Research FDI customers satisfaction with products and services of techcombank, bac ninh branch

Recognizing the role of attracting FDI enterprises using banking products and services, in the period 2012-2015, Techcombank branch in Bac Ninh deployed in-depth product and service deve

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

-

NGUYỄN THỊ MINH PHƯƠNG

RESEARCH FDI CUSTOMERS SATISFACTION

WITH PRODUCTS AND SERVICES OF

TECHCOMBANK BAC NINH BRANCH

NGHIÊN CỨU SỰ HÀI LÒNG CỦA KHÁCH HÀNG DOANH NGHIỆP FDI VỚI SẢN PHẨM DỊCH VỤ CỦA NGÂN HÀNG

TECHCOMBANK CHI NHÁNH BẮC NINH

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2018

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

-

NGUYỄN THỊ MINH PHƯƠNG

RESEARCH FDI CUSTOMERS SATISFACTION

WITH PRODUCTS AND SERVICES OF

TECHCOMBANK BAC NINH BRANCH

NGHIÊN CỨU SỰ HÀI LÒNG CỦA KHÁCH HÀNG DOANH NGHIỆP FDI VỚI SẢN PHẨM DỊCH VỤ CỦA NGÂN HÀNG

TECHCOMBANK CHI NHÁNH BẮC NINH

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS HOÀNG ĐÌNH PHI

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, formulaand 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 the laws for above-mentioned declaration

Hanoi, date of …… / …… /……

ACKNOWLEDGEMENT

I would like to express my deep gratitude to the teachers of the Hanoi school

of Business and Management, Vietnam National University, especially the teachers who imparted to me a lot of knowledge and helped me Carry out this essay

I would like to express sincere gratitude to Assoc Prof Hoang Dinh Phi has spent a lot of time, dedicated guidance, only told me during the course of the topic

I would like to express my sincere thanks to Techcombank Bac Ninh and for helping me in collecting data and information needed for the study of this thesis

I sincerely thank family, friends and colleagues for encouraging and supporting me in the process of study and research

TABLE OF CONTENTS

ABBREVIATION i

LIST OF TABLES ii

LIST OF FIGURES iii

INTRODUCTION 1

CHAPTER 1: THEORETICAL FRAMEWORK ON FDI ENTERPRISES AND SATISFACTION OF FDI ENTERPRISES TOWARDS THE PRODUCTS AND SERVICES OF COMMERCIAL BANKS 6

1.1 FDI enterprises 6

1.1.1 Concepts 6

1.1.2 Characteristics 7

1.2 Satisfaction of FDI enterprises towards the products and services of commercial banks 8

1.2.1 Concept and measurement of satisfaction 8

1.2.2 Characteristics of banking services 10

1.2.3 Research models of customer satisfaction towards the quality of commercial banks’ services 11

1.2.4 Proposed model of the study 17

1.3 Experience in improving the satisfaction of FDI enterprises of commercial banks and lessons for Techcombank - Bac Ninh Branch 18

1.3.1 Experience of some commercial banks 18

1.3.2 Lessons for Techcombank - Bac Ninh Branch 20

CHAPTER 2: REALITY OF SATISFACTION OF FDI ENTERPRISE CUSTOMERS TOWARDS PRODUCTS AND SERVICES OF TECHCOMBANK – BAC NINH BRANCH 22

2.1 Introduction of Techcombank – Bac Ninh Branch and FDI enterprises in Bac Ninh Province 22

2.1.1 Introduction of Techcombank – Bac Ninh Branch 22

2.1.2 Overview of industrial parks and FDI enterprises in Bac Ninh Province 26

2.1.3 Reality of exploiting FDI enterprise customers of Techcombank – Bac Ninh Province 30

2.2 Overall assessment of the satisfaction of FDI enterprise customers 60

2.2.1 Achievements 60

2.2.2 Limitations 60

2.2.3 Causes of limitations 61

CHAPTER 3: SOLUTIONS TO ENHANCE THE CUSTOMER SATISFACTION TOWARDS PRODUCTS AND SERVICES OF TECHCOMBANK – BAC NINH BRANCH 63

3.1 Development orientations and strategy of Techcombank - Bac Ninh Branch 63

3.1.1 General development orientation 63

3.1.2 Orientations for developing FDI enterprise customers 64

3.1.3 Development plan for 2017 65

3.2 Solutions to improve the satisfaction of FDI enterprise customers at Techcombank - Bac Ninh Branch 65

3.2.1 Basis for proposing solutions 65

3.2.2 Contents of solutions 67

3.3 Recommendations 72

3.3.1 Recommendations to the State 72

3.3.2 Recommendations to the bank association 76

CONCLUSION 77

REFERENCES 79

APPENDIX 81

IEC International Electrotechical Commission

NAPAS JSC National Payment Services Joint stock company ISO International quality standard

ATM Automated Teller Machine

POS Point of Sale

ii

LIST OF TABLES

Table 2.1: Industrial Parks in Bac Ninh Province 26

Table 2.2: Locations FDI enterprises in Bac Ninh Province 27

Table 2.3: Characteristics of FDI enterprises in Bac Ninh Province 29

Table 2.4: Products and services operated by Techcombank - Bac Ninh Branch 32

Table 2.5: Number of transaction offices of Techcombank – Bac Ninh Branch’s competitors 36

Table 2.6: Number of ATMs of competitors at industrial parks 38

Table 2.7: Strengths of competitors 40

Table 2.8: Gender 42

Table 2.9: Age 42

Table 2.10: Educational background 43

Table 2.11: Job positions 44

Table 2.12: Income of employees 45

Table 2.13: Reliability of the scale 46

Table 2.14 Convergence of the scale 48

Table 2.15: Correlation among factors 49

Table 2.16 Regression results 50

Table 2.17 Evaluation on Convenience 52

Table 2.18: Evaluation on Tangibles 53

Table 2.19: Evaluation on Serving Style of the staff 54

Table 2.20: Evaluation on Contact with customers 56

Table 2.21: Evaluation on Trust 57

Table 2.22: Evaluation on Image of the bank 58

Table 2.23: General evaluation on Customer satisfaction 59

iii

LIST OF FIGURES

Figure 1.1: Characteristics of FDI enterprises 7

Figure 1.2 SERVQUAL model of customer satisfaction 12

Figure 1.3: CBSQ model of Xin Guo et al (2008) 14

Figure 1.4 FTSQ model (GrÖnroos, 1984) 15

Figure 1.5 Research model of the thesis 18

Figure 2.1: Organizational structure of Techcombank – Bac Ninh Branch 24

Figure 2.2: Number of FDI enterprise customers at Techcombank – Bac Ninh Branch 31

Figure 2.3: Contribution of FDI enterprises in TOI after DP of the branch 34

Figure 2.4: Contribution proportion of FDI enterprises 35

1

INTRODUCTION

1 Statement of the problem

Since the country opened its economy and received foreign investment capital, FDI enterprises have become an important part of the economy In the current context, FDI enterprises play an important role in the Vietnamese economy The labor force employed alone accounts for about 3 million workers, accounting for over 20% of the total capital of the economy The FDI sector has a large proportion of GDP in some provinces such as Bac Ninh, Ho Chi Minh City, Binh Duong (Vietnamplus.vn, 2016) This is a dynamically developing area, helping to increase capital for the economy, create jobs, increase export turnover and make a great contribution to revenue At the same time, this area is more effective than other economic sectors, FDI accounts for about 70% of total export turnover, industrial production accounts for nearly 60% (Hai Quan Newspaper, No 10 / 2015)

As for the banking sector, the potential of the FDI sector in this sector is enormous in the context of Vietnam's integration with developed economies around the world through agreements trade Consequently, the demand for financial services - banking of FDI enterprises is very large However, the number of foreign banks in Vietnam is not much and the network is limited Therefore, this is the segment of potential customers, reducing the competitive pressure in the development of banking products and services for our commercial banking system However, most FDI enterprises are multinational corporations with investment experience in many countries and have a strong financial foundation and deep international business knowledge It therefore requires banks to provide the most comprehensive and up-to-date service

On the other hand, the "landing" of foreign banks in the coming time will cause increased competition pressure on domestic banks in this segment of customers Therefore, at this point the commercial banking system needs more measures to get closer and faster to this potential customer

Understanding that market trend, many commercial banks in Vietnam have taken the first steps in promoting cooperation, modeling, finishing products,

2

services and modernizing banking technology to attract the maximum number of FDI customers With a slower start point than other commercial banks in the field of international payment, Techcombank did not have much access to and attracted FDI firms using services provided by the bank Recognizing the role of attracting FDI enterprises using banking products and services, in the period 2012-2015, Techcombank branch in Bac Ninh deployed in-depth product and service development strategy to meet the needs of FDI enterprises in the area However, due

to the competition among banks in the area, especially internal banking factors such

as product policy, banking size, etc., the ability to attract groups of FDI enterprise customers has not yet achieved high results: its market share was only at the expense

of 6% of market share, equivalent to nearly 50 FDI enterprises in the province

So how to enhance customer satisfaction towards the products and services and expand market share of Techcombank - Bac Ninh Branch are the issues that Techcombank - Bac Ninh Branch is concerned about Therefore, as a branch director of Techcombank - Bac Ninh Branch located in the area where there are

many FDI enterprises, the author conducted the research entitled "A study on FDI enterprise customers’ satisfaction towards the products and services of Techcombank - Bac Ninh Branch" as his graduation thesis

2 Literature review

In general, FDI is an array of scientific research content that is extremely diverse and attracts the attention of scientific researchers However, most of the studies are on the range as a country, region, province or economic sector There is very rare study about attract the existing FDI enterprises to become partners, business customers in the fields of the economy in general and in the banking sector

in particular These followings are related to this research content

Le Sang (2014), focused on analyzing the important role of foreign direct investment enterprises (FDI-enterprises) of Vietcombank This study confirms the role of FDI in the development of Vietnam in many ways such as promoting economic growth, improving the efficiency of domestic investment resources, technology transfer, international payments, export development, improving

in this research is just only based on the author's view, but on any specific theoretical frameworks to analyze

Khue Nguyen (2015) focused on analysis the necessity as well as the solutions to attract customers in group of FDI enterprises for commercial banks This study confirms the importance of the customer in FDI enterprises group with commercial banks Because FDI enterprise customers have large capital investment, higher capital requirements, professional activity, high credit level so hold this market segment is an important business target that commercial banks of Viet Nam should perform At the same time, the author also points out a number of solutions

to attract customers among FDI enterprises group such as: letter of credit, customer development department specifically for FDI customer, unsecured loans (trust loans), widen credit level This study achieved some practical results with commercial banks However, the author has not done to assess the effectiveness of the solutions that were implemented at the banks Also, the lack of scientific basis for proposed solutions

Oanh, Giang (2009) has done a study on attracting FDI enterprises at Vietcombank with the main contents include: banking services for corporate customers in general and FDI in particularity, the solutions that Vietcombank has developed One of the solutions is high appreciated that cooperation agreement signed with the Foreign Investment Agency (FIA) Since then, the Vietcombank became the first official partner of the FIA in providing banking services for FDI enterprises in Vietnam Therefore, the Vietcombank has early access to foreign partners intend to invest in Vietnam At the same time, through the FIA, foreign partners have confidence in Vietcombank; create favorable conditions for future cooperation This study provides commercial banks a truly effective solution in

4

finding partners FDI However, this solution is not the author's offer (this solution is the actual operation was performed Vietcombank) Therefore, the findings are not really the solution to this author's own

Le Trinh (2015) conducted a study on attracting FDI enterprises HDBank Contents of this study refer to services provided by HD Bank for FDI partners such as: account services, support liquidity, funding, projects investment and export financing, electronic services, project consulting Based on this analysis, the authors evaluate the effectiveness of each solution that HD Bank has done In particular, the solution of "Japan Desk" is considered as a intelligent solution and efficient According to the author, the implementation of the strategy dedicated to a specific customer group (Japan) could be a strategic direction for each bank But the author just assessed the effectiveness of solutions that was proposed by HDBank without added another new solutions

Thus, although there is quite a lot of related research, there are always exists certain limitations Previous studies have not clarified the satisfaction aspects of FDI with existing banking services At the same time, there is no appropriate theoretical background in the evaluation of the effectiveness of solutions to attract FDI as well as the specific evaluation indicators On the other hand, at Techcombank-Bac Ninh branch, there is not any research about this content array This is the “research gaps” that author are expected to fill in this study

- Systemize basic theoretical framework on FDI enterprises and satisfaction

of FDI enterprises towards the products and services of commercial banks

- Present the reality of satisfaction of FDI enterprise customers towards products and services of Techcombank – Bac Ninh Branch

5

- Propose solutions to enhance the customer satisfaction towards products and services of Techcombank – Bac ninh Branch

4 Research object

The object of the research is the satisfaction of FDI enterprises towards the

products and services of Techcombank-Bac Ninh

5 Research scope

This study will be carried out at Techcombank-Bac Ninh Branch and FDI enterprises located in Bac Ninh province

6 Research methodology

Comparative method: this method is applied in:

+ Analysing the change number of FDI enterprises who use the Techcombank-Bac Ninh services and other banks in Bac Ninh over the years

+ Analysing the change number of banking products and services for these customers over the years

Descriptive statistics method: this method is applied in:

+ Calculate the average of the results of surveys of customers are FDI enterprises in Bac Ninh province,

+ Determine the level of FDI customers satisfactionin Bac Ninh province with the banking system (in general) and banking service of Techcombank-Bac Ninh via 5 level of Likert scale

7 Research structure

The thesis is divided into three chapters as follows:

Chapter 1: Theoretical framework on FDI enterprises and satisfaction of FDI enterprises towards the products and services of commercial banks

Chapter 2: Reality of satisfaction of FDI enterprise customers towards products and services of Techcombank – Bac Ninh Branch

Chapter 3: Solutions to enhance the customer satisfaction towards services of Techcombank – Bac Ninh Branch

According to the Institute for Statistics and Economic Research of France (2004): An enterprise is an economic organization (agent) whose principal function

is to produce goods or services for sale

foreign-According to the Circular No 213 of the Ministry of Finance issued in 2012, FDI enterprises are enterprises established by non-Vietnamese nationality individuals operating under foreign laws or enterprises established and operating under the law of Vietnam with 100% foreign capital or member fund, or individual stock investment companies which the foreign party is entitled to own 49% of chartered capital

Figure 1.1: Characteristics of FDI enterprises

- FDI enterprises are organizations and units established mainly to carry out business activities

of people

with organi

zation

and hierarc

hy

Combination

of production factors (input factors)

Productio

n for sale (outp

ut factors)

Cause harm

to the environment

Profit division

Worker Owner

Creditor Supplier FDI enterprises

8

- FDI enterprises are large-scale business entities (exceeding the size of domestic enterprises, individuals, households) such as cooperatives, companies and factories The term “FDI enterprises” is conventional to distinguish with independent workers or workers and their households

- An FDI enterprise is a living entity Therefore, it also has its own life cycle from the beginning of its intention, decline or growth, ups and downs or destruction

To sum up, FDI enterprises are large-scale business entities which carry out business activities Due to their large scales, their demands for products and services of commercial banks are also much higher than those of other enterprises

In addition, meeting the satisfaction of FDI enterprises is also the goal that commercial banks in our country are aiming at due to the large potentials of these enterprises

1.2 Satisfaction of FDI enterprises towards the products and services of commercial banks

1.2.1 Concept and measurement of satisfaction

Concept

Customer satisfaction is the state/ perception of customers towards the service providers after using the services (Terrence Levesque & Gordon H Mc McDougall, 1996)

Oliva, Oliver, and Bearden (1995) argue that customer satisfaction is the task

of an organizational expressed through the relationship between the values of the products or services and the customers’ expectations towards them

Parasuraman et al (1988) and Spreng et al (1996) point out that customer satisfaction is a customer’s reaction to the difference between the known experience and expectations That is, the customer's experience in using a service and the results after the service is provided In other words, customer satisfaction is the customers’ mood, perception of the products when their expectations are met or exceeded during the life cycle of the products or services Satisfied customers will

be loyal and continue to use the products of the organization

9

Zineldin (2000) states that customer satisfaction is the emotional response/ perception of a customer to a service provider on the basis of comparing the difference between what they receive and what they expected

According to Forbes (2008), satisfaction has a positive impact on the following activities: Loyalty, Share of wallet, Word-of-mouth and cost efficiencies

Kotler (2000) argues that satisfaction is determined by comparing the results obtained from the service and the expectations of the customers on the following three levels: If the results are less than expected, customers will be dissatisfied; If the results are as expected, customers will be satisfied; If the results are more than expected, customers will be very satisfied and enjoy the service

Meanwhile, Susmita Sharma (2002) states that customer satisfaction is associated with the following factors: Feelings / attitudes towards service providers; Customer expectations about the ability to meet the needs of service providers; Service performance/ values provided by the service; Intention to continue using the service

Based on the concepts of customer satisfaction above, the author defines the satisfaction of FDI enterprises towards banking services as the attitudes and perceptions of FDI enterprises towards the quality of products and services that commercial banks provide Commercial banks always strive to improve the satisfaction

of customers in general and FDI enterprises in particular in order to increase the number of FDI enterprises using products and services provided by the banks

Methods of measuring customer satisfaction towards banking services

- Measure regularly to collect information from each customer when delivering products and services This measurement method helps to capture customers’ opinions right away and make timely corrections to inappropriate points

- Research periodically to collect information from different customer groups

at different time periods after delivering products and services This measurement method captures customers’ expectations and experience but is not regular

- Directly measure key customer groups: This method is conducted through interviews, meetings with key customer groups of commercial banks The main tool for conducting discussions among the key customer groups is the leading of the

10

chairperson A variety of survey questions and issues to be discussed will be arranged in a logical sequence The chairperson uses instructions to suggest participants to express their opinions and experience as many as possible However, the chairperson must ensure that the discussion does not go into other direction

- Measure by questionnaire via mail

This method is very convenient for customers because they can control the contents in the survey form, so they are often more willing to respond Also, clear and specific question will make it easier for them to answer

If the questionnaire is longer than one page, the response rate will be lower

So it needs to be well presented to attract customers’ attention and not make them boring

The organization must better prepare the customer database so that it is easy

to recognize and identify the type of customers that needs to be sent

1.2.2 Characteristics of banking services

1) The process of providing and consuming banking services takes place simultaneously

The process of providing and consuming banking services is carried out simultaneously Especially, there is direct participation of customers in the process

of providing services At the same time, each service follows a certain process that can not be divided into different types of services such as appraisal procedures and loan procedures This means banking services can not be stored but areprovided directly to the customers on demand Therefore, banks often create, maintain and develop relationships with customers and other banks by improving the quality of services, developing customer care activities of the bank staff and modernizing the supply system to create the special characteristics of these services

2) Banking services are unstable and uncertain

Banking services are not heterogeneous The services are closely linked to the process of service delivery of commercial banks Therefore, the quality of banking services depends on service transaction staff (qualifications, skills, etc.)

11

Moreover, with the same service transaction staff, the quality of banking services sometimes changes over time

(3) Banking services are unstorable

The banking services of commercial banks are invisible and therefore can not be stored Meanwhile, the demand for services often fluctuates but but the banks can not produce and store when the demand suddenly rises For example, the services of payment and money transfer at the end of the year are huge, but the banks must increase their means as well as human resources to ensure the most effective transactions Therefore, the costs of banking services must be relatively high to meet the needs and satisfaction of customers

4) Banking services are invisible

This is the main characteristic to distinguish banking services from the services of other material industries in the national economy Banking services can not be seen, felt, heard before buying them like any other services Customers coming to the banks can not know for sure whether their money is safe or not or whether the payment to them is on time Therefore, to overcome this limitation, the business of the banks must be based on trust The operations of the banks must focus on strengthening and creating trust to customers using services by improving the quality of services, increasing the visibility of services, increasing the banks’ images, prestige and facilitating customers to participate in propaganda activities for the banks

1.2.3 Research models of customer satisfaction towards the quality of commercial banks’ services

1.2.3.1 SERVQUAL model (Parasuraman, 1988)

This is the most common research model on service quality used in marketing research According to Parasuraman, service quality can not be determined in general but depends on customers' perception of the service and this perception conseidered on many factors The success of the model is a great breakthrough for economic organizations in general and commercial banks in

The SERVQUAL model considers two key aspects of service quality including service result of and service provision which are studied through 22 scales

of five criteria: Reliability, responsiveness, tangibles, assurance, and empathy

Figure 1.2 SERVQUAL model of customer satisfaction

Reliability

Reliability refers to the ability to provide accurate, punctual and reliable services This requires the consistency in service performance and respect of commitments and promise of the bank to customers

Responsiveness

This component measures the ability to quickly solve problems, effectively handle complaints, be ready to help customers and meet customer requirements In other words, service efficiency is the response from the bank transaction staff to what customers want

13

Tangibles are the external images of the bank's facilities, equipment, machinery, staff manners, documentation, manuals and communication systems In general, everything that customers see directly with their eyes and senses can influence this factor

Assurance

This factor creates credibility and trust to customers through professional service, good professional knowledge, elegant manners and good communication skills of the bank’s staff All of these elements make customers feel secure whenever they use the bank’s services

Empathy

Empathy is the concern and care towards customers, giving customers the best treatment which makes them feel that they are always respected and warmly welcome at anytime Human factor is the key to this success The more the bank cares about the customers, the more the empathy is.‹

1.2.3.2 CBSQ model of Xin Guo et al (2008)

With the aim of assessing all types of banking services and comparing the level of expectations and perceptions of corporate customers about the types of services provided by the banks, Xin Guo et al (2008) built a model of service quality measurement consisting of 31 observed variables with 7 components: (1) Reliability; (2) Empathy; (3) Facilities; (4) Human capital; (5) Access; (6) Technology; and (7) Communication based on the SERVQUAL measurement tool and results of in-depth interviews with 18 financial managers to measure service quality of wholesale banks in the Chinese financial market

After examining the expectations and perceptions of corporate customers using banking services at Chinese banks, Xin Guo et al (2008) proposed a model for measuring the service quality called CBSQ (Chinese Banking Service Quality) with 20 observed variables belonging to 4 components as follows:

14

Figure 1.3: CBSQ model of Xin Guo et al (2008)

The components in the CBSQ model are explained as follows:

Reliability: Showing the ability to perform promised services accurately and reliably

Human capital: Showing issues related to employees’ appearance, understanding about customers, and professional skills

Technology: Showing the application of modern technology, especially information technology, into banking services

Communication: Showing communication channels between the banks and corporate customers, including access to banking services

Of the four components mentioned above, two components of "reliability" and "human capital" belong to the functional quality and two components of

"technology" and "communication" belong to the technical quality

1.2.3.3 FSQ and TSQ model (GrÖnroos, 1984)

According to Grönroos, quality of services in general and quality of banking services in particular are considered based on two criteria: Functional Service Quality (FSQ) and Technical Service Quality (TSQ) At the same time, the quality

of banking services is strongly influenced by the bank image Grönroos outlined three factors that affect customer satisfaction towards the quality of banking services including functional quality, technical quality and bank image (FTSQ model for short)

15

Figure 1.4 FTSQ model (GrÖnroos, 1984)

Technical quality

This is the quality that customers receive through contact with the bank and

is perceived as important to the customers In other words, technical quality is the result of the interaction between the bank and customers, which is the real values that customers receive from the bank There are five criteria for factor assessment including: Problem solving ability; Professional skills; Operational level; Modern equipment; and Information storage system

Functional quality

Functional quality demonstrates the process of service delivery by the bank

or reflects how services are provided In the correlation between these two aspects

of quality, functional quality plays a more important role as reflected in the following seven criteria: Convenience in transaction; Behavior; Serving attitude; Organization; Contact with customers; Serving style; and all-for-customer motto

Perceived services

16

using services Grönroos also pointed out that the bank image is an invaluable asset and has a positive impact on customers' assessment of service quality, product value and their satisfaction

Moreover, the bank image also helps customers become more confident in the bank and becomes loyal customers of the bank (Andreassen & Lindestand, 1998) Thus, the bank image has an impact on customer satisfaction Customers who regularly use the bank’s services will have a better sense of bank image than other customers (Johnson, Fornell, Andreassen, Lervik, & Cha, 2001)

The bank image helps to make the relationship between customers and credit institutions better and more sustainable In addition, a good or bad bank image is evaluated through customers’ perception of the bank and comparison of the bank image with that of other competitors However, the impact level depends on each specific bank

1.2.2.4 Research model of Do Tien Hoa (2007)

When researching the satisfaction of corporate customers towards banking service quality, Do Tien Hoa developed a research model based on the inheritance

of researches on service quality as well as the customer satisfaction by Parasuraman (1988), Cronin and Taylor, (1992) and Grönroos1 (984) The inheritance of scales

in previous studies helped the author build a research model that included the following factors:

(1) Convenience: Convenience is expressed through the network of transaction points of the bank Conveniently located transaction points will create satisfaction for customers

(2) Tangibles: The system of facilities, layout of documents, brochures, transaction space and transaction staff are all the factors that create satisfaction for customers

(3) Serving style of the staff: This is reflected in the satisfactory resolution of customer complaints, in professional qualifications and in the ability to effectively solve customer queries with caring and gentle attitude towards customers

in the security of customer information and transaction information of the bank

(6) Bank image: This is the brand and position of the bank in the market The bank image in customers’ eyes is reflected in the credit and community contributions of the bank

1.2.4 Proposed model of the study

Based on the research models on banking service quality and the scales of customer satisfaction towards banking services, the author selected the determinants

of customer satisfaction including: convenience; tangibles; serving style; contact with customers, trust and the bank image

The factors selected by the author were inherited from the research model on customer satisfaction towards the quality of banking services of Do Tien Hoa (2007) The inheritance from the research model of Do Tien Hoa derived from the following reasons:

- The research model of Do Tien Hoa was on the satisfaction of business customers, so it should have many similarities with the author’s research (research

on the satisfaction of FDI enterprises)

- The research model of Do Tien Hoa was built based on the synthesis of the researches of Parasuraman (1988); Cronin and Taylor (1992); Grönroos (1984), which were all case studies on banking service quality, so the model was comprehensive

- In the research context in Vietnam, Do Tien Hoa's model has been tested and achieved success in terms of relevance

Thus, by inheriting the factors in the research model of Do Tien Hoa (2007), the author proposed the research model as follows:

18

Figure 1.5 Research model of the thesis

1.3 Experience in improving the satisfaction of FDI enterprises of commercial banks and lessons for Techcombank - Bac Ninh Branch

1.3.1 Experience of some commercial banks

Experience of Vietcombank

Recognizing the importance of FDI enterprises with sustainable development

of banking business, Vietcombank has paid great attention to the access and cooperation with FDI enterprises Accordingly, in order to improve the satisfaction

of FDI enterprise customers, Vietcombank has applied the following measures:

Vietcombank is the first bank to set up the department of Japan Desk, which specializes in providing banking products, services and support for Japanese corporate custmers operating in Vietnam The Board of Directors of Vietcombank has recruited highly skilled staffs that are knowledgeable about the banking industry and specific needs of FDI enterprises, fluent in foreign languages to help these customers overcome the barriers of language and culture when trading at Vietcombank

19

Through its cooperation program with the Japan Bank for International Cooperation (JBIC), Vietcombank has signed a Memorandum of Understanding (MOU) with nearly 60 Japanese Regional Banks (JRBs) Accordingly, Vietcombank will be a priority bank in Vietnam serving Japanese enterprises who are customers of these JRBs when they invest in Vietnamese market

Vietcombank has also actively held conferences/ seminars for FDI customers and participated in national and provincial level forums of FDI enterprises to catch

up with the actual activities and demands of FDI enterprises in order to provide appropriate advice on the business environment, design and provide new banking and financial solutions to better meet the diverse needs of FDI customers

For Japanese enterprises, Vietcombank has always been active in building and maintaining relationships with the Japanese business community in Vietnam by participating in and coordinating with the JRBs to hold customer conferences, bringing the brand name of Vietcombank closer to Japanese customers and creating trust for customers

In addition, to take advantage of the cooperation with Mizuho Bank and JRBs, Vietcombank has participated in many customer seminars in Japan Through these programs, Vietcombank is known by many Japanese businesses as having a good image, contributing to better promoting the Vietcombank’s brand to foreign markets

Experience of Vietinbank

VietinBank is the largest commercial bank in terms of chartered capital and assets and is the second largest trading network in the banking system in Vietnam, leading in margin with large and abundant credit portfolio VietinBank is constantly innovating and growing with the goal of becoming a bank with international standards VietinBank's prestige and quality have been highly appreciated and honored by many big organizations in the world such as Forbes, Asia Finance, Asset Tripple, S & P and Fitch, etc Besides, VietinBank has many strategic partnerships with major financial institutions in the world such as Deutsch Bank, International Finance Corporation (IFC) and financial institutions in the region

20

Accompanying FDI enterprises, VietinBank not only provides specialized financial services and banking products but also diversifies its products and services VietinBank always tries to find solutions to provide customers with most suitable products and services which meet their needs of daily transactions as well

as contribute to create the long-term success for customers With a nationwide network and a client portfolio across all industries, VietinBank has been pioneering and serving as a bridge to introduce business partners to many enterprises, contributing to promoting the business of FDI enterprises in Vietnam

In recent years, VietinBank has focused on promoting the growth of FDI enterprises on both width and depth with its good quality of products and services and professional and dedicated staffs The branches in key locations have set up specialized departments to serve FDI business customers, arranged staffs who are skilled and good at foreign language to take care of FDI customers to bring them the most convenience and satisfaction when trading at VietinBank

1.3.2 Lessons for Techcombank - Bac Ninh Branch

From the experience in improving the satisfaction of FDI enterprises from commercial banks in the country, Techcombank - Bac Ninh Branch draws the lessons for itself as follows:

- Establish a specialized department to serve FDI enterprises This department should arrange skilled and professional staffs that are good at foreign languages and have a good knowledge of cultures of foreign countries in order to provide best service quality for FDI customers

- Diversify products and services provided to FDI enterprises combined with providing specialized financial services and banking products: from credit to modern banking services, linking business activities and introducing business partners for enterprises

- Organize conferences and seminars for FDI enterprises in the locality in order to catch up with their actual activities and demands Based on this, design and provide new banking and financial solutions to better meet the diverse needs of FDI customers

21

- Organize training and retraining courses for staffs who directly serve FDI enterprises Especially, the staff must be good at foreign languages and understand cultures of foreign countries to create the most comfort for customers

22

CHAPTER 2: REALITY OF SATISFACTION OF FDI ENTERPRISE CUSTOMERS TOWARDS PRODUCTS AND SERVICES OF

TECHCOMBANK – BAC NINH BRANCH

2.1 Introduction of Techcombank – Bac Ninh Branch and FDI enterprises in Bac Ninh Province

2.1.1 Introduction of Techcombank – Bac Ninh Branch

2.1.1.1 History of foundation and development

Vietnam Techcombank - Bac Ninh Branch was established on March 25,

2005 and located at 20 Nguyen Dang Dao - Bac Ninh City - Bac Ninh Province The operation area of the branch is Bac Ninh province where many sectors are being expanded and developed, especially in the field of services This is one of the provinces which have the most industrial parks in the country and attract many FDI enterprises to manufacture and trade in the area Besides, there are many traditional professions which have their place in the foreign market, especially Dong Ky wood village Despite its establishment, Techcombank – Bac Ninh Branch has a well-developed network of 4 transaction offices, including 2 Type I transaction offices and 2 Type II transaction offices, 13 ATMs located at 15 points in Bac Ninh Province The location of the branch is in the center of Bac Ninh City where there are many administrative agencies and industrial parks with bustling trade and service activities However, in such a dynamic economic environment there are many credit institutions with a large network of branches and transaction offices and other non-bank financial institutions creating excitement and fierce competition

