Impact of internet service on customer satisfaction in vietcombank a case study of vietcombank binh tay branch

Abstract The purpose of this study is to explore the internet banking service dimensions that will have the impact on customer satisfaction of Vietcombank customers.. This study thus aim

IMPACT OF INTERNET BANKING SERVICE ON CUSTOMER SATISFATION IN

VIETCOMBANK

A CASE STUDY OF VIETCOMBANK BINH TAY BRANCH

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

IMPACT OF INTERNET BANKING SERVICE ON CUSTOMER SATISFATION IN

VIETCOMBANK

A CASE STUDY OF VIETCOMBANK BINH TAY BRANCH

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Acknowledgment

First and foremost, I would like to express my deepest thanks to my advisor –

PhD Le Van Chon for his support and guidance throughout my thesis writing I am

sure it would have not been possible without his help

Secondly, I would like to send my sincere appreciation to professors and lecturers

in Master course – International University for teaching and training me during 2

years which provided to me a lot of precious knowledge

Thirdly, I am grateful to all customers of Vietcombank who provided valuable

data during my survey If there is no input data they contributed, the thesis can’t be

completed today

Last but not least, I would like to express my sincere thanks to my parents for

their unceasing encouragement and support me during my hard working time on this

thesis

Plagiarism Statements

I would like to declare that, apart from the acknowledged references, this

thesis either does not use language, ideas, or other original material from anyone; or

has not been previously submitted to any other educational and research programs or

institutions I fully understand that any writings in this thesis contradicted to the

above statement will automatically lead to the rejection from the MBA program at the

International University – Vietnam National University Ho Chi Minh City

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

© Huynh Thi Diem Trang / MBA06038 / 2012-2014

Table of Contents

List of Tables vi

List of Figures vii

Abstract viii

Chapter one – Introduction 1

1 Background 1

2 Rationale for the study 3

3 Problem Statement 3

4 Objectives 4

5 Research Questions 4

6 Scope of the study 5

7 Structure of the study 5

Chapter two – Literature Review 6

1 Basic Concepts 6

1.1 Customer Satisfacion (CS) 6

1.2 Service Quality 7

1.3 Internet Banking 9

1.4 Relationship between Service Quality and Customer Satisfacion 12

2 Empirical Studies 14

3 Suggested Conceptual Model 17

Chapter three – Methodology 21

1 Sampling techniques and Sample size 21

2 Research Instrument 21

3 Data Collection Procedures 22

3.1 Primary Data 22

3.2 Secondary Data 23

4 Data analysis 23

Chapter Four – Data Analysis and Results 26

1 About Vietcombank Binh Tay Branch 26

3 Assessing scale and research model 35

3.1 Assessing scale reliability by Cronbach’s Alpha 35

3.2 Descriptive Statistic 40

3.3 Exploratory Factor Analysis (EFA) 44

3.4 Correlations between variables 48

3.5 Hypotheses testing 50

3.6 Linear Regression Equation 52

3.7 Anova Analysis 53

Chapter Five – Conclusion and Recommendations 55

References 58

Appendix 62

List of Tables

Table 1 List of previous studies 14

Table 2 Independent variables (indicators) 24

Table 3 Total revenue of VCB Binh Tay from 2009-1st half 2012 28

Table 4 Total number of new I-Banking users of VCB Binh Tay from 2011-2013 29

Table 5 Respondent Characteristics 30

Table 6 Cronbach’s Alpha of independent variables scales 36

Table 7 Cronbach’s Alpha after rejecting CS4 item 38

Table 8 Cronbach’s Alpha after rejecting CS6 item 39

Table 9 Descriptive Statistics 41

Table 10 KMO and Bartlett's Test 44

Table 11 Exploratory Factor Analysis (EFA) Results 45

Table 12 Total Variance Explained 46

Table 13 Correlations 48

Table 14 Coefficients 51

Table 15 Model Summary 53

Table 16 ANOVA b 54

List of Figures

Figure 1 Conceptual Model 19

Figure 2 Organization Structure of VCB Binh Tay 27

Figure 3: Total revenue of VCB Binh Tay from 2009 to1st half 2012 29

Figure 4: Total number of new I-Banking users of VCB Binh Tay from 2011-2013 30

Figure 5: Age ranges 33

Figure 6 Income ranges 34

Abstract

The purpose of this study is to explore the internet banking service dimensions

that will have the impact on customer satisfaction of Vietcombank customers

A quantitative research is applied with survey questionnaires distributed to

respondents at bank counters.There are eventually 211 responses that are used as input

data Collected data are processed in the statistical software SPSS; the consistency

cofficients measured with cronbach’s Alpha for scaling test and Exploratory Factor

