Relationship between business process improvement and customer satisfaction at vietnam international bank (VIB bank)

Chapter 2: REALITY OF CUSTOMER SATISFACTION TOWARD PROCEDURES FOR CREDIT AND CREDIT CARD GRANTING SERVICES Chapter 3: SOLUTIONS TO IMPROVE PROCEDURES FOR CREDIT AND CREDIT CARD GRANTING

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN THANH HÀ

RELATIONSHIP BETWEEN BUSINESS PROCESS

IMPROVEMENT AND CUSTOMER SATISFACTION AT

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN THANH HÀ

RELATIONSHIP BETWEEN BUSINESS PROCESS

IMPROVEMENT AND CUSTOMER SATISFACTION AT

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS TRẦN HUY PHƯƠNG

Hà Nội - 2018

DECLARATION

The author confirms that the research outcome in the thesis is the result

of author’s independent work during study and research period and it is not yet published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula,and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration

Date: Jan, 2018

I woud like to express my great gratitude to my supervisor Ph.D Tran Huy Phuongfor her useful comments, remarks and engagement during my process of doing this master thesis Also, I would like to give my sincere thanks tocustomers of VIB, in my survey, who have willingly spent their precious time joining the interview

Sincere thanks are extended to the Faculty of International Training - Vietnam National University, Hanoi for equipping me with huge knowledge and skills through various interesting and practical subjects I also would like

to thanks my classmates for their friendship and reciprocal encouragement to make our class time to be unforgettable time

Lastly, I would like to give my great thanks to my family who always standby me during the past two years and encourages me to keep moving from the beginning of my study

TABLE OF CONTENTS

LIST OF TABLES i

LIST OF FIGURES AND CHARTS ii

INTRODUCTION 1

1 Background to the study 1

2 Statement of the problem 2

3 Objectives of the study 4

4 Research questions 4

5 Significance of the study 4

6 Overview of research methodology 5

6.1 Data collection 5

6.2 Data analysis method 6

7 Scope of the study 7

8 Structure of thesis 7

Chapter 1: THEORETICAL FRAMEWORK ON CUSTOMER SERVICE PROCEDURES AND CUSTOMER SATISFACTION AT COMMERCIAL BANKS 9

1.1 Research overview 9

1.2 Basic concepts 12

1.2.1 Customer 12

1.2.2 Customer service 13

1.2.3 Procedures of customer service 13

1.2.4 Customer satisfaction 14

1.3 Role and characteristics of customer service procedures 14

1.3.1 Role of customer service procedures 14

1.3.2 Characteristics of customer service procedures 15

1.4 Relationship between customer service procedures and customer

satisfaction 16

1.5 Influence of factors of customer service procedures on customer satisfaction 17

1.5.1 Time of procedure implementation 17

1.5.2 Human resources in procedure implementation 18

1.5.3 Convenience of procedures 19

1.5.4 Safety in procedure implementation 19

1.5.5 Flexibility in procedure implementation 20

1.6 Experience in designing customer service procedures to improve customer satisfaction at some commercial banks 21

1.6.1 Experience of BIDV 21

1.6.2 Experience of Vietcombank 23

1.6.3 Experience lessons for VIB 26

Chapter 2: REALITY OF CUSTOMER SATISFACTION TOWARD PROCEDURES FOR CREDIT AND CREDIT CARD GRANTING SERVICES 27

2.1 Overview of Vietnam International Commercial Joint Stock Bank 27

2.1.1 The formation and development process 27

2.1.2 Business mission and function 29

2.1.3 Organizational structure 30

2.1.4 Distribution system 30

2.1.5 The results of the banking business 31

2.2 Reality of customer satisfaction toward procedures for credit and credit card granting services 32

2.2.1 Overview of procedures for credit and credit card granting services 32

2.2.2 Analysis of factors affecting procedures for credit and credit card granting services 45

2.3 VIB General assessment of credit and credit card granting procedures at

VIB 56

2.3.1 Factors making customers satisfied 57

2.3.2 Factors making customers dissatisfied 57

2.3.3 Causes of factors making customers dissatisfied 58

Chapter 3: SOLUTIONS TO IMPROVE CUSTOMER SERVICE PROCEDURES TO ENHANCE CUSTOMER SATISFACTION AT VIB 60 3.1 Development orientation of VIB 60

3.1.1 General development orientation 60

3.1.2 Development orientation of credit and credit card services at VIB 61

3.2 Solutions to improve credit and credit card procedures to enhance customer satisfaction at VIB 63

3.2.1 Specific solutions 63

3.2.2 Supporting solutions 66

CONCLUSION AND RECOMMENDATIONS 72

REFERENCES 74

APPENDIX 76

LIST OF TABLES

Table 1: No of survey’s responses for required competencies 6

Table 2.1: Business results of Vietnam International Commercial Joint Stock Bank 31

