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

20 CHAPTER 2: REALITY OF SATISFACTION OF FDI ENTERPRISE CUSTOMERS TOWARDS PRODUCTS AND SERVICES OF TECHCOMBANK – BAC NINH BRANCH...22 2.1 Introduction of Techcombank – Bac Ninh Branch an

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

-NGUYỄN THỊ MINH PHƯƠNG

RESEARCH FDI CUSTOMERS SATISFACTION

WITH PRODUCTS AND SERVICES OF

TECHCOMBANK BAC NINH BRANCH

NGHIÊN CỨU SỰ HÀI LÒNG CỦA KHÁCH HÀNG DOANH NGHIỆP FDI VỚI SẢN PHẨM DỊCH VỤ CỦA NGÂN HÀNG TECHCOMBANK CHI NHÁNH BẮC NINH

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2018

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

-NGUYỄN THỊ MINH PHƯƠNG

RESEARCH FDI CUSTOMERS SATISFACTION

WITH PRODUCTS AND SERVICES OF

TECHCOMBANK BAC NINH BRANCH

NGHIÊN CỨU SỰ HÀI LÒNG CỦA KHÁCH HÀNG DOANH NGHIỆP FDI VỚI SẢN PHẨM DỊCH VỤ CỦA NGÂN HÀNG TECHCOMBANK CHI NHÁNH BẮC NINH

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

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

Hà Nội - 2018

The author confirms that the research outcome in the thesis is the result ofauthor’s independent work during study and research period and it is not yetpublished in other’s research and article

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

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

Hanoi, date of …… / …… /……

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

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

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

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

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

TABLE OF CONTENTS

ABBREVIATION i

LIST OF TABLES ii

LIST OF FIGURES iii

INTRODUCTION 1

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

1.1 FDI enterprises 6

1.1.1 Concepts 6

1.1.2 Characteristics 7

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

1.2.1 Concept and measurement of satisfaction 8

1.2.2 Characteristics of banking services 10

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

1.2.4 Proposed model of the study 17

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

1.3.1 Experience of some commercial banks 18

1.3.2 Lessons for Techcombank - Bac Ninh Branch 20

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

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

2.1.1 Introduction of Techcombank – Bac Ninh Branch 22

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

26

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

2.2 Overall assessment of the satisfaction of FDI enterprise customers 60

2.2.1 Achievements 60

2.2.2 Limitations 60

2.2.3 Causes of limitations 61

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

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

3.1.1 General development orientation 63

3.1.2 Orientations for developing FDI enterprise customers 64

3.1.3 Development plan for 2017 65

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

3.2.1 Basis for proposing solutions 65

3.2.2 Contents of solutions 67

3.3 Recommendations 72

3.3.1 Recommendations to the State 72

3.3.2 Recommendations to the bank association 76

CONCLUSION 77

REFERENCES 79

APPENDIX 81

IEC International Electrotechical Commission

NAPAS JSC National Payment Services Joint stock companyISO International quality standard

ATM Automated Teller Machine

POS Point of Sale

LIST OF TABLES

Table 2.1: Industrial Parks in Bac Ninh Province 26

Table 2.2: Locations FDI enterprises in Bac Ninh Province 27

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

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

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

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

Table 2.7: Strengths of competitors 40

Table 2.8: Gender 42

Table 2.9: Age 42

Table 2.10: Educational background 43

Table 2.11: Job positions 44

Table 2.12: Income of employees 45

Table 2.13: Reliability of the scale 46

Table 2.14 Convergence of the scale 48

Table 2.15: Correlation among factors 49

Table 2.16 Regression results 50

Table 2.17 Evaluation on Convenience 52

Table 2.18: Evaluation on Tangibles 53

Table 2.19: Evaluation on Serving Style of the staff 54

Table 2.20: Evaluation on Contact with customers 56

Table 2.21: Evaluation on Trust 57

Table 2.22: Evaluation on Image of the bank 58

Table 2.23: General evaluation on Customer satisfaction 59

LIST OF FIGURES

Figure 1.1: Characteristics of FDI enterprises 7

Figure 1.2 SERVQUAL model of customer satisfaction 12

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

Figure 1.4 FTSQ model (GrÖnroos, 1984) 15

Figure 1.5 Research model of the thesis 18

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

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

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

Figure 2.4: Contribution proportion of FDI enterprises 35

1 Statement of the problem

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

As for the banking sector, the potential of the FDI sector in this sector isenormous in the context of Vietnam's integration with developed economies aroundthe world through agreements trade Consequently, the demand for financialservices - banking of FDI enterprises is very large However, the number of foreignbanks in Vietnam is not much and the network is limited Therefore, this is thesegment of potential customers, reducing the competitive pressure in thedevelopment of banking products and services for our commercial banking system.However, most FDI enterprises are multinational corporations with investmentexperience in many countries and have a strong financial foundation and deepinternational business knowledge It therefore requires banks to provide the mostcomprehensive and up-to-date service

