The impact of human factors on customer satisfation on retail service quality at vietinbank hanoi branch

James Cho Keywords: Retail Banking Services, Retail Service Quality, Customer Satisfaction, Human Factors, Vietinbank Hanoi Branch, Vietnam.. The study aims to achieve the following thre

Lunghwa University of Science and

Technology Department of Business Administration Thesis for a Master’s Degree

THE IMPACT OF HUMAN FACTORS

ON CUSTOMER SATISFATION ON RETAIL SERVICE QUALITY AT VIETINBANK - HANOI BRANCH

Researcher: Nguyen Ngoc Khanh

Superviser 1: Dr Dao Tung, International School, VNU

Supervisor 2: Dr James Cho, Lunghwa University

November 2017

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

This is to certify that the Master’s Degree Examination Board has approved the thesis The Impact of Human Factors on Customer Satisfation on Retail Service Quality at Vietinbank - Hanoi Branch published by Mr Nguyen Ngoc Khanh in the Master Program of Graduate School of Department of Business Administration

Master’s Degree Examination Board

Board Members: ………

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Advisor: ………

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Chair: ………

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Date: ………./……… /………

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ABSTRACT

Thesis Title: The Impact of Human Factors on Customer Satisfation on Retail

Service Quality at Vietinbank - Hanoi Branch Pages: 50

University: Lunghwa University of Science and Technology

Graduate School: Department of Business Administration

Graduate Student: Nguyen Ngoc Khanh Advisor: Dr Dao Tung

Dr James Cho

Keywords: Retail Banking Services, Retail Service Quality, Customer Satisfaction,

Human Factors, Vietinbank Hanoi Branch, Vietnam

In the context of Vietnam's developing economy and the banking sector being one of the more competitive, improving quality of service and enhancing customer satisfaction tends to be an essential requirement Specific to the nature of service provision, the human element plays a vital role in improving quality and creating customer satisfaction With that in mind, and with the desire to study the human factors

in providing services of Vietinbank Hanoi branch, the research aims to assess the impact of human factors on improving the customer satisfaction of Vietinbank Hanoi Branch

The study aims to achieve the following three objectives: firstly, analyse, discuss and evaluate current state of retail services quality at Vietinbank Hanoi branch; secondly, assess the impact of the human factors on customer satisfaction on the quality

of retail services; and thirdly, propose recommendations regarding how the human factors can improve customer satisfaction in retail quality services, thereby allowing expansion and development of services at Vietinbank Hanoi branch

Based on the assessment of human factors that affect quality of service and customer satisfaction when using the retail banking services, research has developed a

model with eight independent variables: Reliability, Empathy, Service effectiveness, Commitment, Staff attractiveness, Staff emotions, Staff helpfulness, and Staff interaction

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in service delivery; and studied the impacts of the above eight human factors on

customer satisfaction related to retail service quality in Vietinbank Hanoi Based on past research related to human factors, research hypotheses have been proposed whereby all

of the above eight human factors have a significant and positive impact on customer satisfaction whilst using banking services

To achieve the research objectives and test hypotheses, this research used the method of customer survey The scale for the main variables has been largely derived from past research and translated into Vietnamese A few new scales have been

developed with variables that do not have an evaluation scale (variable: staff interaction

in service delivery) A total of 32 questions were used to measure 8 independent

variables and one dependent variable The final sample consisted of 150 clients, who were generally experienced in using banking services, and at the time of research they had used or were using the services of Vietinbank

To analyse the data, this study used quantative methods to assess the reliability

of the scales (EFA analysis and Alpha Cronbach) and to test the hypotheses (multiple regression analysis) The results of the scales’ reliability assessment show that the scales used are reliable

Based on the results from the survey, the study also analyzed the customer's assessment of the human factors of Vietinbank Hanoi The results show that customers highly appreciate the human factors of Vietinbank (score from 3.7 to 3.92 on the scale

of 5) Customers have a fairly consistent rating on these factors

Hypotheses testing shows that seven out of eight human factors have a positive

and significant impact on customer satisfaction (except for the staff interaction in service delivery)

Based on the results obtained, this study provides a number of specific recommendations to help Vietinbank Hanoi maintain and strengthen its advantages in the human factors to enhance customer satisfaction Limitations of this research and possible areas for future research are also given

