The determinants impact on opening and using ATM account

This study investigates significant dimensions of ATM service quality, customer satisfaction, customer trust and their effect on customer loyalty.. To explain customer loyalty level, thi

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THESIS:

THE DETERMINANTS IMPACT ON OPENING

AND USING ATM ACCOUNT

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

by Ms: Le Thi Hong Ngan ID: MBA02018 Advisor: Dr NGUYEN VAN PHUONG

International University - Vietnam National University HCMC

February, 2013

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THE DETERMINANTS IMPACT ON OPENING AND USING ATM ACCOUNT

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

by Ms: Le Thi Hong Ngan ID: MBA02018 Advisor: NGUYEN VAN PHUONG International University - Vietnam National University HCMC

February 2013

Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree Approved:

-

-

-

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Acknowledge

Firstly, I would like to express the special thanks to my supervisor of this thesis, Dr Nguyen Van Phuong, the teacher in International University, Vietnam National University, Hochiminh City for the valuable guidance and advices given to me during last eight months His enthusiastic instructions and precious reference materials help me

to find out the solutions to complete the thesis

Secondly, I want to gratitude to the members of committee who gave me the helpful comments on my proposal as directions for me to finish my thesis I also would like to thank other teachers of the School of Business of International University, Vietnam National University, Hochiminh City and my classmates who have provided

me with useful knowledge and learning skills The last thanks are specially given to my parents and my husband for their encouragement, sympathetic and great supports during

a long way for successful completion of my thesis

No other person’s work has been used without due acknowledgement in the main text of the thesis

This thesis has not been submitted for the award of any degree or diploma in any other tertiary institution

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Copyright Statement

This copy of the thesis has been supplied on condition that anyone who consults it

is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author’s prior consent © Le Thi Hong Ngan/ MBA02018/2010 – 2012

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TABLES OF CONTENT CHAPTER ONE: INTRODUCTION

1.1 Present and history of ATM 1

1.2 Background 2

1.3 Research purpose 3

1.4 Research questions 4

1.5 Scope and limitation 4

1.6 Implications 5

CHAPTER TWO: LITERATURE REVIEW 2.1 The key factors to make customer open an ATM account 6

2.2 The determinants impact on using ATM account 6

2.2.1 Customer Satisfaction 6

2.2.2 Service quality 7

2.2.3 Customer trust 9

2.2.4 Customer loyalty 10

CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Research Model and Hypothesis 12

3.1.1 The determinants impact on opening and using ATM account 12

3.1.2 The determinants impact on customer loyalty 15

3.2 Research process 16

3.3 Qualitative Research 18

3.4 Quatitative Research 18

CHƯƠNG FOUR: DATA ANALYSIS 4.1 Respondents Characteristics 20

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4.2 Descriptive Statistics 23

4.2.1 Determinants impact on opening and using ATM account 23

4.2.2 Determinants impact on customer loyalty in using ATM account 25

4.3 Cronbach Alpha test 28

4.4 Exploratory Factor Analysis (EFA) 31

4.4.1 Determinants impact on opening and using ATM account 31

4.4.2 These factors affect customer loyalty for the use of ATM card services 37

4.5 Confirmatory Factor Analysis (CFA) 50

4.6 Structural Equation Modeling - SEM 54

4.7 Bootstrap 57

CHAPTER FIVE: DISCUSSION AND CONCLUSION 5.1 Summary of results 58

5.2 Discussions of results and implications 58

5.3 Limitations 60

5.4 Conclusion 61 Reference

Appendix

viii

LIST OF FIGURE

Figure 3.1 – Proposed Research Model 15

Figure 3.2 – Proposed Research Model 16

Figure 3.3 – Research Process 17

Figure 4.1 – Sex 21

Figure 4.2 – Age 21

Figure 4.3 –Income 22

Figure 4.4 – Occupation 22

Figure 4.5 – Determinants impact on opening ATM account 35

Figure 4.6 – Determinants impact on customer loyalty in using ATM card 48

Figure 4.7 – CFA of measurement model standardized 51

Figure 4.8 – Structural Equation Modeling result after adjusting theoretical model (standardized) 54

LIST OF TABLE Table 4.1 - Respondents Characteristics 20

Table 4.2 – Variables Descriptive Statistic 23

Table 4.3 – Variables Descriptive Statistic 25

Table 4.4 – Result of Cronbach Alpha test 29

Table 4.5 – KMO and Bartlett's Test 31

Table 4.6 – Total Variance Explained 32

Table 4.7 – Rotated Component Matrix 33

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Table 4.8 – KMO and Bartlett's Test of first EFA 37

