Customer satisfaction for internet banking services at the bank for investment and development of vietnam bidv

Lunghwa Universityof Scienceand Technology Department of Business Administration Thesis for a Master’s Degree Customer satisfaction for Internet banking services at the Bank for Investme

Lunghwa Universityof Scienceand Technology Department of Business Administration

Thesis for a Master’s Degree

Customer satisfaction for Internet banking services at the Bank for Investment and Development of Vietnam (BIDV)

Researcher: Nguyen Phuong Thao

Supervisor: Nguyen Van Dinh

December 2018

Lunghwa University of Science and Technology Approval Certificate of Master's Degree Examination Board

This is to certify that the Master Degree Examinations Board has approved the thesis Customer satisfaction for Internet banking services at the Bank for Investment and Development of Vietnam (BIDV)published by Mr.／Ms.Nguyen Phuong Thao in the Master Program of Graduate School

of Department of Business Administration

Master’s Degree Examination Board

Board Members：

Chair： Cho, James

Date： 2018／12／12

ABSTRACT

Thesis Title: Customer satisfaction for Internet banking service at the Bank for

Investment and Development of Vietnam (BIDV)

Pages：102 University：Lunghwa University of Science and Technology

Graduate School：Department of Business Administration

Date：December 12th, 2018 Degree：Master

Researcher: NguyenPhuong Thao Advisor：Nguyen Van Dinh

Keywords:Banking services, Internet bankingService, customer satisfaction, customer satisfaction for Internet banking service

This thesis is written based on the idea that the Bank for Investment and Development of Vietnam (BIDV) is facing problem of losing competitive advantage in banking services in Vietnam due to low customer satisfaction for Internet banking (IB) service Therefore, the bank itself is trying its best to overcome this situation by spending energy and efforts to improve IB service – a business area that did not always receive much attention from the managers before BIDV would easily lose its current market to business rivals who are better in satisfying the customer demand

Having recognized these aspects, ojectives of this research study were formulated

depth interview and survey The questionnaire includes eight important dimensions (Tangible, Problem handling, Security, Reliability, Efficiency, Fees and charges, Promotion and extra benefits and Variety of service) measuring customer satisfaction for IB service and concretizing into 30 criteria Each criteria is rated from 1 to 5 which 1

is lowest and 5 are highest with two kinds of assessments: expectation (from not highly expected to very highly expected) and for perception (from total disagreed to strongly agreed) If perception equals expectation, this criteria satisfies customers, if perception

is less than expectation, this criteria dissatisfies customers

After analyzing data by excel application software, the author has come to some key findings as following:

- The overall satisfaction of customer for IB service at BIDV is at an average level

3.29 point on a scale of 5 point However, base on the comparison between expectation and perception for each dimension (disconfirmation), there is no dimension fully satisfies customers because all dimensions get negative disconfirmation or perception lower than expectation Customers dissatisfy most with the variety of BIDV IB serviceat -1.14 point for the lack of money transfer, online deposit function and weak bill payment function Customers are on the trend to satisfy with BIDV IB service for attractive promotion programs, the accuracy of fees calculation, collection and the simplicity of registration form

- The rank of most importance dimension chosen by customers is listed in the

following order: The 1st is Variety of services, the 2nd is Security, the 3rd is Reliability, the 4th is Efficiency, the 5th is Fees and Charges, the 6th is Problem handling, the 7th is Promotion and extra benefits and the least important factor is Tangible

Base on the thesis findings, the author suggested some below recommendations to improve customer satisfaction for IB service in the coming years as:

- Diversify the variety of IB service

- Enhance security for IB customers

- Develop the information technology

- Improve staff quality

- Improve customer care service

- Enhance marketing activities

ACKNOWLEDGEMENT

I would like to express my sincere thank Asoc Prof., Dr Nguyen Van Dinh and Assistant Prof., Cho, James- my supervisors, and corporate officers of Business at Joint Stock Commercial Bank for Investment and Development of Vietnam devoted to guide and help me complete this thesis

Thank you!

Author

Nguyen Phuong Thao

TABLE OF CONTENTS

ABSTRACT i

ACKNOWLEDGEMENT iii

TABLE OF CONTENTS iv

LIST OF TABLES vii

LIST OF FIGURES viii

ABREVIATIONS ix

1 INTRODUCTION 1

1.1 Rationale 1

1.2 Research objectives 2

1.3 Research questions 2

2 RESEARCH METHODOLOGY 3

2.1 Research process 3

2.2 Data collection 3

2.3 Data analysis 5

2.4 Scope of research 5

2.5 Thesis structure 5

3 THEORETICAL BACKGROUND AND OVERVIEW OF INTERNET BANKING SERVICE AT THE BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM6 3.1 Overview of Internet banking at commercial Bank 6

3.1.1 Commercial banks and their services 6

3.1.2 Internet banking of commercial bank 6

3.1.3 Type of Internet banking service 7

3.1.4 Characteristics of IB service 8

3.1.5 Benefits of IB service 9

3.1.6 Trends of IB service 12

3.2 Customer satisfaction for Internet banking service 13

3.2.1 Concept of customer satisfaction 13

3.2.2 Model to analyze customer satisfaction for IB service - Expectation

Disconfirmation Model 14

3.2.3 Factors affecting customer satisfaction for IB service 15

3.2.4 Dimensions and criteria to measure customer satisfaction for IB service 17

3.3 Literature review 24

3.4 Overview of Bank for Investment and Development of Vietnam 26

3.4.1 Bank profile 26

3.4.2 Organization structure 27

3.4.3 The Bank performance in the period 2015-2017 27

3.5 Internet banking service at the bank for investment and development of Vietnam in the period 2015-2017 30

3.5.1 Types of Internet banking service at BIDV 30

3.5.2 Developing Internet banking sevice at BIDV 32

3.6 Conclusion of chapter 36

4 RESEARCH FINDINGS 37

4.1 Evaluation on customer satisfaction for BIDV IB service 37

4.1.1 Customer satisfaction for Tangible 37

4.1.2 Customer satisfaction for Problem handling 40

4.1.3 Customer satisfaction for Security 42

4.1.4 Customer satisfaction for Reliability 44

4.1.5 Customer satisfaction for Efficiency 45

4.1.6 Customer satisfaction for Fees and Charges 47

4.1.7 Customer satisfaction for Promotion and Extra Benefits 49

4.1.8 Customer satisfaction for Variety of services 50

4.1.9 Overall satisfaction for BIDV Internet banking service 53

4.1.10 Priority issues to improve customer satisfaction for IB service 54

4.2 Achievements and drawbacks of Internet banking service at the bank for investment and development of Vietnam in satisfying customers 56