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ACKNOWLEDGEMENT

First of all, I would like to thank Dr Dao Tung, lecturer of International School, Vietnam National University and Dr Jame Cho, Doctor of Business Administration of Longhwa University, who have guided me wholeheartedly during the preparation of this thesis

I would like to express my gratitude to the teachers and staffs of International School, Vietnam National University and Longhwa University for their support in completing my thesis

I also sincerely thank my colleagues at Vietinbank Hanoi Branch for helping me collect the data, my classmates of FBA7, and my friends and other colleagues who have encouraged and helped me to complete this thesis

Their guidance, support, motivation have been extremely valuable to me and helped me complete my thesis on time Sincerest thanks

Thank you! Author Nguyen Ngoc Khanh

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ABBREVIATIONS

of Vietnam

VIETINBANK Vietnam Joint Stock Commercial Bank for Industry and Trade

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TABLE OF CONTENTS

ABSTRACT i

ACKNOWLEDGEMENT iii

ABBREVIATIONS iv

LIST OF TABLES viii

LISTE OF FIGURES ix

CHAPTER 1: Introduction 1

1.1 Rationale and Significance of the Research Topic 1

1.2 Purpose, Subject, and Scope of Research 1

1.2.1 Purpose of this Research 1

1.2.2 Subject and Scope of this Research 2

1.3 Research Model and Variables 2

1.4 Research Methodology 3

1.4.1 Data Collection Methodology 3

1.4.2 Data Analysis Methodology 3

1.5 Thesis Structure 3

CHAPTER 2: The Rationale for Retail Banking and the Human Factor in Creating and Delivering Services 5

2.1 Retail Banking Services 5

2.1.1.1 Definition of Retail Banking Services 5

2.1.1.2 Characteristics of Retail Banking Services 5

2.1.1.3 Role of Retail Banking Services 6

2.1.2 Qualiy of Retail Banking Services and Customer Satisfaction about the Quality of Service 6

2.1.2.1 Definition of the Quality of Service 6

2.1.2.2 Some basic theoretical models on quality of service 7

2.1.2.3 Factors affecting quality of service 9

2.1.3 Customer Satisfaction 10

2.1.3.1 Definition of customer satisfaction 10

2.1.3.2 Theoretical models on customer satisfaction 11

2.1.3.3 Factors affecting customer satisfaction 13

2.1.4 The human factor affecting customer satisfaction 14

2.1.4.1 Human factor from SERVQUAL model 14

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2.1.4.2 Human factors from other research 16

CHAPTER 3: Research Model, Hypotheses, and Methods 20

3.1 Research Model and Hypotheses 20

3.1.1 Research Model: 20

3.1.2 Research Hypotheses: 20

3.2 Primary Data Collection 21

3.2.1 Data Collection Questionnaire 21

3.2.2 Sampling Method 25

3.2.3 Data Collection 25

3.3 Data Analysis Methodology 26

3.3.1 Scale Reliability Measurement Method 26

3.3.2 Data Analysis Method 27

CHAPTER 4: Analysis of the impact of human factors on customer satisfaction at Vietinbank Hanoi Branch 30

4.1 Introduction of Vietinbank Hanoi Branch 30

4.1.1 Formation and development 30

4.1.2 Products and Services Offered by the Branch 30

4.1.3 Business Situation of the Branch 31

4.2 Research findings on impacts of human factors on customer satisfaction about quality of service 33

4.2.1 Research sample 33

4.2.2 Assessment of measuring scale 35

4.2.3 Findings 39

CHAPTER 5: Conclusion and recommendations to enhance customer satisfaction at Vietinbank Hanoi Branch 47

5.1 Orientation for business activities of Vietinbank Hanoi Branch until 2020 47

5.1.1 Orientation of Vietinbank 47

5.1.2 Orientation of Vietinbank Hanoi Branch 47

5.2 Solutions on using the human factor to improve customer satisfaction in Vietinbank Hanoi Branch 48

5.3 Recommendations for Vietinbank Headquarter 49

5.4 Limitations and Future Research 50

REFERENCES 52

vii APPENDICES 55

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LIST OF TABLES

Page

Table 4.4 Number of customers using services of other banks

(different from Vietinbank)

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Table 4.5 Frequency of usage of Vietinbank services of the research

sample

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Table 4.6 Customer assessment of the human factor and overall

satisfaction on the quality of service

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LISTE OF FIGURES

Page

Figure 4.1 Business results of Vietinbank Hanoi in the period

2013-2016

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CHAPTER 1: INTRODUCTION 1.1 Rationale and Significance of the Research Topic

