Improving e banking service quality at VIB HAI BA TRUNG BRANCH

31 3.3.3 Comparisons of E-banking services among commercial banks ...33 CHAPTER IV: RECOMMENDATIONS FOR IMPROVING E-BANKING SERVICE QUALITY AT VIB HAI BA TRUNG BRANCH...38 4.1 Recommenda

It is an honor to thank a large number of individuals who contributed directly or indirectly their encouragement and assistance in the preparation and completion of this research

First and foremost, I express my appreciation to my university supervisor, Ass Prof Dr Bui Duc Tho, National Economics University This research would not have been possible without his enthusiastic guidance and invaluable advice

I am so thankful to my internship guide, Mr Nguyen Xuan Thanh and number of staff at VIB - Hai Ba Trung Branch for their support and co-operation.The customers of the Transaction who provided me valuable data for helping me out the survey

Finally, I sincerely thank to Center for Advanced Educational Programs where has raised my passion in field of Banking and Finance, giving me an opportunity to practice my knowledge at real workplace

STATUTORY DECLARATION

I herewith formally declare that I myself have written the submitted Barchelor’s Thesis independently I did not use any outside support except for the quoted literature an other sources mentioned at the end of this paper

Hanoi, 03/06/ 2016Signature

TABLE OF CONTENTS

ABBREVIATION V LIST OF FIGURES VI LIST OF TABLE VIII

CHAPTER I: INTRODUCTION 1

1.1.Rationale 1

1.2.Research objective 1

1.3 Research methodology 2

1.4 Research structure 2

2

CHAPTER II: THEORETICAL FRAMEWORK OF E-BANKING SERVICE QUALITY IN COMMERCIAL BANKS 3

2.1 Overview of E-Banking Service 3

2.1.1 Definition of E-commerce and E-Banking service 3

2.1.2 Importance of E-banking service 4

2.1.3 Evolution of E-banking services 5

2.1.4 Three levels of E-banking service 5

2.1.5 Categories of E-banking service 6

2.1.6 Delivery channels of E-Banking service 7

2.1.7 Risks of e-banking 8

2.2 E-Banking service quality 10

2.2.1 Definition of E-Banking service quality 10

2.2.2 Criteria to measure E-Banking service quality 11

2.2.3 Conditions to ensure E-Banking service quality of commercial banks 13

2.2.3.1 Subjective condition 13

2.2.3.2 Objective conditions 14

CHAPTER III: ANALYSIS OF E-BANKING SERVICE QUALITY AT VIB BANK HAI BA TRUNG BRANCH 14

3.1 Overview of VIB 14

3.2 Overview of VIB Hai Ba Trung Branch 15

3.2.2 Business result of VIB Hai Ba Trung Branch from 2010 to 2014 16

3.2.2.1 Financial Result 16

3.2.2.2 Product and service development 23

3.3 Current situation of E-banking service quality at VIB Hai Ba Trung Branch 25

3.3.1 Overview of the survey 25

29

3.3.2 Analyzing criteria influencing E-Banking service quality at VIB Hai Ba Trung Branch 30

3.3.2.1Customer satisfaction 31

3.3.3 Comparisons of E-banking services among commercial banks 33

CHAPTER IV: RECOMMENDATIONS FOR IMPROVING E-BANKING SERVICE QUALITY AT VIB HAI BA TRUNG BRANCH 38

4.1 Recommendations to VIB Hai Ba Trung Branch 38

4.2 Recommendations to VIB Head Office 39

4.3 Recommendations to State Bank of Vietnam 41

CONCLUSION 43

VIB: Vietnam International Commercial Joint Stock Bank

LIST OF FIGURES

ABBREVIATION V LIST OF FIGURES VI LIST OF TABLE VIII

CHAPTER I: INTRODUCTION 1

1.1.Rationale 1

1.2.Research objective 1

1.3 Research methodology 2

1.4 Research structure 2

2

CHAPTER II: THEORETICAL FRAMEWORK OF E-BANKING SERVICE QUALITY IN COMMERCIAL BANKS 3

2.1 Overview of E-Banking Service 3

2.1.1 Definition of E-commerce and E-Banking service 3

2.1.2 Importance of E-banking service 4

2.1.3 Evolution of E-banking services 5

2.1.4 Three levels of E-banking service 5

2.1.5 Categories of E-banking service 6

