IMPROVING THE QUALITY OF RETAIL BANKING SERVICES FOR INDIVIDUAL CUSTOMERS AT THE PVCOMBANK BUSINESS CENTER

Based on the study of 173 retail customers using retail banking services of PVcombank on 5 aspects of service quality according to the SERVAQUAL model, the study simulated [r]

STUDENT: VU DINH THIN INSTRUCTOR: DAO TUNG

Hanoi, 01/2017

ACKNOWLEDGEMENT

This thesis would not have been possible without the supports of my colleagues in Vietnam Public Joint Stock Commercial Bank, Mr Dan Ngoc Anh from Vietnam Public Joint Stock Commercial Bank, my classmates in Master in Finance Banking Insurance (South East Asia) program - cohort 7, and others

I would like to show my deepest gratitude towards my instructor – Mr Dao Tung, the lecturer from international school, Vietnam National University, whose full encouragement, guidance, and support from the initial to the end of the thesis have enabled me to cultivate and understand clearly about the structure and activities in PVcombank in particular and in Vietnamese Banking system in general Plus, they also provide me valuable advices to help me to continue my further study

I would also like to thank all of lectures and tutors at Vietnam National University in general and international school in particular who not only have bestowed their valuable knowledge, hands-on experience to me, but also have created the favorable opportunities for me to complete the thesis on time

Lastly but not least, I would especially like to thank all of my friends in Master in Finance Banking Insurance(South East Asia) program for all their motivation and intellectual support that has made this thesis completed

ABBREVIATIONS

EFA Exploratory Factor Analysis

FSQ Functional Service Quality

PVcombank Vietnam Public Joint Stock Commercial Bank

PVFC PetroVietnam Finance Joint Stock Corporation Vietnam

Western Commercial Joint Stock Bank

WTO World Trade Organization

LIST OF GRAPHS, FIGURES AND TABLES

Table 2.1: Scale of data collection

Table 3.1: Exploratory Factor Analysis Result

Table 3.2: Cronbach Alpha values of scales

Table 3.3: Results of customers evaluation according to the service quality aspect

Table 3.4: Results of customers evaluation of Assurance/competence of staff

Table 3.5: Results of customers evaluation of service reliability

Table 3.6: Results of customers evaluation of empathy in staff

Table 3.7: The results of the assessment of service tangibles

Table 3.8: The results of the assessment of service responsiveness

Chart 1 Research model

Chart 1.1 Service quality model of Parasuraman et al (1988)

Chart 1.2 Service quality model of Gronroos (1984)

Chart 1.3 Customer perceptions of quality and customer satisfaction of Wilson et al