Table 4.9 – Total Variance Explained of first EFA 37

Table 4.10 – Rotated Component Matrix of first EFA 38

Table 4.11 – KMO and Bartlett's Test of second EFA 41

Table 4.12 – Total Variance Explained of second EFA 41

Table 4.13 – Rotated Component Matrix of second EFA 42

Table 4.14 – KMO and Bartlett's Test of third EFA 43

Table 4.15 – Total Variance Explained of third EFA 43

Table 4.16 – Rotated Component Matrix of third EFA 44

Table 4.17 – KMO and Bartlett's Test of Customer Loyalty Variable 49

Table 4.18 – Total Variance Explained of Customer Loyalty Variable 49

Table 4.19 – Component Matrix of Customer Loyalty Variable 50

Table 4.20 – Standardized Regression Weights (Group number 1 – Default model) 52

Table 4.21 – Composite Reliability and Variance Extracted 53

Table 4.22 – SEM – Regression Weights for main parameters 56

Table 4.23 – SEM – Standardized Regression Weights for main parameters 56

Table 4.24 – Goodness-of-fit measures 56

Table 4.25 – Results estimated by Bootstrap 57

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ABSTRACT

Today, ATM (automated teller machine) card is just like a friend for everybody in Vietnam This is one of the best services provided by the banking industry to every one having an account in a bank There is a direct relationship between the service quality of ATM card and the level of customer satisfaction Customer satisfaction and customer loyalty are very important in the present world This study investigates significant dimensions of ATM service quality, customer satisfaction, customer trust and their effect on customer loyalty To explain customer loyalty level, this study follows Lin and Wang (2005) model that customer loyalty should be measured along with the factors as service quality, customer satisfaction and customer trust The questionnaire was used to collect the data from a convenience sample of 300 customers of banks in Ho Chi Minh city SEM (structural equation modeling) results indicate that service quality, customer satisfaction and customer trust positively and significantly contributes toward customer loyalty The thesis makes a significant contribution to the banking management because some empirical findings are available dealing with this aspect of ATM card service in the Vietnamese banking sector

Keywords: service quality, customer satisfaction, customer trust, customer loyalty

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Chapter One – INTRODUCTION

This chapter will introduce the present and history of ATM, background, research purpose, research questions, scope and limitation and implications

1.1 Present and history of ATM

An automated teller machine or automatic teller machine (ATM) is a computerized telecommunications device that provides the clients of a financial institution with access

to financial transaction in a public space without the need for a cashier, human clerk or bank teller The ATM has a long and interesting history dated back to 1939 Although, several inventors in different countries simultaneously developed prototype of the machine; there were only few practical model were installed for example Bankograph in New York City in 1939 or Uppsala in Tokyo in 1967 Although these machines somewhat dispense with cash and do certain transactions, they were individual entity and had no connecting capabilities They also incorporated very basic user identification system such as using paper checks marked with carbon-14 readable by machines Until 1968, the first networked ATM was invented in Dallas, Texas U.SA by Donald Wetzel Chemical Bank was the first bank commercialized ATM machine in its branch in New York City The initial rollout was very slow due to extremely high cost

of the machine, unproven reliability of the network, and customers’ perception At the beginning of the ATM era, customers would not have full confident when machines handling their money There were many concerns over machine failures, network outage or banks error which could results bad transactions Also, customers did not accustom to interact with machines, so it created tremendous hesitation to accept new ATM machines

Since then, ATM has been used widely, and now, in The United States alone, there are 371,000 ATM machines You can see an ATM machine almost everywhere

1.2 Background

Vietnam is a country of which the economy is growing rapidly Although the banking system in Vietnam is still regarded as one of the youngest systems in the world, Vietnam has been considered a great potential market for finance and banking industry recently

Since Vietnam joined the WTO in 2007, the number of business invests in banking services have been developed rapidly, Banking services are also increasingly fierce than before The more banks establish, the more choices people have People only choose a bank which has good and comprehensive services The more a bank has high quality products and services, the more customers choose the bank Among the numerous of products and services that banks provide to customers, ATM card is an innovative service delivery mode that offers diversified financial services like cash withdrawal, funds transfer, cash deposits, payment of utility and credit card bills, cheque book requests, and other financial enquiries