2.1.6 Delivery channels of E-Banking service 7

2.1.7 Risks of e-banking 8

2.2 E-Banking service quality 10

2.2.1 Definition of E-Banking service quality 10

2.2.2 Criteria to measure E-Banking service quality 11

2.2.3 Conditions to ensure E-Banking service quality of commercial banks 13

2.2.3.1 Subjective condition 13

2.2.3.2 Objective conditions 14

CHAPTER III: ANALYSIS OF E-BANKING SERVICE QUALITY AT VIB BANK HAI BA TRUNG BRANCH 14

3.1 Overview of VIB 14

3.2 Overview of VIB Hai Ba Trung Branch 15

3.2.2 Business result of VIB Hai Ba Trung Branch from 2010 to 2014 16

3.2.2.1 Financial Result 16

a, Growth in total assets 16

b, Growth in profit before tax 17

c, Growth in capital mobilization 18

d, Revenue and Profit from E-Banking 20

3.2.2.2 Product and service development 23

3.3 Current situation of E-banking service quality at VIB Hai Ba Trung Branch 25

3.3.1 Overview of the survey 25

29

3.3.2 Analyzing criteria influencing E-Banking service quality at VIB Hai Ba Trung Branch 30

3.3.2.1Customer satisfaction 31

3.3.3 Comparisons of E-banking services among commercial banks 33

CHAPTER IV: RECOMMENDATIONS FOR IMPROVING E-BANKING SERVICE QUALITY AT VIB HAI BA TRUNG BRANCH 38

4.1 Recommendations to VIB Hai Ba Trung Branch 38

4.2 Recommendations to VIB Head Office 39

4.3 Recommendations to State Bank of Vietnam 41

CONCLUSION 43

LIST OF TABLE

ABBREVIATION V LIST OF FIGURES VI LIST OF TABLE VIII

CHAPTER I: INTRODUCTION 1

1.1.Rationale 1

1.2.Research objective 1

1.3 Research methodology 2

1.4 Research structure 2

2

CHAPTER II: THEORETICAL FRAMEWORK OF E-BANKING SERVICE QUALITY IN COMMERCIAL BANKS 3

2.1 Overview of E-Banking Service 3

2.1.1 Definition of E-commerce and E-Banking service 3

2.1.2 Importance of E-banking service 4

2.1.3 Evolution of E-banking services 5

2.1.4 Three levels of E-banking service 5

2.1.5 Categories of E-banking service 6

2.1.6 Delivery channels of E-Banking service 7

2.1.7 Risks of e-banking 8

2.2 E-Banking service quality 10

2.2.1 Definition of E-Banking service quality 10

2.2.2 Criteria to measure E-Banking service quality 11

2.2.3 Conditions to ensure E-Banking service quality of commercial banks 13

2.2.3.1 Subjective condition 13

2.2.3.2 Objective conditions 14

CHAPTER III: ANALYSIS OF E-BANKING SERVICE QUALITY AT VIB BANK HAI BA TRUNG BRANCH 14

3.1 Overview of VIB 14

3.2 Overview of VIB Hai Ba Trung Branch 15

3.2.2 Business result of VIB Hai Ba Trung Branch from 2010 to 2014 16

3.2.2.1 Financial Result 16

a, Growth in total assets 16

b, Growth in profit before tax 17

c, Growth in capital mobilization 18

d, Revenue and Profit from E-Banking 20

3.2.2.2 Product and service development 23

3.3 Current situation of E-banking service quality at VIB Hai Ba Trung Branch 25

3.3.1 Overview of the survey 25

29

3.3.2 Analyzing criteria influencing E-Banking service quality at VIB Hai Ba Trung Branch 30

3.3.2.1Customer satisfaction 31

3.3.3 Comparisons of E-banking services among commercial banks 33

CHAPTER IV: RECOMMENDATIONS FOR IMPROVING E-BANKING SERVICE QUALITY AT VIB HAI BA TRUNG BRANCH 38

4.1 Recommendations to VIB Hai Ba Trung Branch 38

4.2 Recommendations to VIB Head Office 39

4.3 Recommendations to State Bank of Vietnam 41

CONCLUSION 43

CHAPTER I: INTRODUCTION1.1 Rationale

With the development of science and innovation, data innovation division has especially impacted all parts of life that change recognition and creation strategies for different fields of business, different monetary areas , including the managing an account segment The idea of electronic saving money , web exchanging , online installments , have begun to wind up the pattern of advancement and intensity of business banks in Vietnam Creating bank benefits