(2008)Chart 3.1 Research sample description

Chart 3.2 Frequency of evaluated value of customers on assurance

Chart 3.3 Frequency of evaluated value of customers on service assurance

Chart 3.4 Frequency of evaluated value of customers on empathy in staff

Chart 3.5 Frequency of evaluated value of customers on service tangibles

Chart 3.6 Frequency of evaluated value of customers on service responsiveness

TABLE OF CONTENTS

ACKNOWLEDGEMENT 1

ABBREVIATIONS 2

LIST OF GRAPHS, FIGURES AND TABLES 3

GENERAL INTRODUCTION 6

R EASONS AND NEED OF THE RESEARCH 6

O BJECTIVES , R ESEARCH OBJECTS AND SCOPES 7

R ESEARCH M ODEL AND R ESEARCH METHODS O VERVIEW 8

E XPECTED RESULTS 9

CHAPTER 1: THEORITICAL BACKGROUND OF THE RETAIL BANKING SERVICES AND SERVICE QUALITY 10

1.1 T HE CONCEPT , CHARACTERISTICS AND ROLE OF RETAIL BANKING SERVICES IN COMMERCIAL BANKS 10

1.1.1 The concept of retail banking services 10

1.1.2 Characteristics of retail banking services 10

1.1.3 The role of retail banking services 11

1.2 S ERVICES AND SERVICE QUALITY IN THE RETAIL BANKING SERVICES SECTOR 12

1.2.1 The concept of service 12

1.2.2 Quality of service and the influencing factors 13

1.2.3 Two important models for quality of service 14

1.3 S ERVICE QUALITY , CUSTOMER SATISFACTION AND ROLES OF HUMAN FACTOR IN THE SERVICE DELIVERING 17

1.3.1 Service quality and Customer Satisfaction 17

1.3.2 The human factor in providing retail banking services 18

CONCLUSION CHAPTER 1 19

CHAPTER 2: DATA GATHERING AND RESEARCH METHODOLOGY 20

2.1 D ATA COLLECTION INSTRUMENT 20

2.2 D ATA SOURCES AND DATA COLLECTION 22

2.2.1 Data sources 22

2.2.3 Implementation of data collection 23

2.3 S AMPLING METHOD AND D ATA A NALYSIS M ETHODS 23

2.3.1 Sampling method 23

2.3.2 Data Analysis Methods 23

CONCLUSION CHAPTER 2 25

CHAPTER 3: EVALUATION OF THE RETAIL SERVICE QUALITY OF INDIVIDUAL CUSTOMERS AT BUSINESS CENTER OF PVCOMBANK 26

3.1 I NTRODUCTION OF PV COMBANK AND PV COMBANK B USINESS C ENTER 26

3.1.1 Introduction to PVcombank 26

3.1.2 The formation and development of the Business Center PVcombank 27

3.2 F INDINGS ON THE INDIVIDUAL CUSTOMERS ’ EVALUATION OF C ENTER ’ S RETAIL SERVICE 28

3.2.1 Description of sample 28

3.2.2 Findings 29

3.2.3 Findings discussions 39

CONCLUSION CHAPTER 3 40

CHAPTER 4: CONCLUSIONS AND PROPOSED SOLUTIONS TO IMPROVE SERVICE QUALITY OF BUSINESS CENTER PVCOMBANK 41

4.1 C ONCLUSIONS 41

4.2 S OLUTIONS TO IMPROVE THE SERVICE QUALITY OF THE RETAIL BANKING AT THE BUSINESS CENTER PV COMBANK 42

4.2.1 Orientation PVcombank and of Business Center PVcombank to 2020 42

4.2.2 Solutions to improuve the service quality 43

4.3 O THER RECOMMENDATIONS 46

4.4 R ESEARCH LIMITATIONS AND FUTURE RESEARCH ORIENTATION 47

CONCLUSION CHAPTER 4 47

CONCLUSION 49

REFERENCES 50

APPENDIX 52

GENERAL INTRODUCTION

Reasons and need of the research

The urgency of the topic

Vietnam's economy is increasingly integrated into the world economy poses many challenges for the commercial banks, which is to compete with the multinational financial groups having the strength of finance, technique technology Under these circumstances, the development of retail banking services is an important objective of many commercial banks Retail banking markets in the Southeast Asian countries; including Vietnam still have big potentials to develop As one of the pillars of the banking financial system Vietnam, with major brands and a broad network in Vietnam, to catch up and catch the trend of the region, and the world, the PVcombank has been focusing on promoting the development of an array

of retail banking services with the ambition to become the leading retail bank in Vietnam The business center PVcombank is the first level branches, is the largest branch of PVcombank Formerly the Exchanges 1 of PVcombank, the business center PVcombank ever had a long tradition of serving the individuals customers, corporations, companies, and large enterprises across the country Retail activity of the business center PVcombank often neglected and not properly focused The proportion of revenue, profit from retail operations is low, is not commensurate with the potential of the branch Besides the human factor also impacts significantly on the satisfaction of our customers, which greatly affect the quality of retail services

Because of the above reasons and from practical activities in business the business center PVcombank, as Deputy Director of the business the business center PVcombank, I chose the theme "Improving The Quality Of Retail Banking Services For Individual Customers At The Business Center PVcombank" as my master's thesis

Overview of the research situation

In recent years, the subject development of retail banking services has many scientific research projects which are worth as the form of presentations, master thesis or research papers published in prestigious journals domestically and internationally; such as: master's thesis "Development of retail banking services in the PVcombank (2011, Nguyen Thi Quy, University of Hanoi National Economy; Thesis "Solutions developed retail banking services

in bank branches Investment and Development Ha Thanh Branch "in 2012 by the author

Pham Thi Ha Giang from University Hanoi National Economics; Study "The solution developed banking services in Vietnam today" by Associate Professor Ph.D Nguyen Thi Mui

- Financial Institute; Thesis " Development of Marketing Services Retail Bank at Bank of Agriculture and Rural Development, Hanoi branch "code LA2016 University of Hanoi National Economics