According to the spread of ATM machines all over the world, ATM cards now are not strange to the majority of the Vietnamese people Almost all the banks in

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Vietnam have launched ATM service, which also created a high competition among them Customers become the important objects to test However, there is a little study about the relationship among customer satisfaction, customer loyalty and customer trust Almost banks are increasingly focusing their strategic effort on marketing and attracting new customers The aim of this thesis is to investigate the factors that affect customers’ continued usage of ATM banking service and determinants impact on customer loyalty

in using ATM card

1.3 Research purpose

The strong development of ATM card market has received considerable attention recently It is an important part in the bank Banking has traditionally operated in a relatively stable political environment for years However, today the banking industry is facing a dramatically aggressive competition in a new dynamic environment The most

of state owned banks have been privatized and become the commercial banks, therefore banking services are much more competitive in bank market Competition will undoubtedly continue to be a more significant factor With the phenomenal increase in the country's population and the increased demand for banking services; service quality, customer satisfaction, customer trust and customer loyalty are going to be key differentiators for each bank's future success

Thus, this study may be very useful to banking manage and it may also help the ATM section of the bank to identify their positive and negative features and the recommendation of the customers Banking managers can take actions on service to improve the quality.The purpose of study included in:

 Identify factors that impact on making the customer open the ATM account

 Analyze the impact of service quality, customer satisfaction and customer trust

on the loyalty of customers

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1.4 Research questions

Factors that affect customers’ continued usage of ATM banking service The customer retention is the most important factor in influencing the financial income of bank The thesis helps us to answer five main questions:

 What are the key factors to make the customer open the ATM account?

 Why do the customers choose the ATM banking service for using regular?

 Does service quality influence the customer satisfaction in ATM service?

 Does customer satisfaction influence the customer loyalty in ATM service?

 Does customer trust influence the customer loyalty in ATM service?

1.5 Scope and limitation

The study has some limitations The study has used convenience sample and just focus all individual office employees and factory workers in Ho Chi Chi Minh City, a big industrial city in Vietnam A mix of interviews and qualitative data gathering techniques could be used to make the results more comprehensive and generalization Future research could focus on diversifying the sample across different ethnic groups,

income, and education in many cities and provinces

1.6 Implications

The research finding and contributions have brought some implications to the banking management The research findings provide some insight and feedback for the banking operator to get the new managerial strategic on how to increase customer Banking managers need to know the key factors that impact on customers’ decision on opening new ATM cards and customer loyalty

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Chapter Two - LITERATURE REVIEW

This chapter will present the key factors to make customer open an ATM account and

the determinants impact on using ATM account

2.1 The key factors to make customer open an ATM account

Sharma (1993) examined the impact of firm characteristics, market structure and state regulations on the adoption of automated teller machines (ATMs) Sharma (1993) analyzed the effect of the explanatory variables to find key factors of the customer need ATMs have been introduced by banks throughout many ways to make the customer understand and start to use all service though ATM account: 1) to attract new customers

by offering and flexible and convenient service; 2) to envisage that these machines could perform many deposit, withdrawal and transfer operation at lower cost than human teller, and showed to the customer many benefit with opening ATM account; 3)

to estimate the demand for service in a particular area before launching the new ATM services

2.2 The determinants impact on using ATM account

2.2.1 Customer Satisfaction

The more satisfied customers are, the greater the number of ATM users is (Ranaweera and Prabhu, 2003) The customer satisfaction strategy is one of the core strength in many banks Researchers show that the service quality has a direct link with the customer satisfaction and the number of customers (Parasuraman et al., 1988) Some studies have also identified customers’ dissatisfaction with ATM service quality dimensions Large numbers of customers are resistant to this new mode of service delivery and prefer more personal services (Murdock and Franz, 1983) The researchers noted that customers do not like ATMs because of impersonality, vision problem, fear

is one of the significant determinants of customer loyalty Hallowell (1996) also supported that the customer satisfaction is associated with the customer loyalty

