Improving the quality of card services at bank for investment and development of vietnam sogiaodich 1 branch

These are the annual fees that cardholders must pay under the card use contract; cash withdrawal fee 4% for issuing bank and at least 50,000 VND for one transaction; fees for payment tra

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

-

CAO LAN ANH

IMPROVING THE QUALITY OF CARD SERVICES AT BANK

FOR INVESTMENT AND DEVELOPMENT OF

VIETNAM – SOGIAODICH 1 BRANCH

NÂNG CAO CHẤT LƢỢNG DỊCH VỤ THẺ TẠI NH TMCP ĐẦU TƢ

VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH 1

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

Hà Nội - 2017

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

-

CAO LAN ANH

IMPROVING THE QUALITY OF CARD SERVICES AT BANK

FOR INVESTMENT AND DEVELOPMENT OF

VIETNAM – SOGIAODICH 1 BRANCH

NÂNG CAO CHẤT LƯỢNG DỊCH VỤ THẺ TẠI NH TMCP ĐẦU TƯ

VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH 1

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: TS PHẠM THỊ THANH HÒA

Hà Nội - 2017

LỜI CẢM ƠN

Tôi xin bày tỏ lòng biết ơn sâu sắc đến các thầy cô giáo Khoa Quản trị và Kinh doanh, Trường Đ ại học Quốc Gia Hà Nội, đặc biệt là các thầy cô đã truyền đ ạt cho tôi nhiều kiến thức và đ ã tạo điều kiện giúp tôi thực hiện bản luận văn này

Tôi xin bày tỏ lòng biết ơn chân thành đến TS Phạm Thị Thanh Hòa đã dành nhiều thời gian tâm huyết, tận tình hướng dẫn, chỉ bảo cho tôi trong suốt quá trình thực hiện đề tài

Tôi xin chân thành cảm ơn Ban lãnh đ ạo Ngân hàng Thương Mại Cổ Phần Đầu

Tư và Phát Triển Việt Nam chi nhánh Sở Giao Dịch 1 và các anh chị em ở các phòng nghiệp vụ của chi nhánh và phòng giao dịch đã tạo điều kiện thuận lợi, giúp đỡ tôi trong việc thu thập số liệu và những thông tin cần thiết cho việc nghiên cứu luận văn này Tôi xin chân thành cảm ơn gia đình, bạn bè và đồng nghiệp đã đ ộng viên khích lệ và giúp đỡ tôi trong quá trình học tập và nghiên cứu

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 TS Pham Thi Thanh Hoa 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 the Board of Directors of Joint Stock Commercial Bank for Investment and Development of Vietnam – Sogiaodich 1 Branch and for the siblings in the professional sections of branches and transaction offices who created favorable conditions Help 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

Hanoi, date 25 month 5 year 2017 Student

CAO LAN ANH

TABLE OF CONTENTS

ABBREVIATION i

LIST OF FIGURES ii

LIST OF TABLES iii

INTRODUCTION 1

CHAPTER 1: OVERVIEW OF CARD SERVICES AND QUALITY OF CARD SERVICES OF COMMERCIAL BANKS 5

1.1 Overview of card services at commercial banks 5

1.1.1 Definition and characteristics of card services of commercial banks 5

1.1.2 The role and benefits of card services of commercial banks 6

1.1.3 Main activities of card services at commercial banks 7

1.2 Quality of card services at commercial banks 10

1.2.1 Definition of card service quality 10

1.2.2 The necessity of improving card operations of commercial banks 10

1.2.3 Evaluation models of card service quality at commercial banks 11

1.3 Experience in enhancing the quality of card services at some banks and lessons drawn for BIDV - Sogiaodich 1 Branch 16

1.3.1 Experience of foreign banks 16

1.3.2 Experience of domestic commercial banks 18

1.3.3 Experience lessons drawn for BIDV – Sogiaodich 1 Branch 19

CHAPTER 2: REALITY OF CARD SERVICE QUALITY AT BIDV – 21

SOGIAODICH 1 BRANCH 21

2.1 Introduction of BIDV – Sogiaodich 1 Branch 21

2.1.1 Foundation and development history 21

2.1.2 Operating model of BIDV – Sogiaodich 1 Branch 22

2.1.3 Business results 22

2.2 Reality of the card service quality at BIDV – Sogiaodich 1 Branch in recent years 24

2.2.1 Results of card business 24

2.2.2 Reality of card service quality at the branch in recent years 31

2.2.3 Reality of card service quality at BIDV – Sogiaodich 1 Branch 36

2.3 Evaluation of the quality of card services at BIDV – Sogiaodich 1 Branch 50

2.3.1 Achievements 50

2.3.2 Limitations and causes 51

CHAPTER 3: SOLUTIONS TO IMPROVE THE QUALITY OF CARD SERVICES AT BIDV – SOGIAODICH 1 BRANCH 54

3.1 Developing orientations of card operations at the bank 54

3.2 Solutions to improve the quality of card services at BIDV Bank – Sogiaodich 1 Branch 55

3.2.1 Investing solutions to improve facilities and demand meeting ability 55

3.2.2 Solutions to improve service deployment outcome 57

3.2.3 Solutions to complete the service providing process 59

3.2.4 Solutions to complete the management operation 60

3.2.5 Solutions to strengthen the brand image of the branch 62

3.2.6 Solutions to enhance responsibility with society and community 63

3.3 Reccomendations 63

3.3.1 Reccomendations to the State Bank 63

3.3.2 Recommendations to BIDV Head Office 64

3.4.3 Recommendations to the association of card issuing and payment banks 66

CONCLUSIONS, LIMITATIONS, AND CONTRIBUTIONS OF THE STUDY 67

REFERENCES 69 APPENDIX

i

ABBREVIATION

ACB Asia Commercial Bank

ATM Automatic Teller Machine

BIDV Joint Stock Commercial Bank for Investment and Development of

Vietnam CVV Card Verification Value

EDC Electronic Data Capture

PIN Personal Identification Number

ii

LIST OF FIGURES

Figure 1.1: Research model of Parasuraman et al (1988) 11

Figure 1.2: Research model of Thai Van Vinh và Devinder Grewal (2007) 12

Figure 1.3: Research model of Huynh Thuy Phuong (2010) 13

Figure 1.4: Research model of Nguyen Thi Kieu Linh (2009) 14

Figure 1.5: Research model of Lê Thị Thu Hương (2014) 15

Figure 1.6: Proposed research model 16

iii

LIST OF TABLES

Table 2.1: Business results of the branch in the stage of 2013 -2015 22

Table 2.2: Results of card service business 24

Table 2.3: Number of ATM cards at the branch 26

Table 2.4: Revenue from card services 28

Table 2.5: Number of international payment cards at the branch 29

Table 2.6: Revenue from international payment card services 30

Table 2.7: Some training activities of card staff at the branch 32

Table 2.8: Some advetising and marketing activities for card products 33

Table 2.9: Distribution system and management technology of card service business 34