Vietnam's economic integration into the world economy poses many challenges for commercial banks, which are to compete with multinational corporations with financial advantages and technology Under that circumstance, the development of retail banking services is a way to be selected by many commercial banks The retail banking market of Southeast Asian countries, including Vietnam, has much potential for development Being one of the leading banks in Vietnam's financial system, having big brand name and wide network in Vietnam, and to catch up with the trend of the region and the world, Vietinbank has been focusing on promoting the retail banking sector with the ambition to become the leading retail bank in Vietnam

Vietnam Joint Stock Commercial Bank for Industry and Trade - Hanoi branch (Vietinbank Hanoi branch) is the primary branch and the largest branch in the Vietinbank network Formerly known as Vietinbank Transaction Office 1, Vietinbank has a long tradition of serving groups, corporations, and large enterprises across the country Therefore, the retail operations of VietinBank in Hanoi is often neglected and insufficiently paid attention to The proportion of revenue, profit from retail activities is low, unproportionate with the branch’s potential In addition, the human factors, which are often considered core and significantly impactful on customer satisfaction, have not been fully paid attention to, thus significantly affecting the quality of the retail services and customer satisfaction

With regards to the above mentioned reasons and to the actual activities at Vietinbank Hanoi branch, as head of the transaction office at this branch, I chose the topic "The Impact of Human Factors on Customer Satisfation on Retail Service Quality

at Vietinbank - Hanoi Branch" for this master's thesis

1.2 Purpose, Subject, and Scope of Research

1.2.1 Purpose of this Research

The research focuses on synthesizing the theoretical background of retail banking, factors affecting the quality of retail services and customer satisfaction, particularly focusing on factors related to human – i.e the staff Based on that, the

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research aims to assess Vietinbank Hanoi's retail service activities, assessing the impact

of human factors on customer satisfaction about the quality of retail services, and proceeding to propose solutions to enhance customer satisfaction that will help Vietinbank Hanoi expand and develop its retail banking services

Specifically, the project aims to achieve the following basic objectives:

First, systematize the theoretical background on retail banking services

Second, analyze, discuss, and evaluate the current situation of retail banking at Vietinbank Hanoi

Third, assess the impact of human factors on customer satisfaction about the quality of retail services

Fourth, propose solutions related to human factors to improve customer satisfaction about retail banking services, thereby to expand and develop retail banking services at Vietinbank Hanoi branch

1.2.2 Subject and Scope of this Research

Research subject: the thesis focuses on issues related to retail banking, human factors in service provision, and customer satisfaction in service quality (retail services)

at Vietinbank Hanoi branch

Research scope: The topic is restricted to clients of Vietinbank Hanoi branch

within the geographical area of Hanoi city

1.3 Research Model and Variables

The study aims to study the effect of independent variables being variables related to different aspects of the human factor on the dependent variable being the customer satisfaction on the quality of banking services

In detail, the independent variables in the model include: Reliability, Empathy, Responsiveness, Assurance, Staff attractiveness, Staff emotions, Staff helpfulness, and Staff interaction in service delivery

Dependent variable is customer satisfaction on the quality of retail banking services of Vietinbank Hanoi Branch

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1.4 Research Methodology

1.4.1 Data Collection Methodology

To achieve the predetermined research objectives, the author uses a combination

of both secondary data and primary data collected from customers who have been using the services of the bank

Secondary data sources are used to synthesize the theoretical issues on service quality, satisfaction, and factors with general influence, as well as particular human factors that affect the quality of service and customer satisfaction; and about Vietinbank Hanoi branch, its products, and its operations Secondary data sources include research articles related to research variables; annual reports of VietinBank in Hanoi, financial reports, information disclosure, statistics offices, annual reports of Vietinbank and some commercial banks, economic, financial and banking magazines, and information on the development of retail banking at Vietinbank Hanoi

Primary data source data was collected to assess the impact of human factors within the research model on customer satisfaction on service quality of Vietinbank Hanoi The research will use a questionnaire to collect clients' opinions on key aspects

of the human factors, and on the clients’ customer satisfaction about the retail banking services of Vietinbank Hanoi