According to Lin and Wang (2006), customer satisfaction exhibited the strongest direct effect on customer loyalty, whereas perceived value exhibited a stronger total effect on customer loyalty than that of customer satisfaction The results consistently supported other studies, in which both perceived value and satisfaction were significant predictors of customer loyalty The findings also indicated that perceived value was partially mediated through satisfaction in influencing customer loyalty Both reasoning and empirical research have provided evidence that the perceived value and satisfaction

of customers tap into different dimensions

2.2.2 Service quality

Service quality is an important factor to attract ATM users The ATM services have become extremely popular among customers as the convenient mode of transactions The technological innovation has transformed the banking business Banks are aggressively adopting this mode The advantages of using ATM have given new impetus to dimensions of service quality and banks are offering new choices to customers Moutinho (1992) established that ATM facility resulted in speed of transactions and saved time for customers Furthermore, researchers also identified many different dimensions of ATM service quality For instance, Lovelock (2000)

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identified secure and convenient location, adequate number of ATM, user-friendly system, and functionality of ATM Davies et al., (1996) examined the factors influence customers satisfaction about ATM service quality These factors include using costs and efficient functioning of ATM Joseph and Stone (2003) examined the United States customers’ perception of ATM quality and found that user-friendly, convenient locations, secure positions, and the numbers of ATM provided by the banks are essential dimensions of ATM service quality In a case study of Botswana, Mobarek (2007) established speed of operation, and waiting time as the important predictors of ATM service quality The better service quality is provided, the more attractive the ATM users want to open new accounts

In various studies the relationship between service quality and customer preference loyalty had been examined (Boulding et al, 1993; Cronin and Taylor, 1992) In their study Cronin and Taylor (1992) focused solely on repurchase intentions Whereas Boulding et al (1993) focused on the elements of repurchasing as well as the willingness to recommend In the study by Cronin and Taylor (1992), service quality did not appear to have a significant positive effect on repurchase intentions (in contrast

to the significant positive impact of satisfaction on repurchase intention), whereas Boulding et al (1993) found positive relationships between service quality and repurchase intentions and willingness to recommend

2.2.3 Customer trust

Trust is a focal key in the development of the relationship between banks and customers It is also acknowledged in marketing theory as the basic policy in developing and sustaining long-term relationships (Crosby et al., 1990), to build a mutually beneficial relationship with customers on the basis of mutual trust and to enhance

Morgan and Hunt (1994) have advocated that trust is fundamental in developing customer loyalty The importance of trust in explaining loyalty is also supported by authors like Singh and Sirdeshmukh (2000)

2.2.4 Customer loyalty

Oliver (1999) defines brand loyalty as ‘‘a deeply held commitment to buy or patronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior.’’ This emphasizes two different aspects of loyalty described in prior studies-behavioral and attitudinal Chaudhuri and Holbrook (2001) suggested that behavioral, or purchase, loyalty consisted of repeated purchases of the brand, whereas attitudinal loyalty included a

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degree of dispositional commitment, in terms of some unique value associated with the brand Thus, customer loyalty here was considered bi-dimensional, including both attitudinal commitment and behavioral re-purchase intention

Srinivasan et al (2007) stated that these are two main categories of loyal customers The first category is of loyal customers Within the loyal category, there are satisfied and un-satisfied customers The satisfaction is not an essential requirement for loyalty,

so satisfied customers do not have to become loyalty, but there is a correlation between the satisfied customers and loyal customers Sometimes unsatisfied customers are also loyal due to attachment and commitment with suppliers This type of loyalty is sometimes called False Loyalty in whish unsatisfied customers remain loyal to their suppliers The reason for this false loyalty is the factors due to which the customer feels hurdles and obstacles in his/her way, which stops him her from switching or choosing another supplier These hurdles are called switching suppliers

Finally, Lin and Wang (2006) model and other studies in banking filed indicated relationship of service quality, customer satisfaction and customer trust to customer loyalty The relationship between customer satisfaction and customer trust depends on the level of service quality (Lin and Wang, 2006) Therefore, this study follows Lin and Wang (2006) to test the effects of customer satisfaction, customer trust on customer loyalty in ATM services in Ho Chi Minh city

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Chapter Three – RESEARCH METHODOLOGY

Based on literature review are presented in the previous chapter, this chapter will continue to present the research process and research model It focuses on research process with two methods of quantitative research and qualitative research and develops the measurement scale

3.1 Research Model and Hypothesis

3.1.1 The determinants impact on opening ATM account

Western society is moving toward to the electronic money As this phenomenal spread all over the world, every person is often required to have a ATM card from a particular bank People attempt to search a particular bank for guidance and reassurance

to open ATM account Therefore, commercial banks would like to offer their customers for the best possible deal Clients always make a comparison among banks to find a good deal To do so, they have to combine many factors that enable them to make a final decision

In the initial step, this study is used face to face discussion method to identify factors impact on opening and using ATM card We invited 20 respondents who have been using ATM card in Ho Chi Minh city They are selected randomly We indentified some factors impacting on opening ATM card as follow:

 Location: Proximity, nationwide spread, localized service How many branches

and ATMs does the bank have and is there one in your local area? All the major banks have a strong presence

 Product type: Saving plus credit saving Customers wonder if the bank offers a

large variety of services that suits all of their requirement How many options do they have for day-to-day accounts and savings accounts? There are some options

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as: small deposit to long term investment, loaning money for mortgage, business investment with a competitive package

 Security: Big banks with long history always create trust with their clients For

example, ANZ is an established banking instituted with over 100 years of banking experience With strong performances year in & year out, customers are looking to open an account, home mortgage, saving, bank card, investment, shares whatever product the bank has to offer, the strength and knowledge of ANZ instill security and trust that their investment is secure

 Customer relations: General characteristics of a bank for instant nice, bright,

friendly and efficient staffs with prompt service is very important

 Interest rate: What interest rates do they have on their accounts: fixed deposit,

loan / credit facility? What rates and fees does the bank charge? Are clients very concerned about those fees? What is the quality of other products and services clients might be interested in, like term deposits, personal loans, overdraft facilities, international money transfers, etc…? Are clients happier with seven days trading hour’s bank which is a benefit to customer which they cannot go during normal working day?

 Promotion: What promotion aspect clients can get from that bank compared to

the others? For instant, a bank offer premium package to make special client A platinum cardholder has no question about their credit rating A bank with good quality and special service always offers have more probability to get more cardholders

 Other factors include salary advance: If you're going to be living and working

in Vietnam, you will require a bank account where your employer can deposit your salary and so that you can make e-money transfers, pay bills and rent, make

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payments by card and withdraw cash - all without worrying about excessive banking fees Another example is that the university you are attending is banking with this bank Or you get introduction from friends with good rating and compliment A bank with a strong marketing strategy to approach customers might attract more customers’ attention It is more convenient to do business transactions, and to deposit on saving account With the factors mentioned above, the sampling and questionnaires will be created for clarifying the determinants impact on opening and using ATM account

e-The above factors are reduced into two key factors as follows: the initial reasons impact on opening and using ATM account, the customers are anxious when they switch to the other bank’s ATM

Figure 3.1 Conceptual Model

3.1.2 The determinants impact on customer loyalty

To study customer satisfaction on ATM service quality, this study bases on theory and model of Wang and Shieh (2006) to analyze relationship between satisfaction and service quality The first hypothesis is offered:

H1: Service quality has a positive effect on customer satisfaction

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Following researches on positive effects of customer satisfaction on customer loyalty (Lin and Wang, 2006), the below hypothesis is proposed to examine the influence of customer satisfaction on customer loyalty:

H2: Customer satisfaction has a positive effect on customer loyalty

Regarding the direct effect of customer trust on customer loyalty that if customers trust are high, it results in higher levels of loyalty (Lin and Wang, 2006), the following hypothesis is offered:

H3: Customer trust has a positive effect on customer loyalty

Figure 3.2 Proposed Research Model

3.2 Research process

Figure 3-3 illustrates the process of questionnaire design and data analysis

Customer Trust

Service

quality

Customer satisfaction

Customer loyalty

H2

H3

H1

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Figure 3.3 Research process

The following step, we develop the questionnaire to determine the information

which will be test hypotheses and solve research objectives In a question, respondents

were asked to indicate their level of satisfaction regarding various aspects of the ATM

client on a five points Likert type scale (1 for “Highly disagree” to 5 for “Highly

Agree”) There are three parts in the design of the questionnaire: first part asked about

Research problem

Pilot study for 40

customers who use

Modify the questionnaire

The determinant impact on opening ATM account

-Descriptive Statistics -Cronbach’s Alpha Test

Component Analysis (EFA) -Collect the data

In-depth interview for 15 customers

- Literature review

- Design model

Establish the scale

customer loyalty using the ATM

account

-Descriptive Statistics

-Cronbach’s Alpha Test

-Exploratory Factor component

Analysis (EFA)

-Confirmatory factor analysis (CFA)

- Structural Equation Modeling

(SEM)