4.2.1 Achievements 56

4.2.2 Drawbacks and causes 57

4.3 Conclusion of chapter 58

5 RECOMMENDATIONS TO IMPROVE CUSTOMER SATISFACTION FOR IBMB SERVICES AT BIDV 59

5.1 Potentials and future perspectives of Internet banking service in Vietnam 59

5.1.1 Business environment and the bank strategy 59

5.1.2 BIDV orientations and objectives for developing IB service 60

5.2 Poposed solutions to improve customer satisfaction for Internet banking service at BIDV 61

5.2.1 Diversifying Internet banking service 61

5.2.2 Enhancinge security for Internet banking customers 63

5.2.3 Updating information technology for IB service 64

5.2.4 Improving staff cabability 65

5.2.5 Improve customer cares 67

5.2.6 Enhancing marketing activities 68

5.3 Conclusion of chapter 69

6 CONCLUSION 71

REFERENCES 73

APPENDICES 74

LIST OF TABLES

Table 1 Primary data collection 13

Table 2 Dimensions e-service quality………32

Table 3 Major performance indicators in 2015-2017 39

Table 4 BIDV retail banking performance 2015-2017 40

Table 5 Internet banking performance 2015 - 2017 44

Table 6 Mean score of Tangible dimension 49

Table 7 Mean score of Problem handling dimension 51

Table 8 Mean score of Security dimension 53

Table 9 Mean score of Reliability dimension 54

Table 10 Mean score of Efficiency dimension 56

Table 11 Mean score of Fees and Charges dimension 58

Table 12 Mean score of Promotion and Extra Benefits dimension 60

Table 13 Mean score of Variety of services dimension 61

Table 14 Most important rank of Dimensions 64

Table 15 Priority rank of dimensions 64

LIST OF FIGURES

Figure 1 Research Process 12

Figure 2 The Expectation Disconfirmation Model 23

Figure 3 Interface of BIDV Online service 42

Figure 4 The high level IT application model 44

Figure 5 Customer satisfaction for Tangible dimension 50

Figure 6 Customer satisfaction for Problem handling dimension 52

Figure 7 Customer satisfaction for Security dimension 54

Figure 8 Customer satisfaction for Reliability dimension 56

Figure 9 Customer satisfaction for Efficiency dimension 58

Figure 10 Customer satisfaction for Fees and Charges dimension 59

Figure 11 Customer satisfaction for Promotion and Extra benefits dimension 61

Figure 12 Customer satisfaction for Variety of Services dimension 63

Figure 13 Most important percentage of Dimension 65

Figure 14 Interface of new Internet banking system 73

LIST OF ABREVIATIONS

ATM: Automated Teller Machine

BIDV: Bank for Investment and Development of Vietnam BSMS: Broadcasts Short Message Service

CAR: Capital Adequacy Ratio

CRM: Customer Relationship Management

IB: Internet banking

MIS: Management Information System

NPLs: Non-performing loans

POS: Point of sale

R&D: Research and Development

ROA: Return on Assets

ROE: Return on Equity

SBV: State Bank of Vietnam

SMS: Short Message Service

SME: Small and medium-size enterprises

SSL: Security Socket Layer

VCB: Vietnam Commercial Bank

1 INTRODUCTION

1.1 Rationale

In the fierce competitive business environment today, customer is the key factor deciding the existence of a bank Customer satisfaction becomes more and more concerned issue in the field of business management The bank attracting attention, making customer satisfied and loyal will win and develop

In the advent of the information era, information technology has developed rapidly and has become significant for every business, especially the banking industry Upgrading technology, diversifying utilities, improving the quality of products and services are survival conditions if Vietnam banks want to compete with not only domestic banks but also foreign banks and further to integrate with the world economy

To satisfy the customers’ increasing demand, BIDV currently changes its traditional banking services to develop modern banking services by becoming increasingly to rely

on E-banking

E-banking in general and IB in particular is modern channels for customers to make banking transactions and it becomes one of the competitive advantages for many banks choosing individual customers as target customer Realize this trend, with the vision to

2018 is “Becoming the leading retail bank of Vietnam, equal to ASEAN leading commercial banks”, BIDV has developed the IB service since 2005 for corporate and

2007 for individuals

Although IB service have attracted many customers in recent years, however, its development still does not adequate to the potential of BIDV Customers often complain about the errors of the services for message duplicate, message lost, etc The revenue coming from services is still moderate in comparison with other services

This fact derived from the low level of customer satisfaction for BIDV IB service Moreover, at this time, BIDV is going to launch the new IB system to all customers thus, it is important to assess the customer satisfaction for current IB service to increase the competitive position with other banks

Therefore, I choose the subject: “Customer satisfaction for Internet banking

service at the Bank for Investment and Development of Vietnam (BIDV)” for my

thesis with the hope of contributing to the development of IB service in particular and the bank in general

1.2 Research objectives

- Studying theoritical bacground of customer satisfaction and for customer satisfaction IB service; identifying dimensions and criteria of customer satisfaction for

IB service base on customer expectation and perception

- Analysing current situation of customer satisfaction for IB service at BIDV, Measuring differences between customer expectation and perception to find out the customer satisfaction for BIDV IB service and causes of thoses

1.3 Research questions

- What are dimensions and criteria of customer satisfaction for IB service?

- How do customers satisfy with current IB service at BIDV?

- What should BIDV implement to improve customer satisfaction for IB service?

2 RESEARCH METHODOLOGY

2.1 Research process

The process of study of this thesis could be summed up in following chart:

Source: Author Idea

Figure 2.1 Research Process

2.2 Data collection

a Secondary data

Internal reports of BIDV performance and IB service at BIDV within 3 years from

2015 to 2017 (number of customers, revenues…) Besides, regulations, brochures, official documents of BIDV were also used to give out overview about BIDV and IB service

Internet, newspapers, other financial magazines and former research studies related

Secondary data

Recommendations

Survey

Dimensions and criteria to measure customer satisfaction

In-depth Interview

Bank Orientation Disconfirmation

Actual satisfaction

to banking and IB services These data let the author know what is the situation of BIDV IB service on current Vietnam IB market and potential development of IB services

b Primary data

Primary data were collected in May and June of 2018

Process and method to collect primary data is following:

Table 1 Primary data collection

In-depth

Interview

- Head of Retail Banking Development Department of BIDV

- 2 managers from Individual Relationship Division of BIDV Cau Giay Branch and BIDV First Transaction Branch

- 2 managers from Individual Customer Service Division of

Branch and BIDV Ha Noi Branch

Interview at their office

1 What does customer expect about IB services?

2 How does customer satisfy with the IB serviceat BIDV?

3 What is BIDV orientation

in developing IB services?