1.4.2 Data Analysis Methodology

The research will use descriptive statistics to describe the research variables; using the reliability measuring scales such as Exploratory Factor Analysis (EFA) and Alpha Cronbach; and linear multiple regression to evaluate the impact of independent variables (human factors) on the dependent variable (customer satisfaction on service quality)

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CHAPTER 2: THE RATIONALE FOR RETAIL BANKING AND THE HUMAN FACTORS IN CREATING AND DELIVERING SERVICES

2.1 Retail Banking Services

2.1.1.1 Definition of Retail Banking Services

According to the World Trade Organisation, retail banking is a typical service of

a bank where individual customers can physically come to the bank's branches to make transactions and receive services such as making a deposit, taking a loan, making a payment, checking account balance, card services, trading foreign currency, etc In the case of commercial banks, retail banking plays an important role in enhancing competitiveness, expanding market share, bringing stable revenue and quality to banks

In addition, it offers the opportunity to diversify banking products and services, selling opportunities with individuals and small businesses

cross-According to economists at the Asian Institute of Technology, retail banking is a service providing banking products and services to individuals, small and medium enterprises through network of branches, transaction offices, from which customers can have direct access to banking products and services

We can therefore understand that retail banking is a service that provides financial products to individuals, households, small and medium enterprises

2.1.1.2 Characteristics of Retail Banking Services

The size of the retail banking customers is large but the value of each transaction

is normally not as high

The products of retail banking are diverse, covering nearly a whole range of banking products such as: lending, sending money, making payments, money transfers, guarantees, cards issuance, etc

The development of retail banking is significantly dependant on the level of information technology of the economy in general and the banking environment in particular For example, in developed countries, individuals can use the internet, smart phones to make banking services such as money transfers, single bill payments, etc

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2.1.1.3 Role of Retail Banking Services

Retail banking plays an important role not only for banks, but also for the economy of a country

For banks, retail banking with product diversification is a stable source of income for banks, reducing risks in banking operations, and enhancing the ability of financial and monetary markets

For customers, retail banking services provide customers with a variety of services, products, convenience, and security for customers

For the economy, direct retail banking has transformed the economy from based to non-cash, improving the state’s management effectiveness, reducing social costs of payments and cash flows, avoiding wastefulness, losses In addition, through retail banking, the cash flow is enhanced and more efficient, utilizing and growing the capital potential to help boost business, production and consumption, improving the standards of living

cash-2.1.2 Qualiy of Retail Banking Services and Customer Satisfaction about the Quality of Service

2.1.2.1 Definition of the Quality of Service

The concept of service quality and quality of retail banking

There are different definitions of quality of service today, but in general terms the quality of service is reflected by what the customer experiences Each customer has different perceptions and needs, so the quality of service varies accordingly According

to Edvardsson, Thomasson and Ovretveit (1994), quality of service is the ability to provide a service that meets the expectations of customers and is customers’ feedback after they have used the service According to Lewis & Mitchell (1990) and Dotchin & Oakland (1994), the quality of service is related to the ability of the service to meet the needs or expectations of customers According to Feigenbaum (1961), quality of service

is the customer's assessment based on actual experience with the product or service, measured based on the customer's requirements - these requirements can be specified regardless of whether it is conscious, purely subjective, or technical - and always represent a dynamic target in a competitive market According to Parasuraman et al (1985, 1988), quality of service is determined by the difference between customer

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expectations of service and their evaluation of the service they receive Parasuraman et

al (1985) offers a five-gap model and five service quality components, referred to as Servqual, which has been derived from "Service" and "Quality", and is considered by many researchers Servqual continues to be perfected by focusing on the concept of

"quality perception" of consumers because the quality of the customer is the most objective assessment of quality of service

From the above review, the quality of retail banking can be understood as the ability to meet card services with the expectations of customers using retail services, or

in other words, all activities and added benefits that banks provide to customers with the aim to inforce, enhance, and extend long-term partnerships with customers through the creation of customer satisfaction

2.1.2.2 Some basic theoretical models on quality of service

Five Gaps of Service Quality Model

Based on the results of interviews with a group of managers and customer groups about service quality, Parasunaman et al (1985) modeled quality of service with five gaps in the perception of service quality of businesses and customers These gaps are the source of a quality level that does not meet customer expectations

GAP 1: the difference between the customer's expectations and the perception of businesses about customer expectations