Analysis (EFA) were used

Results show that Web design, Customer service, Assurance, Preferential

Treatment and Information Provision are the important factors that have the impact on

customer satisfaction While Assurance is the most significant factor, followed by

Customer service, Preferential treatment, Information Provision and Web design

respectively

It is found that, generally, customer satisfaction is not too high, just above

average The findings suggest that banks should focus on main factors, especially

Assurance, in specific plans to develop services and enhance quality for higher

satisfaction of customers from this service

Keywords : Customer Satisfaction, Internet Banking Service

CHAPTER ONE - INTRODUCTION

1 Background

In today’s world of intense competition, one of the keys to competitive advantage is delivering high quality services and enhancing customer satisfaction

(Ismail, Made and Francis, 2009; Shemwell, Yavas and Bilgin, 1998) Service

quality has been identified as the ultimate goal of service providers

(Sureshchandar, Rajendran and Anantharaman, 2002) Service quality and

customer satisfaction are inarguably two concepts at the crux of the marketing

theory and practice (Spreng and Mackoy, 1996) Today, many financial service

organizations are rushing to become more customer focused (Peppard, 2000)

Technological developments particularly in the area of

telecommunications and information technology are revolutionizing the banking

industry The internet has been exploited as a means to provide e-services Many

banks try to provide a quality online service to satisfy their customers These

banks are introducing internet banking as an assurance to their customers that they

will be able to maintain a competitive quality of service in the future, in efforts to

avoid losing their customers (Rod et al 2009) Offering internet banking is no

longer regarded as a competitive advantage but a competitive necessity (Gan et

al., 2006, as cited in Rod et al 2009) With the popularity of computers, easy

access to Internet and World Wide Web (WWW), Internet is increasingly used by

banks as a channel for receiving instructions and delivering their products and

services to their customers

Stiff competition in banking sector is forcing the banks to become

customer friendly and customer oriented Thus the customer satisfaction has

become more important with the increasing competition

The modern banking has become customer-driven and technology-driven

Driven by the challenges of competition, rising customer expectations and

shrinking margins, banks have been using technology to reduce cost and enhance

efficiency, productivity and customer convergence Technology-intensive

delivery channels, like Automated Teller Machines (ATMs), internet banking,

tele-banking and mobile banking etc., have created a win-win situation by

extending greater convenience and multiple options for customers while

providing tremendous cost advantages to the banks (Shainesh and Choudhary,

2004)

During the last decade, technology has been dramatically transforming the

banking activities in Vietnam The banking sector in Vietnam has witnessed

intensive competition in recent years Since becoming a member of the World

Trade Organization (WTO) in 2007, the government has been carrying out the

commitments of trade liberalization policies, which has encouraged some

international banks and private sector institutions to intensify their activities in the

banking sector Customers are also increasingly becoming sophisticated as they

have access to the latest forms of delivery channels (such as the ATM, internet

banking, etc.) Consequently, many financial institutions have to focus on

increasing customer satisfaction and customer retention through improved quality

of their services

The rapid growth of internet banking in recent years is a clear indication

of consumer acceptance of this media However, the impact of internet banking

on customer satisfaction in Vietnam is yet to be examined as few studies have

addressed this issue This study thus aims to fill the gap in the literature by

focusing on the impact of internet banking service quality on customer

satisfaction with a case study of Joint Stock Commercial Bank for Foreign Trade

of Vietnam (Vietcombank) at Binh Tay Branch

2 Rationale for the study

The aim of this research is to study the level of customer satisfaction about

the quality of Vietcombank online banking services to identify whether customers

intend to revisit the banking site and to maintain a lasting relationship with it or