Table 2.2 Lending process description 36

Table 2.3: Credit card process description 42

Table 2.4: Assessment of customer on time service performance 47

Table 2.5: Activity of training of human resources at VIB 49

Table 2.6: Assessment of clients in human resources at VIB 50

Table 2.7: Customer reviews of convenience 52

Table 2.8: Customer evaluations of safety 54

Table 2.9: Customer reviews of flexibility 55

LIST OF FIGURES AND CHARTS

Chart 1.1: The process of credit services deployed in BIDV 22

Chart 1.2: The process of implementing the credit card service in BIDV 23

Chart 1.3: The process of credit services deployed at Vietcombank 26

Figure 2.1: Organizational structure of VIB 30

Process 2.1: Current Lending Procedure Part A Generate Leads & Perform Sales 34

Process 2.2: Current Lending Procedure Part B Manage Originations 35

Process 2.3: Current Lending Procedure Part C Process Contract; Process Collateral; Disburse Fund 35

Process 2.4: Current credit card granting procedure Part A Generate Leads & Perform Sales 40

Process 2.5: Current credit card granting procedure Part B Manage Originations 41

Process 2.6: Current credit card granting procedure Part C Process Contract, Perform Collateral; Disburse Fund 41

Figure 2.2: Average transaction processing time 46

INTRODUCTION

1 Background to the study

Customer service is the provision of service to customers before, during and after a purchase Everyone in the organization is providing one or all of these- perhaps they recognize which ones perhaps not Kurtenbach (2000) explains that those who are successful in customer service rank their customers experience as the top priority Ettore (2001) is of the view that, concentrating on current customer’s information can and should be obtained to better understand their view of the service provided The quality

of service provided determines the level of satisfaction of the customer even though what is seen as quality by one customer may not necessarily be quality

to another Customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation In a competitive marketplace where a business competes for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy Customer satisfaction is an asset that should be monitored and managed just like any physical asset The relationship between customer service and customer satisfaction is a vital one

According to Deloitte research, it is stated that loyalty mainly comes from customer service, not from products & services as many people thought Customer service holds the key to deeper long-term relationships

It is therefore companies and banks in this case, have moved from product-centric to customer-centric positions Customer satisfaction is influenced by the type of services provided Satisfaction is a challenge particularly in the bank based -service as customers can easily switch from one bank to another one of better service It is very significant to find out what makes customer satisfy and loyal to a company VIB bank, has customer service as one of the most priorities on which the bank operates and this research seeks to find out whether the service being provided meets customer expectations and whether customers are being satisfied by those services and also which other ways the service can be improved so as to satisfy the customers

2 Statement of the problem

Achieving growth in retail banking is becoming increasingly difficult Industry-wide, mortgage and deposit revenues are declining and credit card growth is stagnant The ever shrinking share of the market is split between more and more sources of competition

Beginning in the late 2015s, almost banks and credit institutions began offering banking traditional and tech-based services, leading to greater price and technology competition — a trend that has continued For example, retail

VP bank, long noted for putting the squeeze on its competitors through live chat which very modern to Vietnam market and convenient to customers who used to familiar with traditional channels Other traditional competitors, such

as FE Credit, have leveraged their lower, simpler cost and quick approval to their advantage by offering customers very attractive deposit products at

aggressive rates, and a wide range of lending products at typically lower

interest rates

According to Deloitte, survey of banking executives 2017, as a result of

this success, leading drivers of loyalty are customer service quality The

reported cited that it accounts up to 50% if the brands offers best quality

product and services, 41% for outstanding customer service

Banks are having trouble fully the potential strategic value of their

interactive branch The result is that banks cannot execute on the goals of the

company as a whole — such as creating a great customer experience,

cross-selling and up-cross-selling more products and services and increasing agent productivity and satisfaction

3 Objectives of the study

Theoretical framework for customer service procedures, customer satisfaction and the relationship between customer processes and procedures with customer satisfaction

Analyzing, assessing customer satisfaction with the process of credit, credit card at VIB

Proposed solutions to improve the process, customer service procedures

to improve customer satisfaction with VIB

4 Research questions

1 How is current state process?

2 What are dominant transactions and how long is processing time?

3 Does the service quality have any effect on customer satisfaction?

4 How services can be improved in the branch of bank?

5 Significance of the study

VIB bank has customer service as one of its products, hence the need to find out whether they really are providing that service and what ways they can improve so as to have competitive advantage over rivals in the market

This work will therefore provide information regarding excellent customer service and its effects on customer satisfaction in the Vietnam context Furthermore, current status of customer service is analyzed based on figures and statistic

This piece will be available to the bank being researched for the management to know the perception of their customers on services being provided to them and to help improve on service quality

Educational institutions, corporate entities, business policy makers and other researchers will also benefit from this research in making informed decisions when it comes to quality customer service to satisfy the customers

6 Overview of research methodology

Primary data: The primary data were collected from two methods of

in-depth interview and survey

- In-depth interview:

With the qualitative method, in-depth interviews were conducted with relevant and experienced senior managers at VIB Head Office as follows to collect their opinions and comments

+ Interviewees: senior managers at VIB Head Office including the three followings:

* Mr Dang Khac Vy – Chairman of the Board of Directors of VIB

* Mr Tran Nhat Minh – Deputy General Director of VIB

* Mrs Nguyen Hoang Hai – Head ofCorporate Transformation Center

+ Sample size: 3

+ Interviewing method: The researcher held a meeting to interview them directly During the interview, the researcher gave questions based on listed or prepared questions Based on their opinions and comments, the researcher collected and took note for information

+ Objective of in-depth interview: In order to understand more about the VIB’s information, some barriers to branch by VIB proceses, regulations and procedures, recommend improvements should be made to enhance customer service

The number of survey’s responses obtained are as follows:

Table 1: No of survey’s responses for required competencies

Source: Primary data (2016)

6.2 Data analysis method

Both of interviews and survey of questionnaire’s data were analyzed using table, graph, and comparison On the other hand, it was effectively to use descriptive statistics in the study due to this analysis, which is the most common and fundamental data analysis in academic studies, including such as percentage (%), frequency (f) and means

Furthermore, the Researcher used Excel software as tool to carry descriptive statistics as well as drawing table and graphs Using percentage (%), frequency (f) and means is that if an element has a low means, it means that the element is weak and needs to be improved

From those analyzed data, it was able to draw some results Based on them, it was possible to formulate some conclusions and solutions to to enhance customer satisfaction on service processes and procedures at VIB

7 Scope of the study

- Research subjects: Process of credit, credit card at VIB

- Space: study done at VIB

- About time: study conducted in the period 2014-2016

8 Structure of thesis

The thesis is started with the Introduction and ending by the Conclusion The main contents of this thesis are divided into three chapters as following:

Chapter 1: THEORETICAL FRAMEWORK ON CUSTOMER

RELATIONSHIP BETWEEN CUSTOMER SERVICE PROCEDURES AND CUSTOMER SATISFACTION

Chapter 2: REALITY OF CUSTOMER SATISFACTION TOWARD PROCEDURES FOR CREDIT AND CREDIT CARD GRANTING SERVICES

Chapter 3: SOLUTIONS TO IMPROVE PROCEDURES FOR CREDIT AND CREDIT CARD GRANTING SERVICES TO ENHANCE CUSTOMER SATISFACTION AT VIB

Chapter 1: THEORETICAL FRAMEWORK ON CUSTOMER SERVICE PROCEDURES, CUSTOMER SATISFACTION AND RELATIONSHIP BETWEEN CUSTOMER SERVICE PROCEDURES

AND CUSTOMER SATISFACTION 1.1 Research overview

On conducting the research, the author found several published works related to the topic as follows:

The study by Adams B Steven, Yan Dong and Martin Dresner (2012) on

―Linkages between customer service, customer satisfaction and performance

in the airline industry: Investigation of non-linearities and moderating effects‖: In the study, the authors presented the relationship between customer service and customer satisfaction andthe relationship between customer satisfaction and performance of organizations operating in the aviation industry in the United States The results showed that there was a correlation between customer service factors, customer satisfaction and performance of the organizations In addition, the study highlighted the importance of deploying customer services to the profitability and returns of airline companies In general, the research made a great contribution to the development of American aviation companies However, the research only mentioned the relationship between customer service and customer satisfaction without clarifying the relationship between service procedures andsatisfaction of customers using the services

The study by Olowokudejo and Adeleke (2011) on "The relationship between customer focused service and customer satisfaction in Nigerian insurance industry":This study was carried out to find out the relationship between customer service and customer satisfaction in the insurance industry

in Nigeria Relevant literature was reviewed and a model of four variables

was tested by empirical data collected from an experimental survey The sample size of the survey included 180 modern clients using the services of insurance companies 149 questionnaires were fully completed and valid Correlation analysis, regression analysis,and Cronbach Alpha coefficient were used to test the research model The results revealed that there was a positive relationship between customer focused service and customer satisfaction in the insurance industry in Nigeria The study also showed that attractive customer service would lead to satisfaction of customersofinsurances companies Based on the research results, the authors recommended that insurance companies should pay more attention to product design and customer-focused services