GAP 2: the difference between the perception of businesses about customer expectations and the actions of businesses that reflect their standards for quality of service

GAP 3: the difference between the businesses’ standards for quality of service and the actual service that the businesses deliver

GAP 4: the difference between the actual service that businesses deliver and the communication to the market and customers

GAP 5: The difference between service expectations and service experiences from the customers’ perspective

Understanding the nature of these gaps will help businesses understand customers more fully and deliver services that best fits customers’ expectations

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Figure 2.1: Five Gaps of Service Quality Model Source: Parasuraman et al, 1985, p.44

SERVQUAL Research Model by Parasuraman et al (1985, 1988):

Based on the theoretical idea in Gronroos' model (1984), Parasuraman and al (1985) developed a composite measure, called SERVQUAL, to measure the perception

of service quality The SERVQUAL scale consists of 22 Likert scale questions to measure two factors simultaneously (1) expectation and (2) actual perception of customers about service quality Quality of service is determined by the difference between the perceived value (after use of the service) and the value expected by the customer (before using the service) This is one of the most commonly used models for evaluating service quality in many different areas

The original version of the SERVQUAL model consisted of 10 components, including (1) access; (2) communication; (3) competence; (4) courtesy; (5) credibility; (6) reliability; (7) responsiveness; (8) security; (9) tangibles; (10) knowing the customer By 1988, Parasuraman et al updated the model reducing it down to five components (with 22 questions), including (1) reliability, (2) responsiveness, (3) tangibles, (4) assurance, and (5) empathy This is a common model of service quality

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and is widely applied in marketing research According to Parasuraman et al (1988), service quality can not be defined in general but rather depends on the customer's perception of the service, and this perception must be considered based on a number of aspects Specifically, the five aspects of assessing service quality include:

- Tangibles: reflected through the appearance, dress code of staff, equipment

- Empathy: reflected through the care dedicated to each individual customers

- Assurance: reflected through professionalism and politeness in delivery of service, openness to customers

- Reliability: reflected through the ability to perform the service appropriately and

on time from the very first time

- Responsiveness: reflected through the willingness and readiness of staff to provide timely service to customers

With the current competition, the quality of service is an important factor for organizations Moreover, it is also considered vital for organisations to set themselves apart from other organisations on the market Quality of service will help organizations gain competitive advantage

SERVPERF Research Model by Cronin and Taylor (1992)

Based on the SERVQUAL model of Parasuraman et al (1985), Cronin and Taylor (1992) made amendments and produced the SERVPERF model, a by-product of SERVQUAL According to the SERVPERF model, service quality is defined as perception of the level of fulfillment of customer needs, whilst in the original model, the authors made a clear distinction between perception of the service quality and expectation of service quality This new approach has received positive appreciation due to its simplicity and accuracy in customer assessment of service quality (Lee et al., 2000); Brady et al., 2002) The SERVPERF measuring scale also uses 22 similar questions as in the SERVQUAL model but it omits questions about expectations Similarly, the SERVPERF model is composed of five components: reliability, responsiveness, assurance, empathy, tangibles

2.1.2.3 Factors affecting quality of service

Past research studies show that customer assessment and perceptions of service quality depend on a number of factors, including the factors specific to individual

Gronroos (1990) also conducted similar research and identified six factors that affect customer’s perception of service quality These include professionalism and skills, attitude and behavior, accessibility and flexibility, reliability and trustworthiness, reputation and credibility, and recovery

Sureshchandar et al (2001) studied and identified five factors affecting service quality, including: core service, human element, non-human element, tangibles, social responsibility

Factors that measure service quality vary greatly depending on the field of research The above mentioned studies point to a number of aspects associated with the human factor in the process of creating and delivering services as a group of key factors affecting customer perceptions of service quality

2.1.3 Customer Satisfaction

2.1.3.1 Definition of customer satisfaction

Levesque and McDougall (1996) define customer satisfaction as the customer's state / perception of the service provider after using their service More specifically, customer satisfaction is the emotional response / perception in its entirety of the customer to the service provider on the basis of comparing the difference between what they receive and what they had expected This viewpoint is in line with the analyses of Oliver (1999) and Zineldin (2000) on the nature of customer satisfaction

Similarly, Kotler (2000) found that satisfaction is determined on the basis of comparison between the value received from the service and customer expectations The author identified three states / levels of satisfaction, including: Unsatisfactory (when the level of customer perception is lower than customer expectation), Satisfaction (when the level of customer perception is equal to customer expectation), and Very satisfied (when the level of customer perception is higher than customer expectation)

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Understanding service quality is the result of understanding the gap between service expectation and service perception; and satisfaction is also a comparison of these two factors When the gap between service expectation and service perception is narrowed down to zero, then the customer satisfaction is considered attained

Zeithaml and Bitner (2000) argue that the cost of services can greatly influence perceptions of service quality, satisfaction and value Zeithaml and Bitner have put price variable into the model of customer satisfaction (in addition to 5 factors of service quality model SERVQUAL) within the topic "Quality of service in water meter installation in Ho Chi Minh City and recommendations " The results show that there is significant correlation beween the price variable and satisfaction from service quality

Jamal and Naser (2002) described customer satisfaction as the highest fulfilment

of customer expectation, and as the perception or attitude of customers after using a product or service

2.1.3.2 Theoretical models on customer satisfaction

The model of American Customer Satisfaction Index - ACSI

In 1994, the American Customer Satisfaction Index (ACSI) was first published (Fornell et al, 1996) The published ACSI model marks the evolution of the CSI system

by introducing customer satisfaction variables that are expectations, perceived quality and perceived value The application of customer satisfaction research is building and strengthening customer loyalty According to the model, one of the key factors in building loyalty is the detection and handling of customer complaints with with regards

to their products in order to improve customer satisfaction and loyalty

In the American Consumer Satisfaction Index (ACSI) model, perceived value is influenced by customer perceptions and customer expectations Then, the customer expectations have a direct impact on customer perception In reality, the higher the expectations, the higher the perception of the product and vice versa

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Figure 2.2: The model of Customer Satisfaction Index - ACSI

Source: Fornell et al, 1996, p.8 Customer satisfaction index model of European countries:

The European Cuustomer Satisfaction Index (ECSI) model shows a number of differences Compared to ACSI, the image of the product or brand has a direct impact

on customer expectation Customer satisfaction is therefore the combined effect of four factors: image, perceived value, perceived quality of tangibles, and perceived quality of intangibles Typically, the ACSI is generally applicable to the public sector, whilst the ECSI is often used to measure products, product-selling business sectors, and services targeted for individual customers

The goal of the ECSI model is to explain customer loyalty to a product, a business, or a country through customer satisfaction indeces when either directly or indirectly influenced by image, expectations, perceived value (of product or service) and the perceived quality of the product or service

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Figure 2.3: Model of customer satisfaction ECSI

Source: Birkett, 2017, p.1

2.1.3.3 Factors affecting customer satisfaction

According to Nguyen Phuong Hung (2001), customer satisfaction is affected by

a number of factors, which can be categorized into four main groups: product specification, situational circustances, and personal characteristics

Figure 2.4: Model of factors affecting customer satisfaction

Source: Nguyen Phuong Hung (2001) Many studies indicate that quality of service is the cause (source) of customer satisfaction Although there are still many concepts regarding the nature of satisfaction that result from varing perspectives, most researchers believe that the quality of service

2.1.4 The human factor affecting customer satisfaction

Among these factors, the human factor plays an important role because it is present throughout and a crucial factor in the process of creating and providing services

In addition, customers must participate in the service creation process, and have regular interaction with staff, so the human factor as well as service creation and delivery factor play an important role in service quality perception and customer satisfaction

Listed hereafter are some aspects associated with the human factor that are analyzed and recognised by past studies that affect customer perception of service quality and customer satisfaction

2.1.4.1 Human factor from SERVQUAL model

In the SERVQUAL model, a number of human-related factors have been identified suggesting that the human factor plays an important role in customers’ assessment of service quality This model mentions four human factors, including reliability, empathy, assurance, and responsiveness

Reliability:

Reliability refers to the ability to provide accurate, timely, and reliable service This requires consistency in service delivery and respect of commitment and promise to customers Staff and controller are the front-face to directly communicate with customers, as well as an important factor in bringing satisfaction to customers In order

to gain reliability, employees need to comply with a number of important criteria:

- Ensure confidentiality of customers’ personal information; prohibit its use for any other purpose without constumers’ consent;

- Recognize and manage well the invoices, transaction documents; transfer information clearly, accurately, and transparently; ensure service reliability in customer perception;