- Bootstrap Test

Analyze the data and report

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their private information, the second part detailed the question to collect the reasons why customers open the ATM account, the third part focuses on the measurement of service quality, customer satisfaction, customer trust and customer loyalty

3.3 Qualitative Research

Base on the theoretical, an outline of questionnaire was developed based on the findings of the in-depth interview After qualitative research by interviewing 15 customers, the questionnaire was adjusted This questionnaire used a five point Likert scale, test interview with 15 users regularly ATM cards to modify for suiting customer trend in Ho Chi Minh City, and then complete the official questionnaire The result of qualitative presented in the next chapter After testing survey, there are 38 observed variables:

 The determinants impact on opening ATM account: 10 variables

 The determinants impact on customer loyalty when using ATM card: 28 variables

3.4 Quantitative Research

By convenience sample method, 320 questionnaires were delivered to respondents who are using the ATM service in Ho Chi Minh City Then, 298 questionnaires are collected on the rate reach 93.13% With the collected sample, 272 questionnaires were completed Therefore, this study is based on the data of 272 completed questionnaires With 272 questionnaires, the data will analyze as follows:

 The determinants impact on opening ATM account of customer: run the data by SPSS version 20 as descriptive statistics, Cronbach’s Alpha test, Exploratory Factor component Analysis (EFA)

 The determinants impact on customer loyalty using the ATM account: run the data by SPSS version 20 and Amos: Cronbach’s Alpha test, Exploratory Factor

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Chapter Four - DATA ANALYSIS

The purpose of this chapter is to analyze data collected through the use of descriptive statistics, Cronbach’s Alpha test, Exploratory Factor component Analysis (EFA), Confirmatory Factor Analysis (CFA), Structural Equation Modeling (SEM) and Bootstrap Test

4 million VND - less than 8

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47%

53%

MaleFemale

Less than 4 millions VND

4 millions VND - less than

8 millions VND

8 millions VND - less than

12 millions VND

12 millions VND – less than 20 millions VND

20 millions VND – less than 30 millions VNDMore than 30 millions VND

Figure 4.3 Income

Figure 4.4 Occupation

In the survey sample, over half of sample is female (52.9%) Almost of respondents are very young: 38.6% from 25 to 30 and 26.8% from 30 to 35 years old The income from four to less than eight million VND accounts for the highest percentage of 57%

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The main income levels are divided into 4 groups: less than four million VND (19.9%); from 4 million VND to less than 8 million VND (57%), from 8 million VND to less than 12 million VND (14.7%), from 12 million VND to less than 20 million VND (6.3%), from 20 million VND to less than 30 million VND (1.5%) and above 30 million VND (0.7%) Finally, most of respondents are office employee (29.8%)

4.2.1 Determinants impact on opening and using ATM account

Table 4.2 Variables Descriptive Statistic

Observed Variable Symbol N Mean

Std Deviation

Bank’s opening card has many

incentives and promotions

ATM card’s word of mouth by

friends, acquaintance is very good

Reason4 272 2.7684 1.15322

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Advertisement through texting

message by telephone or magazine

Reason5 272 2.5000 1.25083

Ownership cost, using and

maintaining new card is high

Wasting time to figure out services

and transaction of new card

Reduction / loss of the preferential

rights of using ATM cards

Not convenient in the new card

transactions by the company is

currently paying the old card

This table displays mean values of variables Means of variables measuring “the initial reasons impact on opening and using ATM card” have high difference (mean varies from 2.5 to 4.87) Specially, respondents do not agree that advertisement through texting message by telephone or magazine (mean = 2.5); bank’s opening card has many incentives and promotions (mean = 2.66) and ATM card’s word of mouth by friends, acquaintance is very good (mean = 2.76)

Means of variables measuring “the customers are anxious when they switch to the other bank’s ATM.” have high difference (mean varies from 2.65 to 3.40) Specially, respondents do not agree that reduction or loss of the preferential rights of using ATM cards (mean = 2.65) and ownership cost, using and maintaining a new card is high (mean = 2.76)

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4.2.2 Determinants impact on customer loyalty in using ATM account

Table 4.3 Variables Descriptive Statistic

Observed Variable Symbol N Mean

Std Deviation

You are satisfied using ATM card

I don’t have any complaint of

using ATM card of current bank

I like current bank’s brand name Sat4 272 3.2537 .98979

I think that I am right to choose

ATM card of current bank

I am satisfied with consultant at

ATM center of current bank

ATM is a full-featured, easy

operation, easy to use interface

Quality4 272 3.5551 90748

Banks always has gifts of gratitude Quality5 272 2.2206 1.09471

ATM machine is located in many

parts of the City's districts and

provinces in the country

Quality7 272 3.3051 1.08610

The ATM machine system opens

24/24

Quality8 272 3.4265 1.14378

The installation of ATM location

are convenient and near public

area

Quality9 272 3.4559 95560

ATM Space is spacious,

air-conditioned, and clean

Ability to troubleshoot, solve

customer complaints is very quick

Quality13 272 2.8971 1.01487

ATM card with internet services

(E-banking) update all the latest

transaction information

Quality14 272 3.4632 95591

Current bank's ATM card

connected to many other banks

Quality15 272 3.3272 1.05193

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I believe that the current bank’s

ATM is the best

The ATM system has high security

and safety for the property of the

Do you want to use the current

bank continuously next year?

While other banks have more

promotions, but you continued to

use the services of the current bank

ATM card

I will introduce ATM services at

the current bank for friends and

relatives

I will not switch to using ATMs of

other banks which have even

introduced friends

This table displays mean values of variables Means of variables measuring customer satisfaction have high difference (mean varies from 3.10 to 3.36) Especially, the satisfaction level of six variables strikes average value Satisfaction level of “using ATM card of current bank is fantastic service” is the lowest value (3.10) among six variables of satisfaction, which offers bank managers to focus on and make

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improvements for this element However, customers are satisfied using ATM card of current bank (mean = 3.36) The results provide evidence that banks have not yet taken good care to ATM users and service quality is not good enough to satisfy customers (mean = 2.22 – 3.55)

Mean value of trust is higher than average, i.e 3.40 showing positive sign of customer trust about that the ATM system has high security and safety for the property

of cardholder Moreover, the mean value of loyalty is higher than the customer trust which initially indicates correlation between two factors

4.3 Cronbach Alpha test

Cronbach Alpha is a measure of reliability to eliminate inappropriate variables The observed variables are retained if they have two conditions First condition is the Cronbach alpha with scale higher or equal to 0.6 Second, the corrected item-total correlation is higher or equal to 0.3 (Hoang and Chu, 2008)

Table 4.4 Result of Cronbach Alpha test

Variables

Scale Mean if Item Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha

if Item Deleted

Reason Cronbach’s Alpha: 0.620

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Fear Cronbach’s Alpha: 0.655

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From Table 4.4 shows that all scales have alpha coefficients greater than 0.6 So keep all variables are satisfactory at this time The final result of Cronbach’s Alpha was presented on Table 4.4 with all the corrected item-total correlation higher than 0.3 and the Cronbach’s Alpha if item deleted lower than the Cronbach’s Alpha Follow the above result, all variables would be used for Exploratory Factor Analysis

4.4 Exploratory Factor Analysis (EFA)

4.4.1 Determinants impact on opening ATM account

When exploratory factor analysis, this study used principal components analysis with varimax method and stops when the extracted factors Eigenvalue greater than 1 Research models have three independent variables with observations of ten variables

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EFA is often used to identify aspects or independent factors that have relationship with each other (Hoang and Chu, 2008) In this case, the study use factors that affect to open ATM card in order to measure consumer behavior Therefore, this study does not analyze regression

After analyzing the results as follows:

Table 4.5 KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .729 Bartlett's Test of

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There is a standard for variance extracted (Hoang and Chu, 2008) requires that the

variance extracted must reach 50% or more Result of 03 factors above is 53.122%

explained variance of the data, so it could be representing for 10 establishments of the

Ownership cost, using and maintaining new card is high (Fear1) .674

Reduction / loss of the preferential rights of using ATM cards

(Fear3)

.635

Not convenient in the new card transactions by the company is

currently paying the old card (Fear4)

.622

Company transfers salary by bank monthly (Reason3) .727

Need of customers opening card are grouped into three main components are presented in the table above In this table, only groups with a coefficient factor loading greater than 0.5 According to Hoang and Chu (2008), factor loading coefficients greater than 0.5 is considered meaningful sample Three factors affect the customer's ATM card open is named as follows:

 The first factor: depend on bank’s marketing policy

 The second factor: depend on customer’s personal benefit in choosing ATM service

 The third factor: Factors affecting the maintenance of customer ATM card