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

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

services and modernizing banking technology to attract the maximum number of FDIcustomers With a slower start point than other commercial banks in the field ofinternational payment, Techcombank did not have much access to and attracted FDIfirms using services provided by the bank Recognizing the role of attracting FDIenterprises using banking products and services, in the period 2012-2015,Techcombank branch in Bac Ninh deployed in-depth product and service developmentstrategy to meet the needs of FDI enterprises in the area However, due to thecompetition among banks in the area, especially internal banking factors such asproduct policy, banking size, etc., the ability to attract groups of FDI enterprisecustomers has not yet achieved high results: its market share was only at the expense of6% of market share, equivalent to nearly 50 FDI enterprises in the province.

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

many FDI enterprises, the author conducted the research entitled "A study on FDI enterprise customers’ satisfaction towards the products and services of

Techcombank - Bac Ninh Branch" as his graduation thesis.

2 Literature review

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

in particular These followings are related to this research content

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

competitiveness in all three levels: National - Enterprise - and products… WithVietcombank, customer attraction in group of FDI enterprises has much contributed

in total income of Vietcombank To achieve this result, Vietcombank managershave pushed on active many efficiency solutions such as: diversify of bankingservices, flexibility to meet FDI enterprises’ requirements… However, the analysis

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

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

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

Oanh, Giang (2009) has done a study on attracting FDI enterprises atVietcombank with the main contents include: banking services for corporatecustomers in general and FDI in particularity, the solutions that Vietcombank hasdeveloped One of the solutions is high appreciated that cooperation agreementsigned with the Foreign Investment Agency (FIA) Since then, the Vietcombankbecame the first official partner of the FIA in providing banking services for FDIenterprises in Vietnam Therefore, the Vietcombank has early access to foreignpartners intend to invest in Vietnam At the same time, through the FIA, foreignpartners have confidence in Vietcombank; create favorable conditions for futurecooperation This study provides commercial banks a truly effective solution in

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

Le Trinh (2015) conducted a study on attracting FDI enterprises HDBank.Contents of this study refer to services provided by HD Bank for FDI partners suchas: account services, support liquidity, funding, projects investment and exportfinancing, electronic services, project consulting Based on this analysis, theauthors evaluate the effectiveness of each solution that HD Bank has done Inparticular, the solution of "Japan Desk" is considered as a intelligent solution andefficient According to the author, the implementation of the strategy dedicated to aspecific customer group (Japan) could be a strategic direction for each bank But theauthor just assessed the effectiveness of solutions that was proposed by HDBankwithout added another new solutions

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

3 Research objectives 3.1 General objective

This research focuses on studying the FDI enterprise customers’ satisfactiontowards the products and services of Techcombank - Bac Ninh Branch

3.2 Specific objectives

- Systemize basic theoretical framework on FDI enterprises and satisfaction

of FDI enterprises towards the products and services of commercial banks

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

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

Comparative method: this method is applied in:

+ Analysing the change number of FDI enterprises who use the

Techcombank-Bac Ninh services and other banks in Bac Ninh over the years

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

Descriptive statistics method: this method is applied in:

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

+ Determine the level of FDI customers satisfactionin Bac Ninh provincewith the banking system (in general) and banking service of Techcombank-Bac Ninh via

5 level of Likert scale

7 Research structure

The thesis is divided into three chapters as follows:

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

Chapter 2: Reality of satisfaction of FDI enterprise customers towards

products and services of Techcombank – Bac Ninh Branch

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

CHAPTER 1: THEORETICAL FRAMEWORK ON FDI ENTERPRISES AND

SATISFACTION OF FDI ENTERPRISES TOWARDS THE

PRODUCTS AND SERVICES OF COMMERCIAL BANKS

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

is to produce goods or services for sale

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

According to the Decree 01 issued in 2014 by the Government, FDI

enterprises are enterprises in the following cases:

- Being an organization established by non-Vietnamese nationality

individuals

- Being an organization operating under foreign laws or an enterprise

established and operating under the law of Vietnam with 100% foreign capital

- Being an organization established and operating in Vietnam with a foreign

capital contribution of over 49%

1.1.2 Characteristics

From different definitions of enterprises and FDI enterprises, the maincharacteristics of enterprises in general and FDI enterprises are summarized asfollows:

hierarc )hy

Figure 1.1: Characteristics of FDI enterprises

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

business activities

- FDI enterprises are large-scale business entities (exceeding the size ofdomestic enterprises, individuals, households) such as cooperatives, companies andfactories The term “FDI enterprises” is conventional to distinguish with

independent workers or workers and their households

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

To sum up, FDI enterprises are large-scale business entities which carry outbusiness activities Due to their large scales, their demands for products and services

of commercial banks are also much higher than those of other enterprises Inaddition, meeting the satisfaction of FDI enterprises is also the goal that commercialbanks in our country are aiming at due to the large potentials of these enterprises

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

1.2.1 Concept and measurement of satisfaction

Concept

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

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

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

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

be loyal and continue to use the products of the organization

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

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

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

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

Based on the concepts of customer satisfaction above, the author defines thesatisfaction of FDI enterprises towards banking services as the attitudes and perceptions

of FDI enterprises towards the quality of products and services that commercial banksprovide Commercial banks always strive to improve the satisfaction of customers ingeneral and FDI enterprises in particular in order to increase the number of FDIenterprises using products and services provided by the banks

Methods of measuring customer satisfaction towards banking services

- Measure regularly to collect information from each customer whendelivering products and services This measurement method helps to capture

customers’ opinions right away and make timely corrections to inappropriate points

- Research periodically to collect information from different customer groups atdifferent time periods after delivering products and services This measurement methodcaptures customers’ expectations and experience but is not regular

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

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

- Measure by questionnaire via mail

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

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

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

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

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

1.2.2 Characteristics of banking services

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

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

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

2) Banking services are unstable and uncertain

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

Moreover, with the same service transaction staff, the quality of banking servicessometimes changes over time.

(3) Banking services are unstorable

The banking services of commercial banks are invisible and therefore can not

be stored Meanwhile, the demand for services often fluctuates but but the banks cannot produce and store when the demand suddenly rises For example, the services ofpayment and money transfer at the end of the year are huge, but the banks mustincrease their means as well as human resources to ensure the most effectivetransactions Therefore, the costs of banking services must be relatively high tomeet the needs and satisfaction of customers

4) Banking services are invisible

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

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

1.2.3.1 SERVQUAL model (Parasuraman, 1988)

This is the most common research model on service quality used inmarketing research According to Parasuraman, service quality can not bedetermined in general but depends on customers' perception of the service and thisperception conseidered on many factors The success of the model is a greatbreakthrough for economic organizations in general and commercial banks in

particular to apply to improve their service quality The quality assessment must bebased on the perception of customers who use the services of the bank.

The SERVQUAL model is built based on the perceived service qualitywhich is the comparison between the expected values and the values perceived bycustomers

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

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

Tangibles

Reliability

Customer satisfaction Responsivenes

Responsiveness

This component measures the ability to quickly solve problems, effectivelyhandle complaints, be ready to help customers and meet customer requirements Inother words, service efficiency is the response from the bank transaction staff towhat customers want

Tangibles

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

Assurance

This factor creates credibility and trust to customers through professionalservice, good professional knowledge, elegant manners and good communicationskills of the bank’s staff All of these elements make customers feel securewhenever they use the bank’s services

Empathy

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

1.2.3.2 CBSQ model of Xin Guo et al (2008)

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

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

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

The components in the CBSQ model are explained as follows:

Reliability: Showing the ability to perform promised services accurately andreliably

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

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

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

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

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

1.2.3.3 FSQ and TSQ model (GrÖnroos, 1984)

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

of banking services is strongly influenced by the bank image Grönroos outlinedthree factors that affect customer satisfaction towards the quality of banking

Expected Customer Perceived

services satisfaction services

Bank image

Figure 1.4 FTSQ model (GrÖnroos, 1984)