not

From a theoretical viewpoint, this research enriches the literature that has

explored the concept of perceived quality of online services

From a managerial point of view, it points to the bankers the importance

of promoting satisfaction factors which could produce favorable behavioral

intentions among customers

3 Problem statement

Although there has been a rapid diffusion of new technology applications

in banking sector in Vietnam, internet banking services have not been widely

adopted by bank customers This may be due to lack of trust, poor customer’s

attitude and perceived risk towards the services

When judging the quality of the provided internet banking service,

customers consider a lot of factors which influence their judgment For some

customers the response and efficiency of the service providers would be of

greatest importance, for others the security and privacy issues might be more

important, and still for others what matters most may be the website design and

ease of use In reality, customers have different expectations and requirements

4 Objectives

The study aims at enriching the knowledge and understanding of factors affecting

customer satisfaction of internet banking service in Vietcombank Specifically,

the main objectives of the study are:

- To identify what main factors of internet banking service impact customer

satisfaction

- To evaluate the extent of their impacts on customer satisfaction about internet

banking service quality

- To identify the level of satisfaction of customers towards Vietcombank

internet banking service

5 Research Questions:

In order to achieve those 3 objectives, this study aims to answer the following

research questions:

1 What are the major factors affecting to customer satisfaction in using

internet banking service?

2 How do these factors impact customer satisfaction in internet banking

service quality?

3 What is the level of customer satisfaction towards the quality of

Vietcombank online banking service?

6 Scope of the study

The study concentrates on customer attitude and their satisfaction level of

using internet banking services provided by Vietcombank

Due to time, resource constraints, the author could not carry out the survey

in all branches of Vietcombank countrywide, so that the study is limited to

Vietcombank - Binh Tay Branch located in district 6, Ho Chi Minh City

7 Structure of the study

This study is organized into five chapters The Introduction, which is

Chapter One, consists the background of the study, rationale, statement of the

problem, the main and specific objectives of the study, research questions and

how the study is organized Chapter Two discusses literature related to the study

and introduces the framework while research methodology is discussed in chapter

Three Chapter Fourth presents the data and analysis Finally, Chapter Five

presents the summary of findings, conclusions and provide recommendations

CHAPTER TWO - LITERATURE REVIEW

1 Basic Concepts

1.1.Customer Satisfaction (CS)

Customer satisfaction (CS) has received numerous attention and interest

among scholars and practitioners alike because of its role as an important

variable of business strategy in this very competitive market (Lovelock and Wirtz, 2007) Since the early 1960’s to date several researches have been conducted on customer satisfaction by different researchers Infact in the words of Parker and Mathews “customer satisfaction has been fundamental to the marketing concept for over three decades” (Parker and Mathews, 2001)

Customer satisfaction has been traditionally defined as “an evaluative

judgment prior to making a choice, about any particular purchase decision”

(Oliver, 1980) Pairot (2008) also defined Customer satisfaction as the

company's ability to fulfill the business, emotional, and psychological needs

of its customers In that definition he acknowledged that customers usually

have varied levels of satisfaction since they have different attitudes and

experiences as perceived from the company

According to Churchill and Surprenant (1982), customer satisfaction can

be defined as a “disconfirmation paradigm” since it is a result of confirmation/disconfirmation of expectation that evaluates a product’s performance with it expectation and desire Customer satisfaction is therefore

an attitude or a rating made by the customer by comparing their pre-purchase

expectation to their subjective perceptions of actual performance (Oliver, 1980) ‘‘Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing a product’s performance (outcome) in relation to his

or her expectation’’ (Kotler & Keller, 2006 p 144) Bank customer satisfaction is regarded as banks fully meeting the customers’ expectation (Bloemer, Ruyter, and Peeters, 1998) and also said to be a feeling or attitude

formed by bank customers after service, which expressly connects the various

purchasing behaviour (Jamal and Naser, 2002)

Customer satisfaction is seen to be a state of mind that customers have

about a company when their expectations have been met or exceeded over the

lifetime of the product or service (Kevin Cacioppo, 1995 and Kumbhar,

2010) Satisfaction appears to be between pre-exposure and post-exposure of

attitudinal components (Oliver, 1980) and serves as a link between the various

stages of consumer buying behavior (Jamal and Nasser, 2002) Lenka, Suar et

al (2009, p 50) identified ‘customers’ satisfaction as a combination of their cognitive and affective response to service encounters’