- Staff understands customer needs

- Staff cares about customers

- Bank’s staff operates, communicates, consults, and delivers services in customers’ best interest

Assurance (in providing services)

This is the factor that creates credibility and trust for the customer perception through professional service delivery, good technical knowledge, elegant manner and good communication skills, so that the customer feel at peace when using banking services Some criteria that demonstrate the assurance of service associated with the staff that provide the service include:

- Consulting staff provide professional services to customers ensuring the customer feels safe and secure

- Bank’s staff are happy, courteous, polite, and friendly with customers in the process of communication and service provision

- Banks’ staff possess adequate expertise to handle complaints and issues whilst ensuring they provide the services in the customers’ best interest Responsiveness

This is a measure of the ability to resolve problems quickly, handle complaints effectively, be available to help clients, and meet customer requirements In other words, service responsiveness is the effective response from the service provider to what the customer wants Some specific evaluation criteria include:

- Efficient and timely operation of customer transactions

- Willingness from staff in consulting and helping the customer

- Quick assessment of loan application documents

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- Avoid causing annoyance and difficulties for customers

2.1.4.2 Human factors from other research

Attitude and appearance of staff

According to social psychology research, first impressions have a significant influence on the interaction between two individuals (Neuberg, 1989) In marketing materials, physical attractiveness of an employee is defined as: the extent to which the customer considers an employee friendly and attractive (Ahearne et al, 1999; Nickson, Warhurst, and Dutton, 2005) Summarising various research, we found that physically attractive individuals generally tend to be more persuasive than less attractive ones In the banking sector, a good-looking transactions officer or customer relations officer will have a positive impact on customer satisfaction

Emotions of staff

There is evidence that having a friendly servide provider with a smile can lead to positive responses from customers (Hennig-Thurau et al, 2006; Rafaeli and Sutton, 1987)

The display of employee emotions and moods of customers can affect customer assessment of both service providers and the service experience (Hennig-Thurau et al, 2006) Evidence from above research shows positive emotions in service interactions, such as smiling and friendliness, can lead to higher customer satisfaction, hence higher sales volumes, as well as customer loyalty

In addition, expressing positive emotions of employees will affect other employees, creating an effective working environment Therefore, we find that employees with positive emotions can lead to higher customer satisfaction with employees

Helpfulness of staff

Staff helpfulness refers to the extent to which service personnel provide customer support or create an impression of customer care and willingness to serve (Johnston, 1995)

Although helpfulness may be quite close to the concept of "service effectiveness" in the study of service quality (Parasuraman et al, 1988), they are not the same Specifically, the response is the willingness of staff to provide the service in a timely manner, while helpfulness relates to the capability of staff That is the extent to which they can accomplish tasks with confidence and efficiency

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Studies show that successful retail banking transactions often involve behaviors, confidence, and employee benefits For example, in a transaction to provide credit products to customers (in case of good customers, who meet all conditions that the bank requires), because customers are VIP, many credit institutions simultaneously gain advantage of interest rates and services provided to customers, it is very difficult to get customers to borrow money at Vietinbank Having good, qualified staff, with confidence and demonstrating adequate helpfulness can bring satisfaction to customers, making customers trust and use the services of Vietbank

Staff interaction in providing services

In a fierce competitive environment for service provision between banks, service delivery teams must work closely to gain competitive advantage in providing high quality services Some banking products need contacts, close collaboration between many employees to be able provide service to customers The results will be affected if one of them does not complete their work There is an interdependence between front-office staff and support staff but they do not necessarily interact with the customer (Penn, Desyllas, Vaughan, 1999)

For example: When a business asks to borrow a large amount of money at Vietinbank, customer relations officers must receive the documents from the customer, then transfer them to an appraisal officer to re-appraise the truthfulness of documents supplied by the customer A solution and project effectiveness is then calculated, and an answer is then given to the customer whether they qualified or not After detailed calculations, the appraisal officer will transfer the entire client file to the relevant management to approve the loan If the case exceeds the decision-making authority of the branch, then one more step is required, which is to transfer the appraisal documents

to the Vietinbank Headquarters to consult the general director's decision on approving the loan A significant amount of procedural steps can be observed from the above example Incompletion of any one of these steps will lead to long wait for the customer, resulting in loss of business opportunities of customers and also direct impact on the bank