Technical quality

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

and is perceived as important to the customers In other words, technical quality

is the result of the interaction between the bank and customers, which is the real

values that customers receive from the bank There are five criteria for factor

assessment including: Problem solving ability; Professional skills; Operational

level; Modern equipment; and Information storage system

Functional quality

Functional quality demonstrates the process of service delivery by the

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

aspects of quality, functional quality plays a more important role as reflected in

the following seven criteria: Convenience in transaction; Behavior; Serving

attitude; Organization; Contact with customers; Serving style; and

all-for-customer motto

Bank image

The bank image is understood as the general perception/ impression of

customers on the brand of the bank Accordingly, if the bank creates a good

15

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

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

The bank image helps to make the relationship between customers and creditinstitutions better and more sustainable In addition, a good or bad bank image isevaluated through customers’ perception of the bank and comparison of the bankimage with that of other competitors However, the impact level depends on eachspecific bank

1.2.2.4 Research model of Do Tien Hoa (2007)

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

of researches on service quality as well as the customer satisfaction by Parasuraman(1988), Cronin and Taylor, (1992) and Grönroos1 (984) The inheritance of scales inprevious studies helped the author build a research model that included thefollowing factors:

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

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

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

(4) Contact with customers: This factor is assessed through regular contact with customers and customer care activities of the bank.

(5) Trust: The trust of customers towards the bank is expressed when thebank provides correct services right from the first time and do not make any mistakes inthe process of providing services In addition, the trust is also reflected in the security ofcustomer information and transaction information of the bank

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

1.2.4 Proposed model of the study

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

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

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

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

on the satisfaction of FDI enterprises)

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

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

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

Serving style

Tangibles Satisfaction of

FDI enterprise customers

Trust

Contact with customers

Image of the bank

Figure 1.5 Research model of the thesis 1.3 Experience in improving the satisfaction of FDI enterprises of commercial

banks and lessons for Techcombank - Bac Ninh Branch

1.3.1 Experience of some commercial banks

Experience of Vietcombank

Recognizing the importance of FDI enterprises with sustainable development of

banking business, Vietcombank has paid great attention to the access and cooperation

with FDI enterprises Accordingly, in order to improve the satisfaction of FDI

enterprise customers, Vietcombank has applied the following measures:

Vietcombank is the first bank to set up the department of Japan Desk, which

specializes in providing banking products, services and support for Japanese corporate

custmers operating in Vietnam The Board of Directors of Vietcombank has recruited

highly skilled staffs that are knowledgeable about the banking industry and specific

needs of FDI enterprises, fluent in foreign languages to help these customers overcome

the barriers of language and culture when trading at Vietcombank

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

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

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

For Japanese enterprises, Vietcombank has always been active in buildingand maintaining relationships with the Japanese business community in Vietnam byparticipating in and coordinating with the JRBs to hold customer conferences,bringing the brand name of Vietcombank closer to Japanese customers and creatingtrust for customers

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

Experience of Vietinbank

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

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

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

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

1.3.2 Lessons for Techcombank - Bac Ninh Branch

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

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

- Diversify products and services provided to FDI enterprises combined withproviding specialized financial services and banking products: from credit to modernbanking services, linking business activities and introducing business partners forenterprises

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

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

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

TECHCOMBANK – BAC NINH BRANCH

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

2.1.1 Introduction of Techcombank – Bac Ninh Branch

2.1.1.1 History of foundation and development

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

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

2.1.1.2 Functions and tasks

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

when the functions of intermediary payment and money creation are performedwell, they will contribute to increasing the credit capital and expanding creditactivities for the branch.

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

Competence:

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

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

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

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

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

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

2.1.1.3 Organizational structure of the bank

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

Deputy Manager 1 Deputy Manager 2

Customer Service Corporate Customer Individual CustomerDepartment Department Department

Transaction OfficesPriority customers Office

Figure 2.1: Organizational structure of Techcombank – Bac Ninh Branch

Source: Techcombank – Bac Ninh Branch Functions and duties of departments:

Manager: Being responsible for directing general business operations of the

branch under its competence; manages 4 transaction offices in the area according to

the establishment decision prescribed by the General Director of Techcombank

Deputy Managers: Being responsible for implementing tasks assigned by

the Manager in their scope and authority

Customer Service Department:

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

customers

- Initiatively looking for new customers, looking after and maintaining regularrelations with old customers; finding out about customers and exploiting their financial needs

to advise and provide service packages as well as the best solutions to meet their needs

- Dealing with questions and complaints of customers when they need

Corporate Customer Department:

- Advising the Board of Directors on the management and organization ofbusiness activities for corporate customers in accordance with Techcombank’sorientation in each period and the current regulations of Techcombank; beingresponsible for achieving planned targets in each period