The study by Enyonam Afi Ako-Nai (2011) on "Effect of customer service on customer satisfaction - A case study of Fidelity Bank, Adum, Kumasi": The purpose of the study was to find out whether the customer service influenced the satisfaction of customers using banking services The main research method used in this study was a case study involving the Fidelity branch Questionnaires were used to collect information from customers and staffs of the bank The results of the research showed that Fidelity Bank - Adum Branch paid much attention on improving customer service but had not satisfied customers Some remarkable limitations in customer service includedineffective online banking and unreasonable management decisions From the research results, the author proposed a number of solutions such as increasing the number of bank staffs,increasing utilities of products and services to better satisfy the needs of customers Although the research contributed greatly to the development of Fidelity banking system,it did not mention the service procedures of the bank

The study by Krishna, Jacob Alexander and Mihir Dash (2012) on

"Basic customer service and its impact on customer retention":This research

was carried out to find out the relationship between basic customer service and customer loyalty The study was based on the primary data collected from

a survey with 142 business organizations in Bangalore, India The research pointed out that in order to improve customer satisfaction and retain customers to organizations, organizations needed to regularly review the customer complaints and provide full and timely information to customers about the situation of theircomplaints to improve customer service However, the research had a number of typical limitations: The sample size used in the study was relatively small; companies providedinconsistent samples At the same time, the researchwas generallyconducted and did not focus on a particular industry, so the results were difficult to be applied

The research by Bui Thi Trang (2017) on "Impact of customer service quality on customer satisfaction at Vietravel Ha Hoi Tourism Company": The study was conducted in 2 phases Preliminary research was conducted by discussions with five experts from service providers with large market shares including Vietravel, Hanoitourist and Redtour In addition, in-depth discussions and interviews were also conducted with a group of 10 regular customers using the company's products and services and a preliminary survey was carried out with 30 clients The formal study was conducted by means of quantitative research as soon as the questionnaire was modified from the results of the preliminary study (formal interview questionnaire) to

to collect survey data The results showed that the convenience and reliability

in customer service quality had the greatest impact on customer satisfaction From the research results, the author proposed some solutions to improve customer satisfaction such as improving customer care activities,creating good image in customer's mind, diversifying marketing strategies and enhancing convenience and safety of products and services The research

ensured high reliability, but it only evaluated the quality of services without considering the influence of service procedures on customer satisfaction Through the study of published researches, the author found that although there were many studies on customer satisfaction, no studied investigated the impact of customer service procedures on customer satisfaction Therefore, to fill the research gap, the author conducted the research entitled "Improving customer service procedures to enhance customer satisfaction -A case study at VIB" During the course of the research, the author would accomplish the following objectives:

- Synthesizing the theoretical frameworkon customer service procedures; clarifying the relationship between customer service procedures and customer satisfaction

- Evaluating the reality of service procedures at VIB (evaluating the procedures for granting credit and credit cards in detail);conductingsurvey with customers on service procedures of VIB

- Proposing a system of new procedures for the implementation of credit and credit card services and a number of supporting solutions to improve customer satisfaction

1.2Basic concepts

1.2.1 Customer

Customers could best be described as those who use the output of work, the end users of products or services They may be internal to the organization such as the employees and directors or external like members of the public, other businesses, or government (DeiTumi, 2005).A customer is a person who buys goods or services from the service provider It may also refer to any potential buyer

The word "custom" means "habit", a person who goes to a store on a frequent basis to purchase their products or services, thus it is their habit to

buy from that particular store In the opinion of Peter Drucker, there are now a complete new breed of customers with high standards and expectations (Dei-Tumi, 2005) And as competition increases, there is the need to devise creative and new ways of meeting the ever-increasing demands of the modern- day customer who is very sophisticated, knowledgeable, demands excellent products and services and has alternatives

From the point of view of an overall sales process engineering effort, customer service plays an important role in an organization's ability to generate income and revenue From that perspective, customer service should

be included as part of an overall approach to systematic improvement One good customer service experience can change the entire perception a customer holds towards the organization

1.2.3 Procedures of customer service

Procedures are the ways and regulations to carry out an activity.Procedures are mandatory to meet the specific objectives in the business operation of an organization

A procedure is a specific method to perform a process or task Procedures are usually expressed in writing Procedures aredesigned to control the work in an organization

Customer service procedures are the regulations and methods to provide products and services to customers including regulations before, during and after service provision Customer service procedures must ensure consistency and uniformity at all time and place of providing services to customers

1.2.4 Customer satisfaction

Customers perceive service in terms of quality, but how satisfied they are with the overall experience, is what defines their satisfaction Whether the customer is satisfied after purchase depends on the offer’s performance or the customer service in this case, in relation to the customer expectations However, according to Zeithaml et al (2006) although service quality and customer satisfaction are used interchangeably, there is indeed a distinction

Customer Satisfaction is when the outcome of the service matches the expectations of the service As pointed out by Looy et al (2003), even though they differ one is a component of the other Zeithaml et al (2003) defines it as the customer’s evaluation of a product or service in terms of whether the product or service has met his needs or expectations

Failure to meet needs results in dissatisfaction, or a poor perception of the service quality Satisfaction can be acknowledged in various senses depending on what needs the customer had before the service; it ranges from feelings of fulfillment, contentment, pleasure, delight, relief, and ambivalence Positive Aspects

1.3Role and characteristics of customer service procedures

1.3.1 Role of customer service procedures

In an organization, when the products and servicescomply with procedures, the results will be consistent The system of procedures in general and customer service procedures in particular will make the work run smoothly and managers can deal withmismatches moreeffectively

During the operation of an organization, each staffs member with different knowledge and skills will have different ways of working Customer service procedures will help the employeesunderstand what procedures they have to follow,how to do them, and what results they have to achievein the service delivery to customers? The issuance of service procedures will minimize the situation in which employees take the work from higher levels without knowing how to do it or the work does not meet the requirements of the leaders

As for customer services that need teamwork, service procedures enable members to work together in a consistent and orderly way and help them clearly understand their responsibilities

In addition, the system of customer service procedures also help the management levels in the organization control the progress and quality of work performed by staffs during the service delivery to customers

1.3.2 Characteristics of customer service procedures

Customer service procedures are issued by the managers of organizations when they start delivering a new product or service The issuance of service procedures will take time, but will help managers control the services provided to customers more easily

For the system of customer service proceduresto be implemented closely and effectively, the training of staffs on all procedures is necessary The effectiveness of service procedures are presented in whether the employees comply with the procedures and whether the implementation of issued procedures can help services to be implemented smoothly and of high quality

The system of service procedures are specified in documents and documents prescribed by organizations If these documents do not fully reflect the ongoing practices,the implementation of the service procedures will be affected

The compliance with customer service procedures will bring such advantages as Simplifying the process of providing services to customers,improvingservice quality,helping managers organize and coordinate activities,helping the inspecting, supervising and evaluating processesand helping services be implemented in a consistent procedure The disadvantage of customer service proceduresis that these procedures are sometimescomplicated and cumbersome, causing the work of organizations to be carried out mechanically without flexibility

1.4Relationship between customer service procedures and customer satisfaction

The relationship between customer service procedures and customer satisfaction has been mentioned in several previous studies In particular, the theory of 7P marketing in the service industry mentioned that organizations which conduct customer service procedureseffectively will minimize mistakes

in service delivery and receive good responses from customers and customers will be more satisfied with the services provided

In addition, Rust and Chung (2006) also point out that customer satisfaction is the result of providing regular customer service withclose, consistent and flexible procedures

According to Gan et al (2006) and Varki & Colgate (2005), customer service procedures are a variable which supports and promotes good relationships between organizations and customers Customer service procedures can increase customer satisfaction, but they can also make customers dissatisfied with the services provided by organizations

Levitt (1983) argues that organizations exist to meet customer needs, not

to sell products Customer service procedures are ways to deploy services to customers, find out the needs and expectations of customers to provide products and services that meet thoseneeds The more specific customer service procedures are, the more precisely organizationscan identifies the needs of customers When the needs of customers are met, customers will be more satisfied with the services provided by organizations This also means that customer service procedures are closely related to the satisfaction of customers using the services

Thus, from previous studies, it can be confirmedthat customer service procedures and customer satisfaction have interactive relationship with each other The more specific customer service procedures are, the more customers will be satisfied with the products and services of organizations and vice versa

1.5Influence of factors of customer service procedures on customer

satisfaction

1.5.1 Time of procedure implementation

The time of implementing customer service procedures is defined from the time when organizations grasp the needs of customers until the completion of service delivery to customers In other words, this is the period

of time customers have to wait for the implementation of services provided by organizations

If the procedures are simple and the work is quickly implemented, the time of procedure implementationwill be shortened and customers will not have to take time waiting Short time of implementing service procedures as well as responding to customers will make customers more satisfied with the services provided organizations Therefore, the factor of procedure implementation time has a direct impact on customer satisfaction The shorter

the time of service procedure implementation is, the more satisfied customers feel and vice versa

Criteria for assessing the time of procedure implementation include:

- Time to handle credit documents according to the listed procedures

- Waiting time of customers while the bank is implementing procedures

- Number of times customers have to cam back to resolve service procedures

- Time to implement procedures isquite long, which makes customers dissatisfied

1.5.2 Humanresources in procedure implementation

Human resources play an important role in all activities of an organization All operationsin an organization depend on the human resources thatimplement them If the human resources have high quality and professional level, the operations will be carried out more effectively

As for customer service procedures, if the human resources are well trained, firmly grasp the service procedures issued by the organization, they will deploy the provided services more smoothly And if the operations are carried out stably and consistently, customers who use the services will be more satisfied

Moreover, customer satisfaction is also reflected in the attitude and serving style of human resources In the implementation of procedures to customers, human resources arepeople who directly contact customers and meet the needs of customers If the human resources demonstrate their enthusiasm in counseling and guiding customers as well as their professionalism in the service delivery process, customers will be more confident in the organizations and their satisfaction will be enhanced

Criteria for assessing the human resources implementing the procedures include:

- Ability to communicate with customers

- Knowledge and skills to handle the work in the customer service procedures

- Ability to solve problems related to service procedures satisfactorily

- Friendly and polite attitude of human resources when implementing procedures

1.5.3 Convenience of procedures

The convenience of customer service procedures is the speed and ease of access to services in the transactions of customers If customer service procedures are simple and help customers easilyapproach services, customers will be more satisfied with the servicesof organizations

The convenience of customer service procedures is expressed in the time, ways of implementation, andnumber of required procedures If the system of service proceduresis convenient and accessible,it will create the satisfaction of customers using the services

Criteria for assessing the convenience in the implementation of service procedures include:

- Modification/ renewal of procedures to help customers carry out simple and convenient transactions

- The system of procedures of is simple and not cumbersome

- Customers can easily complete the documents at the service provider’s request

- Customers can easily access information about the procedures on the organization's website

1.5.4 Safety in procedure implementation

The application of customer service procedures always requires the speed and convenience, but the safety for customers and organizations also need to be ensured

For organizations, safety is expressed in thefull benefits that they receive after the completion of service delivery to customers For customers, safety is reflected in the security of customer information and benefits of customers when using services provided by organizations To ensure the safety in service provision, organizations must design close and strict procedures and force all employees to comply The strict compliance withthe issued service procedures ensuresconsistent operations andensures the safety for both customers and organizations If the service procedures arewell designed, customers will be more confident in organizations and their satisfaction is also increased

Criteria for assessing the safety in the implementation of procedures

- Organization of confidentiality of personal information of customers

- Customers’ documents are free from errors or loss

- The organization provides high security methods for customers using the services

- The organization ensures the confidentiality of customers’personal information

1.5.5 Flexibility in procedure implementation

It can be seen that the basic limitation of customer service procedures is that it is complicated and cumbersome for service users The system of proceduressometimes makes the work less flexible since employees apply issued regulations stereotypically, which results in customers’ dissatisfaction with organizations Therefore, to improve customer satisfaction, organizations must ensure flexibility in the service procedures provided to customers

The system of customer service procedures should be designed to best match the services and characteristics of organizations and must be flexible from time to time so that services can be provided to customers in a shortest

time This will attract customers to use the services as well as improve customer satisfaction with organizations

Criteria for assessing the flexibility in the implementation of procedures include:

- The staff of the organization demonstrates the flexibility within the regulation framework to remove difficulties for customers

- The regulations on procedures of providing services of the organization ensure good flexibility

- The organization is flexible in the time of service delivery to customers

if customers fulfill the obligations and requirements of the organization

1.6Experience in designing customer service procedures to improve customer satisfaction at some commercial banks

1.6.1Experience of BIDV

At BIDV, all service procedures are issued by the General Director of the bank and widely applied in the whole system from headquarters to transaction offices Therefore, the system of service procedures is always designed to ensure the highest convenience for customers using the services

of the bank, but also ensure the highest safety for both customers and banks Some typical procedures implemented at the bank are as follows:

+ In terms of procedures forgranting retail credit: BIDV always ensures consistent and synchronousprocedures Implementation steps always clearly define the responsibilities and rights of each department, level and individual involved in the credit granting process Besides, the bank's management also ensures that the procedures of retail credit are quick and convenient to createsatisfaction for customers as well as create favorable conditions for the bank to increase sales

+ In terms of procedures for granting wholesale credit: The issued proceduresalways ensure the suitability with the transformation of BIDV's

organizational structure,ensure that credit/ credit card granting activities are carried out consistently and scientifically, create a basis for effective supervision, limit and prevent risks, enhancesafety, identify responsibilities in each step constantly improve the convenience for customers