These projects, however, focus on the broad development of retail services or the perfection of overall marketing effectiveness of a branch/bank in general without any other specific project on the service quality of retail banking of the Business Center PVcombank This topic is not new; however, it can be seen from the particularity of banking services that the quality is usually not uniform among branches of the same bank, and among the different banks With the aims of improving retail banking services for the Business Center PVcombank, the author will focus on studying and evaluating the status of the service quality

of retail banking in this Center to serve as a basis for the services perfection

Objectives, Research objects and scopes

Objectives of the study

The study focuses on researching and analyzing the secondary data to provide overview of the basic theory of retail banking services and the factors affecting the retail service quality, including human factors aspect Based on that theoretical foundation, the assessment was given about the performance of retail services branches of the business center PVcombank according to the essentials of service quality from point of view of individual customers having experiences with the branches (Center), as well as providing solutions to help improve the service quality of the business center PVcombank, thus facilitating its expansion and development of retail banking services To achieve this goal, the subject will focus on addressing the following specific objectives:

To systematize the theoretical basis of the retail banking service operations

To analyze, review and assess the situation developing retail banking services at the business center of PVcombank

To assess the service quality based on customers evaluation

To propose solutions to improve the quality of service of retail activities at the PVcombank Business Center

Research objects and scope of the study:

Research objects: the present research investigates the quality of the retail banking services of PVcombank Center, limited to services provided to individual customers

Scope of study : Topics within the limits of the actual center’s individual customer

Research Model and Research methods Overview

Research model

Research methodology overview

Thesis using some research methods, this includes:

Secondary data analysis: data collected from books and academic journals in economics, finance and banking to provide theoretical backgrounds on the retail banking services and especially on the quality services Data also collected from the annual reports of the business center PVcombank, financial reports, the annual report of PVcombank and some banks commercial, to provide information about the situation of retail banking services activities at the business center PVcombank

Service quality

Empathy

Reliability

Tangibles Responsiveness

Assurance

Chart 1: Research model

Primary data collection: using questionnaire to collect information from customers regarding the main aspects of the quality of retail banking services at the business center PVcombank

Methods of analysis of primary data: the study will use the descriptive statistics to assess the evaluation of customers about the service quality of the center, based on that the other will state the situation of the service quality of the Center

Expected results

This study is carried out with the author's desire to understand the evaluation of individual customers conducting transactions with the Business Center PVcombank with respect to the service quality Specifically, the author will collect information of the customers in terms of 5 aspects of the service quality including Reliability, Responsiveness, Tangible, Assurance and Empathy

The results obtained will help the author evaluate the current status of service quality

in the center attached to various factors such as human, processes and infrastructures of the Center in serving customers in an objective manner Strengths and limitations will be specifically demonstrated from research results

From this current status, on the basis of the objectives and orientations of PVcombank and Business Center PVcombank, a number of important solutions will be drawn in order to improve the service quality of the Center for the individual customers using retail banking service in Hanoi

Structure of the thesis

Besides the introduction, conclusion, list of references and appendices attached, the main content of the thesis is structured in four chapters:

CHAPTER 1: THEORITICAL BACKGROUND OF THE RETAIL

BANKING SERVICES AND SERVICE QUALITY

1.1 The concept, characteristics and role of retail banking services in

commercial banks

1.1.1 The concept of retail banking services

There are a number of different views and definitions of retail banking However, the most general way agreed by many authors is that the retail banking services include a wide range of financial services such as: installment loans, housing mortgage loans, credit loans, deposit services, and personal pension accounts, credit cards, etc

According to the WTO, retail banks focus on developing and trading services and products to individual customers; by which the individual customers can make transactions at various transaction offices to joint many types of services such as making a savings account deposit, account opening and management, checking account, mortgage loan, credit card service, debit card and many other services

According to Federic S Mishkin (2011), retail banking services include banking services provided by the bank to individuals, small and medium enterprises, through a network of branches, transaction offices, or the customers can access directly to banking products and services via electronic and/or internet

To distinguish retail banking services, it is necessary to distinguish the concept of wholesale bank Wholesale banks are often referred to as banks for enterprises When comparing on a professional basis, retail banks often carry a large volume of work due to many services for customers, mainly individual customers Currently, some retail banking services, such as credit cards, internet banking, etc., are considered services which can bring more profit for the financial institutions However, the banks are also facing fierce competition among financial institutions in this field