Table 2.10: Common risks in card service business at the branch 35

Table 2.11 Results of the scale reliability testing 37

Table 2.12 Results of independent factor analysis 39

Table 2.13 Rotated component matrix of independent variables 40

Table 2.14 Results of dependent factor analysis 41

Table 2.15 Rotated component matrix of dependent variables 42

Table 2.16 Multiple regression analysis 42

Table 2.17 Regression coefficients 43

Table 2.18 Evaluation of resources 44

Table 2.19 Evaluation of outcome 45

Table 2.20 Evaluation of process 46

Table 2.21 Evaluation of management 47

Table 2.22 Evaluation of image 48

Table 2.23 Evaluation of social responsibility 49

Table 2.24 Evaluation of the quality of card services 50

1

INTRODUCTION

1 Rationale of the study

Nowadays, the increasing development of science and technology contributes considerably to the improvement of people’s life quality People are more and more accessible to safer and more sophisticated service products Banking service products are one of the breakthroughs on the basis of modern science and technology One of those service products is bank cards Customers using cards can conveniently carry out many transactions such as payment, transfer, cash withdrawal, internet payment, etc without having to go to the bank As a result, card products are becoming friendlier, closer, and being widely accepted by consumers As for the banks, card products also bring them a lot

of intangible benefits such as raising the banks’ position, promoting their brand image, and attracting customers to the banks These are also business activities bringing revenue to the banks These are the annual fees that cardholders must pay under the card use contract; cash withdrawal fee (4% for issuing bank and at least 50,000 VND for one transaction); fees for payment transaction of goods and services by credit card at card accepting units (2.5% of the value of each transaction, commercial discount (for agent banks that help conduct payment transaction for issuing banks); some other fees such as credit card penalty fee, checking fee (fee that cardholders pay for their checking requirements), fee for card re-issuance (due to theft or loss) and card exchange (as requested by cardholders), fee for posting stolen or lost cards to the list of forbidden circulation

With the advantages that card services bring, each bank has built its own strategies to dominate the market and develop its card service brand The competition in developing card services of commercial banks nowadays has made customers’ demands more and more satisfied and made the card service market become more active than ever Therefore, the improvement of card service quality is very important and necessary for commercial banks

In the past few years, BIDV – Sogiaodich 1 Branch has implemented a lot of measures

to improve the quality of card services However, the card services of BIDV still have several shortcomings For example, many customers apply for a card issuance but do not get the cards, causing the cost wastage for the bank The problem of overdue credit card debt is arising Besides, the habit of using cash has existed in Vietnamese people’s minds for a long time Therefore, the aim of Sogiaodich 1 Branch is to improve the quality of card services in order to expand the card product market and better control risks in card business For this reason, the author selected the topic "Improving the quality of card

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services at Bank for Investment and Development of Vietnam – Sogiaodich 1 Branch " as

my MA thesis

2 Overview of the study

The quality of card services is one of the factors affecting card service business, which brings a lot of revenue to current commercial banks Thus, there are lots of studies related

to the operation as well as the quality of card services Some related studies are presented

as follows

Le Thi Thu Ha (2015) conducted a study on the management of card business at Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Hai Duong branch The study focused on the contents related to card business management including management planning, implementation of management plans, and inspection and supervision of the management plan implementation Moreover, the study also focused on clarifying risks in card business and causes of the risks in card business at Vietcombank – Hai Duong branch Nevertheless, the study did not present the issues related to the quality

of card services, which is a prerequisite for achieving the goal of expanding and developing card services in a potential market like Hai Duong

The study of Dinh Nguyen Hoai Phuong (2011) aimed at exploring the solutions for card service development at Asia Commercial Bank (ACB) The research focused on analyzing the reality of card service development and measuring the satisfaction of employees and customers on the card product development at Asia Commercial Bank Despite the fact that the expansion and development of card services are always accompanied by potential risks, the author did not focus on presenting the risks of the bank

in card business to have a right developing orientation and a risk forecasting ability Therefore, the solutions that the author proposed were still general and quite unreasonable

in the card business environment with a lot of potential risks

Bui Thi Thanh Huong (2013) carried out a study on card product development at Vietnam Bank for Agriculture and Rural Development (Agribank) In her study, the author concentrated on analyzing the reality of card service developing solutions that were applied

by Agribank such as marketing solutions, technology solutions, affiliating solutions, card risk management solutions, human solutions, and cost solutions However, the analysis of the solution groups was only based on the collection and analysis of secondary data from the card business of Agribank in the author’s point of view The collection of customer opinions through surveys wasn’t conducted, which decreased the objectivity of the thesis

The reseach of Han Kuo Tan (2009) explored different aspects of service quality and customer expectations from credit card issuers in Malaysia The research showed that the card issuers wishing to improve their competitiveness in the market needed to offer multi-functional credit cards, contributing to enhancing customer satisfaction The research proposed some recommendations for card issuers to improve the quality of their credit card services However, the author failed to mention the risks in credit card business It is a fact that if banks are only interested in developing their credit cards without paying attention to the risk control and management in the card business, serious losses which reduce the banks’ business operations can be caused

To sum up, there have been many studies related to the business operations as well as the quality of card services However, there have been no studies dealing comprehensively with the quality of card services and the risks in card business in order to propose the solutions to improve the quality of card products at BIDV – Sogiaodich 1 Branch Therefore, the research topic of the author is not duplicated with previous research topics

3 Objectives of the study

3.1 Overall objective

- Studying the quality of card services at BIDV – Sogiaodich 1 Branch in order to propose the solutions to improve the quality of card services at this bank

3.2 Specific objectives

- Building a theoretical basis on card services and quality of card services

- Studying the development reality of card services and the quality of card services at BIDV – Sogiaodich 1 Branch, from which the author will assess the quality of card services at BIDV – Sogiaodich 1 Branch

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- Propose some solutions to improve the quality of card services at BIDV – Sogiaodich

1 Branch

4 Subject of the study

The study focuses on quality of card services at BIDV – Sogiaodich 1 Branch

5 Scope of the study

- In terms of space: The study was conducted in BIDV – Sogiaodich 1 Branch

In this thesis, the author combined comparative and synthetic analysis methods

+ Comparative method was used to compare the changes of indicators reflecting the results of card business, the development of card products over the years (number of customers, number of cards, and costs in card business)