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

Individual Customer Department:

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

Priority Customer Department:

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

customer division

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

- Supporting and coordinating with the department head to solve the

problems of the department

Office:

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

- Monitoring the staff recruitment, organization and training

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

Transaction Offices:

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

payment and other professional aspects as required; ensuring the compliance with

the regulations and rules prescribed by the State and the industry

- Establishing, maintaining and expanding relationships with customers;

market all products and services of the bank

- Providing loans to individuals, micro enterprises; mobilizing capital and

providing other banking products and services

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

2.1.2.1 Overview of industrial parks

Bac Ninh Province now has 15 industrial parks, an information technology

park and more than 30 industrial clusters The total area is 6,847ha with the total

area of industrial land planned for lease of 2,138.53ha; the area of recovered land is

1,682.95 ha, and the area of leased land is 1,259.81ha The occupancy rate on the

planned area is 58.91%, and the occupancy rate on the recovered area was 74.86%

The names of the industrial parks and specific areas of land in each industrial park

are presented as follows:

Table 2.1: Industrial Parks in Bac Ninh Province

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

According to the statistics, Yen Phong 2 Industrial Park is the largest industrial

park in Bac Ninh Province with 1,200 hectares Nam Son - Hap Linh Industrial Park

and Thuan Thanh 3 Industrial Pone rank next with an area of 1,000 ha The remaining

industrial parks such as Tien Son, Que Vo, Dai Kim, Thuan Thanh, Dat Dong - Hoan

Son, etc has smaller areas but has large scale compared to neighboring area In the

time to come, Bac Ninh Province will have two more industrial parks concentrated in

Ngu Thai and Nguyet Duc Communes of Thuan Thanh District and in Van Ninh

Commune of Gia Binh District with a total area of 500 ha

It can be seen that industrial parks attract the most FDI capital in the country

Therefore, the development of industrial parks in Bac Ninh Province shows the

potentials for attracting FDI enterprises in the region This is also an advantage for

commercial banks located in the area in the strategy of developing the segment of

FDI enterprise customers serving the medium and long term objective

2.1.2.2 Overview of FDI enterprises

Locations

FDI enterprises in Bac Ninh Province are mainly Korean, Taiwanese and

Japanese enterprises These enterprises have large investment capital and are mainly

located in industrial parks in the area The details are presented as follows:

Table 2.2: Locations FDI enterprises in Bac Ninh Province

Investment capital

Yen Phong Industrial Park, Que

Vo Industrial Park, Dai Dong

Que Vo Industrial Park, TienTaiwanese Son Industrial Park, Thuan

Japanese Que Vo Industrial Park, Tien

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

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

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

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

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

Vietnam-Singapore

Hoan Son

Thuan Thanh Manufacturing and trading enterprises

Manufacturing and trading enterprises

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

FDI enterprises in Bac Ninh Province are mainly Canon, Samsung, Samsunng

Vendor and some other supporting enterprises specializing in import and export In

which, there are 156 enterprises of Canon, Samsung and Vendor in Que Vo

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

Samsung and Vendor in Yen Phong Industrial Park Manufacturing and trading

enterprises specializing in import and export concentrate in Thuan Thanh Industrial

Park and some in other industrial parks Enterprises of Nokia are located in

Vietnam-Singapore Industrial Park

With great potential, sharp management ability, advanced technology level,high number of laborers and large business scale, FDI enterprises always have highdemand for using banking services to make the business process smoothly such aspayroll, transfer payments, loans to supplement working capital, equipmentprocurement, and so on This indicates that if commercial banks in the Bac NinhProvince in general and Techcombank – Bac Ninh Branch in particular havesuitable strategies to exploit and improve the satisfaction of FDI enterprises, theywill have many advantages in their banking business.

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

2.1.3.1 Number of FDI enterprise customers

Techcombank - Bac Ninh Branch was one of the few banks without badloans for many years and excellently completed the targets assigned by the HeadOffice At present, Techcombank - Bac Ninh Branch had become a prestigiousbrand in the banking system and was one of the banks with the best quality services

in Bac Ninh Province Therefore, Techcombank - Bac Ninh Branch was now thereliable address for over 6,000 domestic and foreign customers, including typicalFDI enterprise customers such as Dragon Jet (Japan), KTT VINA (Korea) and manyother potential FDI enterprise customers The number of FDI enterprise customersopening accounts at Techcombank - Bac Ninh Branch was summarized in thefollowing chart: