Uncertainty about processes and regulations of credit officers at orient bank

LIST OF TABLES Table 1: Table of business profit results of OCB compared the plan in 2018 Table 2: Table of results of lending and capital mobilization activities in 2018 LIST OF FIGURES

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Huynh Dao Duc

UNCERTAINTY ABOUT PROCESSES AND REGULATIONS OF CREDIT

OFFICERS AT ORIENT BANK

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2019

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Huynh Dao Duc

UNCERTAINTY ABOUT PROCESSES AND REGULATIONS OF CREDIT

OFFICERS AT ORIENT BANK

MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Nguyễn Thị Mai Trang

Ho Chi Minh City – Year 2019

EXECUTIVE SUMMARY

In 2018 marked the milestone of 10 years since the global financial crisis took place and contrary to previous expectations, the world economy slowed markedly Global growth is estimated to increase by only 3.1% - lower than the previous forecast

of 4% - due to escalating and prolonged trade war between the US and China In addition, the monetary policy of the State Bank also began to tighten

Facing the challenges of the world situation, Vietnam still has a quite successful year, namely: GDP (Gross domestic product) growth of + 7.08%; inflation is well controlled with average annual CPI (Consumer price index) of 3.54%; The stable economic environment has helped attract a large amount of foreign investment in 2018

The banking sector continued to prosper in 2018 with the general trend of profit exceeding the plan, declining NPLs (Non-performing loan), controlled credit increased

by 14%, exchange rate and market interest rates were kept stable thanks to policies active, flexible and effective currency Big banks such as Vietcombank, Techcombank, BIDV, Vietinbank have positive operating results in 2018 with high profits through promoting many associated service activities to promote business, paralleling that, increasing strengthening the quality of banking services

Also in 2018, OCB achieved many successes with revenue and profit growth over the years from 2015 to 2018 Many prestigious awards for banks such as Vietnam Outstanding Banking Awards 2018, Most Innovative Digital Bank Vietnam 2018 and Best New Omni Channel Platform in Vietnam It shows that OCB is constantly improving and improving the quality of services and technology to meet the market's demand in the best way However, besides, there are still a number of problems that have significant impact on the quality of lending services of OCB, partly affecting the satisfaction of customers when using the service, that making the results of business profit of OCB not really achieved as expected Research results show that business activities affected by human factors as credit officers when working with customers are still lacking in knowledge processing skills for ineffective customers to play the role Important in the outcome of the set target bank In addition, some reasonable

solutions are proposed to solve problem to improve the service quality of OCB in order to improve the professional quality of credit officers, promote business growth strongly

TABLE OF CONTENTS

Executive summary……… ………….1

Acknowledgement ……… ….….…3

List of Tables ………… ……….….………6

List of Figures…….……….……… …………6

1 Introduction……….…… ……… ……… 7

2 Symptom analysis……….9

3 Problems analysis……….………16

3.1.Potential problems……… ……… 16

3.1.1.Criteria for assessing loan service quality……… ……….16

3.1.2.Criteria for evaluation of distribution network……….… …….20

3.2 Problem validation ……… ………….………….22

4 Cause analysis……….……….……….24

4.1 Potential causes……… ……….…….… 24

4.1.1 Lack of support from leaders and organizations……… ….… 24

4.1.2 Processes and regulations are overlapping and inconsistent…… … …… 25

4.2 Cause validation……… … …27

5 Alternative solution……….….28

5.1.The first alternative solution: simplify the system of regulatory documents 30

5.2.The second alternative solution: Contribute comments from relevant departments for regulatory documents issued in the system …….….…32

5.3.The third alternative solution: Hire an independent consulting firm to issue regulations……….35

5.4.Justification solution……… 36

6 Organization of action ……….37

7 Conclusion………40

8 Supporting information………41

Interview description ……….……… ………42

Questionnaire……… … ……….… ……49

Interview transcript………….……….………….51

Reference… ……….……… ………72

Appendix……….……….74

LIST OF TABLES

Table 1: Table of business profit results of OCB compared the plan in 2018

Table 2: Table of results of lending and capital mobilization activities in 2018

LIST OF FIGURES

Figure 1: OCB organizational structure

Figure 2: The reason why customers are satisfied when using loan service at OCB Figure 3: Evaluate transaction system conveniently, safely, accurately

Figure 4: Evaluate level of information security control

Figure 5: Customer satisfaction on information of business activities publicly and transparently

Figure 6: Customer satisfaction level of bad debt of OCB is consistent with the government's proposal

Figure 7: Customer satisfaction on diverse, suitable and responsive business products Figure 8: Customer satisfaction on transaction processing time

Figure 9: Customer satisfaction on transaction process

Figure 10: Customer satisfaction on enthusiastic, friendly of customer service

Figure 11: The level of satisfaction of you about the transaction location of OCB Figure 12: Transaction location network of commercial banks

Figure 13: Fish bone chart on the main problem - the cause

Figure 14: Cause – and – effect tree

1 INTRODUCTION

Name of Bank: Orient Commercial Joint Stock Bank (OCB)

Head office: 41 - 45 Le Duan, Ben Nghe Ward, District 1, TP Ho Chi Minh

Founded on 10.06.1996, OCB has nearly 200 business units at 120 transaction points present in all cities and key economic regions throughout the country OCB has affirmed its leading position in the foundation of modern technology, loved brand Continuously for many years, OCB has twice the growth rate of the industry average, the bad debt rate is always controlled with a low level, ensuring high and stable safety indicators

The year of 2017 is considered a successful year of OCB with impressive profit

of over VND 1,000 billion; ranked B2 by Moody’s (one of the three most prestigious credit rating firms in the world) - the highest level of commercial banks in Vietnam OCB also announced that the first Vietnamese bank announced the completion of Basel II project implementation