1.2 Service Quality

Parasuraman, Zeithaml, and Berry (1985) posit that service quality is

‘performance based’ rather than object oriented, therefore “precise manufacturing specifications concerning uniform quality can rarely be set” Tapiero (1996) also indicates that the definition of the term quality differ from

author to author and it is usually based on the person making the definition,

the measures applied and the context within which it is considered

Service quality is an important contemporary issue in service management

and marketing (Clottey and Collier, 2008) Banking is seen as a service that

captures all the characteristics of service (Chakrabarty, 2006) Literatures sampled from the 1980’s and 1990’s have examined service quality from two points of view Researchers like Carman (1990), Garvin (1983), Parasuraman

et al (1985, 1988) have defined and measured service quality by looking at its

attributes This is contrary to Bitner and Hubbert (1994), Iacobucci, Grayson,

and Ostrom (1994), Oliver (1993), and Parasuraman, Zeithaml, and Berry

(1994) who examine the application of services to conceptualize the

relationship between service quality and customer satisfaction Donnelly et al

(1995) also defines service quality as the degree of excellence or superiority

that an organization's product possesses and argues that it is influenced by

three service quality dimensions These three dimensions are customer

service, service knowledge and service infrastructure and technology

Just like customer satisfaction, service quality is equally difficult to

measure accurately and an abstract construct (Carman 1990) In support of the

above statements, while Shostack (1977) looks at the intangibility of service

that is rendered or experienced, Parasuraman et al (1985) argues that service

quality goes beyond outcomes and involves the delivery process Based upon

available literatures sampled, service quality shares some similarities with

customer satisfaction, although the two are not the same (Cronin and Taylor,

1992; Parasuraman et al., 1985) This according to Clemes et al has led to the

combination of service quality and customer satisfaction literature as the basis

service quality theory (Clemes et al., 2007)

1.3.Internet Banking

Internet banking involves the use of banking services via the World Wide

Web (Bernstel, 2000) Internet banking permits consumers to carry out usual

banking transactions on a computer which is equipped with Internet

connection (Fox, 2006) Internet banking is the situation where ―customers

can access their bank account via the internet using a PC or mobile phone and

web-browser (Zeithaml et al., 2002)

Basel Committee Report on Banking Supervision (1998) defines Internet

banking services as the provision of various banking products and services

like bank account management, electronic bill payment and financial advice

over the Internet Mukherjee and Nath (2003) describes Internet banking as a

type of banking activity through which consumers can perform banking

transactions such as checking account balances and making payments via

telecommunication network Internet banking is a process of innovation

whereby customers handle their own banking transactions without visiting

bank tellers (Qureshi et al., 2008)

According to Burr (1996), internet banking is an electronic connection

between bank and customer in order to prepare, manage and control financial

transactions Internet banking allows consumers to access their bank and

accounts to undertake banking transactions Thulani et al (2009) refer internet

banking as systems that enable bank customers to get access to their accounts

and general information on bank products and services through the use of bank’s website, without the intervention or inconvenience of sending letters, faxes, original signatures and telephone confirmations It is the types of

services through which bank customers can request information and carry out

most traditional retail banking services such as opening an account or

transferring funds to different accounts, and new banking services, such as

electronic online payments via a telecommunication network without leaving

their homes or organizations (Aladwani, 2001; Daniel, 1999; Mols, 1998;

Sathye, 1999) It provides universal connection from any location worldwide

and is universally accessible from any internet linked computer (Thulani et al,

2009; Perumal and Shanmugan, 2004; Bradley and Stewart, 2003 and

Rotchanakitumnuai and Speece, 2003)

According to Michael Karlin, the President and Chief Operation Officer of the world’s first virtual bank, Security First Network Bank, the idea of internet banking is as follows:

- You do not have to purchase any software, store any data on your

computer, back up any information, since all transactions occur on

the bank server over the infrastructure of the Internet

- You will be able to conduct your banking services anywhere you

like but you need to have a computer and a modem, no matter

where you are (e.g at home, at office, or in a place outside the

country)

- You can use the banking services 24 hours a day, 7 days a week,

and 365 days a year You no longer have to reconcile a bank

statement or manually track your ATM and paper checks

At an advanced level internet banking is called transactional online

banking, because it involves the provision of facilities such as accessing

accounts, transfer of funds, and buying financial products or services online

(Sathye, 1999) The terms internet banking and online banking are often used

in the literature to refer the same things

Internet banking is considered as an online revolution of the traditional

banking services which offers customers the greatest expediency for

performing banking transactions via the Internet

Internet banking is developed to help banks deliver services and products

better, faster, and cheaper It enables customers to browse essential bank

products and services seven days a week through their personal computers

(Polatoglu & Ekin, 2001) It allows consumers to perform banking

transactions over the Internet anywhere and anytime (Polatoglu & Ekin,

2001)

According to Nehmzow (1997) internet banking offers the traditional

layers in the financial services sector the opportunity to add a low cost

distribution channel to their numerous different services He continues that

internet banking also creates a threat to traditional banks’ market share,

because it neutralizes so many of their competitive advantages in having a

traditional branch bank network

By offering internet banking services, traditional financial institutions seek

to lower operational costs, improve consumer banking services, retain

consumers and expand share of customer Internet is the cheapest delivery

channel for banking products as it allows the entity to reduce their branch

networks and downsize the number of service staff Thus, contemporary banks

now regard the internet channel as equally important to traditional channels of

branches, automated teller machines (ATM), telephone banking and call

centers (Gartner, 2003)

In the new banking environment, internet banking is increasingly managed

as an operational azctivity and an important element of a multi-channel

strategy (Black et al., 2002) ISACA (Information Systems Audit and Control

Association) recorded that more and more banks are transforming their

businesses by using Internet technology to develop or expand relationships

with their customers

Currently in Vietnam, internet banking is available and offered by the majority of Vietnam’s leading international and domestic banks A survey conducted by ComScore announced on 9/3/2011 shows that the number of

users of e-banking in Vietnam has increased 35%, from 701 000 to 949 000

This is still a modest figure compared with the growth rate of the mobile and

Internet market and is much smaller than the population rate

1.4 Relationship between Service Quality and Customer Satisfaction

The importance of service quality and customer satisfaction is shown by

the depth of theoretical and empirical studies on the two concepts in recent

times In the word of Spreng and Mackoy (1996) service quality and customer

satisfaction are the two essential concepts that are at the crux of the marketing

theory and practice

According to Parasuraman et al (1985), there is an established strong

relationship between quality of service and customer satisfaction since a

perceived higher level of service quality results in increased customer

satisfaction and a lower level of service quality results in a dissatisfied

customer (Jain and Gupta, 2004 and Kumbhar 2011)

As also indicated by Parasuraman, Zeithaml and Berry (1988) in their empirical work , they argue that “if the expected quality of service and actual perceived performance is equal or near equal the customers can be satisfy,

while a negative discrepancy between perceptions and expectations or

‘performance-gap’ lead to customer dissatisfaction, and positive discrepancy leads to consumer delight” The relationship between expectation, perceived service quality and customers satisfaction have been investigated in a number

of researches (Zeithaml, et al, 1996)

As posited by Delvin (1995), the quality of services derived from a

banking activity influences it usage hence since customers have less time to

visiting a bank and therefore want a higher degree of convenience and

accessibility This attributes has led to customers being satisfied thus their

adoption of Internet banking Additionally, Delvin (1995) argues that

perceived usefulness, ease of use, reliability, responsiveness, security, and

continuous improvement (Liao and Cheung, 2008) has led to the adoption of

internet banking Liao and Cheung (2002) found in their study that individual

expectations with reference to accuracy, security, network speed,

user-friendliness, and user involvement and convenience were the most important

quality attributes in the perceived usefulness of Internet-based e-retail

banking

2 Empirical Studies

Many past studies have developed various models for understanding

relevant e-service quality dimensions relevant to internet banking Followings

are few studies have examined customer satisfaction in relation to internet

banking

Table 1 List of empirical studies

containing 26 items, measures

five dimensions of service

quality including: termed

responsiveness, assurance, and

empathy

2 “Service quality in

the banking sector:

1999 Joseph et al Six dimensions of online

banking service quality

management, efficiency, queue

management, accessibility and

2001 Zeithaml et al Attributes of internet service

quality include: access, ease of

navigation, efficiency, flexibility,

2001 Jun and Cai Significant dimensions that

determine service quality: web

site design, information, ease of

responsiveness, and reliability

dimensions: ease of use,

aesthetics design, processing

speed and security

multidimensional construct: web

design, customer service,

assurance and order management

Perceived quality influences on

satisfaction; and that satisfaction

influences on consumer loyalty

2010 Ho and Lin There are five dimensions and 17

items in the measurement scale

for measuring the service quality

of internet banking

The five dimensions are:

customer service, web design,

assurance, preferential treatment,

and information provision

3 Suggested Conceptual Model

Based on a thorough review of literature, the conceptual model presented

in Figure 4 It descibes the dimensions of Internet Banking Service Quality

(IBSQ) for which Customer Satisfaction (CS) was measured The conceptual

framework for this study adopts the IBSQ dimensions proposed in the model of

IBSQ in “Measuring the Service Quality of Internet Banking: Scale Development and Validation” (Ho and Lin, 2010) This model is also suggested in an International Journal of Scientific & Technology Research “Customer Satisfaction

With Internet Banking Service Quality In The Ghanaian Banking Industry”

(Nimako, Gyamfi and Wandaogou, 2013) The five dimensions identified in the

model are: web design, customer service, assurance, preferential treatment and

information provision

This model is adopted for two reasons First, the model is based on

extensive literature review Second, the dimensions in the model are validated

empirically as applicable to internet banking context and not just general e-service

quality context

Web design: This dimension covers the design of the web site and includes items

like web content layout, content updating, navigability, and user-friendliness

These are consistent with findings of previous studies (Aladwania and Palvia,

2002; Yang and Fang, 2004; Z Yang, M Jun and R.T Peterson, 2004)

Customer Service: Customer service has been recognized as an important element

for enhancing service quality in online shopping and banking (Zeithaml,

Parasuraman and Malhotra, 2001) Elements in customer service dimension have

been noted in many previous studies (Madu, 2002; Wolfinbarger and Gilly, 2003)

This dimension has to do with service reliability, customer sensitivity,

personalized service, and fast response to complaints that have been described as

responsiveness to customer needs and complaints ( Parasuraman, Zeithaml and

Berry, 1988)

Assurance: This is made up of the guarantee that the record showing banking

activities and security of account information is not shared (Yang and Fang 2004;

Saha and Zhao, 2005) Strong issues on security are a common concern to

individuals hence their unwillingness to use internet banking (Madu, 2002) Many

previous study have demonstrated that assurance is one of the critical elements of

online banking service quality (Yoo and Donthu, 2001), (Wolfinbarger and Gilly,

2003) The assurance dimension describes impressions by the service providers

that convey a sense of security and credibility (Parasuraman, Zeithaml and Berry,

1988) Security and privacy are related items that affect the confidence to adopt

online banking services (Wolfinbarger and Gilly, 2002)

Preferential Treatment: This is related to the added value of using internet

banking services Where customers perceive that the incentive of online banking

is attractive then they would be more willing to use internet banking

Information Provision: Information provision has become one of the key

elements of online service quality as customer would need the right information

that enables them complete online banking transactions successfully (H Li and R

Suomi, 2009)

Customer Satisfaction in Internet Banking

Proposed model

We hypothesize that all those attributes have a positive impact on

customer satisfaction in internet banking

Figure 1 Conceptual Model

Hypotheses

This study came up with the following hypothesis based on the literature review:

H 0 (null): The five dimensions of Online Service do not impact on customer

satisfaction in internet banking

Hypothesis 1 (H1 ): Web Design of Online Service has positive impact on

customer satisfaction in internet banking

Hypothesis 2 (H2 ): Customer Service of Online Service has positive impact on

customer satisfaction in internet banking

Hypothesis 3 (H3 ) : Assurance of Online Service has positive impact on customer satisfaction in internet banking