1.1.2 Characteristics of retail banking services

On the customer side, retail banks aim to serve the needs of individual customers and small and medium enterprises Therefore, in term of transactional profession, the retail banks have a large number of transactions under the small values In contrast, the wholesale banks often target to large credit institutions and business organizations, multinational companies,

and serve the needs of the large investment of government and economic organizations The wholesale banks may not have many transaction but their transactions are often of large -value

In term of products and services, the retail banks provide abundant products and services due to targeting individual customers and/or small and medium enterprises

In term of product supply, the banks often invest in building the most convenient transaction system for customers to trade due to the large and dispersed number of individual customers In addition to traditional channels that provide retail banking services the

customers, the retail banks also build their own automated banking service points and/or Internet banking

As noted by Timothy Clark et al (2007), the retail banks today are featured by three basic characteristics:

Multiple products such as deposits, credit cards, insurance, investments and securities

Multiple channels of distribution such as call center, branch, automates, internet banking, mobile banking

Multiple customer groups such as consumers, small business, and corporate

1.1.3 The role of retail banking services

According to experts on the development trend of retail banking products and services, the individual consumers and small and medium enterprises are an important source

of customers of many banks at present not only in developing countries but also in developed countries such as the United States (Timothy Clark et al., 2007)

On one hand, the large number of customers is an important source of deposits for banks to create the source of credit activities - the most important revenue-creating operation

of almost all banks On the other hand, the individual customers are also an important source

of credit products and services consumption to the market Along with that, the increase in living conditions of the customers also increases their demand for many other banking products and services - especially consumer credit

With the increasing competition among the banks, retail banking products and services targeting individual customers and small and medium enterprises always play an important role in ensuring the survival and development of each retail bank

1.2 Services and service quality in the retail banking services sector

1.2.1 The concept of service

Since service is a common concept in marketing and business, there are many definitions about this term With Armstrong & Kotler (2004), service covers a wide range of activities or benefits created and provided by the enterprises to customers to establish, consolidate, and extend long-term partnerships with customers Similarly, Zeithaml and Bitner (2000) argue that service covers any behaviors, processes and ways of performing a task that create value for the customers to satisfy their needs and expectations

The characteristics of service

The service has some different particularities and characteristics compared to conventional products Several characteristics to distinguish the service with goods include: intangibility, heterogeneity, inseparability and perishability (Loverlock, 2005)

A further important feature of the service is that the process of creating and supplying the service requires direct interaction between the sellers (creating and supplying the service) and buyers (using the service) Therefore, the human factor plays a very important role in determining the service quality and customer satisfaction

The above characteristics of the service make it difficult to quantify and fail to be identified by the naked eyes

Intangible:

The service does not have any specific shape, could not be touched, weighed, measured and counted directly as other tangible physical products With physical products, the customers can control and test the quality before buying; however, only when they decide

to buy and participate in the process of receiving the service do they feel the quality of such service

Inseparable

This characteristic manifests itself in the difficulty in dividing the service into two distinct processes, namely production and consumption The process of creating and using the services is taken place in parallel While the goods are produced, stored, distributed and finally delivered to the consumers, the service is only created and used in the process, requiring direct interaction between the seller and the buyer

Unstored

With the analysis mentioned above, it can be seen that the process of creating and storing service before use is non-existent It cannot be kept, stored and then sold as other goods It can be implemented before or after but the service creation is always parallel to the use of service and service is the product used when forming and ending immediately after

1.2.2 Quality of service and the influencing factors

The concept of quality of service

Actually, there is no single and unified definition among the authors of the nature and measurement of quality of service

Depending on the research subject and research environment, the service quality is defined differently Wisniewski & Donnelly (1996) argue that service quality is the extent to which a service can meet the needs and expectations of customers, or the ability to meet expectations and satisfy the needs of customers With Parasuraman et al (1988), the service quality can be assessed based on the distance between customer expectations and their actual perception when using the service

The influencing factors

Many research projects have been carried out to identify variables that influence the quality of service

The research project by Sureshchandar et al (2001) identifies five key factors that affect customer perception of service quality These factors include (1) core service; (2) human element; (3) tangibles, (4) social responsibility; and (5) technical elements

The research project by Gronroos (1990) shows that the customer perception of service quality consist of five aspects: (1) helpfulness, (2) care; (3) commitment, (4) functionality, and (5) integrity

One of many research projects used by many scholars in their studies is Parasuraman

et al (1988) They studied and indicated 5 aspects of service to base when the customers make any evaluation Such aspects include:

Reliability: relates to the way the company performs and perfects the service committed to its customers in terms of quality and accuracy in agreement with the customers Reliability plays an important role because any customers would also concern whether a service provider can offer a service that meets their requirements and make them feel satisfied

Responsiveness relates to the company's willingness to support the customers through the company's readiness to provide fast, high quality and excellent services This is an important criterion because the customers will feel appreciated when the company is ready to provide them with the best things in the service supply process

Tangibles relates to the appearance of elements supporting transaction and service provision and use, including rooms, tables, chairs, computers, printed vouchers, employees' dress code, and the way to communicate with customers The tangibles factor plays an important role in creating an originally positive feeling about the quality of service

Assurance relates to employees of the service provider to see whether they have the necessary skills and confidence to perform services as committed or not, whether the customers feel comfortable when working with employees or not If they do not feel confident and satisfied when working with the employees, they are unlikely to return to make any transactions with the company

Empathy demonstrates how the company takes care and pays attention to its customers with each detailed element, makes the customers feel respected and are of particular interest This criterion can be understood as the expression at the higher level than the criterion 2, 3 and 4 mentioned above A customer who feels the care and understanding of the service staff will want to return to using the service

It can be seen from the above studies that in the course of service quality evaluation, the customers not only focus on the core service elements created and provided but they also pay much attention to contextual factors and supporting factors during the service delivery process Social factors are also of high interest to consumers and as an important factor affecting the customer perception of service quality

1.2.3 Two important models for quality of service

SERVQUAL model (Parasuraman et al, 1988)

This is a relatively popular service quality model applied in many research projects

about the quality of service It was built on the basis that the perceived service quality is any

difference between customer's expectations and perceptions of service provided

Chart 1.1: Service quality model of Parasuraman et al (1988)

Sources: Parasuraman et al (1988)

Gap 1: Gap one expresses the difference between actual customers’ expectations and

management’s perception of customers To overcome this gap, the service provider needs to

fully understand the characteristics that make up the service quality and understand, evaluate

the customers' expectations as well

Gap 2: Gap two is the difference management’s perceptions of customer expectations

and the translation into service procedures and specifications This gap appears when there is

a large range of service needs (possibly low or high leading the ineffective serving of the

enterprise)

Gap 3: Gap three is the difference between service quality specifications and the service actually delivered It appears when employees fail to correctly perform the commitments and quality criteria that the company put out

Gap 4: Gap four is the difference between service delivery intentions and what is communicated to the customers The content of a media message can increase the customer's expectation which also means the decrease in customers' satisfaction when they are not delivered the service as promised

Gap 5: If the customers find that there is no difference between their expectations and their perceptions when using a service, the quality of the service provided is perfect, that means the gap shall be zero

In terms of measurement, the author uses 22 evaluation criteria for the service quality and such criteria are associated with five basic aspects of the service Such basic aspects include Reliability, Responsiveness, Tangible, Assurance and Empathy

FSQ and TSQ model (Gronroos, 1984)

Gronroos looked at the quality of service on two criteria, namely Functional Service Quality - FSQ and Technical Service Quality -TSQ: and paid attention to the role of corporate image in the customers' evaluation and perception about the quality of service

Chart 1.2: Service quality model of Gronroos (1984)

Sources: Gronroos, 1984

Three factors that affect the quality of service in the model are the functional service quality, technical service quality and corporate image This model is often referred to as the FTSQ model

In term of the technical service quality, it is the result of the interaction process between the service provider and the customer The five criteria to assess the technical service quality include: Problem solving skill, professional competence, professional qualifications, modern equipment and information storage

In term of the functional service quality, it shows the process of creating and supplying service to the customers It is believed to play more important role than the previous factor and shown on the 7 criteria: Convenience in dealing, Behavior, Service attitude, Business organization, Customer contact, Service style and high spirit of customer service

In term of corporate image, it is meant to be the general perception, image or impression of the customers about the enterprise If the enterprise creates a good image in the customers' mind, they can easily ignore the shortcomings during the use of service in the past and vice versa Corporate image also helps the customers feel more confident into the enterprise and become loyal customers As shown by the studies, the customers who regularly use the service of the enterprise will have a better sense of corporate image than other customers

1.3 Service quality, customer satisfaction and roles of human factor in the service delivering

1.3.1 Service quality and Customer Satisfaction

Many studies have shown the intimate relationship between the service quality and satisfaction In theory, when the satisfaction is assumed to be influenced by the experience factor with a particular service, it allows the perception that the service quality is the cause of satisfaction

Eshghi et al (2008) have shown that the service quality is a decisive factor in the level of customer satisfaction regardless of the perception of service quality comes from the accumulation of customer experience or from the initial use of customer service with any specific service

Chart 1.3: Customer perceptions of quality and customer satisfaction of Wilson et al

(2008) Sources: Wilson et al (2008) Based on previous studies, Wilson et al (2008) synthesized core elements associated with the service quality and the impact of this variable to the customer satisfaction

1.3.2 The human factor in providing retail banking services

According to the analysis mentioned above, service in general and retail banking services in particular are highly influenced by the human element as the processes of producing (creating) and consuming of service are taken place in parallel There is always a direct interaction between the service staffs and customers using the service The quality of this interaction in particular and the capacity and attitudes of bank staffs play a decisive role

in the customer perception and customer satisfaction

According to Philip Worsfold (1999), many studies have indicated that there is a closely related relationship between the human element (staff) and quality of service; therefore, the banks can use this element as an important source to create competitive advantage over other banks

In the service delivery process, the service staffs and related people are not merely the service creators and providers but they are also the critical factor to determine the quality of the service provided

As pointed bout by Lovelock (2005), the human element primarily determines the outcome of any service provided because the service differs from commodity at four major points, including intangibility, heterogeneity or variability, perishability of output, no inventory, and simultaneity of production and consumption

Of the four characteristics mentioned above, the intangibility is considered the attribute with the most important role The service intangibility shows that the service delivery/production process is even more important than the other processes In fact, the consumers are experiencing "one process" rather than one output (Gronroos, 1990)

Their perception and evaluation of any service delivery process is critical to their perception of quality This shows that the human element plays a decisive role in providing any high quality service The greater the service quality the providers wish to deliver to the customers, the more important the role of the service staffs (Batt & Moynihan, 2006)

Among the service quality measurement models, the SERVQUAL model has been applied in evaluating the service quality in general and the quality of banking services in particular By applying this model, the researchers will understand the customers' evaluation

of a number of important service elements such as Reliability, Responsiveness, Tangibles, Assurance and Empathy On that basis, the administrators can have an effective impact on each aspect of the service to improve overall service quality

Due to its usefulness, this model was used by the author within the thesis to analyze the customers' evaluation of the retail banking service quality at the PVcombank Business Center

CHAPTER 2: DATA GATHERING AND RESEARCH

METHODOLOGY

2.1 Data collection instrument

In order to obtain the customers' evaluation of five aspects of the service quality as described in the research model in the Chapter 1, the author uses the scale of Parasuraman et

al (1988) for measurement and evaluation

This scale consists of 22 questions, which evaluates 5 aspects of the service mentioned in the research model The scales was translated into Vietnamese with the help of language experts, and then adapted to the terminology to match the research context, i.e the research on the retail banking service quality at the PVcombank Business Center under the customers' evaluation

Prior to the data collection, the author sent a questionnaire to 05 customers who read and evaluated the vocabulary and the manner in the questionnaire to ensure easy understanding, easy answering and correctness to the research implication The comments were updated and adjusted by the author to get the final questionnaire

The table below provides detailed questions used in the research project:

2 REL2 PVcombank Business Center provides services at

the time they promised

3 REL3 PVcombank Business Center performs accurate

services without any mistakes

4 REL4 PVcombank Business Center performs accurate

services right from the start

5 REL5 In case of problems,PVcombank Business Center

is always paying attention to timely resolution

Parasuraman et

al (1988)

Responsiveness

6 RES1 PVcombank Business Center staffs always

satisfactory resolve the questions, complaints by customers

7 RES2 PVcombank Business Center announces when the

services are performed

8 RES3 PVcombank Business Center staffs provide

timely and fast services

9 RES4 PVcombank Business Center staffs respond

positively to the requests of the customers

Tangibles

10 TAN1 PVcombank Business Center has a beautiful

location with convenient and scientific layout for the customers

11 TAN2 PVcombank Business Center has up-to-date and

modern equipment

12 TAN3 PVcombank Business Center has adequate

facilities, which conform to the banking services that the Bank offers

13

TAN4 PVcombank Business Center staffs are

professional and in polite costumes

Assurance

14 ASS1 PVcombank Business Center staffs serve the

customers in a courteous, modest style

15 ASS2 Customers feel safe when making transactions

with the staffs of PVcombank Business Center

16 ASS3 PVcombank Business Center staffs create trust

with the customers

17 ASS4 PVcombank Business Center staffs have expertise

for clear and correct answer to the questions of the customers

Empathy

18 EMP1 PVcombank Business Center staffs concern in the

customers

19 EMP2 PVcombank Business Center staffs give their

concern about the customers

20 EMP3 PVcombank Business Center staffs understand

what customers care about at most

21 EMP4 PVcombank Business Center have convenient

opening hours for all customers

22 EMP5 PVcombank Business Center staffs understand

the needs of customers

Table 2.1: Scale of data collection Appendix 1 at the end of the thesis presents the full questionnaire using the data collected for research purposes

2.2 Data sources and data collection

2.2.1 Data sources

Because the objective of the research is to investigate the current customers' evaluation of PVcombank retail banking services in term of the service quality, the questionnaire is used to collect the primary data

The audiences answering the questionnaire were the customers who make transactions

at the Center for any products and services of the retail banking field in the Center

2.2.3 Implementation of data collection

A total of 200 questionnaires were prepared and sent to the customers to reply in April 2017 The questionnaires were directly delivered by the staffs of any department in direct contact with the customers in the Center to the customers when they went to the bank

to make any transactions The questionnaires after being completed were returned to the bank staffs

The valid questionnaire used for the analysis data were any questionnaires that were answered fully without any abnormality in the answer (such as responding too quickly, focusing on a certain choice for the majority of questions, etc.) There were173 valid questionnaires obtained to be used for the data analysis

2.3 Sampling method and Data Analysis Methods

2.3.1 Sampling method

In this research project, the author uses a convenient sampling method based on the shaping customer groups by age and gender to ensure the representation nature of the research sample

On the scale of the sample, according to Krejcie and Morgan (1970), the sample size

is considered appropriate when the number of observations (respondents) is five times the number of study variables, i.e the number of questions in the questionnaire The research model included in this thesis consists of 5 factors, 22 observed variables, so the minimum sample size required to ensure the reliability of the research data is 5 x 22 = 110 observed variables

The valid form to use the analysis in this thesis includes 173 observations, which can ensure the scale

2.3.2 Data Analysis Methods

The following data analysis methods were used by the author with the aim of achieving the research objective:

Exploratory Factor Analysis-EFA and Alpha Cronbach analysis were used to assess the reliability of the scale

The Exploratory factor analysis-EFA is often used to identify factor structure of a scale, or to gather specific questions in each group to summarize and identify data structures more clearly Regarding the goal of identifying the scale structure, EFA is often used to

explore the latent factors or variables When performing factor analysis, the researcher should make decisions regarding the number of factors to be extracted, basis for holding and/or removing an item, and criteria for evaluating the overall EFA model

The number of extracted factors was decided based on any separate value (Eigen value) created for each factor The total eigen value of all the generated factors would be equal to the total number of observed variables (or questions, called items) used in the scale Eigenvalue values are usually lowered from high to low For example, a study that uses 15 questions (commonly called items) to run EFAs can result in 15 factors where each factor has one or more items associated with it The eigen value of each factor will be specified in descending order The total value of the eigen values will be equal to the total items used, i.e

15 factors with separate value greater than or equal to 1 will be retained (extracted)

The loading value of the item with the factor can be used to remove an item A factor with a low loading (less than 0.5) with factors or a high loading (greater than 0.5) with more than one factor will be removed from the model The factors having loading at least 0.5 with

a single factor among the formed factors will be retained

Criteria for evaluating the quality of a scale using the EFA method include (1) variance ratio of the data explained by explained values, and (2) loading value of items being retained on extracted factors For the total variance of the extract, if the cumulative variance

of the extracted factors is between 50 and 60% or more, it is considered acceptable The better the extracted variance, the higher quality EFA models is On the loading value of items retained on the factors, the loading value from 0.5 or more is considered acceptable, from 0.7 and above is considered good (loading values from -1 to 1)

The Alpha Cronbach is a method used to evaluate the scale reliability of a scale The Alpha Cronbach coefficient allows the evaluation of convergence degree of the measurement criterion (measurement question) with the same variable or factor used in the study The greater the value of Cronbach, the greater the degree of convergence of measurement question in the same variable/factor, the greater the reliability of the scale, and vice versa

Alpha Cronbach values usually change from 0 to 1 The closer the value to 0 is, the lower the reliability of the scale is and vice versa A threshold of 0.6 is often selected in the studies to assess the reliability of a scale (Hoang Trong - Chu Nguyen Mong Ngoc, 2008)

To obtain information about the customer's evaluation of service aspects, the author used descriptive statistics including mean and standard deviation and frequency analysis

On data analysis methods, statistical methods were used to (1) evaluate the reliability scale, and (2) analyze data to meet research objectives The method used to evaluate the scale included EFA analysis and Alpha Cronbach analysis Data analysis methods included descriptive statistics (Mean and Standard Deviation, Frequency) and charts

CHAPTER 3: EVALUATION OF THE RETAIL SERVICE QUALITY

OF INDIVIDUAL CUSTOMERS AT BUSINESS CENTER OF

PVCOMBANK

3.1 Introduction of PVcombank and PVcombank Business Center

3.1.1 Introduction to PVcombank

The formation and development of PVcombank

Vietnam Public Joint Stock Commercial Bank (PVcombank) was established under Decision No 279/GP-NHNN dated 16 September 2013 of the State Bank of Vietnam on the basis of the merger of PetroVietnam Finance Joint Stock Corporation Vietnam (PVFC) and Western Commercial Joint Stock Bank (WesternBank) On 01/10/2013, PVcombank is officially operating on the basis of the certificate of enterprise registration of the joint stock company, business code 0101057919 issued by the Department of Planning and Investment

With the slogan "Bank of No Distance", PVcombank aims to build a close, friendly and devoted bank image for the success of its customers We are committed to striving to become a standard bank in service delivery; with a friendly style, take the benefit of customers - partners as action targets

Now, over 97% of PVcombank’s employees has possessed the university degrees, postgraduate education, and has professional proficiency Plus, PVcombank is one of the first commercial banks has successfully implemented the core banking system software T24 (Core Banking) provided by Temenos in Switzerland with the ability to process over 10,000 transactions per second which can meet most of customers’ requirements and improve the

service quality On 25th November 2015, PVcombank was ranked for 86th on the top 500 largest private enterprises in Vietnam which was a great result evaluated basing on the criteria of revenue and profitability, total assets, growth, and number of employees… all of above-mentioned shows that the business performance of PVcombank in 2015 had a big breakthrough, contributing to strengthening the position of the bank despite the bank just shifted its form of running business from 2013

PVcombank has possessed strengths and certain advantages from the most powerful corporation, Petro Vietnam, known as a strategic shareholder of the bank With compact structure, professionalism, highly trained staff, PVcombank promises to become one of potential commercial banks in the Vietnamese banking field

Vision and strategy

For the statement of the vision, PVcombank has determined not to be the first but to

be the best bank with priority objective is to become one of the top commercial banks of Vietnam

In term of strategy, the Bank aims:

To maintain the financial situation at a high level of safety, to optimize the usage of equity capital – ensuring the rights of customers, the bank, and shareholders

To achieve high growth by creating a difference on the basis of understanding customers’ needs and following customer-based orientation;

To build a risk management system synchronization, efficiency, and professionalism in order to ensure a sustainable growth and development;

And to achieve this objective, there is a strategy to prepare human resources, to train professional labor force, and also to construct “Culture of PVcombank” to become spiritual elements to amount the entire system

3.1.2 The formation and development of the Business Center PVcombank

PVcombank Business Center is based at 22 Ngo Quyen, Hoan Kiem, Hanoi

Some features of the establishment and development of the Center include:

The Business Center was founded on: June 01, 2015

The purpose of establishment: to develop core banking products, including credit loan products, deposit mobilization products, and credit card issue The Center serves the needs of both institutional and individual customers in which the latter is considered the main subject