+ Synthetic analysis method was used to analyze the development reality of card products and the risks in card business (pointing out the causes of changes and explaining the reasons for changes in the development of card products, and the risks in card business)

+ Investigation Method: The author uses the survey method to assess the satisfaction of customers using the card products through questionnaires Survey results were processed using SPSS software

7 Organization of the thesis

This thesis was divided into three chapters:

Chapter 1: Overview of card services and quality of card services at commercial banks Chapter 2: Reality of card service quality at BIDV – Sogiaodich 1 Branch

Chapter 3: Solutions to improve card quality at BIDV – Sogiaodich 1 Branch

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CHAPTER 1: OVERVIEW OF CARD SERVICES AND QUALITY OF CARD

SERVICES OF COMMERCIAL BANKS

1.1 Overview of card services at commercial banks

1.1.1 Definition and characteristics of card services of commercial banks

* Definition

A bank card is a payment tool issued by a card issuing bank to a customer to conduct payment for goods or services or withdraw cash within the scope of his or her deposit balance or allowed credit limit Card services are used to perform services through automatic trading systems, also known as ATM service systems In other words, a bank card is a means issued by a card issuer to carry out card transactions in accordance with the terms and conditions agreed by the parties (Governor of the State Bank of Vietnam, 2007) Bank card services are non-cash payment services originated from the method of purchase and sale of retail goods on credit and have developed associated with the application of information technology in the field of finance and banking (Mwatsika, 2014)

* Characteristics of card services

A card is a payment tool with different characteristics from other payment tools Nowadays, when information technology develops at a high level, card payment service is

a popular payment method replacing other traditional payment methods This is because card services have a lot of outstanding features compared to other means of payment

- Flexibility: With a variety of cards suitable for all people from high-income customers (gold cards) to low-income customers (standard cards), cards can be used to withdraw cash

or pay for goods and services, etc A card is regarded as a modern, safe, and fast

“electronic wallet” helping cardholders control their spending activities

- Convenience: A card is a means of non-cash payment bringing customers many benefits that no other means of payment can compare Cardholders can use their card to pay for goods and services in anywhere at anytime without having to carry cash or travel checks For credit cards, customers can also be provided with a credit limit by the bank Customers can make advance payments and repay money later without interest within a period of time In addition, cardholders also enjoy many preferential treatments from the bank such as free information on banking services, accounts, exchange rates, 24/24 services, etc Cardholders can also get preferential discounts when making payment at card accepting units or enjoy competitive interests on the account balance

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- Security and rapidity: Cards are made based on very modern and sophisticated technology and are difficult to counterfeit, so the security of the card is very high Especially when smart cards are launched to the market, their security is increased; therefore, they are widely used in the market When cards are lost or PINs are revealed, cardholders can notify the bank to lock the card account in time to avoid the thieves' ability

to withdraw the money

Cards are often small and light, so it is easier for cardholders to carry when they have to make a large amount of payment or moving far When shopping for goods or services, customers only need to show their cards and sign payment slips to complete the payment This means customers have saved the costs of transporting and counting

1.1.2 The role and benefits of card services of commercial banks

When the economy is developed, the improvement in people's living standards and incomes leads to the development of many types of services, in which financial services, especially card services, are increasingly developing These services bring many benefits

to customers who are using cards The banking system links the activities in the economy through card services; therefore card services play a vital role in economic transactions + For card users:

Customers using cards are mainly individuals since these services are introduced to primarily serve individuals in the transaction process As people's incomes are increasing, the transaction demands are also going up with the development trend The storage of cash

in transactions is very large, so the demands for transactions via card services are increasing to reduce the risks in cash transactions Moreover, customers can access faster

to their accounts, which are more convenient, secure, and efficient with better time management and less time of traveling Along with that trend, banks are constantly improving the quality as well as mordernizing their services to serve customers better + Card services help develop banking industry

Nowadays, there are a lot of banks in the financial market The evaluation of the bank reputation through the quality of card services is very important because customers are people who decide which banks they want to use based on the quality of their card services and the security that these services offer Customers often perceive that if the service quality of a bank is the best, that bank is reliable Thus, banks need to focus on improving the service quality including the quality of card services

Regarding enterprises outside the banking industry, the impact from the development of card services is very big Apart from companies using ATM cards to pay salaries to their

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staff, many other service enterprises such as commercial centers or mobile operators also have services associated with the development of card services People using postal and telecommunications services can conveniently make their cost payment by card In addition, people can also easily pay by card when they go shopping at supermarkets + Card services contribute to the development of the economy

Card services can not affect the entire economy However, the quality improvement of these services will make the economy more civilized

- Reducing social costs: The use of card transactions helps reduce a big amount of cash

in circulation, thereby reducing the costs of printing, issuing, transporting cash, destroying old money, as well as reducing counterfeit money

- Speeding up payment activities:

Card services improve people’s belief in the operation of the banking system thanks to the security, high accuracy, and time saving At the same time, the government can control the transactions of individuals, enterprises, and the whole economy as a basis for calculating the monetary supply as well as operating more effective monetary policies The application of modern technology in card issuance and payment creates conditions for the national economy to integrate and gradually catch up with the world economy

- Minimizing some of the illegal economic activities, contributing to the management of personal incomes, income taxes, and enhancing the decisive role of the govenment in the economy

1.1.3 Main activities of card services at commercial banks

* Issuing activities:

The issuing activities of banks include the management and implementation of the entire card issuing process, card use, and debt collection These three processes are all important and should not be disregarded Each process is closely related to the customer service and the risk management for the bank Financial institutions and banks issuing cards must develop regulations on the use of cards and debt collection: minimum payment amount, statement date, due date, fees and interests, maximum and minimum credit limits, preferential policies, and so on

Basically, card issuing activities are carried out as follows:

- Conducting marketing activities to bring products into the market

- Verifying card applicants

- Offering credit limits, especially for credit cards

- Designing and buying white cards

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- Embossing and encoding

- Providing personal identification numbers (PINs) to cardholders

- Managing customer information

- Managing customers’ card use

- Managing debt collection from customers

- Providing customer service

- Clearing payments with international card organizations

When carrying out issuing activities, apart from getting card issuance fees from cardholders, banks also get the exchange fees that card payment banks collected from card payment through international card organizations This is the basic profit of financial institutions and banks issuing cards On the basis of this source of revenue, financial institutions and banks issuing cards will offer customers other benefits and preferential treatments to increase the mumber of card users and increase card use revenue

* Payment activities:

The implementation of card payment activities of a bank is not only getting profits from the discount fees calculated on the value of payment transactions by card from card accepting units but also the desire to provide customers a complete service and a convenient basis for card use For international card organizations and their members, it is very important to encourage card payment activities through expanding the network of card acceptors