2.1.1.2 Functions and tasks

Functions: Techcombank - Bac Ninh Branch operates as a commercial bank with the functions of credit intermediary, payment and money creation The functions of commercial banks are closely interrelated, complementary, supporting each other, in which the credit intermediary function is the most basic function, providing the basis for the implementation of the other functions At the same time,

23

when the functions of intermediary payment and money creation are performed well, they will contribute to increasing the credit capital and expanding credit activities for the branch

Tasks: Techcombank - Bac Ninh Branch implements the business tasks assigned by Techcombank including currency trading, credit, payment and banking services and fulfills other tasks assigned by the State Bank and Techcombank

Competence:

+ Techcombank Bank - Bac Ninh Branch operates in accordance with the direction and strategy of the Head Office, complies with the regulations, internal rules, business measures and policies and technical skills necessary in currency trading activities

+ Applying specific interest rates for each term of deposits and loans in accordance with the demand and supply relationship in the monetary market under regulations of Techcombank

+ Deciding the exchange rates of the purchase and sale of foreign currencies under regulations of the State Bank and Techcombank

+ Signing credit contracts and business cooperation contracts with financial and credit institutions under regulations of the State Bank and Techcombank

+ Being responsible for business results, capital conservation and development, recovery of principal and interest; ensuring the growth of business operations of the branch

+ Selling collaterals and pledges when customers can not pay due debts + Being responsible for economic, civil and commitments between the branch and customers; ensuring data security and customers’ information

2.1.1.3 Organizational structure of the bank

The operation model of Techcombank – Bac Ninh Branch is organized as follows:

24

Figure 2.1: Organizational structure of Techcombank – Bac Ninh Branch

Source: Techcombank – Bac Ninh Branch

Functions and duties of departments:

Manager: Being responsible for directing general business operations of the

branch under its competence; manages 4 transaction offices in the area according to the establishment decision prescribed by the General Director of Techcombank

Deputy Managers: Being responsible for implementing tasks assigned by

the Manager in their scope and authority

Customer Service Department:

- Advising the manager on the distribution and introduction of products to customers

- Initiatively looking for new customers, looking after and maintaining regular relations with old customers; finding out about customers and exploiting their financial needs to advise and provide service packages as well as the best solutions to meet their needs

- Dealing with questions and complaints of customers when they need

Manager

Deputy Manager 2 Deputy Manager 1

Office Priority customers

Individual Customer Department

Corporate Customer Department

Customer Service

Department

Transaction Offices

25

Corporate Customer Department:

- Advising the Board of Directors on the management and organization of business activities for corporate customers in accordance with Techcombank’s orientation in each period and the current regulations of Techcombank; being responsible for achieving planned targets in each period

- Being responsible for marketing credit, including setting up, expanding and developing enterprise customer system

Individual Customer Department:

- Advising the Board Directors on managing and conducting business activities for individual customers at the branch/ transaction offices in line with Techcombank's orientation in each period and current regimes and regulations of Techcombank; being responsible for achieving retail targets assigned by Techcombank in each period

Priority Customer Department:

- Preparing and implementing action plans in the direction of the VIP customer division

- Participating in the development of procedures, professional guidelines of VIP customer division

- Supporting and coordinating with the department head to solve the problems of the department

Office:

- Advising the manager on the plan of developing human resources in line with specific activities and conditions of the branch

- Monitoring the staff recruitment, organization and training

- Managing laborers, signing labor contracts approved by the manager; setting up rules and regulations to maintain and preserve the corporate culture and working discipline of the branch

Transaction Offices:

- Advising the Board of Directors on the development policy of new banking products and services; assisting the Board of Directors in dealing with customers,

2.1.2 Overview of industrial parks and FDI enterprises in Bac Ninh Province

2.1.2.1 Overview of industrial parks

Bac Ninh Province now has 15 industrial parks, an information technology park and more than 30 industrial clusters The total area is 6,847ha with the total area of industrial land planned for lease of 2,138.53ha; the area of recovered land is 1,682.95 ha, and the area of leased land is 1,259.81ha The occupancy rate on the planned area is 58.91%, and the occupancy rate on the recovered area was 74.86% The names of the industrial parks and specific areas of land in each industrial park are presented as follows:

Table 2.1: Industrial Parks in Bac Ninh Province

Source: Summarized from the statistical yearbook of Bac Ninh Province in 2016

27

According to the statistics, Yen Phong 2 Industrial Park is the largest industrial park in Bac Ninh Province with 1,200 hectares Nam Son - Hap Linh Industrial Park and Thuan Thanh 3 Industrial Pone rank next with an area of 1,000 ha The remaining industrial parks such as Tien Son, Que Vo, Dai Kim, Thuan Thanh, Dat Dong - Hoan Son, etc has smaller areas but has large scale compared to neighboring area In the time to come, Bac Ninh Province will have two more industrial parks concentrated in Ngu Thai and Nguyet Duc Communes of Thuan Thanh District and in Van Ninh Commune of Gia Binh District with a total area of 500 ha

It can be seen that industrial parks attract the most FDI capital in the country Therefore, the development of industrial parks in Bac Ninh Province shows the potentials for attracting FDI enterprises in the region This is also an advantage for commercial banks located in the area in the strategy of developing the segment of FDI enterprise customers serving the medium and long term objective