4 What is recommendation for BIDV to improve IB services?

Survey - 150 customers using

IB serviceat Hanoi area were choosen randomly from BIDV data base

137valid questionnaires

in which + 28 customers are using only IB service + 56 customers are using only MB service + 53 customers are using both IB and MB services

- Using online customer satisfaction survey on

www.spreadsheets.google.comwith professional product

- Up load the questionnaire by using intuitive wizard interface of this web

- Sending the link of questionnaire to customers via email

1 What does customer expect about IB services?

2 How does customer perceive about BIDV IB services?

3 How do customers satisfy with IB serviceat BIDV in general?

4 Which dimension customers rank the most important?

5 Customer feedbacks to improve BIDV IB services

Source: Author Idea

2.3 Data analysis

With information collecting from survey, I used the Mean in Central Tendency Measure and Excel application to calculate customer expectation, perception and disconfirmation for each criteria and dimension The satisfaction level was found based

on disconfirmation score

2.4 Scope of research

This thesis was carried out under some assumptions and scope as follows:

- Research Objects: This thesis focuses on customer satisfaction for current IB serviceprovided by BIDV to Individual customers only

- Geographical scope: The research was conducted in Hanoi

- Timing scope: Secondary data was collected in 3 the years 2015-2017 and primary data was carried out on June-July 2018

2.5 Thesis structure

The thesis was divided into five chapters:

Chapter 1– Introduction

Chapter 2– Theoritical background and literature review

Chapter 3– Overview on BIDV and IB service at BIDV

Chapter 4– Findings on customer satisfaction for BIDVIB service

Chapter 5 – Recommendations to improve customer satisfaction for BIDV IB

service

3 THEORETICAL BACKGROUND ANDOVERVIEW OFINTERNET BANKING

SERVICE AT THE BANK FOR INVESTMENT AND

DEVELOPMENT OF VIETNAM

3.1 Overview of Internet banking at commercial Bank

3.1.1 Commercial banks and their services

According to the Law on Credit Organizations:

- Commercial banks are credit organizations which are entitled to conduct all banking activities and other related business activities for the purpose of profit in accordance with the Law on Credit Organizations and other provisions of law (Decree

No 59/2009 / ND-CP of the Government about the organization and operation of commercial banks)

- Commercial banks provide these services:

+ Receiving deposits;

+ Credit;

+ Payment service via account

3.1.2 Internet banking of commercialbank

E-banking is one of the new and modern services provided by domestic commercial banks It can offer the concept of E-banking services based on the following concepts:

- Electronic means is a means of operating based on electrical, electronic, digital, magnetic, wireless, optical, electromagnetic or similar technologies (Law on electronic Transaction 51/2005 / QH11)

- Electronic transaction: transaction is conducted by electronic means (Law on electronic transaction 51/2005 / QH11)

- "A service is any act or performance that one party can offer to another that is essentially intangible and does not result in ownership of anything Its production may

or may not be tied to a physical product." (Kotler, 1987)

From the above concepts we can understand: E-banking is a banking service provided to customers via electronic means, where customers do not need to come directly to the bank counter but still perform transactions and capture financial information

Currently, the operation of the bank exists in two forms The first is the form of online banking, which is based only on the Internet environment, providing 100% service through the network environment The second form is a combination of a traditional commercial banking system and the traditional electronicisation of services,

ie the distribution of old service products on new distribution channels E-banking services in Vietnam are mainly developed in the second form

3.1.3 Type of Internet banking service

There are many kinds of classify IB service such as:

a Base on the complicated level of services

- Non-financial services:At the basic level,banks use this service to introduce

products, services to customer and other information such as branch network, Automated Teller Machine(ATM), Point of sale (POS) location…This system is not linked to bank database, therefore, risk to bank is very low At higher level of this service, customers can inquiry balance account, history of transaction, email…but they cannot make financial transaction such as fund transfer or bill payment For this kind of service, customer can connect directly to database of the bank, therefore, the risk will be higher

- Financial services:This service allows customers to make financial transactions

such as fund transfer, bill payment (electricity, water, electronic…), buying or selling stocks… At this level, service will connect directly to database of bank, therefore risk level is highest and bank needs to have strict risk management policy through using

authentication methods

b Base on types of customers

- Services for individual customers:

Account information: Customers can collect account information including balance, transaction history and account statement, deposit information including total amount, type of deposit, term, issued date, maturity date and interest rate, loan information including loan amount, type of loan, date of disbursement as well as credit card information… Customer can download and print out these data

Domestic and international fund transfer: Customers can transfer money from their own accounts to other acceptable accounts immediately or in a future date IB system also supports customer to make an automatically fund transfer orders Customer can check transfer process through SMS or email

Bill payment: This function allows customer to pay bill, support them to register, check the list of bills, set up standing instruction or schedule bill payment in future date Open and close account, deposit: customers can make a deposit, open an account online as well as withdraw deposit

Credit card management: This function allows customers to manage and make transactions related to credit card

Other service requests: Customers can apply for a loan, credit card, debit card, cheque book, statement or bank draft

- Services for corporate customers: Similar to individual customer, IB system

allows corporate customer to inquiry account, loan, deposit information, fund transfer, bill payment, credit card management and other service requests However, there are some additional services for this type of customers which are trade finance and salary payment

In this thesis, I only focus on the IB service providing to Individual customers

3.1.4 Characteristics of IB service

a Self service

In the past, to conduct any banking transaction including simple or complicated transactions, such as balance checking, money transfer, bill payment etc, customers have to go to banks’ transaction points to require banking staffs to carry out banking transactions But now, along with the appearance of IB service, customers can do many different kinds of banking transaction by themselves It seems to be a revolution in banking industry because it makes different opinions of banking, bringing the bank closer to customers Self-service of IB service creates initiate for the commercial banks’ customers in conducting banking transactions and saving time because they do not need

to queue and wait for being served

b Electronic Authentication

Verifying the identities of customers and authorizing IB activities are integral part

of IB financial services Since traditional paper-based and in-person identity

authentication methods reduce the speed and efficiency of electronic transactions, banks should adopt alternative authentication methods, including passwords and personal identification numbers (PINs), Digital certificates using a public key infrastructure (PKI), Microchip-based devices such as smart cards or other types of tokens, Database comparisons (e.g., fraud-screening applications), and Biometric identifiers

These authentication methods vary in the level of security and reliability they provide and in the cost and complexity of their underlying infrastructure The choice of which techniques to use should be commensurate with the risks in the products and services for which they control access

d Availability every time and everywhere

The preeminence of IB service is the availability every time and everywhere The limitation of traditional banking is that customer only can carry out banking transactions within the working time However, with IB service, customers of commercial banks can

do banking transactions in case the banks close That means they can transact with banks every time or 24/7 Furthermore, with IB service, customers can do banking transactions through electronic portals, so they can conduct banking transactions everywhere, for example when they stay at home or office

3.1.5 Benefits of IB service

a Bank benefits

Product diversification: When mentioning banking services, people think about

traditional services firstly such as loan, lending, deposit and other wholesales services Thus, there is a little difference of these services among banks Currently, most banks develop not only traditional banking services but also modern ones such as card services

and IB especially which help banks to create high difference with other banks IB that developed based on advanced and modern technology is a good solution for banks to diversify their product portfolio and to attract more and more customer as well

Attracting high value customers:IB service often attract high profit customers with

higher average income and educational levels, which help to increase the size of revenue streams Most of them are regularly using online channels in terms of a variety

of purposes and no need for regular personal contacts with the bank branch network, which is considered an expensive channel for bank to run Some researchers suggest that the addition of the internet delivery channel to an existing portfolio of service delivery channels result in extra revenues which mainly come from the increase in non-interest income from service charges deposit/current account

Cost reduction: The main economic argument of IB service so far has been the

reduction of overhead costs of other channels such as branches, which require expensive buildings and a staff presence It also seems that the cost per IB service transaction often decrease more rapidly than that of traditional bank once a critical mass of customer is archived The general consensus is that the fixed costs of IB service are much higher than variable costs, so the larger customer base of the bank, the lower costs per transaction would be Whilst this implies that cost per transaction for smaller banks would in most cases be greater than that of larger banks, even in small banks it is seen like the cost per transaction will be below that of other banking channels

Increasing revenues:Revenue increasing as a results of offering e-channel is often

reported, because increases in the number of customers, to be the retention of existing customers, and cross selling opportunities Electronic bill payment is also on rapid rise which suggests that electronic bill payment and other related capabilities of IB service have a real impact on retail banking practices and rapidly expanded revenues streams

Quick expansion: Traditionally, when a bank wanted to expand geographically it

had to open new branches, thereby incurring high start up and maintenance costs IB have made this unnecessary in many circumstances Now banks with traditional customer base in one part of the country, can attract more customers from other parts, as most of financial transactions do not require physical presence near customer living places

Enhanced image:IB service help to improve the image of organization as customer

focused innovative organization This was especially true in early days when only the

most innovative organizations were implementing this channel Despite its currently common availability, an attractive banking website with a large portfolio of innovative products still enhances a bank image This image has been also considered as the effectiveness at e-marketing and attracting young/ professional base

b Customer benefits

Choice and convenience for customers: A “customer first” approach is critical for

success in IB service Customers hold the key to success and companies have to find out what different customers want and provide it by using the best available technology In modern business environment, customers want greater choices They want the traditional range of banking services, argument by the convenience of online capabilities and a stronger focus by banks on developing personal relationships with customers IB service backed up by data mining technologies can help to further understand customer needs and customize products/services according to those needs Offering extra service delivery channels mean wider choice and convenience for customers, which itself is an improvement in customer service IB service can be available 24 hours a day throughout the year, and a widespread availability of the internet, even on mobile phones This means that customer can conduct their financial tasks virtually anywhere and anytime

Speed and time saving: The response of the transaction is very fast; therefore,

customers can actually wait until the last minute before concluding a fund transfer For instance, they can transfer money electronically from their bank accounts or receive money in their bank accounts within seconds On the other hand, customer can save time from travelling to brick and mortar bank branches for conducting banking transactions Furthermore, other key banking activities can be used productively for other pursuits For example, they can reschedule their future payments from their bank account while they are far away from bank branches

Fund management: Customers can download their history of different accounts and

do a “what-if” analysis on their own PC before affecting any transaction on the web This will lead to better funds management

payments, reduce huge amount of cash in circulation and reduce cost of printing, issuing and circulating money IB service pave the way for SBVs to fulfill their tasks in managing cash, non-cash payment and improving the effectiveness of national monetary Given ifs functions, IB service create a dynamic finance market by increasing speed of capital use and production; improving economic activities and expanding relationship with domestic and foreign partners

Security is absolutely paramount in the online channel Banks need to develop systems that combine sophisticated security mechanisms – multiple passwords and virtual keyboards – with simple logon procedures Secure sites are ideal sales channels because they offer a unique opportunity to tailor product alerts and offers to the individual However, because not everyone is comfortable with technology, banks should be able to provide live technical support as well as answers to product queries Given the importance of the internet to time-poor customers, banks must develop websites targeted solely at the mass affluent if they are to fully exploit this segment According to a recent research done by Booz Allen Hamilton, the most valued Global Attributes of online channels are:

- Robust security measures

- Simple and quick logon

- Site availability

- All services on same site

- Clear and intuitive layout

- Comprehensive informatioN

3.2 Customer satisfaction for Internet banking service

3.2.1 Concept of customer satisfaction

In any business, customers are the most important aspect of a successful company and the customers need to be looked after and managed properly To make customers satisfy is one of the most important missions of all business entities in the development today because of its affect on consumer purchase intentions and customer loyalty The term “customer satisfaction” appeared in America in the mid 70s of 20thcentury, after that it is interested by most of countries in the world The English word

“satisfaction” stems from Latin, from the words “satis” (enough) and “facere” (to make) Many scholars have analyzed the term from different angels There are many definitions of customer satisfaction and some definitions broadly known are:

Customer satisfaction generally means customer reaction to the state of fulfillment, and customer judgment of the fulfilled state (“Satisfaction: A Behavioral Perspective on

the Consumer” - Oliver, 1997)

Satisfaction is a person feeling of pleasure or disappointment resulting from comparing a product perceived performance (or outcome) in relation to his or her expectations (“Marketing Management” -Kotler, 2000)

The customer evaluation of a product or service in terms of whether that product or service has met their needs and expectations (“Services Marketing: Integrating

Customer Focus Across the Firm” - Bitner and Zeithaml, 2003)

Customer satisfaction is an overall post purchase evaluation (Expectations

Performance Customer Satisfaction - Formell, 1992)

Customer satisfaction result from the interaction of levels of expectation about anticipated performance and evaluations of percerived performance (“The Theory

of Stochastic Processes” - Miller, 1977)

Though being different, these definitions above contain four common elements: The performance of the product or service as perceived by the customer

The expectation of the performance which the consumer has

The perceived costs or sacrifices involved in making the purchase and using the product/ service

The time at which the satisfaction with the product/ service is assessed

Thus, customer satisfaction is a psychological feeling after the customer needs are met Customer satisfaction is formed on the basic of especial experiences accumulated when shopping and use of products and services After purchasing and using products and services, customers have comparisons between expectations and reality, thereby they have evaluating the satisfaction or dissatisfaction

3.2.2 Model to analyze customer satisfaction for IB service - Expectation Disconfirmation Model

The expectation disconfirmation model suggests that customers determine satisfaction with a service by comparing perceptions of performance against their expectations This model was the dominant paradgim of satisfaction/ dissatisfaction formation for many years It provides the theoretical basis for understanding the formation of customer satisfaction and the assessment of service quality

Figure 2 The Expectation Disconfirmation Model

The four main constructs in the model are expectations, perceived performance, disconfirmation and satisfaction

Expectations: Expectations serve as the comparison standard in the model – what

consumers use to evaluate performance and form a disconfirmation judgment Expectations have a central role in influencing satisfaction with services, and these in turn are determined by a very wide range of factors The basic key factors most commonly seen to influence expectations are described as:

• Personal needs: any customer or user of a service will have what they regard as a

set of key personal needs that they expect the service to address These will vary from service to service and from customer to customer A clear understanding of these needs

Expecations

Perceived Performance

is necessary to design an appropriate service

• Previous experience: many will have had service encounters before Their

previous experience will in part influence their future expectations of the service This can include their past experience of the service in question, but also of other services – for IB service, expectations will be influenced by experience of similar traditional services

• Word of mouth communications: expectations will be shaped by communications

from sources other than the service provider itself This can include family, friends and colleagues, but more widely the media and other organizations, such as audit agencies

Perceived performance: Customer perception is totally subjective and is based on

the customer interaction with the product or service

Disconfirmation: occurs in three stages: 1) positive disconfirmatin where

perceived performance exceeds expectations; 2) confirmation, where perceived performance meets expectations; and 3) negative disconfirmation, where perceived performance falls below expectations

Satisfaction is caused by confirmation or positive disconfirmation of consumer

expectations, and dissatisfaction is caused by negative disconfirmatin of consumer expectations

3.2.3 Factors affecting customer satisfaction for IB service

a Objective factors

- Political and legal factor: Stable political situation will keep calm customer and

make IB service to develop stably Unstable political factor will have the great effort on human behavior The bank does not concern on the widen investment of scale, and of course, the consumption will not believe to use banking service, including IB service and this will cause the low level of customer satisfaction Banking business is a risky field supervised by legal systems A legal environment, which is perfect, professional and effective shall be a firm base for IB development, by confirming benefits to all the parties such as issuers, users, merchants…

Economic factor: Basically, economic cycle and government economic policies

have directly or indirectly effected on the quality of banking services If there are few banks launching IB service to customer, they will have little choice This will lead to low expectations of customers and therefore, they will be satisfied easier In contrast,

when the market has many competitors, customers will have more choice and their expectations will be higher Therefore, it will make banks more difficult to satisfy their customers

On the other hand, GDP, inflation rate, development and investment policies, economic stable, the export and import rate… have also affected on the satisfaction for banking service For example, when the economy is on the developing process, GDP increases, investment policy is opened, customer will be more tolerant in their consumption This will lead to higher satisfied level of customers

Customer, cultural and social habit: Customers are considered as the decisive

factor to the development of IB service Customers are different in term of age, sexual, education, income level and geographic areas Given that electronic banking is becoming one of the main determinants of how banks interact with customers, banks must ensure that customers are satisfied and willing to use the services again in the future The extent to which customers accept IB service depends on various factors as follow: Customer habit of using cash; Customer awareness about the IB and its benefits; Availability of access to computers and Internet, customer computer literacy and IT skills; Customer willingness to use IB service depends on convenience and security Consumption behaviors and habits are affected by cultural factor such as awareness, knowledge, cultural level, living style, money keeping habit…For instance, the Vietnamese have the habit of using cash Therefore, improving IB service to make customer satisfy is a difficult issue

Technological factor: Technology has the power to improve the service that banks

offer to their customer The development of software, internet…creates modern service with diversified utilities As more customers participate in the information revolution, banks need to be able to deliver to their customers the information and service that they desire at a time, place and in a manner which is acceptable to them, design suitable products and services to satisfy the increasing expectations of customers as well as increase the bank competitiveness

b Subjective factors

Besides the above mentioned objective factors, internal banking factors have the most effect on customer satisfaction for IB service as following:

Service quality: People often tend to use the terms service quality and customer

satisfaction inter changeably.Some studies have examined e-banking services and

suggest that there is a positively relationship between e-banking service quality and overall satisfaction

Price: For all services including IB , price plays a decisive role in customer

satisfaction It is apparent from the review that one of the factors customers use to determine satisfaction level is the benefits received from a product or service in comparison with what is spent

Complaint management:Customers who register complaints, will do business again

with the company if their complaints are resolved If the customer feels that the complaint was resolved promptly Customers who have complained to a company and had their complaints satisfactorily resolved tell an average of five people about the good treatment they received

In routine interactions with IB service, consumers seem not to be concerned about the availability of online customer service representatives or the compensation policy However, when customers confront problems and questions, such factor would be used

in evaluating customer satisfaction This will help to inspire customers’ satisfaction as well as their confidence in using IB service

Utilities of services: IB is a modern channel which is applied new technology,

therefore, customers desire a large range of services to be provided through this channel similar to traditional banking services from inquiry information to payment services Banks with a diversified list of services will attract many customers and be easier to make customer more satisfied with their IB service

3.2.4 Dimensions and criteria to measure customer satisfaction for IB service

To measure customer satisfaction it is important to understand what are customers’ expectations on IB service As mentioned in article 2.2.3, service quality is important input to customer satisfaction At present, there has not yet got any standard and professional dimensions to measure customer satisfaction for IB service, therefore, to identify dimensions and criteria of customer expectation for IB at BIDV, I analyzed some service quality models and carried out interviews with 5 BIDV managers to find out the dimensions customers expect on IB service

a From service quality models

In SERVQUAL model, a 22-item scale with a set of service quality dimensions to quantify a customer’s assessment of a company’s service quality Five key dimensions

of service quality — reliability, responsiveness, assurance, empathy and tangibles — have been identified and form the foundation on which a lot of other studies on service quality have been built

- Tangible: The appearance of physical facilities, equipment, personnel and

communication materials All factors above are tangible evidence of care and attention

to detail that are exhibited by service provider

- Reliability: The ability to perform the promised service both dependably and

accurately Reliable service performance means that the service is accomplish in time,

in the same manner and without errors every time

- Responsiveness: The willingness to help customers and provider prompt service

If a service failure occurs, the ability to recover quickly and with professionalism can create very positive perception of quality

- Assurance: the knowledge and courtesy of employees as well as their ability as

convey trust and confidences The assurance dimension includes the following features: competence to perform the service, politeness and respect to the customers, effective communication with the customers and the general attitude

- Empathy: The provision of caring, individualized attention to customers Empathy

includes following features: approach ability, sensitivity, and effort to understand the customer need

However, SERVQUAL has been subject to certain criticisms, including vagueness

in the definition of expectations, its dubious applicability in some industries After extensive literature review, Zeithaml, Parasuraman and Malhotra (2000, 2002) developed the e-SERVQUAL measure of electronic service quality to study how customers judge e-service quality According to the definition, the concept of e-service quality would cover from the pre-purchase phase to the postpurchase phase e-service quality focused on the interaction between the customer and the website However, these studies do not deal with aspects of the quality of the website, what in our opinion narrows the customers’ perception of e-service quality Therefore, creating the instrument for the evaluation of e-service quality from customer’s perspective we should integrate both of these approaches, i.e., the quality of the website and the qualit y

of e-service

- Efficiency refers to the ability of the customers to get to the Web site, search for

information and log out with minimal effort

- Fulfillment involves the accuracy of service promises, having products in stock

and delivering the products in the promised time

- Reliability is associated with the technical functioning of the site, particularly

the extent to which it is available and functioning properly

- Privacy is related to assurance that shopping behavior data are not shared and

that credit card information is secure

- Responsiveness refers to the ability of e-tailers to provide appropriate

information to customers when needed

- Compensation involves receiving money back and returning shipping and

handling costs

- Contact is associated with the ability of customers to talk to a live service agent

online

b From BIDV managers’ view

IB service’ development in Vietnam is affected by cultural and consumer habit of Vietnamese people as mentioned in article 3.2.3, therefore, to get more accurate dimensions to measure customer satisfaction for IB service, I decide to carry out the in-depth interview with 5 managers from BIDV Head Office and Branches They are very kind assistance to answers questions and give me much information on bank policies about IB service, bank strategy as well as tell me suggestions that help me complete the list of dimension to measure customer satisfaction for IB service Realizing the fact that customer satisfaction is the key to bring success, most managers asked understand that similar to other products and services provided in the market, the most importance objectives of IB service at BIDV is the satisfaction of customer: “the services provided

by the banks are aimed at satisfying the customer demands” The more customers satisfy with the service, the stronger attachment customers will have with the bank which results to customer loyalty

Director of Retail Banking Development Department expressed that the compliments, recognization and satisfaction of the existing customers will communicate

to other people who need banking services and then these one will come to the promoted banks According to her opinion, there are some dimensions customers expect

for IB service The first dimension is Variety of service Besides inquiry function,

customers require IB service to provide financial functions including money transfer,

bill payment, deposit and more complicated functions like investment or financial

advisory tools The second is Security IB service need to apply new technology to

protect financial security and customer information This will make customer feel

secure when using the services The third is Reliability with quick and accurate update

in transaction and information Moreover, service needs to operate accuracy The forth

is Problem Handling For this dimension, the most important is the attitude of

supporting staff They are require to be friendly as well as have knowledge and ability

to help customers in all situations and give advice to them in short time The fifth is

Fees and Charges Vietnamese customers always compare the costs and benefits

between all kinds of services especially banking services Services with lots of functions and provided at low price or even free will attract customers and win in the competition

The last dimension is Efficiency which ensures the service to be used anytime and

anywhere - the convenient advantage of the services

This manager also mentioned that at present, BIDV has not had specific dimensions or criteria and professional system to measure customer satisfaction for all services including IB service The bank mainly evaluated customer satisfaction based on sensibility normally, for example, the growth of users and turnover, the number of errors, the complaints of customers…However, the bank has just tried to satisfy customer with the best effort from staff Since the middle of 2010, BIDV has enhanced training program of 10 transaction principles for staff worked with customers directly This is a professional style and the effort of BIDV in order to improve customer satisfaction in the whole system Besides, the bank also focused on the quality of IB service through minimizing of transaction errors and controlling risks in business performance of the banks In addition, because customers always concentrate on financial charge and banking fees, therefore, BIDV pays much attention to this sensitive financial information

Manager of Individual Customer Service Division of Hanoi Branch considered

Security, Fees and Charges, Promotion and extra benefits and Variety of services as

decisive dimensions of customer expectation for IB service In term of Security, customers want their financial information and operation received a strong protection from bank to avoid the wrong purpose usage For Fees and Charges, customers need fees are calculated and collected accuracy Moreover, they require this information to be informed public and transparent Promotion and extra benefits such as discount

programs, advertising message or wishes in special events are value added to attract customers using IB service Customers usually do not satisfy with the banking services which they do not receive any promotion or receive extra benefits from the bank This kind of marketing activities expresses the care of the bank to their customer and is a useful tool to increase customer satisfaction He also expressed that variety of services

is the key dimension customer expect from IB service

Manager of Individual Relationship Division of Cau Giay Branch thought that

Problem Handling, Reliability, Efficiency and IB design are important dimensions

customers expect for IB service For Problem Handling, he explained that in modern banking channel like IB service the transaction risk transfers to customers, therefore, they need a very close and rapid support from the bank This requires the availability of staff to support customers through telephone 24/7 In term of Reliability, bank reputation is considered as an element affecting their satisfaction Customers usually expressed their high expectation toward bank with long developing history like BIDV in every banking services For Efficiency, customer require the service line to operate well and stably Relating to IB design, customers expect that the Web is designed friendly, easy to use with multi language including English and Vietnamese, the SMS structure is simple and easy to remember with attractive using manual documents

Mention to the dimensions of customers’ expectation for IB service, Manager of Individual Customer Service Division of Ha Thanh Branch listed the following

dimensions: Fees and charges, Efficiency, Promotion and Extra Benefits For Fees and

Charges, customers expect relatively competitive fees of IB service with some attractive promotions and discount programs launched in nationwide Unlike traditional banking, fees and charges of IB service are calculated automatically Therefore, the accuracy and transparency in price mechanism will effect to customer satisfaction Relating to Efficiency, customers want the registration procedures to be simple and convenient Moreover, the user needs to be created and informed quickly to them The ease and speed of accessing and using IB service is also a vital criteria affecting customer satisfaction In term of promotion and extra benefits, customers expect these activities were launched and maintained frequently to enhance them using IB service

Manager of Individual Relationship Division of The First Transaction Branch listed

the dimensions customers expect including Variety of services, Fees and Charges,

Problem Handling and Tangible Variety of services is the most important dimension

because the more service bank can provide to customer, the more customer can save time without coming to transaction points This in turn will increase the satisfaction of customer for the service Relating to Problem Handling, customers expect their complaints to be solved quickly For Fees and Charges, the accuracy and transparency

in fees and charges mechanism will effect to customer satisfaction In term of Tangible, she noted that customers require the user guidance documents and registrations for IB service to be simple and easy to understand

From dimensions in SERVQUAL, e-SERVQUAL model and dimensions mentioned by BIDV managers, I suggested eight below dimensions measure customer

satisfaction for IB service at BIDV They are Tangible, Problem handling, Security, Reliability, Efficiency, Fees and charges, Promotion and extra benefits and Variety

of service The following table will show 8 dimensions with 30 criteria to measure

customer satisfaction for IB service

Table 2.Dimensions e-service quality

Tangible (1) Web design is friendly, easy to use and multi language for

customer

SERVQUAL

(2) SMS structure is simple and easy to remember (3) Marketing documents (leaf, using manual…) is attractive and enough information

(4) Registration form is simple, easy to understand Problem

handling

(5) Always having staff to support customer through telephone Author

(6) Staff are friendly, have knowledge and ability SERVQUAL

e-SERVQUAL

(7) Bank solve customer complaint quickly (8) Bank give advice to customers in short time (9) Bank compensate for errors derived from bank side Security (10) Customer information is not used for wrong purpose SERVQUAL

e-SERVQUAL

(11) Bank applied new technology to protect financial security

and customer information

(12) Customers feel secure when using bank IB service Reliability (13) Information of transaction was updated accuracy and sent

quickly

SERVQUAL e-SERVQUAL

(14) Service operates accuracy

Dimension Criteria Reference

(15) Bank reputation make customer confident Efficiency (16) Service can be used anytime and anywhere e-SERVQUAL

(17) Service line operates well and stably (18) Registration procedures are simple and convenient (19) User is created and informed quickly to customer Fees and

charges

(20) Service fees and charges are competitiveness BIDV concept

(21) Fees are calculated and collected accuracy (22) Fees and charges are informed public and transparent Promotion

Source: Author design

From 8 dimensions of customer satisfaction, the questions will be scored using Likert scale from 1 to 5 levels The difference between perceptions and expectations will result to disconfirmation (Disconfirmation = Perception – Expectation) A negative score indicates an unsatisfactory result for the clients The balance between perception and expectation (confirmation) shows that the services offered by the bank have satisfied customers

The overall satisfaction is also graded with 5 levels (from the lowest to the highest satisfactory) to compare customer satisfaction and dissatisfaction between their expectation and perception of IB service

3.3 Literature review

When researching the subject of “Customer satisfaction for Internet banking service at the Bank for Investment and Development of Vietnam (BIDV)”, I have consulted a number of theses on this subject These themes have their own research methodology and find good solutions A review of previous studies related to the problem under investigation:

Nguyen Thi Loan (2013), "Measuring Customer satisfaction for Internet banking Services at DongA Bank" - Master thesis of University of Economics Ho Chi Minh City The study was conducted to identify the components that affect the quality of Internet banking services in East Asia Bank according to the model of E-SERVQUAL service quality and measure the impact of quality services to the satisfaction of customers using Internet banking services in DongA Bank The study was conducted for individual customers using Internet banking services This research has brought some practical implications for bank administrators, especially DongA Bank The study helped DongA Bank to draw a picture of the quality of Internet banking services, and the remaining elements from which the proposed solutions would help DongA Bank executives improve and raise the higher quality of Internet banking for individual customers increases the satisfaction of customers using the service to ultimately retain existing customers, attract more new customers, increase revenue and profit

Phan Van Hung (2013), "Individual customer satisfaction for Internet banking Services at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Ho Chi Minh City Branch", Master thesis of University of Economics Ho Chi Minh City This research aims to identify the factors influencing the personal satisfaction of customers using Internet banking services Joint Stock Commercial Bank for Foreign Trade of Vietnam - Ho Chi Minh City Branch (Vietcombank – HCM Branch) and measure the influence factor on loyalty of customers when using this service The research subjects

of the project are individuals aged 18 and above living in Ho Chi Minh City and using the Internet banking service of Vietcombank – HCM Branch The scope of the study is individual customers who open accounts and use Internet banking services at Vietcombank – HCM Branch The results show that price, reliability factors strongly impact on customer satisfaction Another important result of the subject is that satisfaction is proportional to loyalty, that is, the greater the satisfaction, the greater the loyalty In addition, it can be explained that banks do not pay enough attention to old

customers but only focus on developing new customers, so the satisfaction of this group

of customers decreases with time, leading to reduced loyalty

Nguyen Hoang Ha (2016), "Research on Customer Satisfaction for Internet banking Services of Vietnam Join Stock Commercial Bank for Industry and Trade – GiaLai Branch", Master thesis of Da Nang University The research objective of the project is to systematize the basis of Internet banking and customer satisfaction, study the current business situation and Internet banking services of Vietnam Join Stock Commercial Bank for Industry and Trade – GiaLai Branch (Vietinbank - Gia Lai Branch) The research objective of the project is to systematize the basis of Internet banking and customer satisfaction, study the current business situation and Internet banking services of Vietinbank - Gia Lai Branch Understand the factors influencing customer satisfaction with Internet banking service of Vietinbank - Gia Lai Branch Finally, Offer advanced solutions to improve customer satisfaction for Internet banking services at Vietinbank - Gia Lai Branch The subject of research is the Internet banking service system at Vietinbank - Gia Lai Branch The scope of the study is the data analyzed in this study which is the data from September 2015 to March 2016 The research provides some useful conclusions: Firstly, the most desirable customer is the level of responsiveness of the Bank Second, the factors that influence customer satisfaction include Efficiency and Reliability It is important to note that customer satisfaction is the result of many factors Therefore, the work to the satisfaction of customers need to make regular and long-term As the business environment is constantly changing, the application of the research results needs to be flexibly handled and adjusted accordingly From the survey of customer satisfaction on the quality of Internet banking services at Vietinbank - Gia Lai Branch, the study has presented the status and assessment of customer satisfaction to be released Proposing solutions to improve the quality of Internet banking services for Vietinbank - Gia Lai Branch