First, the payment activity of a certain type of card is expanded in a market meaning that cardholders can use their cards more easily and conveniently As people’s demands for tourism and entertainment are increasing, the development of card payment market abroad becomes more urgent Card issuers and issuing banks pay maximum attention to how cardholders make use of this non-cash payment method The large number of card acceptors available throughout potential markets and business lines means that bank cards are more widely accepted and bring benefits to cardholders, card accpetors, and issuing banks

Second, not just stopping at expanding the payment market by signing contracts with new card acceptors, a card payment bank is particularly interested in maintaining relationships with current card acceptors This is reflected in the customer service of the payment banks Without proper policies and good support services enabling card card acceptors to accept the customer's cards easily and being credited by the bank after subtracting discount fee rates, other banks will take advantage of this situation to offer more perfect services to these card acceptors As a result, customers in payment activities will decrease and the profit targets of the banks will deeply be affected

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In general, card payment activities are not just limited to the crediting to the card acceptors under commitment Instead, since the profits from card payment activities are not small compared to the average business profits, the severe competition makes payment banks always have appropriate marketing strategies and customer services At the same time, they have to provide card acceptors (who accept their customers’ cards) with free services to enhance their competitiveness

Card payment activities of banks are mainly conducted as follows:

- Building and managing the information system of customers and card acceptors

- Managing the operation of card acceptor network

- Conducting payment for card transactions to card acceptors

- Providing customer services

- Offering training on card payment methods to staff of card acceptors

- Supplying equipment and facilities for card payment

* Risk management activities:

The issuance and payment of bank cards face different types of risks such as illegal use

of cards by organizations or individuals, card acceptors not complying with instructed procedures, counterfeit transactions, information being revealed to the third party, or card acceptors not announcing business termination while still owing money to the bank All these behaviors cause risks and financial losses to the banks Therefore, one of the key areas of bank card business is the risk management

The risk management department at issuing banks is considered the backbone of card activities, which has the functions of:

- Preventing and investigating the use of counterfeit cards

- Managing the list of accounts related to lost cards

- Making plans to keep track of the security of card workpieces, printed cards, damaged ards, and withdrawn cards

- Updating information on the list of stolen or lost cards

- Cooperating with relevant authorities in investigating and dealing with contract breaches or counterfeit card use

- Tracking and managing the operations of card center including operations of the staff

- Organizing training sessions for card acceptors’ staff and cardholders on counterfeit preventive measures

The more the bank card business grows, the more the risk management sector is invested Experts in this field should be really knowledgeable about cards and modern

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technology Due to the ability to earn super profits, international criminal organizations are

by all means making use of modern technology to collect card data and customer accounts

to implement counterfeiting activities, which causes financial losses as well as bad reputation to the banks and cardholders

1.2 Quality of card services at commercial banks

1.2.1 Definition of card service quality

Before discussing the definition of card service quality, the author provides a brief ofverview of service quality

- Parasuraman et al (1985), the pioneers in service quality research in marketing, offer a five-gap model and components of service quality, which are abbriviated to SERVQUAL

* Quality of card services

The quality of card services is the ability to meet the card service with the expectation

of customers using cards In other words, it is all the additional benefit activities that the banks give customers who are using cards with the aim to establish, consolidate, and extend long-term partnerships with customers through the creation of customer satisfaction (Le Hoang Duy, 2009)

1.2.2 The necessity of improving card operations of commercial banks

Card services are becoming more and more important in the economy The improvement of this activity is really essential for banks The improvement in card payment activities brings benefits not only to banks and customers but also to the economy, contributing to the economic development Moreover, the development and improvement of card operations also aim at modernizing the banking sector, helping Vietnam integrate into the world’s economic development trend Regarding banks, through card services, banks can attract huge deposits from customers with low deposit rates

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Card services are considered a strategic self-service banking channel and an important tool for the activities of banks Card services provide 24 hours a day and 365 days a year banking operations and transactions and are located in strategic locations

1.2.3 Evaluation models of card service quality at commercial banks

1.2.3.1 Service quality model of Parasuraman et al

Parasuraman et al (1988) initiated and conducted a quantitative and qualitative research

to develop and test the scale of service quality components (called SERVQUAL scale) The SERVQUAL scale was adjusted and tested for a variety of services Finally, the SERVQUAL scale consisted of 22 variables which measured five components of service quality including reliability, responsiveness, assurance, tangibles, and empathy Namely, according to the SERVQUAL model, service quality was defined as follows:

Service quality = Perceptions – Expectations

The research model of Parasuraman et al (1988) was demonstrated as follows

Figure 1.1: Research model of Parasuraman et al (1988)

Parasuraman et al asserted that SERVQUAL was a complete scale for service quality, which had a high value and reliability and could be applied to any types of service However, each service sector had its own characteristics Many researchers had also tested this scale with a wide range of services as well as in different countries The results showed that the components of service quality were not consistent across service sectors and in different markets

Service quality

Reliability Assurance

Empathy

Tangibles Responsiveness

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Therefore, due to the specificity of each type of service, researchers should adjust the SERVQUAL scale so that it is suitable for each specific study

1.2.3.2 ROPMIS service quality model of Thai Van Vinh and Devinder Grewal

The authors developed a model of card service quality consisting of 6 components: (1) Resources (physical resources and financial capability of the bank), (2) Outcomes (what customers enjoy when using card services), (3) Process (process of serving and satisfying customers’ needs when they use card services), (4) Management (management capability

of the banks for card service business, (5) Image (image of the banks in customers’ eyes), (6) Social responsibility

After identifying the variables in the draft model, the authors conducted testing with quantitative method in which data were collected through direct interviews with 1,250 clients and indirect interviews 1,000 customers online Collected data were synthesized and coded using Exel, and statistically verified using SPSS 20.0 The scales were checked for reliability and Exploratory Factor Analysis (EFA) From the testing results, the authors concluded that the initial research hypotheses were completely suitable Therefore, the research model of the author was presented as follows:

Figure 1.2: Research model of Thai Van Vinh và Devinder Grewal (2007)

1.2.3.3 Card service quality model of Huynh Thuy Phuong

The author built a model to study the quality of Connect24 cards based on SERVQUAL scale of Parasuraman et al (1988) However, since each type of service has its own characteristics, the author conducted qualitative research to adjust and add some components suitable with card service quality at Vietnamese commercial banks Qualitative research was carried out via direct interviews with about 15 random clients

Six affecting components:

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using ATM cards at Vietcombank and consultation with card department managers The results showed that the quality of card services included the following components (1) reliability, (2) customer care skills, (3) security, (4) empathy, (5) tangibles, and (6) accessibility with 31 variables to measure these components That way, the author developed her research model as follows:

Figure 1.3: Research model of Huynh Thuy Phuong (2010)

1.2.3.4 Card service quality model of Nguyen Thi Kieu Linh

According to Parasuraman, there were three main factors affecting customers’ expectations including personal needs, words of mouth, and experience in using the service However, in the process of building her research model, Nguyen Thi Kieu Linh did not analyze the impact of these factors but focusing on collecting customers’ feedback

on expected services and their perceptions of the actual services The author aimed to find out what customers expected from card service quality when their demands arose

Together with the exploration of customer expectations was the measurement of their assessment on the actual services The measurement of service quality was based on the comparision of the difference between expectations and perceptions This was also the measure of distance in the theoretical model of Parasuraman

Accessibility

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In addition, in order to concretize customer expectations from card services, the author used five components including tangibles, reliability, responsiveness, assurance, and empathy The SERQUAL scale of Parasuraman consisted of 22 verified variables that were tested to be appropriate and comprehensive However, the author had some adjustments compared to the original model The author’s research model was presented as follows:

Figure 1.4: Research model of Nguyen Thi Kieu Linh (2009)

1.2.3.5 Card sevice quality model of Le Thi Thu Huong

The author developed her research model based on a review of relevant literature in the field of bank card services such as studies by Rahaman et al (2011), Hasan (2013), Mwatsika (2014), Kumbhar (2011), Ha Nam Khanh Giao (2011), and Le Thanh Dich (2009) According to Le Thanh Dung (2009), the quality of card services was formed on the basis of five components: employee skills, transaction security, reliability, tangibles, and accessibility Phung Tien Dat (2010) pointed out that there were five components affecting the quality of card services including reliability, responsiveness, empathy, and tangibles In addition, the study of Mwatsika (2014) on customer satisfaction with the quality of ATM services in Malawi pointed out that there were 5 components affecting customer satisfaction with ATM services including reliability, responsiveness, empathy, assurance, and tangibles Besides, Hasan (2013) also concluded that customers would be satisfied with the quality of ATM services offered by banks through such components as reliability, responsiveness, convenience, and ease of use

From the reviewed studies, Le Thi Thu Huong proposed a research model using SERVPERF model and adjusted the measurement variables to suit the context of the study Accordingly, the research model of Le Thi Thu Huong was as follows:

Perceptions

15

Figure 1.5: Research model of Lê Thị Thu Hương (2014)

1.2.3.6 Research model proposed by the author

After reviewing the research models to measure the service quality and card service quality in previous studies, the author decided to adapt the ROPMIS model by Thai Van Vinh and Devinder Grewal (2007) to study the quality of card services at BIDV – Sogiaodich 1 Branch for the following reasons:

Firstly, the model was developed from the synthesis of many theories in different studies (Dang Thanh Hung, 2012)

Secondly, the original ROPMIS model was implemented in the specific context of Vietnam whereas other models are mainly tested in other countries This meant that applying ROPMIS model was appropriate because it was very close to the research scope

of the topic (Tran Trieu Khai, 2010)

Thirdly, although this model had not widely been used, some studies using ROPMIS model to study card service quality showed positive results and demonstrated the applicability of this model (Dang Thanh Hung, 2012)

Fourthly, the ROPMIS model used six components whereas other models were mainly based on the SERQUAL model and the SERVPERF model which only consisted of five components

Thus, the proposed model for this study was stated as follows:

16

Figure 1.6: Proposed research model

The components in the model could be explained as follows:

- Resources: ability to meet the facilities and equipment for transactions related to card services of banks

- Outcome: ability to meet transaction time, level of performance of the bank's commitments, accuracy, as well as security of transactions

- Process: relates to attitude and behaviour of the banks’ staff when dealing with customers’ requirements in their card-using process

- Management: ability to manage card service business of the banks including the application of information technology in card services, knowledge and skills of managers, knowledge of the bank about card users, ways of dealing with customers’ complaints, etc

- Image: refers to the relationship between banks with other commercial banks and economic organizations to deal with transactions related to customers’ card services It was the perception of customers about the banks

- Social responsibility: refers to the reliability and brand of the banks, the banks’ responsibilities to special subjects, customers, employees, and the community

1.3 Experience in enhancing the quality of card services at some banks and lessons drawn for BIDV - Sogiaodich 1 Branch

1.3.1 Experience of foreign banks

Experience of Citibank – The USA

17

Citibank is one of the largest banks in the United States which provides a very abundant and diverse bank services for customers (individual and corporate customers) including card services With a diversified development plan, good services, and a large number of customers, Citibank is one of the most successful banks in the world’s financial and banking market It is the largest credit card issuer in the world The experience of CitiBank

in improving the quality of card services is:

- Citibank researches and develops a type of credit card linked to other industries such

as aviation, real estate (Mortgage Minister Credit Card - which allows customers to pay rent up to 15 years in advance), sports such as football (The Football Card – the credit card with special football prize), and golf (The Link Golf Card - a type of credit card designed for golf players and became the official card of The Australian Golf Link)

- CitiBank always creates very different ways to approach customers compared to its competitors The new card services are created on the basis of understanding and grasping the needs of customers, so the card services designed by CitiBank are very creative, flexible, and completely suitable for customers’ needs CitiBank increases the number of automatic distribution channels, develops online and ATM transaction systems to facilitate customers in transactions with Citibank without having to go to transaction offices

- In providing card services, CitiBank focuses on improving the quality of customer service The staff are trained with professional customer serving skills and the management are always advised to provide customers with the most suitable card services This creates the prestige of CitiBank to customers CitiBank always builds a long-term relationship with its customers through its direct marketing programs with many innovative ideas such

as providing members with trips, special entertainments, and a wide range of unique products and services

Experience of HSBC – The UK

HSBC – the UK, established in 1865 and headquartered in London, England, is one of the largest banks in the world with nearly 9,500 offices operating in 76 countries and territories over the world and modern technology HSBC offers a wide range of services such as personal finance, investment and corporate finance, private banking, financial advisory and many other services In which, the most successful aspect is the card services

of the bank Experience in the card business of HSBC is as follows:

- The Bank has constantly researched and issued new types of cards to better meet the needs of the market At the same time, HSBC is constantly expanding its market in various forms of advertising and promotion

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- HSBC focuses on improving the quality of card transactions The staff at the bank are trained with card service skills to serve customers professionally and the management provides customers with the best card services

In addition, the bank also conducts advertising and sponsorship programs to promote its image and brand, develop and improve the quality of business activities in general and card services in particular

1.3.2 Experience of domestic commercial banks

Experience of Vietinbank

VietinBank has affirmed its position as the leading commercial bank, holding the leading and key role in the monetary market of Vietnam At the same time its is the first state-owned commercial bank with foreign strategic shareholders At present, VietinBank

is the second largest bank in terms of total assets with 15% market share in the domestic market and has the best credit quality in Vietnam The bank has the second largest network

in the Vietnamese banking system (after Agribank) with 157 branches and more than 1,000 transaction offices / savings accounts It has achieved many national and international awards such as Awards from Government and Industries; Brand award; International awards For card business, Vietinbank has achieved quite a lot of success in the issuance and payment of domestic credit cards, international credit cards (VISA, MASTER CARD, etc.), ATM card services, cash cards; Internet Banking, Phone Banking, SMS Banking Vietinbank has provided a wide range of services in accordance with international standards, including card service products Vietinbank's card services are diverse in terms

of types and bring many outstanding benefits to customers This has helped the branch strongly develop card services business in recent years

Experience of Vietcombank

From a specialized bank for foreign trade, Vietcombank has now become a functional bank offering a full range of services in the field of international trade, traditional activities such as capital trading, capital mobilization, credit, project financing

multi-as well multi-as modern banking services such multi-as foreign exchange trading and derivative business, electronic banking, and so on

With the advantage of technology, Vietcombank has been ahead of other banks when officially issuing debit card connect 24 (in May, 2002), promoting the development of automated bank (Auto Bank) Since its success in the domestic card market, Vietcombank has combined with domestic and foreign organizations to develop affiliate card services such as Golden Lotus Plus, MTV, Connect Visa, etc ; support the Bank for Foreign Trade

Vietcombank continues to diversify its card services when officially launching its Vietcombank UnionPay card International credit card Vietcombank UnionPay is a convenient product with the feature of advance spending and later paying, interest free period up to 45 days, and flexible credit limit up to hundreds of million

With the motto of always accompanying customers in improving financial management and spending efficiency, Vietcombank continues to lead in the issuance of international cards with over 33% market share of debit card and nearly 30% market share of credit card issuance The network of ATM acceptors all over the country facilitates customers with maximum convenience The card payment services are superior to those of other banks and lead the market with 55% market share in local areas

In addition, with the aim of building a non-cash payment society, Vietcombank always cooperates with international card organizations, switching organizations, banks, and partners to bring convenience to customers The trust of customers is the motivation for Vietcombank to develop its card service products, continuing to improve its position and prestige in domestic and foreign markets

1.3.3 Experience lessons drawn for BIDV – Sogiaodich 1 Branch

Firstly, the branch should focus on developing debit cards so that local people are familiar with non-cash payment services and gradually apply credit features into card products (lessons from Vietinbank)

Secondly, BIDV Head Office plays a very important role in policy making and issuing regulations to support the development of card services of branches including BIDV – Sogiaodich 1 Branch, enabling the branch to develop its card market rapidly (lesson from Vietcombank)

Thirdly, the branch should develop a debit card system to contribute to the development

of the card market (lesson from Vietinbank)

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CHAPTER 2: REALITY OF CARD SERVICE QUALITY AT BIDV –

SOGIAODICH 1 BRANCH

2.1 Introduction of BIDV – Sogiaodich 1 Branch

2.1.1 Foundation and development history

Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) is one of the four largest commercial banks in Vietnam (Agribank, Vietinbank, Vietcombank, and BIDV) in terms of total assets and operating network

According to Decision No 70 QĐ/TCCB dated 28 March, 1991 of BIDV's General Director, BIDV established Sogiaodich 1 Branch which was a subsidiary and BIDV's legal representative, carrying out internal accounting with separate balance sheet and its own seals, and directly conducting transactions with customers From 1991 to 1998, Sogiaodich

1 Branch was located at 194 Tran Quang Khai and moved to 53 Quang Trung in 1998 After that, it was moved to 191 Ba Trieu, which is also the current office Sogiaodich 1 Branch was built with the duty of a direct business unit of the Head Office and gradually become a key unit in BIDV system At the same time, Sogiaodich 1 Branch was also a leader in experimenting new products, implementing new technologies, performing special customer service tasks, and training managers and specialists for the Head Office In 1998, the branch became an independent cost-accounting division and in 2000, Sogiaodich 1 Branch actually became a multi-functional business model During the past 24 years since its foundation, the branch has grown up, affirmed itself as a reliable address, a brand deserving to be the "leading bird" as the compliments of BIDV’s CEO

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2.1.2 Operating model of BIDV – Sogiaodich 1 Branch

2.1.3 Business results

With 25-year experience of foundation and development, BIDV – Sogiaodich 1 Branch

has achieved many successes in its operation process and successfully accomplished many

tasks assigned This was reflected in the business results of the branch in recent years with

stable growth indicators over the years

Table 2.1: Business results of the branch in the stage of 2013 -2015

Unit: million dong

mobilzation

25.705

35.157

30.969 9.452 36,8%

(4.188) -11,9%

2 Credit balance 10.660 12.780 16.329 2.120 19,9% 3.549 27,8%

3 Total revenue

from services

98.049

120.888

161.930 22.839 23,3% 41.042 34,0%

4 Profit before

taxes

664.151

785.783

852.298 121.632 18,3% 66.515 8,5%

Source: Statement of business results at Sogiaodich 1 Branch (2013 -2015)

Risk Management Department

Risk Management Division 1

Risk Management Division 2

Operation Department

Credit Management Division

Individual Customer Transaction Division Enterprise Customer Transaction Division Budget Management Division Card Business Division

General Planning Division

Finance and Accounting Department

IT Team

Human Resources Department

Office

Subsidiaries

Quoc Tu Giam Transaction Office

Ton Duc Thang Transaction Office

Ngo Thi Nham Transaction Office

Kham Thien Transaction Office

Hoa Binh Transaction Office

23

In 2012, BIDV system transformed its operation model into a joint stock commercial bank in the context that the Vietnamese economy in general and the banking sector faced many difficulties and challenges due to the fierce competition in the market However, with BIDV’s tradition and strength, all the staff of Sogiaodich 1 Branch quickly implemented BIDV's orientations, assessed the situation, and determined the targets to have suitable and creative developing strategies; proposed synchronous and effective measures and solutions to adapt to the difficult and challenging business environment; developed working emulation movements and created a professional, active, and friendly working environment; promoted scientific research, innovation, and work improvement; took care of the material and spiritual life of laborers, etc Thanks to these activities, the business results of the branch always had stable growth over the years Namely, as for the capital mobilization, the mobilized capitals of the branch reached 25,705 billion dong in

2013, 36,157 billion dong in 2014, 36.8% (increase by 36.8%), and 30,969 billion dong in

2015 (decrease by 11.9% compared to 2014) The increase of mobilized capitals of the branch was due to the fact that the branche always applied flexible forms of mobilization

to ensure the value for depositors at all times

Besides, the credit balance of the branch also increased rapidly with the amount of credit in the years of 2013, 2014, and 2015 was 10,660 billion dong, 12,780 billion dong, and 16,329 billion dong respectively (increase by 19 - 28%) The increasing credit balance was strictly controlled in terms of quality with the bad debt ratio of much lower than the average in the area and the whole sector (in 2015 at 0.09%) On the other hand, the profit

of the branch was also at the top of the BIDV system and was constantly increasing every year In 2013, the branch's profit was 664.151 billion dong (18.3% compared to 2013) and its total profit reached 852.29 billion dong in 2015 (increase by 8.5% compared to 2014) These achievements were because in recent years the branch had provided a full range of products and services of a modern bank including many leading efficient products in BIDV system; The customer structure was improved with a wide range of economic sectors, types of enterprises, and sectors such as production, business, circulation, distribution, electronics and telecommunications, etc

To sum up, business activities of BIDV – Sogiaodich 1 Branch achieved many positive results which created favourable developing conditions for other types of service including card services

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2.2 Reality of the card service quality at BIDV – Sogiaodich 1 Branch in recent years

2.2.1 Results of card business

2.2.1.1 Results of card service business in general

In the context of many difficulties and challenges in both international and domestic environment, BIDV had closely adhered to the policies of the Government and the State Bank, flexibly responded to the market movement, and initiatively and creatively provided

a lot of new services to accomplish the tasks assigned BIDV – Sogiaodich 1 Branch had inherited those achievements and received many priorities from the Head Office in the aspects of management, customer service, as well as service products in the system including card services The business results in this kind of service at the branch in recent period were as follows:

Table 2.2: Results of card service business

Unit: Thousand dong Indicators Year 2013 Year 2014 Year 2015 CL 2014/2013 CL 2015/2014

Amount Ratio Amount Ratio

Total revenue

from card services

8.813.000

8.603.000

8.710.000 (210.000) -2,4% 107.000 1,2% Revenue from

card issuance and

use fees

2.621.000

2.508.000

3.011.000 (113.000) -4,3% 503.000 20,1% Revenue from

ATMs and POSs

6.192.000

6.095.000

5.699.000 (97.000) -1,6% (396.000) -6,5%

Total costs 5.723.000 5.608.000 5.705.000 (115.000) -2,0% 97.000 1,7% Costs for buying

card-making

materials

2.464.638

1.890.610

2.026.572 (574.028) -23,3% 135.962 7,2% Depreciation costs

and costs for

maintaining

ATMs

2.508.000

3.008.000

2.980.000 500.000 19,9% (28.000) -0,9%

equipment and

receipts

750.000

709.000

698.000 (41.000) -5,5% (11.000) -1,6%

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The table shows that the revenue from card service business of BIDV – Sogiaodich 1 Branch did not have much fluctuation over the years In 2013, the revenue from card services of the branch was 8,813,000 thousand dong, 8,603,000 thousand dong in 2014 (decrease by 2.4% compared to 2013), and 8,710,000 in 2015 (increase by 1.2% compared

to 2014) Thus, in 2015, the revenue from card services of the branch improved compared

to previous years This improvement was because the Sogiaodich 1 Branch implemented the Head Office’s policy in increasing service fees Accordingly, in order to develop its card services, the branch expanded its cooperation with local enterprises paying employees’ salary through cards At the same time, the branch installed more POS machines at stores, helping the stores add more convenience to attract customers In addition, the revenue from ATM and POS services accounted for the majority of the total revenue with the revenue in three years of 2013, 2014, and 2015 was 6,192 thousand dong, 6,095,000 thousand dong, and 5,699,000 thousand dong respectively

With the revenue from the card services mentioned above, the branch spent on card business operations with the total cost of 5,723,000 thousand dong in 2013, 5,608,000 thousand dong in 2014, and 5,705,000 thousand dong in 2015 In which, the costs for buying card materials and ATM depreciation accounted for the major proportion After subtracting all expenses on card business, the bank's total profit from card business operations was 3,090,000 thousand dong in 2013, 2,995,000 thousand dong in 2014, and 3,005 thousand dong in 2015 It can be seen that the revenue from card services of the branch tended to decrease due to the fact that most of the customers still appreciated using cash in their spending The shops installing POS machine system refused to use the service due to the fees In addition, the project "Promoting non-cash payment in the period of 2010

- 2015" of the branch had not been completed, so the implementation was not as effective

as expected

In general, the card service business at BIDV – Sogiaodich 1 Branch still faced many difficulties and challenges, and the biggest challenge was the spending habits of the people Facing this relality, the branch had continuously offered promotion programs to encourage customers to open and use cards with the desire to expand the number of customers using their card services However, in order to do this, BIDV – Sogiaodich 1 Branch should increase the benefits for customers using the service

2.2.1.2 Results of domestic payment card business

BIDV deployed its card service business to its branches quite early with both card issuance and payment operations The first card service product of BIDV was ATM cards

60.034

63.108 9.611 19,1% 3.074 5,1% Number of

newly

issued cards

16.211

10.626

9.112 (5.585) -34,5% (1.514) -14,2% Number of

active cards

48.113

45.509

47.450 (2.604) -5,4% 1.941 4,3%

6.119

6.874 537 9,6% 755 12,3% Number of

newly

issued cards

1.123

876

965 (247) -22,0% 89 10,2% Number of

active cards

5.322

4.802

4.013 (520) -9,8% (789) -16,4%

Source: Statements of busisness results of Sogiaodich 1 Branch (2013 – 2015)

+ Basic debit cards

The three types of basic debit cards of BIDV – Sogiaodich 1 Branch were mainly BIDV Harmony, BIDV eTrans, and BIDV Moving Each card brand had its own design and aimed at serving a different group of customers, namely: BIDV Harmony card was designed for customers with good and high income, who wished to carry out transactions

at high limits whereas BIDV eTrans aimed at the group of common customers with average income and average spending needs and BIDV Moving was designed for younger clients (pupils, students, new staff) Based on the modern technology integrated with advanced banking system, the issuance of basic debit cards at the branch was an important

27

step to issue international smart chip cards such as VISA and MASTERCARD The basic debit cards at the branch always maintained high security with the technology of embossed magnetic card In addition, with the strategy of becoming the leading card issuing branch

of BIDV, the branch had prepared the personnel conditions and technology to meet the needs of agencies, organizations, and enterprises in the area regarding payment delegation service through card accounts As a result, the number of accumulated debit cards of the branch had constantly increased By the end of 2015, the number of issued cards by the branch was 63,108 cards, in which the number of active cards was 47,450 cards and the number of newly issued cards in the year was 9,112 cards