The procedures for granting credit at BIDV are conducted as the following chart:

Chart 1.1: The process of credit services deployed in BIDV

+ In terms ofcredit card granting procedures: In the system of procedures, BIDV’s procedures specify the conditions for issuing card to customers, creating convenience for customers who need to use the services

In addition, BIDV also has procedures for consistent application and the

Receiving

customers’

requests

Drafting contracts; implementing procedures on security property

Dealing with customers on additional conditions / approvalcond itions

Enter information into the system

Management checks contents

of credit contracts, check the completeness

of documents Informing

customers

necessary documents to carry out the transactions This ensures that credit card transactions take place in the quickest time and minimizes the waiting time of customers, helping to improve customer satisfaction toward services provided by BIDV The specific procedures are presented as follows:

Chart 1.2: The process of implementing the credit card service in

BIDV 1.6.2 Experience of Vietcombank

The issuance of procedures at the Vietcombank always closely follows the charter of organization and operation of the bank The issued service procedures are widely applied in the system, thus creating the highest consistency in implemented services At present, Vietcombank has two typical service procedures, namely credit granting procedure and credit card granting procedure Each specific procedure is implemented as follows:

+ As for credit granting procedures: The establishment of the procedures

is determined by the bank's management based on the operational model, in which the tasks of the departments and functional units are clearly defined to create the most convenience for customers when doing transactions In addition, the credit procedures also ensure the business security objectives of the bank as well as the information security of customers using the services The procedures are always appropriate with each group of customers, each type of loans as well as credit technology to provide all the necessary

Customers

Deliver and receive

cards + PINs

Issuing credit cards Processing data

Appraising documents BIDV – Receiving

documents

information to customers,create flexibility in the implementation of services and save the time of deploying services for both customers and the bank + For credit card granting procedures: Credit cardsare considered a comprehensive, effective and superior solution for payment and management

of public services, bringing many benefits and incentives to card holders Therefore, the number of card holders at the bank is constantly increasing The design of convenient, flexible procedures for providing cards is what the bank managers are aiming at In the system of credit card granting procedures, Vietcombank clearly define the responsibilities and tasks of each individual andspecify the conditions for using cards as well as the necessary documentswhen customers need to use the service As a result, the procedure

of providing credit cards to customers always ensure the implementation in the fastest time and bring maximum satisfaction to customers

At present, all service procedures at Vietcombank are regulated asmandatory banking rules within the bank and are printed in writing or handbook to unify the arising operations at the bank As a result, the bank staffs will know their responsibilities in their positions, and their relationships with other colleagues in order to have the right working attitude to create the highest satisfaction of customers

The procedures of providing credit of Vietcombank are shown in detail

in the chart below:

- Managers of loan division

- Heads of loan offering branches

Documents for loans:

- Requests for loansplus business

Loan contracts:

- Loan contracts enclosed with withdrawal schedule

- Loan guarantee contract

- Terms and conditions

- Check the use of loans

- Periodically assessing financial capability

- Make written records and inspection reports

Collecting principal and interest

- Transfer overdue loans

- Continue to urge debt collection

Credit liquidation

self-1.6.3 Experience lessons for VIB

From the experience of improving customer satisfaction through the system of customer service procedures at a number of commercial banks, the lessons can be drawn and applied at VIBas follows:

Firstly, the system of service procedures should be widely applied in the whole system and printed in writing or employee handbook

Secondly, the implementation of service procedures should clearly and specifically define the responsibilities of each individual or division so that employees will have a good working attitude in accordance with their responsibilities and tasks to create the highest satisfaction of customers

Thirdly, the system of service procedures should be suitable to each group of customers, each type of service as well as characteristics of specific task to provide necessary information to customers,createflexibility in service implementation, save time and minimize the waiting timeof customers

Fourthly, the service procedures should clearly state the conditions for service provision andnecessary documents in order to create maximum convenience for customers

+ Fifthly, the system of service procedures should be strictly and rigorously constructed in strict compliance with current regulations in order to ensure the safety of the bank and customers

Chart 1.3: The process of credit services deployed at Vietcombank

Chapter 2: REALITY OF CUSTOMER SATISFACTION TOWARD PROCEDURES FOR CREDIT AND CREDIT CARD

GRANTING SERVICES 2.1 Overview of Vietnam International Commercial Joint Stock Bank

2.1.1 The formation and development process

The Vietnam International Commercial Joint Stock Bank has been established on September 18 in 1996, with its headquarter located at 16 Phan Chu Trinh, Hoan Kiem Dist., Hanoi After nearly 21 years of operation, Vietnam International Commercial Joint Stock Bank has developed its network to 160 branches and transaction offices in over 30 provinces in the country, with a number of staffs over 5.000 By the end of 03/ 2017, Vietnam International Commercial Joint Stock Bank’s chartered capital increased to VND 5.644 billion

Vietnam International Commercial Joint Stock Bank is currently one of the top 12 leading Vietnam International Commercial Joint Stock Banks in Vietnam (G12) Vietnam International Commercial Joint Stock Bank has affirmed the prestige of a professional Vietnam International Commercial Joint Stock Bank, dynamic, stable financial foundation and high responsibility

to the community Vietnam International Commercial Joint Stock Bank has implemented aggressive growth strategies in the period 2014 - 2016 With this strategy, Vietnam International Commercial Joint Stock Bank strives to have

a high growth rate in the segments of the target customer, building the platform systems for growth, and active in catching up the market opportunities In addition, under the orientation of ―All for Customers‖, the transaction offices (branches) have been completely changed (image, operating model and service facilities, for example) The products and services of Vietnam International Commercial Joint Stock Bank have been improved and combined with many utilities to add more benefits for

customers These changes help Vietnam International Commercial Joint Stock Bank increase the satisfaction of existing customers and attracting new customers, expanding number of Vietnam International Commercial Joint Stock Bank’s customers

With these continuous renovations, Vietnam International Commercial Joint Stock Bank’s trade mark has become more and more famous and confirmed through prestigious awards Particularly in 2016, Vietnam International Commercial Joint Stock Bank achieved 12 valued international awards by prestigious organizations Vietnam International Commercial Joint Stock Bank is proud to be the first commercial joint stock Vietnam International Commercial Joint Stock Bank to have the national trade mark (and also the third consecutive year Vietnam International Commercial Joint Stock Bank was honored at this program) Vietnam International Commercial Joint Stock Bank also be recognized as "Vietnam International Commercial Joint Stock Bank of the Year 2016 " by The Vietnam International Commercial Joint Stock Banker (Financial Times) of England, "Vietnam International Commercial Joint Stock Banks with the most innovative SME Vietnam International Commercial Joint Stock Banking services in Vietnam

in 2016" by Global Vietnam International Commercial Joint Stock Banking & Finance Review, ―Best Trade Finance Vietnam International Commercial Joint Stock Bank in East Asia‖ by ADB; ―Best e-Vietnam International Commercial Joint Stock Bank 2016‖ and ―Best retail mobile Vietnam International Commercial Joint Stock Banking experience 2016‖ by The Asset Triple A Digital Award These prestigious awards affirm the outstanding products and services, prestige and competitive capacity of Vietnam International Commercial Joint Stock Bank in the Vietnamese financial and Vietnam International Commercial Joint Stock Banking market and the right development direction In the upcoming time, Vietnam

International Commercial Joint Stock Bank will focus on renovating products and services to increase benefits to customers, improving service quality towards international standards

2.1.2 Business mission and function

As a nature, the existence of banks was due to the demand of keeping high value things (gold, jewelry…) for rich people with a keeping fee When the society being developed, trading being opened (and widespread), the demand of money becomes more and more popular, banking becomes an important industry that keeps the money of whom excessed to lend the others who need (lack) The bank is an intermediary financial institution that will mobilize unoccupied capital in the society and lend it to other individuals and organizations That is the basic principle in the function and operation of the bank, in general

VIB also has the basic function of mobilizing the leisured money (capital) and lending to others who need VIB is a ―connection bridge‖ between individuals (and organizations), attracting the leisured fund (capital, money) to transfer it to whom need and ability to pay The difference between the deposit rates and interest rates (lending rate) is the main source of VIB profit

In the developing country such as the Vietnam, commercial banks (in general) and VIB (in particular) take an important role of keeping the capital flow be favorable (and smoothly) rotated, contribute to the economic growth and social development

In Ho Chi Minh City there are 18 branches and transaction offices

In the North (Ha Noi, Hai Phong, Nam Dinh, Hai Duong, Hung Yen, Bac Giang, Bac Ninh, Quang Ninh, Vinh Phuc): 72 branches and offices

2.1.5 The results of the banking business

Based on smart (and right) policies and efforts, over the past 3 years, Vietnam International Commercial Joint Stock Bank has achieved many

remarkable results as follows

Table 2.1: Business results of Vietnam International Commercial

Joint Stock Bank

Unit: Billion VND

Business result

Change 15/14 Change 16/15 Value Rate (%) Value Rate (%)

Source: Vietnam International Commercial Joint Stock Bank’s business

results during the period of 2014-2016