in light of data innovation – Electronic Banking - is the inescapable pattern in the time of monetary coordination Today, web saving money has gotten a development the world and Vietnam keeping money area is not a special case Along these lines, to survive and develop, Vietnam International Commercial Joint Stock Bank (VIB) takes a stab at satisfying their conventional business, as well as spotlights on creating E-banking an account application to meet with market prerequisites and upgrade its upper hands among other business banks

Notwithstanding, the bank still demonstrates that there are troubles and restrictions Discovering measure to enhance its administration capability is by all accounts a pressing usage Because of above reasons, I chose to complete a study looking into the issue of VIB Hai Ba Trung Branch-one of driving branches in Vietnam in the zone of data innovation application and particularly

in the improvement of e-managing an account benefits with topic “ Improving

E-banking service quality at VIB HAI BA TRUNG BRANCH” for my

graduation thesis

1.2 Research objective

Banks have invested heavily in introducing and making Internet Banking service, with the objective of improving customer satisfaction and loyalty, ultimately the contributing positively income and profits This study’s purpose was to explore customer’s perceptions on key electronic service dimensions or factors of Internet Banking service quality The survey was done with a primary objective of having an insight into Internet banking service quality The

secondary objective was to determine if there were any differences in perceptions

on Internet banking service quality based on gender, age or primary banking institution

1.3 Research methodology

Two types of data were used: the primary and the secondary data The primary data was derived from the answers respondents gave in the self-administered questionnaire prepared by the researcher The secondary data, on the other hand, was derived from published document of VIB’s annual report and VIB Hai Ba Trung Branch’s data

Furthermore, there were 100 members for the questionnaire overview In the wake of gathering the polls, the reactions were tallied, figured, broke down, and recorded

One the other hand, for the individual meetings, a large portion of the interviewees were given time as per their accommodation Decisions were given for the interviewees who will answer the inquiries addresses, through telephone, email, online discussion, visit or individual meeting

1.4 Research structure

The thesis includes Introduction, Conclusion and 3 main chapters

• Theoretical framework of E-Banking service quality in commercial banks

• Analysis of E-Banking service quality at VIB Hai Ba Trung Branch

• Solutions and recommendations to improve E-Banking service quality at VIB Hai Ba Trung Branch

CHAPTER II: THEORETICAL FRAMEWORK OF

E-BANKING SERVICE QUALITY IN

COMMERCIAL BANKS2.1 Overview of E-Banking Service

2.1.1 Definition of E-commerce and E-Banking service

Definition of E-commerce

Electronic commerce, usually known as E-commerce or eCommerce, is a type of industry where the purchasing and selling of items or services is conducted over electronic systems, for example, the Internet and other computer networks Electronic commerce draws on technologies, for example, mobile commerce, electronic finances transfer, store network management, Internet marketing, online exchange processing, electronic information interchange (EDI), inventory management systems, and automated information collection systems Modern electronic commerce normally uses the World Wide Web in any event at one point in the exchange's life-cycle, in spite of the fact that it might encompass a wider range of technologies, for example, e-mail, mobile devices, online networking, and telephones too

Electronic commerce is generally considered to be the sales aspect of business It additionally comprises of the exchange of information to facilitate the financing and payment aspects of business exchanges This is an effective and efficient method for imparting inside of an association and one of the best and useful methods for leading business

e-Definition of E-banking

Electronic banking, otherwise called e-banking, virtual banking and online banking, is a service that permits customers to access their bank data, conduct monetary exchanges, make deposits, withdrawals and pay charges through the Internet without having to physically visit their bank

Currently, some people still heterogeneous internet banking services with electronic banking (e-banking) Truth be told, e-banking services have wider meanings compared with internet banking While internet banking is merely giving services through internet banking, e-banking service covers the procurement of services through some other means, for example, fax, telephone , e-mail .Therefore, internet banking is a division of e-banking, and with the inexpensive exchange price and quick speed, internet banking is considered as the spirit of e-banking.

2.1.2 Importance of E-banking service

Given the way of the exchange is totally done through electronics and telecommunications networks, the appearance of electronic banking has brought numerous down to earth advantages for both banks and clients, and society For banks, the conceived of electronic banking services opens another channel improvement for banking services Through the procurement of electronic banking service, banks can without much of a stretch extend the extent

of their exercises, achieve clients at whatever time, anyplace without any breaking points on space and time Through the electronic media and telecom arranges, banks can direct limited time exercises, acquaintance of items with clients all the more rapidly and advantageously Moreover, the bank could cut too the related costs, for example, office costs, staff costs and different costs of papers, treasury administration framework and so on

For clients, the real electronic banking administrations is anything but difficult to utilize, viable and can help clients spare time and cost The stride exchange through electronic banking administrations are now pre-customized, so the client just needs to agree to the required steps, the exchange will be done accurately Utilizing electronic banking benefits, with the electronic media organizing telecom clients can perform their exchanges at whatever time and anyplace Also, the attributes of the exchange totally on the web, the bank can connect together into the card relationship to encourage clients to make interbank exchanges of his

For society, the appearance of electronic banking services has made another method of operation, adding to the monetary and business exercises, administrations and tourism improvement, encouraging open broad exchange and financial collaboration with the locale and the world.

2.1.3 Evolution of E-banking services

The idea of electronic banking systems started when the first automated teller machines (ATMs) were introduced in the 1970s ATM machines permitted stores to be produced using remote areas ;an accommodation for clients who generally would have needed to withdrawal money from their bank As indicated

by D K Murthy and K R Venugopal in the book ; the focal points offered by ATM machines immediately overflowed to envelop different territories of bank administrations, modernizing manual systems for more noteworthy effectiveness and time funds The idea driving ATM machines offered ascend to shrewd cards, intranet and Internet banking, EFT (electronic funds transfer ) and POS (point of sale) systems, telephone banking and other electronic services

2.1.4 Three levels of E-banking service

E-banking services are categorized into three singular levels:

At the elementary level, e-banking is very little different to the exchange on

phone or dealing with an automated teller machine By utilizing the phone's keypad, customers can know the status of your record or can perform simple exchanges like transferring money from a bank account to the current record of the same subject record

At the second level, the Internet play a more active role Nowadays each

bank's home page on the Internet is viewed as an exchange window Notwithstanding checking account, customers can likewise use a variety of online services, for example, shopping loan, purchasing an insurance policy and even investing in securities

At the third level, banks play a very important role in supporting for

electronic commerce among businesses All exchanges, for example, money transfers, letters of credit opened for sales contracts between importers and exporters, opening the letter of guarantee, all should be possibly online

Customers don't have to go to the boycott yet at the same time can perform exchanges through a bank program installed in the customer's office This program permits access to the bank's server 24/24 hours and seven days a week.

2.1.5 Categories of E-banking service.

Internet-banking service provides automated data items and banking

services by means of the Internet This is a wide circulation items and banking services to customers anywhere and whenever With a computer connected to the Internet, customers can visit the bank's website for the data provided, complete guide to items and services Furthermore, with access code and secret key issued, customers can view account balances, print statements Besides, Internet-banking is likewise an effective feedback channel between customers and the Bank

The Internet-banking provides following services:

- View account balances at present

- View exchange and transaction history

- View information exchange, interest rate savings

- Payment of bills for electricity, water, telephone

- Customers can send all questions and comments on items, products, services

Home banking The capacity to lead a wide range of budgetary exchanges

that require interaction with the bank while a person is in an inaccessible area is sometimes called home banking Such capabilities may likewise be referred to as electronic or online banking The types of exchanges that can be conducted in this manner include applying for new bank services, checking balances on existing accounts, and transferring money between a person's account and to the account of others Benefits of home banking include convenience, speed, and investment funds

Telephone banking is a service provided by a financial institution , that

enables customers of the budgetary foundation to perform monetary exchanges over the telephone, without the need to visit a bank office or automated teller machine Telephone banking times can be longer than branch opening times, and some money related establishments offer the service on a 24 hour premise From the bank's perspective, telephone banking reduces the cost of taking care of

exchanges by reducing the need for customers to visit a bank office for money withdrawal and deposit exchanges.

non-Mobile banking (also known as M-Banking, mbanking) is a term used for

performing balance checks, account exchanges, payments, credit applications and other banking exchanges through a mobile device, for example, a mobile phone

or Personal Digital Assistant (PDA)

SMS banking is a type of mobile banking, a technology-enabled service

offering from banks to its customers, permitting them to operate selected banking services over their mobile phones utilizing SMS messaging

2.1.6 Delivery channels of E-Banking service

Credit cards: plastic cards issued by a financial establishment that permits

its user to acquire pre-approved supports at the point of sale in order to complete

a purchase Credit cards have a most extreme sum or credit restrict the user can get amid a given period As far as possible is pre-determined by the card issuer based on the cardholder's credit rating and credit history Visa and MasterCard are the two most normal types of credit cards

Debit cards: plastic cards used in real money exchanges, yet which is not a

credit card In a debit card exchange, the measure of a purchase is pulled back from the available balance in the cardholder's account On the off chance that the available finances are insufficient, the exchange is not completed Additionally called asset card (in the US), or payment card (in the UK)

ATM Cards: A plastic card used to pull back money from a banking

establishment's automatic teller machine (ATM) Sometimes this card may likewise be used as a debit card, yet not all ATM cards have this capacity

Automated Teller Machines (ATMs machines automated teller to

customers, performs customer identification through ATM card (debit card, credit card) or compatible devices, and helps customers check accounts, money

withdrawals, transfers, payments for merchandise and services.

Electronic Funds Transfer at Point of Sale (EFTPoS):

Online-transaction taking care of system regularly used in retail trade The buyer swipes his or her bank or credit card through a magnetic-stripe reader and enters a personal identification number (PIN) The sum authorized by the buyer is electronically transferred from his or her account to that of the retailer

2.1.7 Risks of e-banking

•Operational risk is defined as the danger of misfortune stemming from

deficiencies in system reliability or integrity The most widely recognized danger

of e-banking, operational danger can be demonstrated in three manes

•Security risk comprises of internal and external frauds Internal frauds

can be intentional, for instance, misappropriation of assets, duty evasion, stealing

of client's account, and accidental, for example, employee's negligence External fakes include yet not limited to hacker's assault, theft of data or money counterfeit, all of which can greatly damage bank operations

•Traditional risks are in this case of secondary importance as they don't

cause the same damage as essential danger Conventional dangers are characterized into four categories as takes after

•Credit risk refers to the danger that a borrower won't settle a commitment

for full value, either when due or whenever thereafter E-banking credit danger

is like conventional credit hazard in the sense that it is managed and controlled

by the same methods The differences are in e-banking, payment is electronic and client applies for credit by means of remote banking procedures and they come

up short make required payment

•Liquidity risk is the danger emerging from a bank's failure to meet its

commitments when due without bringing about unacceptable losses despite the bank may ultimately be able to meet its commitments The significant problem banks have in this case is to ensure adequate asset to cover redemption and settlement demands at a specific time as in conventional banking (Procedure is

complicated by including e-banking into accounting for need liquidity.)

•Strategic risk refers danger to earnings and capital, either current or

prospective, emerging from adverse business decisions or improper implementation of business decisions Competition and peer pressures cause bank to introduce or expand Internet banking without an adequate money saving advantage examination and without completely understanding the strategic and technical aspects of Internet banking As a result, the association structure and resources might not have adequate aptitudes to manage Internet banking

•Transaction risk is the current and prospective danger to earnings and

capital emerging from extortion, error, negligence and the powerlessness to keep

up expected service levels Transaction hazard appears as Internet banking items require sophisticated internal controls, information integrity, nonrepudiation of exchanges and steady accessibility As most Internet banking stages are based on new stages which use complex interfaces to connect with legacy systems, exchange errors danger are altogether increased Besides, the involvement of outsider providers additionally increases exchange dangers, since bank does not have full control over them Without seamless process and system connections between the bank and the outsider, there is a higher danger of exchange errors

from infringement of, or nonconformance with, laws, regulations and ethical measures Compliance risk may lead to diminished reputation, monetary losses and reduced business opportunities Banks need understand and carefully interpret existing laws as they apply to Internet banking and ensure consistency with other channels, for example, branch banking Compliance danger is further amplified when the customer, the bank and the exchange are in multiple countries as a result of clashing laws, charge procedures and reporting requirements crosswise over different wards The need to keep customer information private and seek customers' consent before sharing the information likewise adds to compliance hazard Customers are very concerned about the protection of their information and banks need to be seen as reliable gatekeepers

of such information At long last, the need to consummate exchanges immediately (straight-through processing) may lead to banks relaxing conventional controls, which expect to reduce compliance hazard

•Reputation risk refers to hazard to earnings and capital emerging from

negative popular opinion A bank's reputation can be damaged if its Internet banking services are shoddy (e.g., limited accessibility, carriage software or poor response) Customers are less sympathetic of any problems and demand even higher performance from the Internet channel Hypertext connections could interface a bank's site to other sites and may reflect a verifiable endorsement of the other sites

•Information security risk is the danger to earnings and capital emerging

out of remiss data security processes, in this way exposing the establishment to pernicious hacker or insider assaults, viruses, denial-of-service assaults,

information theft, information destruction and extortion The fast change of technology and the way that the Internet channel is accessible universally make this danger especially basic.

2.2 E-Banking service quality

2.2.1 Definition of E-Banking service quality

Prior reports acknowledged numerous dimensions as criteria of e-service quality The conceptualization and growth of e-SQ measurements is desired because it will aid to control and advance the functioning of online companies (Yang et al., 2003) Most studies of the concept and measurement of electronic service (e-SQ) have shown the dimensions of the form from either the customer's perspective or the provider's perspective (Heim and Field, 2007) An evaluation

of prevailing literature on eservice quality shows more different dimensions in eservice quality that are useful for different research circumstances (Madu and Madu 2002, Li and Suomi, 2009; Santos 2003; Field et al 2004; Ho and Lin, 2010: Kim and Stoel 2004; Yang and Fang 2004; Long and McMellon 2004; Gounaris et al 2005; Lee and Lin 2005; Kim et al 2006)

Cox and Dale (2001) set up 6 dimensions of online retailing service quality with the correlation of the customary dimensions of service quality, and the six dimensions are website appearance, correspondence, accessibility, credibility, understanding and accessibility (Cox and Dale 2001).Yoo and Donthu's (2001) SITEQUAL believes the e-service quality includes four dimensions, for example, the accessibility, taking care of speed of the memorizer, the creative design and the response rate of interaction Lociacono et al (2002) develop an eservice quality scale called WEBQUAL, which is composed of 12 dimensions (Lociacono et al 2002) Consequently, Kaynama and Black (2000) expand on the customary SERVQUAL dimensions to develop an e-service quality measure comprised of seven dimensions: content, access, route, design, response, foundation, and personalization Parasuraman, Zeithaml, and Malhotra (2005) mention five expansive sets of criteria as relevant to E-SQ: (a) data accessibility and content; (b) ease of use or ease of use; (c) protection/security; (d) realistic style; and (e) reliability/fulfillment Yang and Jun (2008) measured e-service

quality utilizing two gatherings: Internet purchasers and Internet non-purchasers They found that reliability was the most imperative dimension for Internet purchasers even when compared to access, ease of use, personalization, security, and credibility

Yoo and Donthu (2001) develop a 4dimension scale called SITEQUAL to measure online service nature of website, and the four dimensions are ease of use, esthetic design, processing speed, and interactive responsiveness (Yoo and Donthu 2001) These researchers emphasized both system and service attributes

in measurement of e-SQ For example, Zeithaml et al (2005) developed the S-Qual" by extending and refining SEVQUAL to measure e-SQ It consisted of two sections, i.e routine service encounter and service errors (E-ResS-QUAL) Yoo and Donthu (2001) develop a 4dimension scale called SITEQUAL Lee and Lin (2005) adopted a modified SERVQUAL scale to measure e-SQ in terms of web site design, reliability, responsiveness, trust, and personalization Wolfinbarger and Gilly (2003) developed a 14-item scale "eTailQ," based on reasoning of aggregate quality management to measure e-SQ and predict customer e-SAT, dedication, and attitude

"E-In this thesis, I used the six-dimensions criteria to measure the E-Banking service quality

2.2.2 Criteria to measure E-Banking service quality

Initially is Qualified procedure and process: This dimension guidelines

are available on website or from bank's staff This dimensions interpret the ability

of bank in terms of processing the customer’s demand, for example, apply the banking service It is not only about the ability but also the time , which is a vital element to satisfy customer

E-Second is Customer Service: Customer service has been recognized as a

vital element for enhancing service quality in online shopping and banking This dimension needs to do with service reliability, customer sensitivity, personalized service, and quick response to grievances that have been described as responsiveness to customer needs and protestations

Third is Assurance or Security: This is constantly best need of banks when

developing electronic exchanging systems Because security technology is always enhancing and continually evolving In the business environment turbulence, as the economy develops, data theft, stolen money online, hackers accident likewise always evolved Banks ought to concentrate on this issue because the technology security and safety will manufacture trust in customers, giving them solace, peace of brain when dealing with banks

When customers register personal data, for example, credit card number (Master card, Visa card ), identity card number they often fear of being hackers collect this data in order to serve the shady guide Clearly, electronic exchanging poses very levels of popularity on security and safety When working in the tremendous Internet environment, we face dangers related to the security of data transmitted over that stream

Fourth is Time of response: This element measures ability of giving

banking services through websites When an incident happens, the customer receives the data from the customer protestations For example, customers don't know how to register to use the online request service; or to take after multiple steps, or to complete data to complete an exchange So what they would expect from a bank? Ordinarily, clients expect to be notified by the bank rapidly by means of e-mail inbox established between internal bank and client, banker or call directly to illuminate the cause of the problem and afterward provide guidance to bolster clients perform undertakings that they were not commonplace There are numerous banks have set the guidelines of quantitative circumstances like this For example, when receiving the email bolster request utilizing the e-services customers, banks must respond inside

of 12 hours by e-mail, and inside of 24 hours have direct contact with customers through phone or text

Fifth is Product Diversification: Varity of item choices has become one of

the key elements of online service quality, as customer would need the right data that enables them complete online banking exchanges successfully This feature

is likewise a critical element that creates competitive advantages among banks

Sixth is Number of errors or mistakes: Qualified service is measured by

low number of errors or mistakes Errors happen for a number of reasons and manifest themselves in different ways For example, ATMs may likewise assume

a role in the miscounts, registering a withdrawal incorrectly, with the result either finding to support you or not Extra charges or extra deposits that are not accounted for are the most glaring problems

2.2.3 Conditions to ensure E-Banking service quality of commercial banks

2.2.3.1 Subjective condition

Infrastructure

This is an essential variable of the implementing of e-banking services The bank can just develop e-banking services effectively with the qualified data technology infrastructure A data technology office is considered to be qualified

on the off chance that it meets the accompanying two requirements: advanced and economical In a competitive market these days, it is clear that the utilization

of advanced technologies is a urgent requirement In the case of utilizing outdated technology, banks themselves kick out of the game Notwithstanding innovative technology, banks ought to likewise pay attention on economic aspect

of that sort of technology

Internet: The Internet is an essential instrument to connect people and

association over the world Without it, E-banking is not able to work

Intranet: A network is internal inside of an association that helps

association to perform their own operations inside of their association boundaries An Intranet is regular in online banking system

Hardware : Personal computers, servers, modems, switches, purpose of

sale, automated teller machines

Software: To lead online banking operations several software are currently

available, for example, FLEXCUBE, which enables banks to process and store banking exchange information and making payments

Human resource of the company

Regardless, man dependably plays an imperative role Besides reducing a lot of organization personnel, the development of e-banking services requires human resource to equip themselves the necessary knowledge to be able to apply data technology effectively Banks likewise need to have a team of experts sufficient to be able to continue research and development of electronic systems

of banks Moreover, experts need to set up e-banking system easy to use, user friendly Besides, when the service is quite new, the fear of customers is inevitable, therefore, the necessity of friendly staff and persuasive capacity is to remove fears of customers and entice customers to use bank's services

2.2.3.2 Objective conditions

Living Standard of customers

Living Standard is an essential element to advance payment services electronics Assume that people live with low salary; maybe they couldn't care about bank services They will use money instead of electronic payment services Therefore, economic improvement and developed way of life are dependably the prerequisite for the improvement of E-Banking services

Understanding and acceptance of customer

Propensities and favorite of money might be the primary obstacle for the development of E-Banking This would be no reason for the Bank to provide electronic banking services without customer endorsement The understanding of numerous customers in the electronic banking services and benefits of these services is essential Clearly, E-banking services are modern and qualified However, banks cannot assume that the service is enough To promote electronic banking services, banks need to make sure customers know these services and provide them detailed guidelines

CHAPTER III: ANALYSIS OF E-BANKING

SERVICE QUALITY AT VIB BANK HAI BA

TRUNG BRANCH3.1 Overview of VIB

Vietnam International Commercial Joint Stock Bank, abbreviated as Vietnam International Bank (VIB), was founded on 18th September 1996, with its head office based at 16 Phan Chu Trinh, Hoan Kiem District, Hai Ba Trung.

By 15th June 2015, after 19 years in operation, VIB has become one of the leading commercial joint stock banks in Vietnam, with total assets of nearly VND 80,000 billion The bank’s charter capital is now VND 4,250 billion while its shareholders’ equity is nearly VND 8,200 billion Currently, it has 4,000 people working at nearly 160 branches and transaction offices in 27 key provinces/ cities across the country

2010 marked a significant development milestone of VIB by a strategic partnership with the Commonwealth Bank of Australia (CBA) - the Number One retail bank in Australia and the world’s leading bank with over 100 years of experience CBA has officially become our strategic shareholder with an initial stake proportion of 15% After one year, on 20th October 2011 CBA made an additional investment of 1,150 billion dong in VIB, increasing its stake to 20% from 15% in order to further strengthen the capital base and capital adequacy ratio (CAR), and expand business opportunities and operation scale for VIB This strategic partnership facilitates its improvement to successfully implement the long-term plans in the bank’s business strategy and especially to improve the customer service quality in line with international standards

Being one of the pioneers in reforming business activities, it always takes our customers as the focus and our service quality and innovative solutions as the business motto VIB has been enhancing its efficiency in the use of capital and management capacity and continuing to focus on the development of retail banking networks and new products through diversifying distribution channels in order to provide financial solution packages to focused customer groups, and simultaneously improving the service quality to serve its customers better

3.2 Overview of VIB Hai Ba Trung Branch

3.2.1 Organizational structure

The VIB Hai Ba Trung transaction office’s scale is equivalent to a VIB

branch, so its organization structure includes departments as followings:

Figure 3.1: VIB Hai Ba Trung’s organizational structure

(Source: VIB Hai Ba Trung)

3.2.2 Business result of VIB Hai Ba Trung Branch from 2010 to 2014

3.2.2.1 Financial Result

As indicated by the consolidated financial statements of VIB for the year ended 2014, net profit after tax was 522,670 million VND, increasing by 1040% compared to the year 2013 which is 50,248 million VND Total assets with 80,660,959 million VND saw an increase of 5.2% versus a year ago

VIB Hai Ba Trung is despite the fact that a Card center of VIB however it possesses a scale and operates like a VIB branch Since its establishment nearly 5 years prior, VIB Hai Ba Trung has developed very firmly with critical achievements, adding to the development of VIB Here are some key financial pointers of VIB Hai Ba Trung

a, Growth in total assets

In recent years, the banking and financial market experienced different changes; however, VIB Hai Ba Trung worked out proper strategies and took

specific activities to continue keeping up its development in terms of both scale and operation quality In 2014, the entire VIB Hai Ba Trung all out assets increased by 16% against the previous year and reached 110% of the arrangement set.

Figure 3.2: Growth in total assets

(Unit: Million VND)

(Source: Annual financial report of VIB Hai Ba Trung)

Through the graph above, we can inform that VIB Hai Ba Trung absolute assets have bit by bit increased over the years In 2011 and 2012, the Vietnamese economy and in addition the worldwide economy was affected heavily by recession and high inflation resulting in bankruptcy of numerous huge banks, the VIB Quang still achieved relatively high development

b, Growth in profit before tax

The VIB Hai Ba Trung's profit before tax saw a fundamentally upward trend from 2012 to 2014, which has accompanied with our economic recovery With an appropriate business strategy and its internal limit improved, VIB Hai

Ba Trung achieved positive results in 2014 The bank's profit before tax reached nearly 7.5 billion VND in 2014, equaled 457% against 2012 when the office was