+ Affiliated and co-branded debit cards

With the aim to make card services become a basic product in the process of diversifying banking service products and the expansion and development of ATM

services, BIDV – Sogiaodich 1 Branch continuously focused on deploying affiliated and

co-branded debit cards By 2015, the branch had had a certain number of cardholders with 6,874 issued cards and 4,013 active cards (decrease by 16.4% compared to 2014) BIDV's affiliated debit cards were cards that identified students, officer staff, or members of the partners to carry out the management functions which were built by the partners

Besides, co-brand debit cards of the branch included BIDV - Co.op Mart, BIDV - Lingo and BIDV - HIWAY These types of card were issued based on the cooperation between the branch and commercial organizations trading large-scale and prestigious goods and services Cardholders could enjoy many preferential treatments when carrying out card transactions with co-branded partners or the third party However, up to now, BIDV - Lingo and BIDV - HIWAY cards had ceased to be issued at the branch and in the whole BIDV system

Thus, although the number of accumulated cards of the branch increased, the number of issued cards and the number of active cards decreased This showed that the development

of card services of the branch in the past few years had mainly based on quantity and not accompanied by the fundamental changes in quality as well as the enhanced transactions of cardholders after card issuance This reality caused a waste in the issuing costs of inactive cards; therefore, reduced the quality of card services

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Revenue from card services

Table 2.4: Revenue from card services

Types of card Year

Basic debit

cards (million

dong)

7.295

6.661

6.975 (633) -8,7% 314 4,7% Affiliated and

from ATM

cards (million

dong) 7844 7485 7665 (359) -4,6% 180 2,4%

Source: Statements of busisness results of Sogiaodich 1 Branch (2013 – 2015)

The table shows that the revenue from the domestic payment card services of the branch had an unstable fluctuation and was decreasing The revenue from domestic payment card services of the branch reached 7,844 million dong in 2013, 7,485 million dong in 2014, (decrease by 4.6% compared to 2013) In 2015, the revenue from domestic payment services of the branch was 7,665 million dong (increase by 2.4% compared to 2014, but decrease by 359 million dong compared to 2013) In addition, in the total revenue from the domestic payment card services, the revenue from basic debit card services accounted for the majority (over 90%) with 7,295 million dong in 2013, 6,661 million dong in 2014 and 6,975 million dong in 2015; This was quite a specific limitation in card business operation

in Vietnam in general and at BIDV – Sogiaodich 1 Branch in particular These results indicated the ineffectiveness and unsustainability of the card issuance and card payment activities at the branch It also showed that the link between selling units and the branch was not high and sustainable, which led to the slow development in the revenue of credit card payment through POSs and had not met the requirements of an economy gradually aiming at a non-cash payment system

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2.2.1.3 Results of international payment card business

Apart from domestic payment card products, international payment card products had

also been paid attention by the branch The development of this type of card in terms of

quantity and revenue was as follows:

Number of cards

Table 2.5: Number of international payment cards at the branch

Types of card Indicators Year

newly issued cards 542 616 716 74 13,7% 100 16,2% Number of

active cards 1.908 1.706 1.888 (202) -10,6% 182 10,7%

Visa/MasterCard

Number of accumulated

Number of newly issued cards 149 179 237 30 20,1% 58 32,4%

Source: Statement of busisness results of Sogiaodich 1 Branch (2013 – 2015)

According to the results, the number of international payment cards of BIDV –

Sogiaodich 1 Branch fluctuated over the years The number of MasterCards was 2,196 in

2013, 1,891 in 2014, and 2,034 in 2015 At the same time, the number of

Visa/MasterCards of the branch in the three years was 782, 819, and 918 respectively

Different from domestic payment card products, the number of international payment cards

of the branch had an increase in the number of issued and active cards This is a signal showing

the changes in the spending habit of customers and the utilities of the product line

- Easy to use, time-saving, easy to shop in anywhere at any place: With a small card and

simple operation, BIDV Visa/MasterCards could be used at tens of million ATM / POS

30

booths or on websites with a VISA/MASTER logo around the world Customers could use the cards to go shopping, travel domestically and abroad, pay at supermarkets, shops, restaurants, shopping centers, hotels, resorts, or place online orders

- High security, maximum prevention of counterfeit cards: BIDV Visa/MasterCards are one of the safest credit cards nowadays due to the integrating technology of magnetic cards and Chip cards under EMV standard (a global standard for cards given by Europay, Mastercard and Visa, the three largest card alliance in the world) The processor in the chip

on the cards protects card data information, ensure safer and more secure transactions, and prevent the risks of counterfeit cards

- Attractive credit limit, 0% interest within maximum 45 days

- There were three types of Visa/MasterCards: Platinum - issued to the group of customers with an income of 20 million dong and higher; Gold - issued to the group of customers with an income of 10 million dong and higher; Standard - issued to the group of customers with an income of 4 million and higher

In general, the number of international payment cards at the branch had an increasing signal However, the strong competition from other banks in the field of card payment at card acceptors caused the share in customers This required the branch to have flexible solutions in charge policy, customer service, tangible assets, etc to quickly increase the number of issued cards

Revenue from card services

Table 2.6: Revenue from international payment card services

Tyes of card Year

31

It can be seen from the table that the total revenue from international payment card services of BIDV – Sogiaodich 1 Branch changed over the years The total revenue from international payment card services of the branch reached 969 million dong in 2013, 1,119 million dong in 2014 (increase by 15.48% compared to 2013), and 1,045 million dong in

2015 (decrease by 6.61% as compared to 2014)

Of the total revenue from international card payment services, the revenue from MasterCards reduced gradually and the revenue from Visa/MasterCards increased The revenue from MasterCards at the branch in the three years was 727 million dong, 763 million dong, and 637 million respectively, and the revenue from Visa/MasterCards at the branch in 2013, 2014, and 2015 was 242 million dong, 336 million dong, and 408 million dong respectively

Thus, despite the fluctuation in the revenure from international payment card services, the operation of international payment cards developed quite effectively and sustainably due to the rise of the revenue from Visa/MasterCards This was very important for the policy of developing non-cash payment of our government

2.2.2 Reality of card service quality at the branch in recent years

2.2.2.1 Some activities to improve the quality of card services at the branch in recent years

In recent years, the improvement in the quality of card services was one of the important tasks that the branch always concerned In order to improve the quality of card services, the branch had carried out the following activities:

Firstly, training and developing card staff

Identifying the important role of the staff in improving the quality of card services at the branch, over the past few years the management of the branch had organized a series of training programs with the aim to develop the card staff at the branch The specific contents of these activities included: