THE STATUS OF CARD SERVICES BANK BRANCH BIDV AND PROPOSED SOME MEASURES TO IMPROVE SERVICE QUALITY CARD

Development of card distribution system at BIDVThe formation and development of the BankDISTRIBUTION SYSTEM STATUS CARDIN BIDVSolution development of distribution system at BIDV: Developmentoriented distribution system card at BIDV Focus on improving the system of distribution channels direct card

THE STATUS OF CARD SERVICES BANK BRANCH BIDV AND PROPOSED SOME MEASURES TO IMPROVE SERVICE QUALITY

CARD

INTRODUCTION

1.The urgency of the subject

Can be confirmed, an important part of the marketing strategy isdistributed Resolve the distribution system to deliver goods and services toconsumers like Distribution system to create the smooth flow of each product frombanking services to customers, improve the exchange relationship between the bankand customers on the market This is a problem most of the bank executivesinterested

For the Bank's card products (BIDV), is a kind of new products, modern BIDVofficially launched operations in 1997 as a payment agent Visa and MasterCard forUOB bank in HCM City , after 10 years of operation, the Bank has obtained acertain result and initially confirmed the location of the NH in VN card market Inthe course of operations, the Bank was interested in the development of card

distribution system.However, the results were not really satisfactory, inadequate andneed to develop effective solutions to card distribution system, contribute toimproving the competitiveness of card products BIDV

Derived from practice, I have chosen the theme: " Development of card distribution system at BIDV" master's thesis.

2.Research purposes

System, analysis and commentary to clarify the basic theoretical issuesabout card distribution system of commercial banks, the proposed system solutiondeveloped distribution channels in BIDV card

3 The object and scope of the study

Cards are large problems, the thesis research focused on card distribution system,for practical distribution system cards at BIDV from 2001 to 2007 as the basis ofevidence

4 Research methodology.

Thesis using research synthesis methods: dialectical materialism, historicalmaterialism, methods of analysis, synthesis, inductive, statistical method,comparative method, retrospective documentation of the previous research and theactual survey questionnaire

6.Scientific contributions of the thesis

 Clarify the basis of a review of the card distribution system Development inthe Commercial Banks

 Underestimated card distribution system at BIDV, indicating the presence andlimitations of the distribution system cards at BIDV

 Proposed a number of solutions to development card distribution system atBIDV

7 Structure of the thesis

In addition to the introduction, conclusion, list of references, the content of thethesis is structured into three chapters:

Chapter 1: The basics of card distribution system of commercial banks.

Chapter 2: Status of card distribution system in the Bank.

Chapter 3: System solutions developed distribution channels in BIDV card.

CHAPTER 1

BASIC PROBLEMS OF SYSTEM CARD DISTRIBUTION OF COMMERCIAL BANKS

1.1 OVERVIEW OF BANK CARD TRANSACTIONS

1.1.1 The formation and development of the Bank

Social reproduction process always takes place on an ongoing and constantlyevolving, in the course of which there are many relationships between the subject ofthe production, especially the relationship traded goods Therefore, the paymentinstitution in the relationship of the production process is important and necessarycontribution to the development of the social productive From ancient times to afew hundred years ago the precious metal acts as a medium of exchange in allsocieties The problem occurs with the payment system based entirely on preciousmetals is that this money is very heavy and difficult to move from one place toanother The continued development of the payment system is paper money At firstpaper money may be converted to coins However, in most countries, it has evolvedinto fiat money, not able to be converted into coins Paper currency benefit is that it

is much lighter than coins or precious metals; constraints of paper money and coinsthat they can easily be stolen and expensive to transport due to cumbersome.

To overcome this difficulty, a new progress payment system appeared with modernbanking activity: it is the birth of a check The use of checks has reducedtransportation costs associated with the billing system and improve economicefficiency Benefits of checks they can write any amount of money for the rest ofthe balance on the account makes dealing with large amount of easy, bringconvenience in the collection of funds and the ability to take greatly reducedtheft However, obstacles to check takes time to move from one place to check,bank time to check and credited to your account, moreover, the use of checkshaving a lot of trouble with complex magazine papers

Along with the development of science and technology, an e-payment system inwhich the use of papers will minimize being developed Next check is thedevelopment bank payment cards, dating from the first decades of the 20th century,developed from the 70s and has become a popular tool in this day and age

Cards first appeared in 1914 when the California Petroleum Corporation (thecompany that today is the Mobil) conducted cards for the staff and a number of itscustomers The basic purpose is to encourage sales of the company, notaccompanied by a provision regarding the extension of credit However, the newbank card technology actually began nearly 50 years ago, in which the relationshipbetween customer and vendor relations center When a business wants to expandtheir credit to its customers, the customer is allowed to debit their account

Form is the first bank card Charge-it, a credit system developed by John Biggins in

1946, allowing customers to make purchases at retail locations The business inBiggins banks and deposit banks collect payments from customers and return

business This system was prepared for the first credit card in circulation in 1951 inNew York issued by the Franklin National Bank.

There are many types of cards have been used around the world, typical of them tomention the cards held by the prestigious international release, including DinersClub, Amex, Visa, JCB and MasterCard

Diners Club card, first released in 1949, with an annual fee of $ 5.Diners Club

cardholder can debit going to eat at 27 restaurants located in or along the New YorkCity Diners Club initially be used to pay for meals at the restaurant, but thengradually become travel and entertainment cards are present all over theworld 1960 is the first card in Japan, the branch is managed by Citi Cop At thistime all over the world, only about 1.5 million Diners Club cards in circulation with

a turnover of 7.9 billion USD In 1990, this number up to 6.9 million cards andsales of $ 16 billion Following Diners Club, is the appearance of a series ofuniform cards with it like Trip Change, Golden Key, Guest Club At first themajority of cards issued by large companies, until the bank realized the superiority

of using the card and a huge market in the future, then quickly enter the field ofbank issuing card

Figure 1.1 history of ATM Card

Amex card is the abbreviated name of the American Express card issued by the

American Express card in 1958 with a total of 5 times Diners Club.If you stand interms of tourism and recreation, annual Amex card is the most preferred bycustomers, with the largest revenue in this area with 3 cards mainly Amex Gold andAmex Platinum and Amex Optima In 1973, when the U.S economic crisis brokeout, the turnover of Amex remains at 8% / year In the three years from 1990 to

1993, revenues increased from $ 111.5 billion to $ 120 billion, the number of cards

in circulation increased from 35.4 million to 36.5 million, with over 3.6 millioncards merchant base (CAU ) payment Unlike other cards, Amex card itself own anddirectly manage cardholders, whereby they grasp the necessary information aboutcustomers to develop programs such as customer classification to provide serviceprovider

Visa card issued by Bank of America in 1960, originally named Bank

Americard.The Bank of America itself is an affiliate association of banks in theU.S states, so it has wide distribution network In 1977, Bank card Americardofficially changed its name to Visa, were present throughout the world and isknown as card-scale development in the world By the end of 1990, about 257

million cards in circulation revenue of about $ 354 billion In late 1993, Visa'srevenue grew strongly up to $ 542 billion Visa ATM systems around 164,000ATMs in 65 countries around the world Visa card is not directly transferred to theunit members, as well as favorable conditions for Visa easier to market expansioncards Visa now has more than 22,000 affiliates in more than 200 countries, hasreleased more than 500 million cards, more than 13 million merchant payment,320,000 cash dispensers, sales of $ 800 billion in annual transactions.

JCB cards are cards came from Japan in 1961 by San Wa bank, in 1981, began to

develop into an international basis.Main goal is to focus on the tourism and leisuremarket, is to compete with Amex JCB card, the Japanese have proven cardtechnology is no longer the absolute monopoly of the American organizations If

1990 JCB card sales of $ 16.5 billion with 17 million payment cards in circulationare accepted at more than 400,000 locations in 109 countries outside Japan;, to

1992, with over 30 million cards, 2 , 9 million merchant and 160,000 ATMs in 139countries with revenues of $ 30.9 billion Today JCB is strong rise on par with othercards

MasterCard card is launched in 1966 under the name MasterCharge by bank card

association ICA (Interbank Card Association) released through members around theworld.In 1979, MasterCharge was renamed MasterCard payment card and becomethe second largest in the world after Visa So far the number of membersparticipating in MasterCard card associations have up to 29,000 members in morethan 200 countries, issued 350 million cards, 12 million merchant payment, 200,000ATMs, sales transactions in about 460 $ t5y

Today, MasterCard and Visa are the two most popular cards used in the world Cardincreasingly diversified and became very popular products During 80 years of cardtransactions increased by 20% annually With these utilities provide bank card has

become a major means of payment of all strata of the population in developedcountries and the developing world.

1.1.2 The concept of bank card

From the perspective of considering different studies, we launched the concept of adifferent payment card In the opinion of the State Bank of Vietnam (SBV) Vietnam

(Regulation issued, used and bank card payment issued under Decision 371/1999/QDNHNN1 date 19/10/1999 of the Governor of the State Bank of promulgating the regulations issued, and use the bank card payment): Bank card is

a means of payment for goods and services can not cash or cash at the cash machineautomatically or the agent bank.In other words, the bank card is a non-cash paymentmeans that cardholders can use to withdraw cash or pay for the purchase of goods,use services at the POS

In terms of release, the card is a means by banks, financial institutions or otherissuers for transactions of goods, services or cash

From a technology perspective the payment card as payment method e-bookamount of the payment transaction needs, made on the payment system is connectedbetween the actors, based on banking technology and telecommunications It allowspayment transactions in a convenient, safe for the participants pay

From the above analysis, it can be concluded that: payment card is an electronicmeans of payment issued by a bank / issuer, allowing cardholders to use to pay forgoods or services to withdraw cash within the amount on the customer's account orcredit card

1.1.3 Structure of the card bank

From the beginning of time, the card is made of metal, through the selectionprocess, so far most of the cards are made of hard plastic (Plastic) with normal size

is 95mm x 55mm x 0.76 mm, 3 layers: the core card is a plastic layer in the middle

and two layers of rolled plastic sides Depending on the method of access andmanagement of information processing card that is made from strips of tape (creditcard) or integrated circuits (chips) recorded data (chip card) or magnetic tape, Chip(card from Chip).

The front of the card typically includes (see Figure 1.2):

- Background, color cards, depending on the bank chosen and depending onthe card type prescribed by the issuing bank

- The name and logo of the issuing banks, card organizations badge and logo

of the organization, such as MasterCard, Visa, AMEX, Diners Club, JCB

- For the chip, the chip will be arranged on the front

- Number of cards: Each card is assigned a separate number to managesubject to the provisions of international card organizations, or the issuing bank

- The effective date of the card: embossed on the card

- They cardholder name, company name (if corporate card)

- The security element of the card organizations

Figure 1.2.Eye tric and after CNA Visa

MÆt sau cña thÎ VISA

The back of the card include:

- Tape strips (for credit card): the ability to store the following information:card number, effective date, the name of the issuing bank, the cardholder name,effective date, cardholder's personal identification number (PIN)

- Oh signatures: for a sample signature card to card-accepting unit (CAU)when using test.Currently, card printing technology to print the signature on thefront of the card.

- Some guidelines for cardholders, contact phone

1.1.4 Classification of bank card

Bank card is really very rich and diverse, are used for many differentpurposes Based on various criteria that bank cards are classified

- In terms of production technology, it is divided into braille engraved card,

magnetic stripe and chip card:

 Braille engraved card (Embossing Card): The original early card, the basicinformation is relief on the card.This card is now no longer used by poor security,ease of counterfeiting

 From card (Magnetic stripe): Card is covered with a bandage with 2 or 3strips of coded information relating to clients such as: fixed information about thecardholder and the card number, the expiry date of the card, name card holder

 Chip card (Smart Card): Card is produced based on microprocessortechnology.The front of the card is attached to an electronic chip on the principle ofhandling such a small computer This is the latest generation, the most modern ofthe current card, overcome the drawbacks of the card from a high security safe

- Payment terms of the nature of the card, it is divided into debit and credit

cards:

 Debit card (debit card): A type of card has a direct relationship andconnection with your customers' deposits.Every time a transaction is made, the bankwill automatically deducted at the corresponding amount on the cardholder'saccount

 Credit Cards (Credit card): Credit Card payment to a certain spending limitthat banks provide to users on the basis of financial capacity, security deposit orcollateral.

- In terms of the subject issue: payment cards often include cards issued by

banks, due to the non-issuing banks, card association between bank and non-bankinstitutions

- In terms of the cardholder: There are two types of cards are personal and

- In terms of territory use: Card card is divided into domestic and international

1.1.5.The role of service development card

1.1.5.1 For the economy:

- Reduce the volume of cash in circulation:

Means of non-cash payments, the first role of the card is to reduce the volume ofcash in circulation.Thus, the costs related to transportation, cash counting, mass,pressure on cash, counterfeit money in circulation decreased significantly.

- Increasing the volume of turnover, payment:

Most card transactions within the national or global level will be done online

(online), the rate cycle, payment transaction much faster than through other means

of payment such as checks, authorized to collect, authorized payment

- Contributing financial transparency, support macroeconomic management policy of the State:

In card payment transactions are done through banks With modern technology, alltransactions are within the bank's ability to control and create the foundation for thework of the State's macro-management, implementation of national monetarypolicy, reducing the negative impact of underground economic activities

- Implement measures to "stimulate" the State:

Card which brings convenience to users, Merchants, banks make more and morepopular card use, increase spending and create a new consumer trend "consumerfirst, pay later "lead to increased consumer demand Thus, the card has become auseful tool contributing to the implementation of measures "stimulus" of the State

- To contribute to improving the environment of civilization, to promote international tourism and foreign investment:

Card payments to reduce the transactions manually, access to a payment of worldcivilization Along with the process of international economic integration Vietnamdeeper wave of foreign tourists and investors access to the growing Vietnamesemarket The card development will help meet the needs of foreigners, eliminate thepay gap between Vietnam and the world

- To promote e-commerce development:

Is the primary means of payment cards of e-commerce transactions.Thedevelopment of electronic commerce depends largely on the method of payment, inorder to ensure the speed factor, safety and security Therefore, the card paymentservices growing, e-commerce since then as conditions develop and perfect

1.1.5.2 For the bank

- Increase of capital and profits for the Bank:

Card activity grows, the amount of customer deposits to increasing card payments,giving the bank a substantial amount of capital in cash, can be considered a source

of profit for the bank.In addition, payment and distribution activities as well asbusiness cards bring income to the bank through service charges: revenue frommerchant fees, distribution charges, charge cards, charge credit limit, interest ratesfor credits which payment cardholder slow, cash advance fees, service chargesrelated

- Empowerment of the bank:

In addition to business performance including card services also bring intangiblebenefits to the bank as: empowerment of the bank, to promote the brand image anddrag the customers to the bank

- Diversification of banking, risk diversification:

Card launched to enrich the banking, gives the bank a multi-utility payment, riskdiversification in the business activities of the bank In addition, the card servicerelationships also support other banking services, such as electronic banking (e-banking), the purchase of the business operations over the network

1.1.5.3 For cardholders

- Convenience, flexibility and time savings in the payment:

The flexibility and convenience of the payment in the country as well as abroad is autility that highlights the use of cards, so card users do not need to carry largeamounts of cash with you and still young payment of goods and services andwithdraw cash when needed 24/24h; 7 days a week Since then, it has contributed tothe habit of using non-cash payment facilities in residential areas

In addition, card services also save time to cardholders when shopping for avoidsewn counting money when paying large sums of money, control spending throughthe bank card account statement

1.1.5.4 For Merchants

- Increase business efficiency:

Quick help card merchant acceptance of return Merchants will be credited to youraccount as soon as the card transaction data is transmitted to the bank or themerchant submits bills to the bank card Merchants will be entitled to non-terminterest rates to maintain balance on the bank card payment account The merchantalso help the merchant to attract more customers using the card; leads to increasesales at the same time significantly reducing the cost of sales as: counting,preservation of money, financial management

- Safety and security: The acceptance of payment cards help CAU reduce the risk

of receiving counterfeit money, stolen money risk

- Shorten time dealing with customers:

When cash transactions, cash register, book-keeping is very complex Cardtransactions when done in EDC devices, simple operation, licensed processing timefor transactions only takes 10-25 seconds, which is very convenient for both thecustomer and the merchant

1.2 DISTRIBUTION SYSTEM of commercial banks.

Distribution strategy of products and services is considered as a central component

in the marketing mix strategy, including channel distribution is a distribution toolmarket products and communicate effectively.Develop a strategic product, goodservice, reasonable price strategy is not enough to ensure success in the bankingbusiness, which requires managers to plan marketing distribution strategy to put thebank's products and services to customers in the best way This will be an importantevent to promote the most effective of the two strategies Thus, determining theappropriate distribution system is extremely important issues but it is verycomplicated, because it involves so many marketing activities, influence activitiesand results of operations bank Therefore, today the bank is interested in theimprovement and development of distribution system and see it as an advantagefactor in the modern banking business Card is a new products and services of thebank, to "knock" each customer in the use of the card, the bank has used a variety ofdistribution channels, however popular and effective in a certain channels In manycases, the idea of multi-channel management has not been done in a coordinatedand unified However, the development of card distribution system must be set out

as the leading strategy to put the card into one of the main business activities of thebank

1.2.1Characteristics of the channel bank card

Distribution channels can be understood as a set of organizations and individuals and facilities involved in the process of bank card supply to customers

From understanding the distribution channel can see NH card has the followingbasic characteristics:

- Channel card NH diversity and abundance, by the involvement of manyfactors such as human, material and technological conditions.Therefore, the quality

of the channel depends on the quality of the above factors

- Channel distribution channel bank cards are usually short, and broad marketcoverage

1.2.2 The structure of the distribution channel bank card

Channel card NH mainly three members:

- Bank card service providers (supply NH DV card)

- Intermediate: branch or agent

- The consumer (the cardholder)

1.2.2.1 Supply bank card DV:

DV supply bank card is a bank State Bank of Vietnam (SBV) allows issuance andpayment cards; if you want to release and international card payment, the officialmust be a member of the international card organizations.NH card service providershall receive dossiers of application for the card, card account processing andmanagement, and is responsible for international payment cards, card paymentservice provider at Merchant To the issuance and payment cards bring higheconomic efficiency, there must be a reputable bank in the country as well asinternationally NH card service provider shall:

- Consider the card issuer to the cardholder, guide the cardholder using the card andregulations in the course of using the card

- Deduction directly to the account holder transactions arising reduce depositbalance or limit card account, and credited to this account when cardholders paymore money

- Signing of contract management and monitoring activities approved merchant cardpayment, payment in full transaction amount after deducting the fees banksreceive

1.2.2.2 The intermediary:

The middleware is an important member in the channel.The maincharacteristics that make up the different characteristics of each type of channel Forcard distribution channels, there are two main types of intermediate branches andagents make two specific type of card distribution channel is direct and indirect The branches are usually available or NH can actively open new basespractical needs as well as their abilities.As for agents, each bank has its own

approach (based on the relationship, or in the form of promotions, etc.) to attract

and persuade the agency contracting units on the basis of cooperation mutuallybeneficial

1.2.2.3 Cardholders

Cardholders be the person named on the card issuing bank to

use.Cardholders may be a single individual or personal representative of a company

or organization that needs to use payment cards Cardholder is the only person whohas the right to use your card to withdraw cash at an ATM or pay for goods andservices at the merchant Cardholders are responsible for:

- Storage card to tell others not to steal or abuse

- Use the right purpose

- Must be at risk of losing money by PIN or counterfeit cards

- To be responsible for the payment, refund used

- When the loss must immediately notify the Issuer

Issuing three types of channel members are involved in the process of "buying andselling" services to members of the front and rear channels Each member canfeatures and individual objects but the result is the emergence of a particularchannel consists of a mixture of power, conflict and cohesion.

Power in the channel is the ability of one member affect the operation of other

members, this means dynamic range.Learn the power of the channel firstly identifywhich member is the decision maker on all matters related to the organization as thenumber of channel members, the function of each member, and media technologymaterial used In fact, power is often shared, members have the power to channeldistribution at different levels Strong power often focus on the more powerfulmembers, but they also dominated from the other elements in the channel

Conflict and links: Conflict and links co-exist in most of the channels.So for card

distribution activities, the members must be linked together to create therelationship between the members of the channel:

- The relationship between supply bank card DV intermediate and often emergingconflicts of power and interest in distribution The balance of power between banksand agents in the bank decided the basic elements of service delivery card (price,scope of use, level of service is done)

- The relationship between intermediaries and customers less conflict, the level isnot intense Both have their own advantages and can force the enemy to performcertain requests

- The relationship between bank card service provision and customer is the indirectrelationship between the producer and consumer NH card service provider is tosatisfy the customer's needs at the same time when using the services of the bankcard, customers have returned to banking information to know the effectiveness ofthe services provided to the Project completion products and services, furtherincreases the income for the bank

Besides the relationship always exists a conflict between members of the samechannel system These are two sides of the same process In each task, each member

to determine its position in relation to conflict - cooperation Synthesis of all theserelationships is the reason to stick the channel members together make up acomplete card distribution system and science

The channel members often talks about the specific functions they willperform Sometimes conflict occurs, break the relationship between the channelmembers Of course, the bank card service provider can remove a certainintermediate but can not eliminate the functions that it performs Thus, all channelmembers to perform the following main functions:

- Market research: to gather the necessary information about supply and demand in

the market from card distribution strategy accordingly

- To promote the expansion card products: this is the special work required for new

products, new to many people used to using cash.The card distribution channelmembers need to prepare and disseminate information on the card to the customer

- Negotiating: to income distribution agreements and interest in the channel.Agree

with each other on price and delivery conditions

- Card Distribution: transportation, storage and place the card in the hands of

customers

- Establish relationships: building and maintaining relationships with potential

buyers

- Complete card products and services: making card services meet the requirements

of the buyer, that is, perform a the Card Issuer work

- Funding: financial support mechanism for members in pay channels.

- San exchange risk: risks related to the distribution process.

The question is reasonable to divide these functions among channelmembers Principle to divide the functions of specialization and division of labor If

NH card service providers perform these functions, the cost will increase and priceswill be higher than the transfer of some functions to intermediaries Therefore, theissue of concern is who perform the work of the channel will make for higherproductivity and efficiency.

1.2.3 The role of distribution channel card

Card distribution channels means of direct bank card services to

customers.Thanks to the distribution channels that bank card services done quickly,

to meet the needs of customers Distribution channels play a positive role inimproving, perfect card services, creating favorable conditions in the supply of bankcard services to customers Cards is a modern means of many facilities withaffordable but to be able to customers, clients preferred cshuong and use it, theremust be a distribution system expansion cards, flexible and effective Modernproducts are distributed by a channel system science is a tool not only to create thedifferences, but also expand the bank's image in the market

1.2.4 Factors affecting the distribution channels in the bank card.

1.2.4.1 The development of the market.

Today, the competition has become a rule of all economic sectors, takes place ineach branch, department, individual products and services at anytime,anywhere Products and services nascent bank card can not be located outside thelaw Along with the development of competitive markets, and theinternationalization trend is increasing Moreover, a diversified banking productsshould more pressure on profits and hence increase Therefore more and more banksplan l Select the product distribution channels in order to maximize profits

1.2.4.2 The requirement of customers

Customers have come to bank card services bank means that they need to meet theirneeds Often customers looking for bank card services in the followingrequirements:

- Search the income from bank card services through deposits receive the product

on a card account

- Ensure safe management of assets (money)

- Convenient and payment transactions

- Transfer of currency (bank transfer)

- Consulting expertise

- Find out information

Due to the growing demand more, so the card products and services to customers inmany different ways essential nature, the basic thing here is to find the appropriateway, scientific learning and more effective

1.2.4.3 The level of team work card distribution

Man is always the deciding factor for all activities in the economy, especially in thecard distribution process requires highly standardized, ensuring a smooth, uniform

in all phases of process A tag team work with professional, knowledgeableprofessional is a prerequisite to develop service delivery channels On the otherhand, is a service of the bank card should have a team working on flexible paymentcards, dynamic, knowledgeable customer psychology

1.2.4.4 Information Technology

The scientific and technical achievements require continuous investment in productdistribution channels associated with modern technology Thanks to this system,customer requirements can meet without the involvement of people with a role as an

intermediate component The latest scientific and technical achievements allowcustomers to use multiple ability that previously could not be performed.To get asystem to ensure extended service card at a high technical level requires banks andother credit institutions need to have a large investment, and application of scienceand technology in system development channel bank card services.

1.2.5 Types of distribution channels in the bank card

Currently, in the field of card services have two types of distribution channels aremainly direct channel and indirect distribution channels

1.2.5.1 Direct Distribution

Direct distribution channel is the channel in which banks use the branch network as

an intermediary to provide card services to customers Therefore, the directdistribution channel card is the bank's branch network

Branch is a traditional channels associated with the system headquarters andfacilities in certain locations Especially the provision of products and services thebank card mainly made by bank staff Therefore, the use of this channel oftenrequires a team of employees and customers to the transaction at the head office or abranch transaction Therefore to provide more card products and gain market share,banks often develop extensive branch network and are always ready to supplyproducts to the bank In fact, many banks have used a branch of duty carddistribution

a Organizations distributed cards at the branch:

 supply Place the card and transaction-based branch of

Is a very important factor because the head office and a branch of the transactionmust be placed in a convenient location such as populated areas, near commercialcenters, major town will bring many benefits for banks However, the selection of

a suitable place of business is not easy If placed near the head office, head office ortrading room of a branch with a banking system or a branch of a commercial bankhas an advantage over or placed in an appropriate place will make it difficult forcard distribution activities.

 Card products are provided at the branch

Might say, a branch bank is a living cell, is a miniature of the whole system, so itcan provide all kinds of bank card products However, depending on the specificcharacteristics of each region, depending on the business strategy of each differentbank branches can supply various card services to make up the rich, diverse form atthe same time there is a specialization in the provision of products and servicescard

 Equipment at the branch

Usually a branch arranged a number of major equipment such as: computers, laserprinters, UPS, safe, trading desk, generator, counter, cabinet documents, signage,ATM

Also in the process of implementing its functions, the branch also uses a lot ofphysical clues and supporting technologies such as pen and paper, automobiles,buildings

 Staff

Staff dealing directly with customers, the bank's image By impression withcustomers during transactions, employees involved in the sales promotion cardservices Therefore, the branch teller not just solid professional qualifications, butalso should have a courteous style, enthusiasm and openness, absolutely avoid acold attitude and too rigid In addition, employees also need to be sensitive toreceive and convey information from market signals, from the client to the bankexecutives

 Opening Hours

It is also an important factor for effective branch operations Opening hours tocreate favorable conditions, in accordance with the hours of the customers,especially the group of customers was chosen to satisfy the needs of them There is

so new to attract the largest number of customers

b Advantages and disadvantages

 Pros

- Type of card distribution channel system branch has relatively highstability Before the products, the bank has built extensive branch network toprovide the products and services before, so the initial cost to build a new branchservice delivery is very little card Born card services complement and enrich thelist of products and services are provided at the branch, thereby increasing incomefor the bank

- Our employees are professional bankers understand, so could well be propaganda,guidance and service to attract customers to the card

- Card service life, distributed through branches will take advantage of existingrelationships with customers, so the card distribution process easier

- Activities of the branch system is relatively safe, easy to create the image of thebank for customers

- Branches are often easy to attract customers and satisfy the specific requirements

- Operating this type of distribution channels mainly by human labor force shouldrequire a large professional staff and staff management.

- Direct distribution channel is limited in space and time within transactionsbetween banks and customers So poor customer coverage, ineffective

1.2.5.2 Indirect Distribution

Indirect distribution channels as the commercial banks to establish agencyrelationships with organizations, companies and other banks to provide cardservices to customers

Distribution service agent bank card through a letter he applied the banks do nothave branches, due to unauthorized or ineligible establishment or if opening morebranches will not be efficient.So banks usually through a organization based in theplace of business as agents of card distribution and dealer commissions

a Organizations card distribution through agents:

Agent distributing cards to fully prepare the conditions for the provision of services

to the end-customer card a most effective way The construction of these termsbelong to the agents that supply bank card DV relationship, it is important toconsider, selection agent in accordance with the objectives, strategic plans and thedistribution and business cards This is especially important to decide the success ofthe card distribution process So supply NH DV card to build yourself a newinformation system properly and fully, timely science and to decide the mosteffective card dealer

b Advantages and disadvantages

 Pros

Indirect distribution channel has to overcome the limitations of direct distributionchannels, as shown:

- Coverage of the market wide indirect distribution channels which can reach, set ofcustomers both in breadth and depth, just get a large number of customers at thesame time have a customer segment key.

- Supply Bank Card DV is not cost-based construction, housing, infrastructure,costs rose

- Activity card distribution is done in an active, not regular customer calls to banktransactions

- The biggest advantage of the agent is that it overcomes the geographical distancebetween the bank offers its customers A commercial bank can ask other agents inthe commercial banks in the country and abroad by opening the account, foreigncurrency and receive other bank account opened at the bank Through relationshipssuch that supply bank card DV can provide their card products and services tocustomers thousands of kilometers or from country to country

 Cons

- Compared to the cost of opening a branch is less but the cost of commissions andcosts for agency staff is quite often

- The system of distribution channels-style card dealers often highly stable, many

do not take advantage of existing relationships with customers to establish newrelationships, so time-consuming and new large costs have been familiarrelationship with customers

- Agency staff sometimes less knowledgeable professional service tag becauseagents often interested in different services, so in some cases, agency workers cannot carry out the distribution good card and expertise as professional supply bankcard card DV

1.2.5.3 Development trend channel card

Along with the continuous development of the economy, and the banking industryitself, as well as card services, most every bank tries to expand the scope ofactivities, develop share your card Always be the priority target is to "bank cardservices" closer to the public by placing more branches and create more favorable,widely introduced and the add-in card services customer process cards Derivedfrom the requirements extensive contact with clients in areas at the same timeexpand the market to find new business direction, the branch is still commondistribution channel and plays an important role in the distribution system bankcard However, the need to use the card on the rise, along with it is the internationaltrend, the existence and development of indirect distribution channels as veryinevitable, necessary objective Although existing distribution channels is not muchbut tend to develop more indirect distribution channels will expand In terms ofnumbers, both direct and indirect distribution channels are increased but in terms ofthe proportion of indirect distribution channels will gradually increase as theproportion of direct distribution channel narrowing.

As for the big banks, the strategy development services multi-region, multi-service

and multi-dimensional marketing, distribution system is clearly complex.Soadministrators think of the fan-shaped distribution system, which is a combination

of direct and indirect distribution channels, using a variety of intermediatedistribution card services to customers Especially effective is the use of multipleindependent agents with very large distribution

1.2.6 Selection, design and management of distribution channels in the bank card

1.2.6.1 Selection of channels

The question for distribution channel management is the selection of appropriatedistribution channels for products and services your card Direct distribution

channels over the years and become a popular traditional distribution channels Butnot all traditional distribution channels are also effective, in many cases still need tochoose a new distribution channel more efficient Common base to select optimalchannel for your card is:

- The objectives of the channel: The goal of distribution channels will define the

channel will reach the market, with the goal?The target may be customer servicelevels, require intermediate levels of activity, coverage of market

- Characteristics of target customers: It is also important factors affecting the

selection of channels.The important factors to consider about customercharacteristics as size, structure, density and consumer behavior More customers ingeographically dispersed, the more need to use indirect distributionchannels Customer density per unit area as high as using direct distributionchannels

- Characteristics of the Intermediate: A manager should consider the strengths and

weaknesses of the market intermediaries in the distribution of your cardservices.Banks need to be analyzed to choose the appropriate intermediarydistribution channel for your card

- Distribution of competitors: Banks need to select distribution channels can bring

competitive advantage for the business card over competitors channel, like it should

be the channel there is a close link

- Characteristics of the bank: the bank's size will determine the size of the market

and the banks ability to find the appropriate intermediary.Bank of resources willdetermine the bank can perform the distribution function and must give way to theother member functions

- The marketing environment characteristics: As the economic recession, banks

often use direct channels to reduce the selling price.Regulations and legal

constraints prevent the organization of channels tend to eliminate competition andcreate monopolies.

- Ask about the level of coverage of the market: It is considered as a table varies

widely distributed to exclusive distribution.If you want to distribute widely cardsshould use indirect distribution channel because it has better market coverage

- Ask about the level of control channel: This is proportional to the channel

directly.When using the indirect channel, banks have to give up some controlrequires the consumption of its card products in the market

- The size of the total distribution costs: Bank to select any channel with the lowest

total cost of distribution by efficiency gains

- The last issue to consider is the level of flexibility of the channel This stems fromthe request of the banks need to adapt to market changes taking placerapidly Generally increasingly uncertain future, do not select the channel long-termcommitment

1.2.6.2 Design (organization) channel

Organize the distribution of the bank card market is a complex and importanttask Organized distribution channels are all activities related to the development ofnew distribution channels where it previously did not exist or to improve existingchannels Each bank has its own style to set the card distribution channels as apotential competitive weapon There are many ways to distribute the card has beenapplied and has brought success and failure for many banks

A bank can channel-oriented design competition-related marketing relevancebetween card services, intermediaries and customers Some of the content on theappeal of the card services customer care as convenient, convenient, fast andsafe Customer registration card where near for the purpose of saving time Thefactors governing the distribution channel card design include:

- The number of intermediaries.

- Intermediate

- The distribution of the additional value on the function of the members

- What kind of support materials and technology used by the members

- Card Services, elements and parts that make up the distribution process inthe bank card

1.2.6.3 Management of bank card distribution

After the channel has been designed card, the issue is important to manage ouroperations The channel management focus on selected activities and encourage theactive channel members, solve the problem of card services

- Selection of channel members:

In the process of channel activity, banks are required to select and attract specificmembers involved in the distribution channel card Banks need to identify a set ofcriteria for selection of channel members, affordability, cooperation and reputation,business conditions, conditions of natural persons, legal entities, etc

- Channel members are encouraged to:

The regular members must be encouraged to achieve the highestperformance Banks need to understand the needs and wants of the members of thechannel There are many methods used by banks, including three popular methods

is cooperative, member relations and the construction of distributedprograms These methods have focused on creating a close relationship links in thechannel

- Performance evaluation of channel members:

- Cyclical, banks should periodically assess the performance of the channelmembers according to the following criteria: number of cards issued, venturepayment, the level of cooperation etc

The set of norms for intermediaries is also necessary to encourage theiractivities This figure also help the bank to see the performance of the channel andadditional marketing measures timely delivery However, the evaluation of channelmembers to the legal standard and the channel member support.

The entire first chapter has focused on content analysis system and to clarify somebasic theoretical issues cards and distribution system of commercial banks, such as:the concept, the role of card distribution channel structure, the influencing factors,the type of card distribution, selection, design and management of distributionchannels in the bank card

These problems create a theoretical basis for the analysis underestimated thesituation card distribution system of BIDV in Chapter 2

BIDV (Bank) is considered one of the four largest state-owned commercial banks inVietnam with total assets account for 25% market share in the entire bankingsystem in Vietnam Formally established in 1996, after being separated since theState Bank, BIDV has extensive sales network, with its headquarters located inHanoi, two representative offices in Ho Chi Minh City and central area in Da Nang,two transaction offices, 140 branches and over 700 outlets in the provinces andcities nationwide BIDV also includes business units Training Center, InformationTechnology Center, Center for the card and its members as financial leasingcompanies, securities companies, the Management Company funds and assetexploitation.

With its position as one of the leading commercial banks in the application ofscientific techniques and modern technology in banking operations in order toprovide the best products and services to customers, the Bank is the bank the firstopen Web page to provide contact information and the utility service of the Bank'sbusiness and customers Moreover, the Bank is also one of the founding members

of the financial and credit institutions as Indovina, Saigon Commercial banks,international financial leasing companies VILC and joint venture insurancecompany in Asia Harmony with the trend of integration with international friends,BIDV is now an official member of the Association of Banks in Asia, theAssociation of Issuing and Payment Visa / MasterCard, interbank financialtelecommunication Association global customers Up to now, BIDV has establishedagency relationships with 735 banks of 60 countries worldwide

Signal along with the prosperity of the Vietnamese economy in the reform era, thebusiness activities of BIDV single positive developments, which meet and exceedthese targets credit, mobilize capital, profits, risk provisioning serve

Bank's development objectives in 2010 is "BIDV build a major commercial banksand the state of modern, efficient business operations, sound financial, high

technology, multi-functional business large market share in Vietnam " For anoverview of the business of the Bank, we will analyze some of the key financialindicators that BIDV achieved in some recent years.

Table 2.1 The growth index of Bank Unit: billion

(Source: Annual Report of BIDV)

To get the big picture on the Bank's activities in recent years, the thesis will analyzegeneralize the following specific criteria:

 Evaluate the growth rate of deposits

Figure 2.1: Diagram of growth capital mobilization Unit: billion

(Source: Annual Report of the Bank in 2000 and 2006)

After seven years, the total deposits of the Bank increased more than three-fold:from 40,744 billion in 2000 up to 125,760 in 2006 This confirms the growth inboth size and reputation of the Bank

 Evaluate the growth rate of total assets

Figure 2.2: Diagram of growth of total assets Unit: billion

(Source: Annual Report of the Bank in 2000 and 2006)

In 2000 the total assets of the Bank is 48 703 billion in late 2006 triple 135 916billion Structure of liabilities and assets are adjusted in the direction of safety,quality, efficiency and sustainability.Factors confirmed the ongoing development ofBIDV in recent years

 Evaluate the growth rate of net profit

Normal profit is the last important factor confirm the size and position of a bank.Figure 2.3 Net profit growth chart Unit: billion

Looking at the chart clearly shows the rapid advances of the Bank, net profit from

133 billion in 2000 increased by nearly six times in seven years This effort not onlycollective of BIDV leadership along officers and employees, but also to includepartners and loyal customers of the Bank in the past along the way

In the process of formation and development, BIDV constantly improving newproducts to best meet customer needs In the future, customers can use the mostadvanced banking products such as electronic payment systems 24/24h, Internetbanking, home banking, telephone banking, sales odd Throughout the years, theBank has achieved high growth rates and sustainable With high reputation at homeand abroad, a growing number of businesses, families and individuals to theBank

2.2.Professional development card at BIDV

After much research effort to diversify the products and services, BIDV in 1997 toparticipate in the market as agents card payment Visa and MasterCard throughbanks UOB Ho Chi Minh At this time the Vietnamese card market begins to boilwith the participation of a number of privatization and foreign bank expansion cardacceptance Unit (CAU) becomes very difficult However with flexible marketing

policies, the Bank has tried its best to expand their own merchant network to meetcustomer needs and use payment cards in a number of important cities such asHanoi, Ho Chi Minh City Ho Chi Minh City, Danang, Haiphong etc.

BIDV in 1999 became an official member of the Visa organization and at the sametime become a bank credit card payment This time marked a new development path

of BIDV card services in the process of modernization and international integrationwith the deployment of more cash and merchant agents in many cities across thecountry

BIDV official membership card organization MasterCard in late 2002 This is theopportunity to BIDV official issuing international credit cards Visa, MasterCard in

2004 with two yellow cards and standard cards After six months of implementationhas 1,000 credit card was released for sales in excess of $ 1 billion / month

BIDV is now actively diversifying ATM cards, credit by promoting links with theairlines, taxis, supermarkets, cosmetics, etc to bring new products to market At thesame time began to have access to international card organizations such as Amex,JCB brand to quickly develop the above cards in the shortest time

Of BIDV is released in card attached card center at its headquarters in Hanoi, thenmove down the branch to the branch directly distributed to the customer card.Forcash and payment services, current machines accept card payment (EDC) of BIDVallowed to withdraw cash from Visa / MasterCard at the branch, payment for goodsand services in the Merchant by BIDV exploitation The number of ATMs acceptcards of BIDV has increased significantly since when BIDV joining Banknetvn,link with BIDV, Agribank and other commercial banks

Figure 2.4 Organizational models of business cards at BIDV

2.2.1.1 Structure of Card Center

Card Centre with functions to advise and assist the board and general manager ofadministration and management, business organization cards at BIDV Advise theDirector-General of the organization to carry out research, development andoperations related to the Bank's card services

Center tag attached to the main headquarters in Hanoi was established by decision

of the General Director of the Bank, including the technical and professional skills.Currently, the center has 7 card room the following functions:

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- Credit Department and DVKH

- Payment Department and General Administration

- Technical and card issuance

- Chamber of Control and Risk Management

- Marketing Department

- Business Development Office

- Based Management Office accepts cards and Licensing

- Division of supported cards in Central and South

2.2.1.2 Functions and duties of the Card Center

Card Center is the implementation of career goals in the field of businesscards Card Center has the following functions and duties:

- To advise the board to promulgate documents guiding the implementation of theissuance and payment of the entire system BIDV Develop operating procedures ofthe business card in the Card Office in the Center

- Card Market Research, Marketing plan for the Bank's card services Perform directmarketing activities for the support services to attract the customer andmerchant Look at the plan in collaboration with the Merchant in the provision ofutilities and promotion policies to the cardholder

- Implement and control the issuance and payment Organizations manage andmonitor the activities of the merchant Implementation of training programs,professional training card for parts in its branches

- Synthesis report on the issuance of payment cards affiliates, agents, Merchants

- Management of risk-related information and payment under the provisions of theBank and in accordance with the provisions of the international card organization

- Management and operation of mechanical systems and equipment related to theissuance and payment Building regulations in collaboration with its partners,affiliates, in handling problems, failure to ensure the continuity of the system.

- To perform other operations while assigned leadership

2.2.1.3.Marketing and Management Department facility to accept card & Licensing

In addition to other duties assigned leadership, this is the second room isresponsible for developing the distribution channel card services include thefollowing two arrays:

- Development of distribution channels provide customer card (done by

Marketing Department)

- Development of distribution channels providing card payment services to

customers (by the Office of Management card accepting establishments & Licensing perform)

 Functions and tasks

- Direct Marketing distribution channel development of card services

- Research and implement surveys scalable distribution channels including branches

of the Bank, issuing agent and paying out of BIDV

-Build cooperation mechanism issuance, payment for each agent

- Prepare and manage contracts to accept release, payment of its affiliates or agents

- Manage business cards sales of affiliates (release, payment, etc.)

 Coordinate - the separation of powers

- Elaboration of a business plan and marketing plan

- Direct and coordinate branch of the Bank, implementation of the policy agent,special promotions for the cardholder, the merchant (by affiliates, agentsexploited)