Hypothesis 4 (H4 ): Preferential Treatment of Online Service has positive impact

on customer satisfaction in internet banking

Hypothesis 5 (H5 ): Information Provision of Online Service has positive impact

on customer satisfaction in internet banking

CHAPTER THREE - METHODOLOGY

1 Sampling techniques and Sample size

Convenience sampling method is used for data collection Convenience

sampling is a non-probability sampling technique where subjects are selected

because of their convenient accessibility and proximity to the researcher (Black,

1999) Convenience sampling is easy to carry out and requires relative little cost

and time to carry out

The sample size used for this study is two hundred and eleven

Vietcombank customers who have used banking service provided by

Vietcombank for the last twelve months

2 Research Instrument

The main research instrument used for this study is the questionnaire

Based on the literature review and the previous concerning researches we build up

our own questionnaires that are most suitable to our case, to our geographic

and demographic situation

The questionnaire used for the study is divided broadly into two sections

One is on the demographics and the other one is on characteristics of service

quality In the demographic section variables such as age of the respondent,

gender, income level, marital status and educational level are asked The section

on service quality is divided into five sub sections These subsections are Web

design, Customer service, Assurance, Preferential treatment and Information

are asked to indicate the extent to which they agree/disagree with various

statements The Five-Point Likert’s scale having the ratings of “strongly disagree”

(1) and “strongly agree” (5) are used

3 Data Collection Procedures

3.1 Primary Data

A self-administered, structured questionnaire is used to gather data from

respondents to the study Each respondent to the study is supposed to fill a

questionnaire after a brief introduction and objectives of the study have been

explained The research questionnaires are distributed to customers coming to

Vietcombank Binh Tay Branch during business hours

A total of 220 questionnaires are sent to individual customers However

only a total of 211 responses are collected and used for input data Those

unusable responses are left aside and rejected, of which that are not

completely finished, or suspiciously unintended crossed, or crossed with same

scale for more than five items with the same frequency

According to Hair’s theory (Hair et al, 2010), the required sufficient sample size is a result of number of variable multiplied by 5 There are 23

variables in our questionnaires Thus, the number of 211 accessible samples

would be accepted since it satisfies the requirement for chosen sample size

Moreover, the higher the number is, the more reliable the data become Therefore,

this total number is quite good

The chosen respondents should have been using Internet banking for at

least twelve months That is long enough for a person experiencing the

internet-banking services

3.2 Secondary Data

Secondary data are obtained through various kinds of documents such as

research reports, annual reports, books and articles related to development of

internet banking service quality and customer behavior toward this service of

Vietcombank

4 Data analysis

The data gathered via the questionnaires are recorded and coded into

Statistical Package for Social Science (SPSS) software

The data are analysed using two statistical techniques These techniques

are multiple regression analysis, and analysis of variance (ANOVA) The use of

multiple regression analysis is to help test the conceptual framework or model,

whiles the analysis of variance is help compare the results with the customers’

demographic characteristics

The collected data are processed with statistical software SPSS version 16.0 The consistency coefficients measured by Cronbach’s Alpha for scaling test and Exploratory Factor Analysis (EFA) are used

The scale is assessed by the reliability value through Cronbach's alpha

coefficient Cronbach’s alpha is a coefficient that indicates how well the items in

a set are positively correlated to one another This Cronbach's alpha coefficient is

expected to be higher than 0.7 and total variable correlation is over 0.5 The closer the Cronbach’s alpha is to 1, the higher the internal consistency reliability of the research instrument After that EFA (Exploratory Factor Analysis) is used for

factor analysis to examine the appropriateness of the factor analysis

The next step is using regression analysis and building Linear Regression

Equation to explain the relationship between Customer Satisfaction and Service

Quality factors

Through data analyzing process, we can find out whether five hypotheses

mentioned aboved would be accepted or rejected From that result, we would

explore which of among five dimensions had significant relationship with customer’s satisfaction of internet banking usage

Following is Coding table of 22 main measurement variables matching

with 22 survey questions in questionnaire:

Table 2 Independent variables (indicators)

NUMBER

WD2 Display is well organized and easy identified 2

WD4 Easy understanding which button to be clicked for the next step 4

CS1 Offer sufficiency,wide range of services & utilities 5

CS2 Sufficient and real time financial information provided 6

CS3 Validity of the hyperlinks on the bank's portal 7

CS5 Easy completion of online transactions 9

CS6 Not occurring errors when perform services 10

CS7 Prompt reception of responses to customer request 11

CS8 Ability to guide customer to resolve problems 12

AS1 High reliability and credibility of transactions 13

AS2 Protection/security of customer transaction data 14

AS3 Feeling of relief of customer to transact on internet banking 15

PT1 Reasonable fees in transfer transactions 16

PT2 Reasonable fees in other payment and request 17

IP1 Complete and sufficiency of the transaction information 20

IP2 Accuracy of the online transaction process of the bank 21

IP3 Easy updating new preferential policies & promotions 22

CHAPTER FOUR - DATA ANALYSIS AND RESULT

1 About Vietcombank Binh Tay Branch

Vietcombank Binh Tay Branch (VCB Binh Tay) was established by

decision 207/QD-TCCB of the Board of Foreign Trade Bank of Vietnam’s

Chairman, began operation on 10 Jan 1998 on the inheriting and upgrading

from Binh Tay transaction office of VCB Ho Chi Minh The main office located

in Hậu Giang street, District 6, HCMC This is a densely populated region in the

southwest, with the majority of Chinese-Vietnamese people who own small and

medium businesses

In the early days, human resource of VCB Binh Tay was limited in

only 47 people operating in eight departments However, up to now, the number

has increased to 160 employees in eleven departments at its main office and five

transaction offices included The five transaction offices are allocated

surrounding Ho Chi Minh City center and in some districts that have potential

economic development in the area of Ho Chi Minh City

The organizational structure of VCB Binh Tay is shown in Figure 2

below:

Figure 2 Organization Structure of VCB Binh Tay

Source: Vietcombank Binh Tay profile

DEPUTY DIRECTOR 1

DIRECTOR

Credit Service Department

Transaction Office 1

IT Department

Treasury Department

Card Payment Department

Transaction Office 2

Transaction Office 4 Trade Service

Department

Debt Management Department

Transaction Office 3

Personal Services Department

Transaction Office 5

From a small scale bank, through many years of efforts in development, VCB Binh Tay now has achieved some certain positions in customer’s mind and the number of loyal customers also increases day by day Despite of competition

from other commercial banks in the area, especially the joint-stock commercial

banks, operation performance of VCB Binh Tay is still bright and in sustainable

development Increasing total revenue yearly would be the most pratical

evidences for that statement

Table 3 Total revenue of VCB Binh Tay from 2009-1st half 2012

(Unit: VND)

TOTAL

REVENUE 174,181,608,842 270,955,532,086 371,689,268,370 176,223,000,235

Source: VCB Binh Tay Income statement from 2009 to 1st half 2012

From 2009 to 2010, total revenue increased 55.6% and in the next year

2011, the number exceeded 37.2% Due to some problems related to overdue

debts, the growth rate of 2011 declined a little bit in comparison with the year

2010 Within the first half of 2012, total revenue had reached more than 52.6%

total revenue of the previous year The development seems relatively stable

Figure 3 Total revenue of VCB Binh Tay from 2009 to1st half 2012

Source: VCB Binh Tay Income statement from 2009 to 1st half 2012

Regarding the Internet Banking of VCB Binh Tay, this is a utility service

introduced to customers since 2001 With many integrated utilities, this service

brings to users extreme convenience and high effectiveness in making transaction

without coming to any transaction office of Vietcombank Due to its advantages,

Internet banking is increasingly popular and the number of users therefore also

increases day by day

As annual reports, the number of Internet banking users at VCB Binh Tay

in 3 recent years are shown below:

Table 4 Total number of new I-Banking users of VCB Binh Tay from 2011-2013

Figure 4 Total number of new I-Banking users of VCB Binh Tay 2011-2013

Source: VCB Binh Tay annual report

Data from the table show that from 2011 to 2012, new registrations on

Internet banking service increased 13.3% and got significant increase at 39.1% in

2013 That is a speaking number In today’s busy life, what can help people save

time but still do things effectively, it will be easily accepted Undoubtedly, trends

of using Internet banking service will continue to increase and soon become basic

service in banking section in the future