2.1.2.2 Overview of FDI enterprises

Locations

FDI enterprises in Bac Ninh Province are mainly Korean, Taiwanese and Japanese enterprises These enterprises have large investment capital and are mainly located in industrial parks in the area The details are presented as follows:

Table 2.2: Locations FDI enterprises in Bac Ninh Province

Investment capital (million USD)

Korean enterprises

Yen Phong Industrial Park, Que

Vo Industrial Park, Dai Dong - Hoan Son Industrial Park 297 87,674

Taiwanese

enterprises

Que Vo Industrial Park, Tien Son Industrial Park, Thuan Thanh Industrial Park 104 3,500 Japanese

enterprises

Que Vo Industrial Park, Tien

Source: Summarized from the statistical yearbook of Bac Ninh Province in 2016

28

Currently, Bac Ninh Province has totally 654 FDI enterprises scattered in industrial parks in the area In particular, Korean enterprises account for the largest number with 297 enterprises located in Yen Phong Industrial Park, Que Vo Industrial Park and Dai Dong - Hoan Son Industrial Park The FDI capital of these enterprises is 87,674 million USD Taiwanese enterprises also have a large amount

of FDI capital of 3,500 million USD, located in Que Vo Industrial Park, Tien Son Industrial Park and Thuan Thanh Industrial Park In addition, Japanese enterprises with FDI capital of 350 million USD, located in Que Vo Industrial Park and Tien Son Industrial Park, also contribute significantly to the economic development of the province

Besides, there are 160 other FDI enterprises in Bac Ninh, including Thai enterprises, Chinese enterprises, etc with a total investment capital of 235 million USD, trading in various fields and making great contribution to the province’s GDP

According to annual statistics, these 654 FDI enterprises pay about 3,920 billion VND to the provincial budget (out of 8,900 billion VND of the budget revenue of Bac Ninh Province), accounting for 44% of Bac Ninh Province's GDP This shows a huge market potential of the FDI customer segment Therefore, commercial banks in general and Techcombank - Bac Ninh Branch in particular need to invest in human resources and adopt appropriate policies to implement successful business strategies with this type of customers

Bac Ninh City Vendor Samsung & Supporting enterprises 60 Vietnam-

Manufacturing and trading enterprises

Other

Manufacturing and trading enterprises

Source: Summarized from the statistical yearbook of Bac Ninh Province in 2016

FDI enterprises in Bac Ninh Province are mainly Canon, Samsung, Samsunng Vendor and some other supporting enterprises specializing in import and export In which, there are 156 enterprises of Canon, Samsung and Vendor in Que

Vo Industrial Park, 120 enterprises in Tien Son Industrial Park and 150 enterprises

of Samsung and Vendor in Yen Phong Industrial Park Manufacturing and trading enterprises specializing in import and export concentrate in Thuan Thanh Industrial Park and some in other industrial parks Enterprises of Nokia are located in Vietnam-Singapore Industrial Park

30

With great potential, sharp management ability, advanced technology level, high number of laborers and large business scale, FDI enterprises always have high demand for using banking services to make the business process smoothly such as payroll, transfer payments, loans to supplement working capital, equipment procurement, and so on This indicates that if commercial banks in the Bac Ninh Province in general and Techcombank – Bac Ninh Branch in particular have suitable strategies to exploit and improve the satisfaction of FDI enterprises, they will have many advantages in their banking business

2.1.3 Reality of exploiting FDI enterprise customers of Techcombank – Bac Ninh Province

2.1.3.1 Number of FDI enterprise customers

Techcombank - Bac Ninh Branch was one of the few banks without bad loans for many years and excellently completed the targets assigned by the Head Office At present, Techcombank - Bac Ninh Branch had become a prestigious brand in the banking system and was one of the banks with the best quality services

in Bac Ninh Province Therefore, Techcombank - Bac Ninh Branch was now the reliable address for over 6,000 domestic and foreign customers, including typical FDI enterprise customers such as Dragon Jet (Japan), KTT VINA (Korea) and many other potential FDI enterprise customers The number of FDI enterprise customers opening accounts at Techcombank - Bac Ninh Branch was summarized in the following chart:

31

Figure 2.2: Number of FDI enterprise customers at Techcombank – Bac Ninh Branch

Source: Techcombank – Bac Ninh Branch

The figures in the chart showed that the number of FDI enterprise customers of Techcombank - Bac Ninh Branch increased steadily over the years There were 36 FDI enterprise customers in 2014, 43 FDI enterprise customers in 2015 and 50 FDI enterprise customers in 2016 In addition, the branch also built relationships with a large number of other FDI enterprises, which were potential customers that the branch aimed at in the near future The number of potential FDI enterprise customer of the branch ranged from

600 to 618 enterprises in the period of 2014-2016

It can be recognized that the number of FDI enterprise customers at Techcombank - Bac Ninh Branch was continuously expanded using products and services such as deposits, payment accounts, foreign currency transactions, domestic money transfer, payment via account, ATM cards, credit cards, consumer loans, and so on However, the proportion of FDI enterprise customers was still low

in the structure of customers and was not corresponding to the capacity of Techcombank - Bac Ninh Branch and the potential demand of FDI enterprises in the area This was due to the fierce competition environment Moreover, the segment of FDI enterprise customers often fell into foreign banks with large capital potential