Each of the dissertations has different methods of analysis, research subjects and research, but they provide the basic concepts of Internet banking service and customer satisfaction for this service From there, the author offers practical solutions for bank administrators to increase service quality and increase customer satisfaction for Internet banking service

3.4 Overview of Bank for Investment and Development of Vietnam

International transaction name: Bank for Investment and Development of Vietnam Abbreviated name: BIDV

Address: 35 Hang Voi, Hoan Kiem Dist., Hanoi, Vietnam

Slogan: Share opportunities, share success

BIDV has always accomplished its tasks as assigned by the Government since its establishment In parallel with other State-owned Commercial Banks, BIDV has been regarded as a main agency to execute national monetary policy BIDV has ensured full compliance with relevant laws and regulations, and fulfilled its obligations to national budget

BIDV major areas of business include domestic and international fund mobilization

to finance and co-finance projects especially fundamental projects for socio-economic development; trade finance; lending to every economic sectors; joint-ventures; guarantee services; financial leasing and other banking services, namely, securities services; foreign exchange; domestic and international payment With its experience investing in key projects, BIDV plays the leading role in development investment and project financing in Vietnam

In the context of international integration and due to new requirements of nation economic development, BIDV will get opportunity for expanding field of activity and customers’ base but have to face to the pressure of more competition from domestic and foreign banks to exist and develop This puts BIDV in challenge of incessantly

improving the service quality, satisfying existing and potential demands of customers The bank majority of customers has been shifted from state-owned to various enterprises as well as individuals

3.4.2 Organization structure

Since BIDV was first established, its organizational mechanism has just had 8 branches with more than 800 staff Up to now, BIDV has had more than 24.000 professional staff BIDV has one of the biggest distribution networks in Vietnam bank system with four main units including:

- Subsidiaries: BIDV Leasing Company (No.1 and No.2) (BLC), BIDV Securities Company (BSC), BIDV Insurance Company (BIC), BIDV Asset Management Company (BAMC), BIDV International Limited Company in Hong Kong (BIDVI)

- Commercial Banks: 180 Branches/Transaction Center with 798 transaction offices

- Administrative and Operation Units: BIDV Training Center (BTC), BIDV Information Technology Centers (BITC) and Presentative Office in Southern, Central of Vietnam, Cambodia, Myanmar and Czech Republic

- Joint ventures: VID Public Bank (VPB), Lao - Viet Bank (LVB), Vietnam - Russia Bank (VRB), BIDV Tower joint-stock Company and BIDV-Vietnam Partners Investment Management Company (BVIM)

In the year 2008, BIDV successfully implemented the project of organizational restructuring following recommendations in Head Office and branches, including the restructuring of banking operation towards customer-orientation The bank operation is managed by the general director and supervised by the Board of directors as dispayed in Appendix A

3.4.3 The Bank performance in the period 2015-2017

Major business indicators

The business performance of BIDV has been carried out closely in line with the target and motto of Quality – Sustainable Growth – Effectiveness – Safety This is aimed at the focus guidance and implementation of various pratical measures and solutions which are appropriate to the factual business, the timely, flexible and drastic action plans and programs for the corporate governance and operation over the head

quarter to the subsidiaries of BIDV Therefore, in three years from 2015 to 2017, good business achievements, as shown in the follows, were obtained as results:

Table 3 Major performance indicators in 2015-2017

1 Total assets (Billion VND) 850,507 1,006,404 1,202,283

2 Net operating income (Billion VND) 13,625 16,907 23,512

3 Provision for credit losses (Billion VND) (5,676) (9,199) (14,847)

6 After-tax profit/Net operating income (%) 47% 37% 30%

Source: BIDV Annual Reports 2015, 2016, 2017

The total assets of BIDV have accelerated year after year with high and reasonable growth scale This has helped BIDV maintain its position and share on the monetary and financial market and efficiently contributed to the implementation of the Government monetary and financial policies Concretely, the year on year increases of the total asset in 2016 and 2017 were 18% and 19% respectively

The bank ROA (Return on Asset) decrease because of provision for credit losses increase ROE (Return on Equity) reduced year by year because of the gap in growth between the total asset and equity Equity has been growth in higher speed than total asset with the 36% increase in 2017 while the speed of total asset only increased 19% During the recent years, BIDV has been making all efforts to enhance its financial capacity and doing its business transparently and publicly: Capital Adequacy Ratio (CAR) in 2015, 2016 and 2017 were 9.01%, 9% and 10.1% respectively The NPL rate was strictly controlled and stayed at 2.10% on 31/12/2010 At the same time, BIDV actively had its credit-worthiness of borrowers ranked according to the international standards by Moody Corporation and the bank reached the nation celling level

In term of profit, the net operating income in 2016 increased 24% against the previous year, compared with the increase of 39% in 2017 This mainly derived from the fact that BIDV had tried its best to diversify its income structure as well as adjust

the structure towards the trends of increasing the percentage of non-interest income Thanks to the income structure adjustment, BIDV has step by step become corresponding to the trend of modern banks in which the investment into high risk credit industry is reduced while non-credit sector is paid more attention since it is highly sustainable and much less risky This has also reflected the right vision and orientation

of BIDV during recent years

Retail Banking performance 2015 – 2017

BIDV started to provide banking services to individual customers as early as 1995, when BIDV become a truly commercial bank However, the level of interest in retail banking development activities of BIDV is still limited Only in recent years, BIDV began to be interested in this field, which clearly separated retail banking activities with the appropriate organizational structure and clear objectives

Recently, retail banking in BIDV has also achieved certain results Total number of individual customers by the end of 2017 is more than 10 million people By 2017 banking network increasingly expanded to 1000 outlets nationwide, ATM network ranked second in terms of number of ATM with market share around 11.2% Net fee return of retail service was VND2686 billion, accounted for 31% in total net fee return

of the whole bank

Table 4 BIDV retail banking performance 2015-2017

Source: Reports on BIDV retail banking performance in 2015, 2016, 2017

As for mobilization capital from inhabitants, the average growth rate of 27% in the period from 2015 to 2017 and the proportion in the total mobilized capital of the bank increases from 48% in 2015 to 55% in 2017