concerned with all type of banking transactions to be taken place on internet through a personal computer (PC) or other intelligent device To classify by kinds of customers, Internet banking products and services could be divided into two kinds wholesale and retail With internet banking, bankers could easily save more cost, increase customers base, be enable mass customization, conduct marketing and communication, be enable innovation, develop non-core business (Comptroller’s handbook, 1999) Although the benefit of banking using IB was huge, IB in Vietnam was still infancy at the beginning stage

According to a study of Stegman (1999), to implement one banking-transaction by traditional channel costs average 1.07 USD in USA After applying internet banking, the cost was 0.04 USD for call center; 0.27 USD for ATM; 0.01 USD for Internet banking It is obvious that offering IB, banks have a clearly cost advantage compared to traditional transaction To realize these benefits, bankers invest billions of dollars in providing and improving the IB system for their customers (Bauer, Hammerschmidt and Falk, 2005) In Pacific Asia, IB was launch in China,

HongKong, Singapore, Thailand, Malaysia etc In Malaysia and China, IB was official allowed by Centre Bank in 2000 Maybank is the first bank in Malaysia to offer IB However, Thailand and Singapore were applied IB a bit earlier since 1995 and 1997 by turns

In Vietnam, Society of Worldwide Interbank Financial Telecommunication (SWIFT) appeared in Vietnam in 1995 to support Vietnam’s banks Interbank Payment System which is a key component of banking industry’s modern future was presented at Vietnam in 2002 Foreign and joint-venture banks are the pioneer to apply e-banking in Vietnam market Following up the foreign banks, in 2004, ACB launched Home-banking which permits customers enable to do transaction via their PC; VCB launched VCBmoney (Sai Gon Computer Times, Sep 2004) But these online banking services served only a few companies at this time Many enterprises didn’t want to use IB or were afraid of using it because of flinching from security of

IT infrustructure, and lack of commerce law in Vietnam Until the end of 2005, commerce law was born Two recent years, e-banking is more familiar with Vietnam customers Many Vietnamese banks have been investing into technology infrastructure which aims to focus on “one-stop e-banking service” to serve their potential customers T24 core banking – Tenemos Swiss, the leading financial banking software to be operating over 400 banks on over the world and Oracle Flexcube core banking are modern technology system which Vietnamese banks have been applied with investment expenses is up to millions dollars

e-According to Investment News (2010), Vietnamese IB has three levels:

 Level 1: supplying simply functions such as enquiring transactions, enquiring outstanding balance current accounts

 Level 2: be added more functions compared to level 1 such as transferring money to the same banking system and to other banking systems, paying loan, opening LC etc

 Level 3: supplying completely online banking and online payment such as serving investment activities and other value-added services

At present, most of Vietnamese banks supply IB at level 1 or level 2 Although IB

is at the beginning stage, there is a high rate of internet user Vietnam is promised

to be the hot market due to growing sharply in the next few years affecting the competitive advantage enjoyed by traditional banks with physical branch (Duclaux 1996; Liao et al., 1999)

Table 1.1: Vietnamese Internet users

Source: Internet W orld Stats

And according to Nielsen, the total number of internet users worldwide is 1,5796,108 (1) Comparing with the world, Vietnam ranked at 103th (7.7 users per

100 people) in 2004 and 92sd in 2008 (24.17 users per 100 people) about internet users (2) It is clearly that the more internet users the more convenience for banks to expand their e-banking service

Figure 1.1: Internet Penetration in Asia in 2009 (% of population)

Top 10 countries

Source: Internet W orld Stats ( www.internetworldstats.com )

1

NetRatings via Internet W orld Stats, A pril 2009

2 International Telecommunication Union, W orld Telecommunication Development Report

However, Nielsen also announced that only 1% Vietnamese population who using banking services had used and enable to use the utilization of IB Lack of awareness about this channel (52%) and safety (28%) are some reasons that customers don’t

want to conduct IB (AC Nielsen 2010)

1.3 RESEARCH PROBLEM

RATIONALE OF THE STUDY

IB has been brought benefits both banker and customers With IB, bankers use their website to offer classical operations such as accounts balance detail or money transfer, or to provide bill payment, credit card and investment advice and stock trading (Guru et al., 2003) Website is a modern channel to provide information and undertake customers’ transaction and it also is a tool to improve customer relationship (Diniz, 1998) It help financial institutions to reduce costs as above analysis, shorten processing periods, increase speed and improve the flexibility of business transactions and provide better service overall (Ainin et al., 2005) Beside,

IB also allows customers to save time by undertaking their transactions 24 hours a day without queuing for hours waiting at mortal branch banks; it allows customers to reduce their bank’s costs because banks decrease the fees or charges due to their reducing costs advantage Due to the advantages of IB, the major banks offer IB service In the competitive context, it is easy to duplicate products and services when banks supply mostly identical services, where customers are the key factor for the success in term of profit and market shares Customer satisfaction has been being as attention of many organizations because the high customer satisfaction has

been linked to customer retention, market share, loyalty, higher company’s profits (Szymankski and Henard, 2001)

From the first IB introduction, according to author’s knowledge, There has been a little of researches which have examined the customer satisfaction And these authors have applied several theories to predict the factors influence in customer satisfaction from using retail IB The theories include: service quality of Parasuman (Riquelme et al., Mekkaoui et al., and Rios et al., 2009) Hence, a research of IB customer satisfaction is significant important to fulfill this gap

RESEARCH PROBLEM

Sacombank is one of the first commercial banks in Vietnam was establish in 1991 Its charter increases to 9,179 billion dong in 2010 The bank has 320 transaction points in 45 of the 63 provinces and cities in the country and has also established international operations in Laos and Cambodia

Sacombank’s brand name and reputation has been recognized by Vietnam community through prestigious awards as “Yearly Retail Banking in Vietnam 2007, 2008” be voted by Asian Banking and Finance, “The best local Bank in Vietnam 2008” be voted by The Asset, Global Finance and Finance, “The best foreign exchange business bank in Vietnam 2009”

To be competitive and compete effectively in long run, Sacombank invested in modern IT infrastructure supplied by reputed partners such as: Tenemos, Oracle, Cisco, IBM, HP etc Its modern technology comprises: main applied server – IBM p595, main database server – HP Superdome, database – Oracle and Storage

system SAN XP24000… These systems which are modern international standard were installed in Sacombank’s data center Based on high tech systems, to improve competitiveness and management capacity to serve customers better and better, Sacombank has been conducted deploy new applications to improve competitiveness and administrative capacity Projects which have been implemented are E-banking, Data Warehouse, Customer Relationship Management, Management Information System, Treasury, Contact Center, Risk Management, and Human Resource Management …

For retail segment, Sacombank presently supplies more than 120 products and services which are cards, mobilizing capital, credit, internet banking, other individual financial service and products linked with bancassurance insurance Sacombank firstly introduced IB in 25/05/2011 To end of 2010, there was over 8,000 individual users using IB With retail IB service of Sacombank, customers don’t need to go to the bank “brick and mortar” but enable to implement their transactions at anywhere with their PC/laptop or intelligent devices which connect internets “click and mortar”

In Vietnam banking industry, today, it is easy to duplicate products and services when banks supply mostly identical services To create the differentiation, Sacombank does its own way by supplying qualified service and applying customer contact to take care customers Sacombank puts customer satisfaction in the top concern

However, Sacombank has faced the problem that the speed of increasing percentage of IB customers was rather low than estimated plan The figure 1.2

below demonstrates that the development of IB users was low increasing in the last three months of 2010 The expected speed of increasing IB was 25% at the end of

2010 compared with September, 2010 The estimated plan was reasonable because the huge demand to use IB service at Sacombank which was got from the previous study with exist retail customers

Beside, according internal report, the critical point that Sacombank has faced that there were customers complaints which focused on (1) IB service qualification such

as late transferring money transactions, unprofessional consultant staffs, busy contact center, inconsistency instruction between consultant staff at branch and contact center and (2) internet qualification such as difficult in logging in account, embarrass interface etc

The project aims to measure the customer satisfaction from using retail IB by examining customer satisfaction via service and internet quality dimension From measuring customer satisfaction, Sacombank would improves its’ customer satisfaction by suitable approaches And it could get customer retention because satisfied customers are more loyal than unsatisfied customers (figure 1.3)

Figure 1.2: IB’s users at Sacombank

Source: Internal source of Sacombank

Figure 1.3: Relationship of loyalty and satisfaction

Source: James L.Heskett.W Earl Sasser, Jr., and Leonard A Schlessinger, The

service profit chain (New Y ork, NY : The Free Press, 1997).p.83

1.3.1 RESEARCH OBJECTIVE

The purpose of this study was to exam the level of customer satisfaction from using

IB of Sacombank The specific objectives were as follows:

- To measure the relative customer satisfaction with retail IB service at Sacombank;

- To identify the drivers of customer satisfaction with retail IB service at Sacombank;

- To find out which are the most significant important in service and internet attributes impacting on customer satisfaction;

- To contribute recommendations to improve customer satisfaction

1.3.2 RESEARCH QUESTIONS

The survey was conducted to answer below questions:

Question 1: What are the customers’ perceptions impacting on satisfaction over the internet and service quality dimensions?

Question 2: How well do eight dimensions predict customer satisfaction?

Question 3: What is the most important critical predictor of customer satisfaction?

1.3.3 RESEARCH MODEL

Base on the research (1) of Riquelme et al., Mekhaoui et al., ans Rios et al (2009)

“Internet banking customer satisfaction and Online service attributes” and the

research (2) of Minjoon J, Shaohan C (2009) “the key determinant of internet banking service quality”, research (1) presents about relationship of customer satisfaction with service attributes and online attributes and research (2) displays the key determinant of internet banking service quality To simplify base on these researches, below is author’s model

Figure 1.4: Author’s research model

Hypothesis H3: There is a positive impact of “courtesy” on “customer satisfaction”

Hypothesis H4: There is a positive impact of “access” on “customer satisfaction”

Hypothesis H5: There is a positive impact of “ease of use” on “customer satisfaction”

Hypothesis H6: There is a positive impact of “content” on “customer satisfaction”

Hypothesis H7: There is a positive impact of “timeliness” on “customer satisfaction”

Hypothesis H8: There is a positive impact of “security” on “customer satisfaction”

1.4 METHOD OF STUDY

The quantitative research was applied in the study to exam the model by analyzing the reliability and testing hypotheses Self-administrated questionnaires were sent

to Sacombank’s retail IB customers to collect primary data Respondents were selected from Sacombank’s database The survey was implemented from 10th

December, 2010 to 31st January, 2011 676 questionnaires were emailed to respondents After collecting the customer feed backs, SPSS was used to process data

1.5 SCOPE AND LIMITATION OF STUDY

IB for retail segment brings potential to both banks and customers by its conveniences Although, IB remains immature in Vietnam, there is a phenomenon that many Vietnamese banks launch IB to the market To get customers satisfaction

is the most concern in banking industry With this project, the result and analyses are significant with Sacombank to improve its customer satisfactions by efficient approaches

Due to the limited time and resources, the survey was conducted by email questionnaire in HCMC only Target population was IB experience customers and

169 respondents were rather small compared to other research in Hong Kong (632), Kuwait (185) and Turkey (527) The number of respondents should be larger to representative of IB in HCMC And, the research could not reach customers in other regions of Vietnam Although the majority of IB customers concentrate in HCMC, however it maybe customers at other region have different assessment about satisfaction from IB

1.6 FRAMEWORK OF THE STUDY

This project was organized in the following way:

Chapter 1 mainly presents general introduction (section 1.1); research back ground (section 1.2); research problem (section 1.3) which comprises research objectives (section 1.3.1), research questions (section 1.3.2), research model (section 1.3.3) and research hypothesis (section 1.3.4); the method of the study describes the way

to conduct the survey (section 1.4); scope and limitation of the study (section 1.5); and the end of this chapter is the structure of this study (section 1.6)

Chapter 2 comprises the literature review Introduction (section 2.1), Internet banking (section 2.2), and service quality (section 2.3), and customer satisfaction (2.4); and the main part is theoretical framework which contain two sections: measurement of service quality (section 2.5.1), measurement of internet quality

Chapter 3 is the research methodology which contains general introduction (section 3.1); description of research method (section 3.2) includes qualitative research (section 3.2.1), quantitative research (section 3.2.2) and measurement of variables, data collection (section 3.2.4) and measurement instruments (section 3.2.5) In quantitative research, questionnaire development, target population, sample size will be presented

Chapter 4 is finding analysis Introduction (section 4.1), brief information about IB service at Sacombank (section 4.2) and descriptive findings of the research (section 4.3) In section 4.3, descriptive general information (section 4.3.1) and descriptive about IB service findings (section 4.3.2) was descriptive sample Reliability analysis

(section 4.4), regression analysis (section 4.5) were main instrument in the research

In multiple regression part, correlation analysis and findings (section 4.5.1) and evaluation author’s model (section 4.5.2)

Chapter 5 presents recommendations and conclusions Introduction (section 5.1), research summary (section 5.2), summary related to research questions (section 5.2.1) and summary related to hypotheses (section 5.2.2) Recommendations (section 5.3) and implications for future research (section 5.4) are the last section

2.2 INTERNET BANKING

The concept of internet banking firstly appeared in 1980’s, four of the major banks

in New York – Citibank, Chase Manhattan, Chemical and Manufacturers Hanover launched “home banking service” through videotext system in 1981 (Mary J, 1997) According to Ehow, this system operated much like a rudimentary dial-up connection by using a numeric keypad to send tones down a phone line These tones provided instructions to the bank on what transactions to complete Due to the lack

of commercial success for the videotex system, home banking services never really caught on at that time The online banking service as it is known today began on October 6, 1995 On this day, Presidential Savings Bank became the first financial provider to offer Internet banking for regular customer use The revolution of

internet banking has spread to the world It is used widely on over the world and takes the huge benefit for bankers

Internet banking is a service that allows bank members to access bank accounts and conduct financial transactions via the Internet (E-how) It is one of banking channel which brings banking services to home, offices, schools, anywhere and anytime Sacombank’s internet banking, is definite as a one of e-banking channel which is provided by Sacombank to customers via Internet with the main purpose is to apply payment and transfer subsystem facilities to supplied internet channel products/services and other fundamental services such as enquiry, information registration etc; customers enable to access to Sacombank’s website via login information to conduct transactions on their own accounts (Sacombank, 2010)

Acar et al., Nadi et al., and Huseyin C have examined IB websites and IB products and services (2010) Minjoon J and Shaohan C (2001) investigated the determinant

of IB service quality via three categories which are internet quality, service quality and diverse product This project aims to exam customer satisfaction via service quality and internet quality So in the next part, service quality, internet quality and customer satisfaction will be present

2.3 SERVICE QUALITY AND INTERNET QUALITY

2.3.1 SERVICE QUALITY

Parasuraman (1985) describes that there are ten dimensions of service quality which

are used to measure the quality of services:

1 Reliability involves consistency of performance and dependability It means that the firm performs the service right the first time It also means that the firm honors its promises Specifically it involves: accuracy in billing, keeping records correctly, performing the service at the designated time …

2 Responsiveness concerns the willingness or readiness of employees to provide service It involves timeliness of service: mailing a transaction slip immediately, calling the customer back quickly, giving prompt service (e.g setting

up appointments quickly)…

3 Competence means possession of the required skills and knowledge to perform the service It involves: knowledge and skill of the contact personnel, knowledge and skill of operational support personnel, research capability of the organization e.g securities brokerage firm

4 Access involves approachability and ease of contact It means: the service is easily accessible by telephone (lines are not busy and they do not put you in hold); waiting time to receive service (e.g at the bank) is not the extensive; convenient hours of operation; convenient location of service facility…

5 Courtesy involves politeness, respect, consideration and friendliness of contact personnel (including receptionists, telephone operators, etc.) It includes: clean and neat appearance of public contact personnel…

6 Communication means keeping customers informed in language they can understand and listen to them It may mean that the company has to adjust its language for different consumers – increasing the level of sophistication with a

well-educated customer and speaking and plainly with a novice It involves: explaining the service itself, explaining how much the service will cost, explaining the trade-offs between service and cost, assuring the consumer that a problem will

be handled…

7 Credibility involves trustworthiness, believability, and honesty It involves having the customer’s best interests at heart Contributing to credibility is: company name, company reputation, personal characteristics of the contact personnel, the degree of hard sell involves interactions with the customer…

8 Security is the freedom from danger, risk or doubt It involves: physical safety (Will I get mugged at the ATM?); financial security (Does the company know where my stock certificate is?); confidentiality (Are my dealings with the company private?) …

9 Understanding the customer involves making the effort to understand the customer’s needs It involves: learning the customer’s specific requirements, providing individualized attention, recognizing the regular customer …

10 Tangibles include the physical evidence of the service: physical facilities, appearance of personnel, tools or equipment used to provide the service, physical representations of the service, such as a plastic credit card or a bank statement

2.3.2 INTERNET QUALITY (WEBSITE QUALITY)

In online shopping, customers are frequently interacting with the website to undertake their transactions Hence, the website can act as a tool which enables to

be established the relationship between customers and company (Yuan G, 2005) Customer satisfaction with internet shopping experience is closely associated with the perceived quality of process of using the web, as much as it is determined by the outcome quality (Gronross et al., 2000)

Many researchers have assessed website quality via some factors such as useful, user friendly and pleasant to use Online consumers also concentrated in security that leads secure transactions (Yuan G, 2005) Also, the speed and ease of use of a retail web are considered to be important contribution to customer perception (Yang

et al., 2003) Kim and Stoel (2004) found that loading speed and response time have been being factors which positive influence customer satisfaction with retail website

Customers highly appreciate a website with feature easy navigation, appropriate search function, relevant content and consistent interface (Radosevich, 1997; Spool, 1997; Palmer, 2002; Agarwal & Venkatest, 2002) Consumers, today, are capable of searching for their best choice (Monczka and Morgan, 2000) Gronroos et al (2000) also point out that an effect website will provide customers products and service information and related information

Many researchers also assessed website quality via dimensions developed by Parasuman as above section (La et al, 2005)

2.4 CUSTOMER SATISFATION

Explanation about customer satisfaction with a purchase depends upon the product’s performance relative to a buyer’s expectations; a customer might experience various degrees of satisfaction If the product’s performance the falls short of expectations, the customer is dissatisfied If performance matches expectations, the customer is dissatisfied If performance matches expectation, the customer is satisfies If performance exceeds expectations, the customer is highly satisfied or delighted (Kotler P, Amstrong G, Saunders J, Won V, 2001)

Customer satisfaction is one of the most studied areas in marketing Until now, there are a wide variety of alternative definitions of customer satisfaction exist Such as, customer satisfaction is defined as: an evaluative response or outcome of the product purchase and consumption experience resulting from a comparison of what was expected and what was received (Patterson, 1993b) Or customer satisfaction is the level of a feeling which is derived from the comparison of outcome obtained from product with the expectations (Kotler, 2001) Customer satisfaction as what the customer should want, against these organizational and marketing needs (Yi, 1990; Dutka, 1994) Or Hill (1996) defined customer’s perceptions that a supplier has met

or exceeded their expectations

The benefits of getting customer satisfaction are huge It is because of customer satisfaction’s importance which has been linked to customer loyalty, customer retention, market share, profit (Szymankski and Henard, 2001) An unsatisfied customer will tell more people of their dissatisfaction, possibly complain to the company and sufficiently disenfranchised, change to another company for their

product or service, or totally withdraw from the market (Anderson and Sullivan, 1993; Fornell, Ittner and Larcker, 1995; Oliva, Oliver and Bearden, 1995) Hokanson’s (1995) proposed that some factor impact on customer satisfaction:

Figure 2.1: Factors impact on customer satisfaction

Source: UCTI W orking Paper

2.5 THEORICAL FRAMWORK

2.5.1 MEASUREMENT OF SERVICE QUALITY

Many studies have used service quality as a factor impact on customer satisfaction (Parasuraman et al., 1988) Parasuraman (1985) proposed ten service attributes, after that in 1988, he distilled these ten dimensions to five attributes by using factor

analysis: tangible, reliability, responsiveness, assurance and empathy Base on the five dimensions, 22-item survey instrument called SERQUAL was used to measuring service quality SERQUAL was applied to assess the service quality widely However, according to Cowling and Newman (1995), one bank found that among the five dimensions in SERQUAL, reliability, responsiveness and empathy are the highest impact on customer satisfaction Minjoon J and Shaohan C(2001) proposed that ten dimensions to assess IB service quality: reliability, responsiveness, competence, courtesy, credibility, access, communication, understanding the customer, collaboration and continuous improvement The first eight dimensions were previously uncovered by Parasuraman et al (1985), the remaining two dimensions, collaboration and continuous improvement, were uniquely develop the Minjoon J and Shaohan C (2001)

Correct service

Keep service promse

A ccuate record

Keep promised as advertised

A vailablity for hepl

A ccount access when broad Phone access

A vailablity of status of transaction

A bility to solve problem

Knowlegable to answer questions

Personal attention

A ddress complaints friendly

Consitently courteous

External collaboration Internal collaboration

Confidence in bank's service

Good reputation

Continuous improvement online system Continuous improvement banking product Continuous improvement customer service

In part service quality, sixteen item-scale adjusted base on the practice of Sacombank Vietnam

2.5.2 MEASUREMENT OF INTERNET QUALITY

Liu and Arnett (2000) proposed four factors to evaluate the website as: system use, system design quality and playfulness Barnes and Vidgen (2000) used four components to evaluate a website: functionality, content, service and attractor Davis (1989) provided Technology Acceptance Model (TAM) to predict user acceptance of a system: perceived usefulness and perceived ease of use Loiacono

et al., (2002) proposed that two of five dimensions in SERQUAL need to be included in assessing website quality Doll and Torkzadeh (1988) designed and validated a 12-items instrument to measure customer satisfaction for computing end-user There are four factors to measure these 12 items: content, accuracy, format, ease of use and timeliness Jayawardhena and Foley (2000) suggested that

to enhance customer satisfaction from Internet banking, the speed of download, content, design, interactivity, navigation and security are critical to assess internet

banking website Minjoon J and Shaohan C(2001) proposed that six dimensions are needed whenever assessing internet quality

Information or product and service online

Other information that customer needs

In internet quality part, twelve items scale was adjusted based on the practice of Sacombank Vietnam

 SPSS  Reliability test, factor analysis and Multiple regression

Figure 3.1: Research process of the study

3.2 DESCRIPTION OF RESEARCH METHOD

3.2.1 QUALITATIVE RESEARCH

To simplify the research of (1) of Hernan E R, Khalid A M, Rosa E R and the research (2) of Minjoon J and Shaohan C, the author wants to investigate whether factors which impact on IB service in these researches have any impact on IB service in Vietnam banking environment Before conducting author’s research,

qualitative research was conducted to exam which factors, items related to customer satisfaction of IB service at Sacombank in HCMC A group included 15 customers who have been using Sacombank’s IB service Moderator was expert in market research Qualitative research questions are in appendix C:

The key findings from quality research:

 Most of customers chose IB service at Sacombank because (1) they are exist customers at other channel: loan, deposit, debit/credit cards etc and they believe Sacombank by its reputation

 The most significant element impacting on customer satisfaction are both service quality and online systems quality of Sacombank

 With quality service dimensions, customers highly appreciate the consultant staff’s behavior (supporting staffs at the counter and telephone supporting staff) and services qualities related to IB

 With online system quality, customers concern more the online system of Sacombank than IT infrastructure of Vietnam

 And most of customers agreed that diversify product would not Sacombank’s critical concern in this year to get customer satisfaction

 One to three portion of customers replied that they would be complete the questionnaire in 3 weeks