On March 19, 2017, OCB was also the first bank to deploy digital banking services on the Omni-Channel platform With the foundation already prepared, OCB will continue to implement the strategic objectives to affirm the best Banking group in Vietnam with good business efficiency, good asset quality and intelligent management system transparent, complying with the regulations of the State Bank and towards international standards

Figure 1: OCB organizational structure

(Source: OCB, 2019 (14))

Enterprise customer relations department (credit officer) is a subordinate sales team of CB and SME centers of business units within the enterprise customers and micro- Enterprise customers (business block) Operation of the sales team is to set up marketing plans and exploit customers according to each specific region and locality; Developing new customers, selling products and services on mobilization, credit, services and consulting, solving customer requirements; Take care and maintain existing customers Managing business customers on business operations; Besides, participating and designing to build content on policies, procedures, guidelines and promotions for products and services for enterprise customers The operation of the

customer records All three blocks are under the general director, the business units of the two business blocks have the same structure as follows: A managing director, a sale and marketing department with about 5 salespeople, a division of credit service, accounting and treasury Currently the network of OCB spreads across provinces and cities with 129 business units

Topic in this report's content focuses on the issue of professional quality of credit officer at OCB, especially customer relations department in OCB organization To drill down on research into the matter, according to the annual report of the OCB in

2018 found that the data is not encouraging when research on the profitability of the business sector business is done in 2018 than planned that the proposed bank A plan is

a set of activities and tasks are arranged in a certain order to achieve the objectives set Planning is the first of the four functions of management: planning, organization, leadership and inspection Scheduling is a feature very important for every manager because it is associated with the selection of targets and programs of action in the future, this is a major challenge for most businesses (1) From the theory above, we evaluate the implementation of pre-tax profits of the OCB enterprise business block through the table as follows:

Table 1: Table of business profit results of OCB compared the plan in 2018 (unit: million VND)

Profit before tax of enterprise

(Source: OCB internal annual report, 2018)

According to the data in the table above, we can see that the company's positive business results in 2018, the pre-sales profit before tax reached 110% on the set plan with VND 2,201 billion But besides, the profit before tax of business customers has

not achieved the expected profit as planned Specifically, according to statistics, the profit before tax achieved in 2018 was 670 billion VND, accounting for 95.7% of the expected profit, 4.3% less than the total plan to be implemented

Table 2: Table of results of lending and capital mobilization activities in 2018

(Source: OCB, 2018) Based on the 2018 financial report of OCB, it is possible to see a big difference between customer deposit and loan sales When developing a lending policy, managers have noticed the relevance of the policy's content with the government's socio-economic development path, the harmonization of interests of depositors and borrowers and the bank itself A good lending policy will help credit officers have a solid basis to ensure safe and efficient loans Specifically, we can see that customer loan revenue in 2018 is 55,751 billion dong, while sales for customer deposits at banks are about 60,363 billion dong, the gap between the two indices is nearly 4,612 billion This shows that the bank's operation has not fully utilized its ability to take advantage

of the existing money, therefore, it may lead to not optimizing profits for banks, leading to the assessment of the operational efficiency in 2018, which has not achieved the expected profit as proposed

Nowaday, customers are factors that determine the existence and development of businesses So how to satisfy customer satisfaction when their needs are changing This is the problem that banks are trying to improve their competitiveness to meet customer needs Lewis (2) presented that service quality is consumer appreciation (a form of attitude) and results from consumer comparisons between expectations and their perceptions of actual service performance Therefore, in the banking sector, the quality of service is perceived from the difference between customers' perceptions of services provided by the bank (services received and their expectations for banks that provide that service (expected service) As the above sign, the situation of lending

activities of OCB has not reached the expectation as planned, showing that the demand

of customers borrowing loans with OCB has been reduced, this may indicate weaknesses The fact that customers are not satisfied with the loan service quality of OCB can lead to loss of customers Therefore, I conducted a survey with 60 customers

in Ho Chi Minh City about the dissatisfaction of enterprise customers affecting the behavior of lending to OCB, because Ho Chi Minh City is a city with the economy leading the nation with diverse people in provinces and cities, it can represent the whole country, so I choose this place The target customers for the survey are small and medium enterprises and large enterprises Based on the survey to see if any of these factors greatly affect customer satisfaction (10, 16), the results are given as follows:

Figure 2: The reason why customers are satisfied when using loan service at OCB

(Source: Synthesized from OCB's enterprise customer survey)

The measurement of service quality has attracted considerable research interest and has been further debated A structure of service quality includes: Technology, scale, risk management, empathy(3) According to the customer satisfaction survey on

Risk management (financial capacity, operational risk level)

Quality (product - service, reputation, brand value).

Other 13%

38%

22%

10%

17%

OCB, we can see from the figure 2 that there are many reasons affecting customer satisfaction in using OCB service to increase revenue as well as profit In which, the main reasons accounted for a low rate from service quality accounted for 10%, system network accounted for 13% Service quality and system issue at the lowest rate in general can be a proof that this can be considered a potential problem affecting OCB access of customers

Ms Duong Thi Mai Hoa - Deputy Director of Bamboo Airway Company limited admitted that:

Technology application bringing many combined utilities to customers, good control of risk activities with European technology information security platform On the other hand, it still has many things are not satisfied, the bank's documents required to provide procedures are cumbersome and complicated

Ms Pham Thi My Nuong - Director of Thien Loc Phat Technology Trading Co., Ltd shared that:

OCB has many integrated features based on advanced technology to help make transactions convenient, easy, preferential policies with low fees, diversified products suitable to my company situation Besides, some services have not met my expectations, such as transaction network, Professional qualification of credit officers are not really professional

Criteria for evaluation of technological capacity, banking equipment

In today's era, the success of the currency trading industry depends greatly on banking technology In particular, in the context of international integration today, science and technology are developing rapidly, Vietnam commercial banks must necessarily innovate properties and technology quickly and even take short cuts just stand up and improve your competitiveness

Modern equipment allows banks to provide modern products and services with low cost, automate banking operations and services (6) This is an important factor that increases the competitiveness of banks The investment in modern equipment also allows banks to diversify their activities and products and services on the basis of dispersing risks and improving operational efficiency

Figure 3: Evaluate transaction system conveniently, safely, accurately

(Source: Synthesized from OCB's enterprise customer survey)

According to the data in the chart, the percentage of satisfied customers is high with 63% satisfied, 13% of customers are completely satisfaction, only 3% of customers are not satisfied with this criterion

Figure 4: Evaluate level of information security control

(Source: Synthesized from OCB's enterprise customer survey)

According to the data in the chart, the percentage of satisfied customers is high with 67% satisfied, 17% of customers are completely satisfaction, only 3% of customers are not satisfied with this criterion

For Industry 4.0 market, technology factor has a significant impact on banks' strategy in attracting customers with many online transaction utilities, smart budget management, as well as benefits finance, goods in risk management, enhance information security Determining the digital banking development strategy, OCB focuses on investing in synchronous technology infrastructure and organizational model to develop digital business channels In March 2018, OCB officially launched the first integrated channel platform in Vietnam Omni channel, with the deployment of the first two important trading channels in the digital environment: Internet banking (IB) and mobile banking (MB), opening the trend of providing many different products, with the highest deployment speed and security capability According to survey of customer satisfaction on this factor, based on the above chart, it can be find that customers are satisfied with the technology platform that OCB is implemented with a high satisfaction rate from 63% or more and the level of dissatisfaction is quite small Therefore, this factor is not a problem affecting customer dissatisfaction

Criteria for assessing operational risks

In banking credit activities, there is always risk Through the completion of Basel

II project, OCB has created a solid and effective risk management system The risk management structure has been clearly separated from the responsibility in three defensive lines; policies, risk management processes are strengthened, and updated regularly according to international risk management practices (9) Improved risk management capacity is demonstrated by: improved credit quality by centralizing debt approval and processing models; overdue debt and bad debt ratio are strictly controlled, market risk limits and liquidity are in high compliance with regulations; Operational risks are well controlled by risk assessment tools and control points

Figure 5: Customer satisfaction on information of business activities publicly and transparently

(Source: Synthesized from OCB's enterprise customer survey)

According to the data in the chart, the percentage of satisfied customers is high with 57% satisfied, 10% of customers are completely satisfaction, only 7% of customers are not satisfied with this criterion

Figure 6: Customer satisfaction level of bad debt of OCB is consistent with the government's proposal

(Source: Synthesized from OCB's enterprise customer survey)

According to the data in the chart, the percentage of satisfied customers is high with 53% satisfied, 10% of customers are completely satisfaction, only 8% of customers are not satisfied with this criterion

According to the survey on customer satisfaction on risk management level of OCB as transparency to control capital adequacy, bad debt management, satisfied customers or higher account for over 53% and about 27% of customers do not care about this factor This indicates that this factor does not affect customer dissatisfaction when trading

From the above analysis, give a preliminary conclusion that customer satisfaction creates trust when performing behaviors with partners, factors that make a difference, convenience outstanding benefits create satisfaction, attract customers, this leads customers to feel satisfied with the factors of technology operations and risk management activities of the bank In this view, we continue to analyze the remaining contents of the survey to find out what the underlying problem is and the main issue affecting customer satisfaction, thereby finding out the cause of problem

3 Problem analysis

3.1 Potential problems

3.1.1 Criteria for assessing loan service quality

Because bank is characterized as an enterprise operating in the service sector and

is a high-end service, human resources and technology are evaluated at a very important level in competitiveness The difference in the quality of products between commercial banks is difficult to distinguish Because the transaction quality of the bank's direct transactions with customers is the point that makes the difference between banks, playing an important role in creating the bank's image for customers

Figure 7: Customer satisfaction on diverse, suitable and responsive business products

(Source: Synthesized from OCB's enterprise customer survey)

Looking at the chart, we see that the proportion of customers satisfied with this target is quite high, with 50% of satisfied customers, 13% completely satisfied, 33% of neutral customers and few with 3% are not satisfied Based on the data, the majority of customers are satisfied and optimistic about this target

Figure 8: Customer satisfaction on transaction processing time

(Source: Synthesized from OCB's enterprise customer survey)

According to the chart, the percentage of customers satisfied with this indicator is

as follows: 20% of customers are satisfied, 3% are completely satisfied, 48% are

neutral and 28% are not satisfied Based on the data, the percentage of customers who are not satisfied with this indicator, shows that OCB should pay attention to assess the problem

Figure 9: Customer satisfaction on transaction process

(Source: Synthesized from OCB's enterprise customer survey)

According to the chart, the percentage of customers satisfied with this indicator

is as follows: 22% of customers are satisfied, 7% are completely satisfied, 45% are neutral and 27% are not satisfied Based on the data, the percentage of customers who are not satisfied with this indicator, shows that OCB should pay attention to assess the problem

Figure 10: Customer satisfaction on enthusiastic, friendly of customer service

(Source: Synthesized from OCB's enterprise customer survey)

Looking at the chart, we see that the percentage of customers satisfied with this target is quite high, with 42% of satisfied customers, 12% completely satisfied, 27% of neutral and small customers account for 18% are not satisfied Based on the data, the majority of customers are satisfied, but the unsatisfactory index is still worth considering

OCB wants to develop, they must have qualified human resources to manage, exploit and use effectively modern technology that is constantly innovated Thus, the quality of human resources is a factor that makes the difference, playing an important role in improving the competitiveness of banks According to customer satisfaction survey on service quality of OCB through the criteria of diversity of supporting products, price, interest rate policy, the majority of customers are satisfied with product policies that OCB is applying, occupying a large proportion are satisfied with 50% In terms of time and transaction processing procedures for customers such as loans, deposits, pledge, the percentage is high in neutral order with 48% and 45%, besides that we see that the level is satisfaction also accounts for a high rate of 28% and 27%, suggesting that this factor partly affects the demand for customers' transactions at OCB Also according to the survey, it shows that the satisfaction level

of customers on the quality of staff to reach customers is about 42%, accounting for nearly half of the rate, this shows the general quality of human activities Credit members working with customers are not really effective with a specific rate of 27% in normal and 18% in unsatisfactory

Ms Hoang Thi Thuy Linh - Head of Credit Transaction Processing Division - Credit Management Division - OCB Head Office responded that:

Although there are many changes in the quality with many products offered to meet customer needs, but there are many shortcomings in the quality of professional credit officers are still limited Long processing time for records

Mr Cao Xuan Phong - Director of Enterprise Customer Relationship of OCB District 4

Branch confirmed that:

The reflection on partly due to complicated and cumbersome processes and regulations has not yet accelerated the processing speed for customers

Based on the above feedback from the interview, we realize that service quality from lending activities of OCB is a potential problem affecting customer satisfaction when making loan transactions

3.1.2 Criteria for evaluation of distribution network

Figure 11: The level of satisfaction of you about the transaction location of OCB

(Source: Synthesized from OCB's enterprise customer survey)

The network and distribution system of banks impact through location, create convenience for customers when performing trading activities (8) OCB aims to increase the quality of card products and services, and use cost effectively In order not

to spend too much on the installation of ATM systems, OCB only installs ATMs at key transaction locations that create a lot of value such as Hanoi and Ho Chi Minh, and at the same time focus on expanding links Other banks through which to expand payment channels and meet the diverse needs of customers According to the chart above, we find that the network also affects customer satisfaction with the utilities of the transaction point system, ATM when performing transactions with OCB Service infrastructure comes with 57% of customers feel accepted In addition, we find that a part of customers with a remarkable 20% rate is not really satisfied when accessing

OCB's network This shows that this is also a potential problem affecting customer needs

Figure 12: Transaction location network of commercial banks

(Source: Cafef, 2018)

Mr Nguyen Hoang Long - Credit staff of enterprise customer department of OCB

district 4 branch said that:

The density of banks is still sparse so customers feel uncomfortable when coming to the transaction is quite far

Ms Hoang Thi Thuy Linh - Head of credit transaction processing division - Credit

management division - OCB head office commented that:

Bank's transaction locations are few, although OCB is linked with ATM Vietinbank and Vietcombank systems, but in general, the bank scale is still quite limited for customers to access”

Thus, we see that the transaction location affects somewhat to the behavior of customers who actively approach to borrowing at OCB, when convenient locations will create more utilities for customers to contact more often to borrowing instead of remote locations is hard to find Therefore, this factor shows that there is a potential problem affecting the dissatisfaction in lending activities of OCB

In sum, there are two potential problems and next section will present how to validate the main problem

3.2 Problem validation

Figure 13: Fish bone chart on the main problem - the cause

The banking service industry is now in the world and in particular in Vietnam has developed strongly in recent years OCB is also growing strongly among many domestic and foreign banks However, the unfulfilled sign of OCB in business profit

of enterprise customers in 2018 is really worrying Therefore, determined to conduct in-depth research through interviews with customers; management and internal staff of OCB to clearly see the current problem that OCB is facing Based on the general report of the interview, the company is generally facing the current major problem, the remaining factor is the quality of the loan service has not met customer satisfaction, especially long processing time, cumbersome and overlapping procedures and

regulations Therefore, through interviews to determine the main issue affecting the quality of lending services for enterprise customers

Mr Cao Xuan Phong - Director of enterprise customer relationship of OCB district 4 branch thought that:

Staff still has many errors in detailed information when preparing documents such as regulations on application, forms and shortcomings of records The above content makes the processing time of a file lengthened, affecting other records and reducing work efficiency

Ms Hoang Thi Thuy Linh - Head of credit transaction processing division - Credit management division - OCB head office concluded that:

On average, records moved to the center of credit services right at the first time, only reached 28% of the total records Records of errors returned usually 2, 3 times due to errors such as wrong forms, interest rates, lack of prescribed records,

According to the above interview contents, consider that the processing of records according to the procedures and regulations of credit officers is still uncertain, not sufficient and adequate when providing and handling records, bewildered in the application implementation rules, impact on job processing performance, leading to pulling long time processing a set of pools This profile affects many other records, strongly affecting work performance that does not meet the needs of customers, as well as reducing customer satisfaction From this issue can lead to the departure of customers by factors of competitive advantage from rivals, losing existing customers and potential new customers of OCB

Ms Pham Thi My Nuong - Director of Thien Loc Phat Technology Trading Co., Ltd said that:

the average time for processing documents of OCB is quite long as the company records payment for partners, assign credit officers in the morning or the previous day to process disbursements but until the end of the afternoon the account informs them of money, sometimes the company has to re-sign the 2.3-time record for that transaction because of the mistake made

by the credit officer.

In summary, from the analyzed signals, it shows the dissatisfaction of customers about the quality of loan services at OCB Through quantitative and qualitative research activities such as customer surveys, in-depth interviews with enterprise customers as well as OCB internal staff, summing up that the problem situation is facing is uncertainty about credit officers' processes and regulations, this represents

errors in the records, prolonging the process of affecting the attitude of the customer to the trading behavior resulting in unexpected results in business operations

4 CAUSE ANALYSIS

4.1 Potential causes

4.1.1 Lack of support from leaders and organizations

According to McCall and Lombardo (26) presented the negative personal attributes of leaders, studies have revealed a number of negative personal characteristics that lead to inefficiency of leaders, some individual acts of leaders lead

to his inefficiencies and derailment in general, lack of appropriate management skills,

no team building, cannot think strategically and spend more time on issues other than their job duties

Mr Nguyen Van Loc - Credit staff of enterprise customer department of OCB Ben thanh branch said that:

There is no connection with each other in the way of working, the head of the bureaus often scans the files and approves, so sometimes they do not fully understand, there is little opportunity to exchange problems due to the busy management

Activities to promote employees in the organization have not been promoted, lack of activities to associate employees such as: there are not many exchange sessions, sharing of experiences, knowledge and problems encountered among employees leader Employees are still shy, not actively exchanging knowledge with their superiors, besides, leaders at all levels pay much attention to business activities, sales targets, not paying attention to the needs and desires of employees On the other hand, OCB has not really promoted activities to connect regional staff together through activities to exchange information and culture

Mr Nguyen Hoang Long - Credit staff of enterprise customer department of OCB district 4 branch shared that:

The superiors mainly focus on the results of business goals, there are not many activities of exchanging knowledge, difficulties that employees are having such as sharing / training sessions

on weekends and end of the month

Organizations which are able to support its employees will be able to engineer their efforts to meet organizational goals and remain committed to realizing

organizational objectives (4-7, 17-19) This then goes to say that if organizations care about the wellbeing of its employees then employees will reciprocate by engaging in activities that improve their ability and capacity to help the organization and aspiring

to achieve organizational goals Lack of organizational support can be a symptom of failure to make changes in the organization When an employee thinks that the organization will support him or her in doing some kind of job (such as improving his

or her qualification), he or she will be more willing to do an assigned job 14,20,21)

(11-Mr Nguyen Minh Tien - Director of credit approval - Credit management division -

OCB head office said that

Leadership is mainly focused on results of business targets, so it does not take much time to help all staff handle the business

According to the above information, we can see that the support activities of OCB have not really met the needs of employees, propaganda activities, announcements of knowledge updates, as well as job skills that have not really been promoted Since then, it is partly a potential cause affecting work performance as well

as receiving knowledge of employees

4.1.2 Processes and regulations are overlapping and inconsistent

In recent years, OCB leaders have focused on implementing many activities to promote technology and banking image communication to promote business Meanwhile, the activities of the departments drafting and promulgating regulations still use the previously issued regulations as a basis for implementing new regulations, management levels have not focused on management and issuance of processes and regulations Moreover, the experts issued regulations that only control the information issued by their department based on the rules of rules to make it easier to control, so the implementer always struggles with overlapping regulations Based on the interviews, the main reason affecting the current problem mentioned in the previous section shows that the process content and regulations are unclear and inconsistent in the content

Mr Tran Van Thanh - Credit staff of enterprise customer department of OCB Phu nhuan branch shared that:

As collection activities insurance fees, process of granting credit does not require insurance invoices, for small and medium enterprise customers department, the insurance regulations must have invoices, while large enterprises customer department are not required Show that the regulations of the bank overlap, some contents in the regulatory documents are vague

According to Nguyen Khanh Chinh (25): Regulations are rules that define what

to do, must not do or guide the implementation of legal provisions; charter of enterprises, regulations of enterprises Regulation contains the content of specific instructions on professional and operational activities for the operation of the enterprise

The process is a norm that refers to the sequence of work steps, resources used, the responsibilities of the departments; the responsibility of individuals in coordinating

to manage and perform an activity or a certain activity (22, 23, 25)

OCB's regulations are constantly updated and improved to meet the needs of the market, but besides, there are still many problems that exist in policies promulgating regulations, such as regulatory documents There is a unified link about the content of departments, overlapping in the way of implementation Therefore, credit officers who handle records encounter obstacles in the content of the regulations, which are confusing in the way of understanding or unclear

Mr Cao Xuan Phong - Director of enterprise customer relationship of OCB district 4 branch said that:

Firstly, new regulations are issued and take effect during the day, leading to insufficient time to update information and adjust records Secondly, regulations have many problems that are unclear, such as regulating customers to prove their own capital to pay for goods

The process of issuing policies is not really effective so that the implementer can know the information and timely, such as the time when the documents provide to the person who holds the information close to or coincides with the effective date of the document,

Mr Nguyen Minh Tien - Director of credit approval - Credit management division - OCB head office shared that:

Process and regulations between policy departments that have issued documents that do not inconsistent with each other cause overlap in regulations or the use of misleading or unclear words that lead to the issuance of each people who understand each meaning

According to the analysis and feedback from the interview content, consider that the cause of major impacts on credit officers on weaknesses in knowledge regulated in dossier processing is policy regulations issued as well as regulations The implementation process does not have a consensus to contribute opinions between the departments to unify the viewpoint of implementing and clarifying the content, besides, the lack of flexibility in the process of issuing documents to implementers

4.2 Cause validation

Figure 14: Cause – and – effect tree

Based on causal plants, in-depth interviews from 8 interviewees were divided into 4 main groups, enterprise customers, head office management, unit management units and credit staff, shows that the main problem facing credit officers is affected by the causes: lack of support from management and organization levels, inconsistencies

in content regulations between departments Discovering what factors are the most important causes affecting the problem that OCB is facing will help relevant departments to implement appropriate solutions to improve their situation

First of all, the direction of management and organization helps employees identify the issues that will be implemented, assisting employees to promote the spirit

to achieve the organization's goals Wayne et al (21) stated that employees have the resources they need to do a good job, it both shows signs of support and confidence not only from the leadership, but also from the organization in general Therefore, in the competitive environment among banks, the lack of support resources affects the performance of employees

Secondly, the regulations and processes are always changed to suit the market, comply with the law In order for the company's operations to be fast, it always requires regulations, processes to be compact, easy to implement, from which to carry out the work to follow the process quickly and easily, to promote the progress of the work , achieve more efficiency In the case of OCB, the process also overlaps with each other, causing difficulties for officials in the implementation, such as: collateral is land book, customers borrow and update house information, resulting in a change in the legal property, therefore, according to the provisions of the property, the mortgage file must be adjusted in accordance with the new information before being warehoused, but for the process of borrowing assets, the warehouse must be warehoused right after the land book update completed Therefore, the process and regulations are not clear, lack of uniformity is the factor causing many mistakes causing customer dissatisfaction, impacting business efficiency for the business division of OCB, and a precise solution is needed based on this main cause

5 ALTERNATIVE SOLUTIONS

According to the analysis and feedback from the contents in the cause, we find that the main cause of the frequent errors of credit officers in the work is the policy procedures as well as the implementation regulations without uniformity of content among departments issued Besides, the lack of flexibility in the process of issuing policies is not really effective so that the implementers can know the information in a timely manner, specifically many newly promulgated and effective regulations immediately

The departments issuing regulations also have their own solutions for policies and procedures that are not effective, but they seem to be countermeasures and cannot help solve the problem thoroughly Their countermeasures are listed below:

Firstly, the experts of the departments issued procedures, regulations to respond

to mail confirming the advisory information about the unclear or overlapping regulations and processes of the business departments They say that this solution can help clarify the content of the points of the regulation and the unit will be more content-aware Although this action addresses the above points of existence, it creates

a heavier burden for other departments to act as a center for handling credit transactions, appraisals, and also for business departments They have to handle a large number of centralized records of the business departments, and update the information

to confirm the problems of the regulations and gather and store for implementation Only after a period of implementation in this way, with a large volume of confirmed information, most of them have ignored or stopped reading information and wait for problems to confirm with their experts about the problem They were tired of the huge amount of daily confirmation information from many departments' experts

Secondly, the departments have conducted meetings to agree on how to deal with problems encountered monthly according to reports of business units This before can reduce a large amount of aggregate information about the feedback of the specified content, but besides that, this solution is only applied temporarily and not thoroughly Thirdly, OCB's General Director decided to support overtime allowance for credit support units to help them better cooperate with business units in content consultancy and to exploit value from customers However, the money does not make the support staff members have more time to help the business unit

Ms Hoang Thi Thuy Linh - Head of credit transaction processing division - Credit management division - OCB head office said that:

My department always try to support the business units in advising about the problems when dealing with But I always get stuck in many phone calls about explaining the problems that the records are processing under the business unit that I have, I can't arrange enough time to consult all units

According to above point of view, management levels of the relevant departments issued the process, regulations need to provide different specific solutions

to be able to solve thoroughly based on the authenticated cause: the main Process books and regulations are not clear In order to overcome the overlap and conflict between the provisions of the Policy and procedures, it is necessary to unify the

management of regulatory policies, so that the management is appropriate with the current reality Consistency: Uniformity is set for both the process system as well as for each regulatory document The process system is composed of different elements,

so in order to ensure the consistency of the process system, it must not have contradictions and cross-contradictions between the constituent elements Any conflicts, overlaps that occur in the regulatory system must be detected and removed from the system

In order to improve the efficiency of ensuring consistency among documents in the current process and regulation system, it is necessary to consider the following solutions:

5.1 The first alternative solution: simplify the system of regulatory documents

Using the specified data source management software, from the original rules will link to the relevant regulations The bank credit team has difficulty in receiving a large amount of daily updated information about banking activities from staff levels to management, because the information data is adjusted and changed internally Using individual documents, creating a large number of changes, difficult to grasp and control all relevant documents

Mr Cao Xuan Phong - Director of Customer Relations in District 4 branch shared that:

We really need a process system with neat, concise rules combined with an automated search system that links relevant regulations to ensure that the operator understands, makes it easy to deliver to work effectively and meet customer needs quickly and efficiently.

The above facts make the system of legal documents very complicated, monitoring, applying and determining the validity of regulatory documents encounter many difficulties for employees, credit management levels and performance departments The regulation of many subjects with the authority to promulgate regulatory documents also makes the system more easily overlapped, contradictory, lack of assignment and clear division of authority Therefore, in order to be able to address the compactness in the regulatory system need:

Limit the situation of issuing "framework law": According to Dinh Dung Sy (24),

it is defined that "framework law" is the status of the regulatory system with the

is, laws often have many provisions that stop at the most common or general rules, have not reached a specific, clear and complete adjustment to the extent necessary Therefore, it cannot be immediately applied to practice There should be legal documents with lower legal value than detailed regulations and guidelines for law enforcement The contents of the laws are incomplete to provide a basis for detailed regulations and guidelines for implementation Therefore, many cases of detailed regulations do not stop at the concretization of existing laws but also new regulations Therefore, in order to avoid the issue of documents issued by lower-level departments

or contradicting documents issued by higher-level departments, when issuing documents stipulating higher-level sections, they should try to give specific provisions

to be enforceable immediately, without detailed documents or guidelines for implementation

Applying techniques to a multi-text edit text: Completing the process of developing and issuing documents in the direction of improving efficiency to ensure the consistency of the process and regulations system Using a text to correct multiple documents is a progressive regulation Accordingly, it is possible to modify many documents in one document instead of having to modify each text in turn Therefore, with the technical application of a text-editing document that allows a part to modify a regulation, at the same time correct the relevant provisions in other documents issued

by themselves In order to ensure the consistency between the new regulations and the process system, avoid conflicts, overlaps and overlapping with the old rules in the process system Only in cases where other documents cannot be repaired immediately for objective reasons, complicated modifications must clearly identify the list of documents, articles, clauses and points of the prescribed documents which are contrary

to the provisions of the new regulations and have the responsibility to amend and supplement them in advance When new regulatory documents take effect to ensure the unified regulations of the process system

The application of a text to modify many documents has many advantages, but if

it is too abuse, there is no preparation for careful discussion before the adoption, resulting in limited quality of documents Creating new conflicts and overlaps between the rules in the process system Therefore, to apply effectively, it is necessary to set

clear and specific criteria An original document can be modified by many different documents so if the review is not carefully leading to the abolition of the old rules without concurrent modification with new rules, creating conflicts, overlap between new and old rules Therefore, the application of a method of writing a revised document only maximizes the effect to ensure the consistency of the process system in the context that we proceed to import the process system technology Then all the regulations after being amended and enforced will be updated immediately into the application software and therefore in the following revisions only need to be reviewed

on the application suite

Mr Tran Van Thanh - Credit staff of Enterprise Customer Department of OCB Phu nhuan Branch commented that:

A text that fixes many documents, this solution helps to unify the content of documents together,

as well as synthesize many documents into one, reduce a large number of individual revision documents, as well as time to search and understand regulations to implement, reduce large amount of time to process records, but this solution takes a long time to complete deployment

Advantages: Easily search and capture the specified content and related documents, regulations are simplified, helping employees and managers capture accurate, clear and consistent information among departments

Disadvantages: Concentrate a large amount of professional resources to implement the regulated source control, a large amount of work is put into one clue, high resources and software, time to review, synthesize and adjust long term, if preparation

is not easy, it leads to limited quality of documents issued, creating new conflicts and overlaps between the regulations in the process system

5.2 The second alternative solution: Contribute comments from relevant departments for regulatory documents issued in the system

Activities to establish a control board for policies and procedures for promulgating regulations include participants who are representatives of departments related to credit policies that contribute to unified content Before issuing documents

to regulate the entire system, the contents of the documents are contributed, evaluated

and clarified through the relevant departments, aiming at the content clearly and consistently

Mr Nguyen Minh Tien - Director of credit approval - Credit management division - OCB head office shared that:

Documents issued must be approved by the relevant processing departments, those sections must have comments, what content is unclear, vague, or overlap with other regulations then drafting department will synthesize and adjust accordingly Therefore, the solution is evaluated feasibly to apply to OCB's current system as well as available resources

Improving the quality of regulatory documents at the stage of construction and promulgation of documents will help to avoid the occurrence of documents that still entangle, regulations are not suitable with the text of departments about conflicts, overlap, specifically: Firstly, focus on drafting process projects, regulations and through a focal point is the legal department (hereinafter referred to as specialized control department) This is a legal department, using techniques to control the project The renewal of such processes and regulations will enhance the specialization in each stage and each stage in the process of drafting processes and regulations Secondly, Enhance the quality of appraisal and verification of draft legal documents; In appraisal,

it is necessary to pay special attention to the validity of the prescribed documents so as

to be consistent with the documents of superiors and other department and not in conflict with the documents; Subjects who issue documents need to resolutely not consider, approve or sign documents when the project dossiers and draft documents do not yet have evaluation and verification reports

Mr Nguyen Van Loc - Credit staff of customer department of OCB Ben thanh Branch share that:

Draft regulations are provided by relevant departments to contribute comments, help to unify understanding and implementation of departments, promulgated activities are appropriately controlled, the effective time is reasonably issued and helps the implementers have time to learn and implement the regulations correctly

Improving the effectiveness of regulatory documents inspection: The system of regulatory documents of the bank with a large number of subordinate documents, economic orientation, these documents are issued by many different subjects in many forms Therefore, ensuring the consistency between the provisions contained in

documents issued by different stakeholders, it is necessary to regularly maintain the regulatory examination Check the regulatory documents including the following activities: Self-inspection of regulatory documents of blocks / departments / sections / departments issued; inspection activities of the superior department for the issuance of documents of subordinate sections; The examination of legal documents for the purpose of detecting documents with insecure contents unified with the prescribed system to promptly handle and remove from the system

Constructing judicial institutions for legal documents showing signs of not ensuring consistency with the system Operation and supervision to detect regulatory documents do not ensure consistency, conflict, overlap does not bring much effect, even when detecting cases of documents with wrong signs then the processing is rarely done That leads to those wrong rules still in effect Therefore, it is necessary to have a set of judges to consider and issue judgments on documents with signs that do not ensure consistency with the prescribed system This is necessary to thoroughly eliminate the overlapping conflict provisions that exist in the regulatory system

Advantages: The content of the regulation evaluated by the relevant departments -> has a multi-dimensional advice on the current regulations The content of regulations when transferring to the departments, all the departmental officers control the content, therefor, content is strictly controlled and evaluated by many people; The relevant parts of the contribution appropriate comments on issues that parts that perform, improving the effectiveness of inspection and supervision of regulatory documents, ensuring judicial institutions with respect to documents that have signs that

do not guarantee consistency with the prescribed system

Disadvantages: Extruding responsibility if there is no clear assignment of responsibilities for each implementing unit, increase the workload of departments, current work and the amount of text that must be frequently contributed to comments may be imbalanced

5.3 The third alternative solution: Hire an independent consulting firm to issue regulations

Consultation and assessment of regulations and laws are the foundation for the sustainable and effective development of the financial market The quality of the independent evaluation factor is a vital factor for managers, shareholders, policy makers to expand and develop processes and regulations that are unified, coherent and clear in how to understand and perform

Data of OCB must be separated from the data of credit institutions and other enterprises using the same technical foundation and evaluation structure of the consulting company The consulting company must provide inspection reports to comply with the confidentiality of information performed by the state audit organization annually on the appropriateness in the process specified by OCB during the contract implementation period; Provide regulatory control tools, monitoring procedures; It is also responsible for protecting data, preventing unauthorized data access on service distribution channels from consulting companies to OCB; Supporting and cooperating Investigation in case of requests from competent Vietnamese state agencies according to the provisions of law; Timely update guidelines, new circulars of the State Bank and laws, minimize legal risks

Mr Nguyen Minh Tien - Director of credit approval - Credit management division - OCB head office said that:

Documents are reviewed in general in accordance with the general market situation and the state bank circular But this solution costs high, risks in information security OCB, besides, the consulting organization if not understand the system of OCB, the consultant will not be suitable

to apply

Advantages: Content is inspected and consulted by an independent company, providing expert advice on regulations appropriate to the industry and current needs of customers, Check the validity of the content that needs to be processed to detect false information due to errors in the process of processing or acts of modifying intentional information, evaluating the update level measure, meeting the current regulations with the industry of competitors

- Disadvantages: High cost of implementation (Amount: 250.000 – 10.000.000 VND, depending on the nature of the text and the number of pages), risk in information

security, consulting company is not suitable for consultancy if it does not understand regulation system in OCB activities

5.4 Solution justification

In summary, activities of adjusting and agreeing on the regulated content are implemented Solutions for implementing consultancy require that the service company has been removed due to the high cost and risk and complex aspects Therefore, the professional knowledge of credit officers has not met the requirements due to inconsistent procedures and clear content can be resolved by using one of the two remaining solutions: “implementation simplify the system of regulatory documents, study the reference and technical application of a textual amendment document” or “Commenting activities of related departments to improve the effectiveness of guarantee consistency of regulations in the system” Although the first solution has many advantages such as many regulations expressed in a specific document, the amount of regulations promulgated is reduced, easy to grasp regulations, saving reading time, but the second solution is actually a more effective solution and should be implemented as soon as possible based on the following reasons:

Firstly, in terms of cost, take advantage of existing resources with the experience

of departments/ divisions dealing with situations as well as apply daily rules, understandable and viewable views specific, easy to implement for the implementer and in accordance with regulations, while solution 1, seek additional resources to carry out the task of collecting a departmental clue, increasing the cost of labor resources for the project Therefore, in the long run, use the stable resources of the relevant departments/ divisions of solution 2, the optimal source of cost savings for OCB budget is actually a more economical solution than solution 1 On the other hand, with the existing experience of the relevant department / department resources to implement the project, it can be easily implemented immediately without new training For that reason, using solution 1 will help save more on recruiting and training activities than solution 2, while preliminary calculations show the opposite

Secondly, the implementation time is really different, specifically, for solution 1, the policy department has to spend a lot of time to synthesize and evaluate many

current regulations of OCB being applied, then appraising each regulation is not consistent/ unclear about the content to make adjustments, synthesizing the entire document for large amounts of regulations may take several years to complete Meanwhile, in solution 2, the adjustment and promulgation of new regulations is carried out with a much shorter time, with an average of 15-30 days for drafting of the department, then send samples to relevant departments/ agencies for comments on the time of determination and through legal advice, the average time of 10-15 days to synthesize and control Besides, the promulgated activities are appropriately controlled

to help implementers have time to learn and be checked, increase the ability to remember and apply easily for credit officers to implement When the activity is completed partially and increasingly accumulated, the synchronization and implementation of regulations are easier and more carefully controlled, ensuring more effective

6 ORGANIZATION OF ACTIONS

With the current scale of distribution throughout OCB's country, it is feasible to propose the application of the sample area for initial deployment in Ho Chi Minh City, meeting the extent of access to the scope as well as the geographical proximity to departments After comparing many solutions with many aspects from feasibility, cost

to feasibility, decision makers should prioritize the use of the solution "Contribution activities of related departments to improve effectively ensure consistency of regulations in the system” An initial action that the Project Committee must take immediately is to evaluate the ability, cost and duration of the implementation plan for detailed actions including specific time and costs The second phase consists of two steps: Activities to control the process of issuing new documents and supervising the issuance of processes and regulations The final stage is the following inspection activity monitoring issued

Phases Activities Objectives Department involved

Year 2019 Month

implementation Determine the suitability of the project with the needs of

the credit department towards

General Director, Head of Credit Policy / Division, Appraisal, Legislation, Risk Management, Credit Transaction

The project committee evaluates, plans and presents capabilities for the project Determine the total cost and

time frame of the project

Project manager, HR department and policy

Evaluate the cost and schedule of

Establishing a team of departments under the project

Identify objects related to each stage of implementation

Product Development Department;

Insurance; Business Management, Legal, Risk Management Division; Credit

Department in charge

Submit the prescribed template information and connect the meeting with the representatives

of the relevant departments

The department in charge,

representatives of the relevant departments and contents stipulate