Although many employees do not interact directly with customers, it is important that: when in the service provision chain, they must understand their role in the process and Vietinbank must also recognize their contribution to customer satisfaction Employees are equipped with the resources they need, receive the training

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they require and commit to providing quality service to their clients The management efforts to build a high-quality service environment should enhance the cooperation and interdependence of staff and reduce the likelihood of incidents between interdependent staff in providing services, thus increasing customer satisfaction

Interaction between staff becomes especially important when that interaction is carried out in the presence of the customer during the service delivery process An effective interaction, centred around responsibility towards the customer, a friendly relationship between staff can have a positive impact on customer satisfaction

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Chapter 2 Summary

Chapter 2 mentioned the basic concepts related to research, including the nature and specificity of services in general and of retail banking services specifically, the nature of service quality concept, customer satisfaction about received services, and the factors that affect customer satisfaction

Among the factors that affect consumer perceptions of service quality and customer satisfaction, the group of human-related factors - employees who interact directly with customers to provide services in all stages play an important role and have been mentioned in past research Specifically, in Chapter 2, the author identifies and analyzes eight specific elements / aspects that are human-related, including: Confidence, Empathy, Assurance, Effectiveness, Employee Emotions, Employee Helpfulness, and Employee Interaction in the Service Delivery Process

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CHAPTER 3: RESEARCH MODEL, HYPOTHESES,

AND METHODS 3.1 Research Model and Hypotheses

H3 H4

H5

H8

3.2 Primary Data Collection

3.2.1 Data Collection Questionnaire

The measuring scale used in this research was developed based on Parasuraman

et al (1988), of (Hui-Ling Tung and al (2012), and a number of questions developed by

the author (for a new variable - Interaction between staff in service delivery to customers) The below table provides detailed description of the measuring scale and

supporting sources

The original questions were translated into Vietnamese by professional linguists, then adjusted for technical terminology to adapt to research background – that is, research quality of retail banking services at Vietinbank Hanoi according to customers’ assessment

The scale includes a total of 32 questions, evaluating the 8 aspects of the human factor (independent variable), variations about customer satisfaction (dependent variable), and questions related to beahviour and personal information of customers Particularly, the measurement scale of customer satisfaction consiste of 3 items, developed and validated in the research of Hui-Ling Tung and al (2012) The scale refers

to three aspects of customer satisfaction, including: overall service provided (Q30), bank’s products/services range in response to customer needs (Q31), and experience with bank staff (Q32)

Table 3.1 below provides detailed questions used in the research:

Table 3.1: Measuring scale for data collection

2 Q5.2 The invoices, transaction documents,

statements are complete, clear, and accurate

3 Q5.3 Bank staff actively respond in a

timely manner to customers queries over the hotline

convenient opening times for all customers

Responsiveness

23

completion is quick and timely

Parasuraman

et al (1988)

9 Q5.9 Customer relations staff willingly

consult and assist customers

10 Q5.10 Time is takes to evaluate loan

application is quick and minimal of inconveniences

Assurance

11 Q5.11 Customers feel safe when consulted

by staff of the service provider

Parasuraman

et al (1988)

12 Q5.12 Bank staff is cheerful, polite,

courteous, friendly to customers

13 Q5.13 Bank staff have sufficient knowledge

to resolve complaints and problems

Attractiveness

14 Q5.14 Bank staff who provide services to

customers look presentable

Hui-Ling Tung and al (2012)

15 Q5.15 Bank staff who provide services to

customers have an attractive appearance

16 Q5.16 Bank staff who provide services to

customers are dressed professionally and eye-catchingly

Emotions

17 Q5.17 Bank staff say “Hello”, “How is

your day”, or other forms of greeting

Hui-Ling Tung and al (2012)

18 Q5.18 Bank staff say “Thank you” to

customers

24

19 Q5.19 Bank staff maintain eye contact with

customers

20 Q5.20 Bank staff smile to customers

satisfaction expressed by bank staff

Helpfulness

22 Q5.22 Bank staff attended to customers

promptly

Hui-Ling Tung and al (2012)

exactly when the service would be completed

24 Q5.24 Bank staff was never too busy to

attend to customers’ needs

25 Q5.25 Bank staff showed genuine interest

in solving the problem that customers encountered

30 Q5.30 Customer is satisfied with the overall

service provided by staff

Hui-Ling Tung and al (2012)

31 Q5.31 Vietinbank Hanoi Branch met all of