Solution to develop e banking service at joint stock commercial bank for investment and development of vietnam – thanh do branch

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --- Hoàng Diễm My SOLUTIONS TO DEVELOP E-BANKING SERVICES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM

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

-

Hoàng Diễm My

SOLUTIONS TO DEVELOP E-BANKING SERVICES AT

JOINT STOCK COMMERCIAL BANK FOR

INVESTMENT AND DEVELOPMENT OF

VIETNAM – THANH DO BRANCH

CÁC GIẢI PHÁP PHÁT TRIỂN DỊCH VỤ NGÂN HÀNG ĐIỆN TỬ TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH THÀNH ĐÔ

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2021

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

-

Hoàng Diễm My

SOLUTIONS TO DEVELOP E-BANKING SERVICES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM – THANH DO BRANCH

CÁC GIẢI PHÁP PHÁT TRIỂN DỊCH VỤ NGÂN HÀNG ĐIỆN

TỬ TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT

NAM – CHI NHÁNH THÀNH ĐÔ

Chuyên ngành: Quản trị kinh doanh

Mã số: 8340101.01

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS TRẦN NGỌC CA

HÀ NỘI - 2021

COMMITMENT

I hereby undertake that the topic of thesis “Solutions to develop e-banking

services at Joint Stock Commercial Bank for Investment and Development of Vietnam- Thanh Do Branch” is researched by myself and originated from trainning

in practice and scientific research The documents and data in the thesis are clearly originated and properly & truthfully quoted

I would like to take responsibility to the Thesis Evaluation Committee, Faculty of Business Administration - Vietnam National University and the research results in the thesis have not been published in previous studies

THE AUTHOR

Hoàng Diễm My

TABLE OF CONTENT

LIST OF TABLES i

LIST OF FIGURES ii

PREFACE 1

CHAPTER 1: OVERVIEW OF E- BANKING SERVICE DEVELOPMENT 5

1.1 The definition of E-banking service 5

1.1.1 Advantages of E-banking service 5

1.1.2 Disadvantages of E-banking service 6

1.2 E-banking services development at BIDV 7

1.2.1 E-banking services 7

1.2.2 Definition of E-banking services development 7

1.2.3 Strategy and evaluation criteria for E-banking services development 7

1.2.4 Influence factors 8

1.3 Experiences in e-banking services development of some commercial banks and lessons 9

1.3.1 Experiences in e-banking services development in the world 16

1.3.2 Experiences in e-banking services development in some Domestic Commercial Banks 17

1.3.3 Experienced Lessons for BIDV – Thanh Do Branch 20

Conclusion of Chapter 1 21

CHAPTER 2: THE CURRENT DEVELOPMENT SITUATION OF E-BANKING SERVICES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - THANH DO BRANCH 23

2.1 BIDV- Thanh Do Branch Introduction 23

2.1.1 Foundation and development 23

2.1.2 Organizational chart 23

2.1.3 Human resource current situation of the Branch 25

2.1.4 Business performance results for the period of 2017 - 2019 26

2.2 Current situation of e-banking development at BIDV - Thanh Do Branch 37

2.2.1 Number of provided e-banking services 37

2.2.2 Number of customers using e-banking services 54

2.2.3 Transaction value of e-banking services 62

2.2.4 Income from the service, and the cost of operating and maintaining the service 63

2.3 Evaluation of factual development situation of E-Banking Services at BIDV – Thanh Do Branch 65

2.4 Factors affecting the development of e-banking services at BIDV – Thanh Do Branch 73

2.4.1 Management and administration work 74

2.4.2 Employee qualification 79

2.4.3 Marketing activities 80

2.4.4 Technology infrastructure for banking 81

Conclusion of Chapter 2 83

CHAPTER 3: SOLUTIONS TO DEVELOP E-BANKING SERVICE AT BIDV - THANH DO BRANCH 84

3.1 Development orientation of BIDV - Thanh Do Branch to 2022 84

3.1.1 General development orientation 84

3.1.2 E-banking service development orientation 86

3.2 Solutions to develop e-banking service at BIDV - Thanh Do Branch 87

3.2.1 Improve governance efficiency 87

3.2.2 Develop cooperation with businesses 89

3.2.3 Improve human resources quality 90

3.2.4 Completing customer service 92

3.2.5 Promote marketing 94

3.2.6 Increase the invesment in facilities and technology equipment 95

3.3 Some Suggestions 97

3.3.1 For the Government 97

3.3.2 For the State Bank 98

3.3.3 For BIDV 99

Conclusion of Chapter 3 102 CONCLUSION 103 LIST OF REFERENCES 104

LIST OF TABLES

Figure 2.1: Organizational chart at BIDV, Thanh Do Branch: 25

Figure 2.2 Proportion of staff by level 26

Figure 2.3: Structure of customer-based capital mobilization 28

Figure 2.4: Structure of term-based capital mobilization 29

Figure 2.5: Credit outstanding balance by customer groups in the period 2017-2019 33

Figure 2.6 Proportion of service activities at BIDV Thanh Do Branch by product in the period of 2017-2019 35

Figure 2.7: Income-Expense-Pre-tax profit in 2017-2019 37

Figure 2.8: Percentage of customers using e-banking services 56

Figure 2.9 Proportion of customers using e-banking 57

Figure 2.10: Proportion of e-banking products and services 57

Figure 2.11: Structure of customers using e-banking services 59

Figure 2.12: Proportion of cards 61

Figure 2.13: Revenue from electronic banking services 64

Figure 2.13: Service cost for operation and maintenance 65

LIST OF FIGURES

Figure 2.1: Organizational chart at BIDV, Thanh Do Branch: 25

Figure 2.2 Proportion of staff by level 26

Figure 2.3: Structure of customer-based capital mobilization 28

Figure 2.4: Structure of term-based capital mobilization 29

Figure 2.5: Credit outstanding balance by customer groups in the period 2017-2019 33

Figure 2.6 Proportion of service activities at BIDV Thanh Do Branch by product in the period of 2017-2019 35

Figure 2.7: Income-Expense-Pre-tax profit in 2017-2019 37

Figure 2.8: Percentage of customers using e-banking services 56

Figure 2.9 Proportion of customers using e-banking 57

Figure 2.10: Proportion of e-banking products and services 57

Figure 2.11: Structure of customers using e-banking services 59

Figure 2.12: Proportion of cards 61

Figure 2.13: Revenue from electronic banking services 64

Figure 2.13: Service cost for operation and maintenance 65

PREFACE

1 The pressing need & necessity of the topic

In the current era, the industrialization trend is taking place at a rapid speed, harmonizing with all sectors of the economy Thanks to the advent of the Internet and Telecommunications networks, Commercial banks also get closer to consumers and exchange of information between customers and banks is simplified with just a click of a mouse or phone’s keyboard From which, E-banking service has also developed at a strong speed, contributing to the banks' competitiveness and large income

Therefore, E-banking service has been set up by commercial banks as a banking transaction channel for all types of customers including individuals and corporates helping customers become the own of financial resources everywhere

financial-E-banking service is increasingly attracting more and more individual and corporate customers for usage due to its convenience, speed, ability to serve anytime and anywhere, which helps many corporates improve the efficency of capital usage

in business

E-banking service has also been developing more and more professionally at BIDV- Thanh Do Branch, providing e-banking products and services more diversified, improving the turnover of service usage, increasing the number of customers to raise income from e-banking services

However, the Branch still faces up to many difficulties in the market, in terms of competitiveness in the development of banking products and services derived from governance, human resources, and technology, equipment and marketing to increase the number of customers using e-banking services

Hence, it is necessary for the Branch to have synchronous solutions to solve the current difficulties and limitations in order to take advantage of opportunities to better develop e-banking services, contributing to reduce costs, increase income, improve BIDV's competitiveness and position in Phuc Dong ward, Long Bien district, Ha Noi city

From the above reasons, the Author chose the topic: "Solutions to develop

e-banking services at Joint Stock Commercial Bank for Investment and Development of Vietnam - Thanh Do Branch" as the theme for Master's thesis

2 Overview of the research status

Regarding the research situation related to the Author's research theme, in Vietnam, there are some research topics as follows:

“Solutions to develop e-banking services at Joint Stock Commercial Bank for Foreign Trade of Vietnam”, Master's thesis in economics by Huynh Thi Le Hoa, Ho Chi Minh City University of Economics in 2004: The thesis research on the current situation of e-banking services development at Joint Stock Commercial Bank for Foreign Trade of Vietnam, analyzing the e-banking products and services that the Bank for Foreign Trade of Vietnam is providing, along with giving theories and solutions to develop e-banking services at the Bank for Foreign Trade of Vietnam;

Th research period is from 2000 to 2003

"Developing e-banking services at Vietnam Joint Stock Commercial Bank for Industry and Trade - Thang Long Branch", Thesis of Master of Economics – Ms Cao Thi Thuy, University of Economics - Vietnam National University in 2016: Analyzing the current situation, advantages, successes as well as difficulties in service development at Vietnam Joint Stock Commercial Bank for Industry and Trade - Thang Long Branch, the research period is from 2013 - 2015

"Completing e-banking business activities at Vietnam Export Import Commercial Joint Stock Bank - Da Nang Branch", Thesis of Economics Master –

Ms Nguyen Thi Thuy Trang of Danang University in 2016: Research content and evaluation on the basis of e-banking service business at Vietnam Export Import Commercial Joint Stock Bank - Da Nang Branch as the basis to offer solutions to complete e-banking business operation

As a number of researched subjects before, with the theme “Solutions to develop e-banking services at Joint Stock Commercial Bank for Investment and Development of Vietnam - Thanh Do Branch", the Author also focused on deeply presenting theoretical issues about e-banking development, then analyzing the strengths and weaknesses, shortcomings and limitations still existing at BIDV -

Thanh Do branch and offering solutions to develop e-banking services at the Bank However, unlike previous research projects on banks such as Foreign Trade Bank, Industry and Trade Bank, Import-Export Commercial Joint Stock Bank, or numerous banks in Vietnam in general, BIDV - Thanh Do Branch is the research space selected

by the Author with the research period is from 2017 to 2019 Therefore, the solutions given in this theme are different from the previous ones to be suitable for the research space as well as with the new stage

3 Research‘s Objective

The objectives of this study as belows:

- - Propose solutions to develop the service of Joint Stock Commercial Bank for Investment and Development of Vietnam - Thanh Do Branch

- Research the theories about e-banking service development, at the same time give evaluation criteria and factors affecting e-banking services development

- Based on the current status of e-banking service development at BIDV - Thanh Do branch, evaluate the achievements, limitations and causes of the limitation

in developing e-banking services

- Propose solutions to develop e-banking service at BIDV - Thanh Do Branch

4 The subject of research

The subject of research is the development of e-banking service at BIDV – Thanh Do Branch

Some sources as followings:

- Documents on e-banking services issued by BIDV - Thanh Do Branch

- Summary reports in 2017, 2018, and 2019 of BIDV - Thanh Do branch including contents on e-banking development activities

- Documents: books, articles about e-banking services

- Other information related to the development of e-banking products and services at other commercial banks on the Internet

7 The method of research

- Analysis – comparison method: make tables and charts comparing data between years to realize the increase and decrease fluctuations each year, thereby analyzing the causes

- Analysis - synthesis method: from the collected data, the Author analyzes and evaluates the overall business performance in the period 2017-2019 of the Branch and the current status of e-banking service development, achieved results, shortcomings, causes and proposes solutions to overcome

8 Structure of the thesis

Regarding the thesis’s structure, apart from preface and conclusion, it is divided into 3 parts:

- Chapter 1: Overview of e-banking service development

- Chapter 2: The current development situation of e-banking services at Joint Stock Commercial Bank for Investment and Development of Vietnam -

Thanh Do Branch

- Chapter 3: Solutions to develop e-banking services at BIDV – Thanh Do Branch

CHAPTER 1: OVERVIEW OF E- BANKING SERVICE DEVELOPMENT

1.1 The definition of e-banking service

Electronic Banking service (Electronic Banking abbreviated as E-Banking) is explained as the ability of a customer to remotely access a bank in order to: collect information; perform financial and payment transactions based on depository

accounts at that bank and register to use new services

(Source: Truong Duc Bao, E-banking and e-transaction facilities, Banking informatics magazine No 4 (58) -7/2003)

E-banking service, in a visual sense, is a type of banking service performed

by customers without going to the transaction counter to meet bank staff In a wider sense, this is the combination of a number of traditional banking services with information technology and electronics and telecommunications E-Banking is a form of e-commerce (electronic commerce or e-commerce) applied in banking business It can also be understood more specifically that E-Banking is an informatics software system that allows customers to find out information or perform some banking transactions via e-means (information technology, electronics, digital, magnetic, wireless transmission, optical, electromagnetic or similar technology)

This is a wide concept based on the ability of each bank in application of information technology to its products and services In other words, e-banking is a computer software system that allows customers to find out or purchase banking services by connecting their computers to the bank

1.1.1 Advantages of e-banking service

- Fast and convenient:

The first advantage of e-banking services is the speed and convenience banking services always provide customers convenience and readiness for a variety

E-of online banking services Customers can make transactions at any time and anywhere, which is meaningful and important to customers nowadays E-banking services help customers save their time and travel costs by waiting at the bank's transaction counters or being present at banks for transactions during working hours

- Cost-saving and increase of revenue:

Beside saving time and reducing service costs for customers, E-banking services also help banks cost-saving and increase revenue by reducing a lot of labor costs, printing, document and etc

- Expand the scope of operations, improve operational efficiency and increase competitiveness:

E-banking services help banks easily expand their scope of operations without opening more branches and transaction offices due to the lack of geographic distance between banks and customers

E-banking services also help banks quickly update information, transactions,

be transparent about data, quickly have accurate, completed and detailed analysis and assessment of each customer's situation to other business activities of the bank, improve operational efficiency and increase competitiveness

1.1.2 Disadvantages of e-banking service

-The high risk:

The biggest disadvantages of e-banking services is safety and confidentiality The more modern the information technology increases, the easier the private data and passwords to access customers 'accounts and money from customers' accounts are stolen by the hackers

Investigating the above risks to determine whether the fault is the bank or the customer is not easy However, when risks happen, customers lose money and the bank's reputation is affected

- Quality of tranmission line:

The quality of the transmission line, the processing speed of the computer system, the technical error, the computer infected with the virus or the poor quality

of the terminal leads to low quality of service such as: crashes, low transaction processing speed, or many-time access

Although e-banking service is a utility service meeting the needs of modern life, the above disadvantages make many customers afraid and lose their trust when using e-banking services

However, e-banking services still plays an important role in contributing to enhancing the competitiveness of commercial banks and making users' life simpler and more convenient

1.2 E-banking services development at BIDV

1.2.1 E-banking services

1.2.1.1 Interner Banking: banking transactions through the Internet

Internet Banking is an online banking service and e-banking service for banks Equipment used for this service is phone, laptop and the computer with internet connection

With Internet Banking service, customers can perform almost banking transactions without going to the Bank's branch or transaction office to perform.The Access and connection with the bank has been done at anytime, anywhere, regardless of the working hours of the banks

Banking transactions through Internet Banking service are secured by the access password, OTP code run and generated by the system and then sent to the customer's phone number previously registered with the bank

1.2.1.2 Mobile Banking: banking transactions through the phone

Mobile Banking is a service provided by a bank that allows customers to conduct financial transactions remotely using devices such as mobile phones or tablets

After successfully registering Mobile Banking at the bank, customers download the software to their phone and are provided with customer’s code and password to log in to perform financial transactions This application can be installed

on phones, tablets using IOS, Android, J2ME and etc

Currently, banks are increasingly diversifying their financial products In which, Mobile Banking services are gradually being focused and improved so that customers have the best experience when using these services

1.2.1.3 BSMS Banking: banking transactions via SMS of mobile phone

BSMS Banking is a notification service about changes in customers' deposit and loan accounts opened at the bank This is a method of transaction on mobile

phones, which helps customers know their account information for a period of time, from the time of the query and earlier

To use BSMS Banking service, customers send messages according to the bank's prescribed syntax to receive information about interest rates, exchange rates, transaction outlets, account balance and etc

BSMS Banking service is relatively safe for customers because of its high security The phone numbers, which the customers use to register, are his or her own phone number, so all information is under the control of the customer

1.2.1.4 Card service

Commercial banks often issue many different types of cards to provide customers to meet the diverse needs of customers such as debit cards, credit cards, loyalty cards, affiliate cards, prepaid card, cashback card, and etc…Each type of card has different functions and usage rules for each type of needs Basically, there are 2 main types of cards: debit (Debit) and credit card (Credit)

Different cards and different customers will be provided different credit card limits

by the bank The function of a credit card is to pay for commonly used service bills

Unlike debit cards, credit cardholders can use more money on their accounts After 45 days of free-interest rate, the customers must pay the full-used amount If overdue, the bank starts to calculate the interest on deferred payment as prescribed

- ATM: banking transactions via ATMs system

ATM (Automated Teller Machine) means automatic teller machine The main function of ATMs is to withdraw cash stored in the machine by banks through cards

issued to customers In addition, ATMs can also perform other functions such as transfer, balance inquiry and etc Using facilities at ATMs helps customers minimize the time and cost of moving to the bank for transaction

- POS: machine accepting card payment

POS is the abbreviation in English (Point of Sale) which is a machine accepting card payment POS machines are mainly used for payment at department stores, supermarkets and etc POS machines have the advantage of being compact and occupy only a very small area, so they can be easily and quickly installed at many locations of the store

Using POS machines helps business owners strictly manage goods and cash neatly to limit losses For customers, the payment of goods and other consumer invoices via POS machines helps them limit bringing a lot of cash to avoid the risk

of loss and the payment via POS shows professionalism in consumption

1.2.2 Definition of E-banking service development

1.2.2.1 Definition

According to the Vietnamese dictionary, development is a change or a change

in an increasing direction, from a little to a lot, narrow to wide, low to high, simple

to complex

According to materialistic dialectics, the concept of development refers to the process of moving in the upward direction of things: from a lower level to a higher level, which is the movement going up, from low to high, from simple to complex, from incomplete to complete In the simplest sense, development is an increase in both quantity and quality

Accordingly, the development of e-banking services is understood as the expansion of e-banking services in both the scale of using service sales and service quality improvement This development includes the growth in both width and depth

In-width development is the diversification of types of e-banking products and services The bank not only stops at maintaining existing e-banking products and services, but aslo needs to research, operate and provide new e-banking products and services

In-depth development is the improvement of the quality of e-banking

products and services through service provision, transmission quality, confidentiality, timely troubleshooting and etc

From the development of e-banking services towards improving the quality of the bank's products and services and increase customer satisfaction, the Bank needs

to increase the number of customers using e-banking services, income, and improve the competitiveness and position of the Bank

In fact, the development of e-banking is to pursue activities to increase the number of customers, increase sales and profits through activities as finding new customers and promote customers use more e-banking products and services

1.2.3 Strategy and criteria for evaluating e-banking service development

1.2.3.1 Strategy to develop e-banking service

Developing a service is always associated with market development Based

on that, service development content can include some strategies as follows:

- Developing current services: This strategy is called as the deep penetration into the market, which means seeking to promote the sale of existing services in the current market This is how to increase existing products while maintaining the same consumption market and modern technology This strategy requires businesses to go through strong marketing efforts such as pricing policies, distribution policies, and promotion policies to increase purchasing power of existing customers However, the application of this strategy just get efficiency when the current market is not saturated, the market share of competitors is declining and the corporate now has a competitive advantage; simultenouly the speed of revenue must be higher than the minimum one of cost increase With this strategy, the corporate can increase the purchasing power of customers or attract customers of competitors

-Market development for existing services: This strategy is called as market development, which means seeking growth by penetrating into new markets to consume products currently produced in the enterprise This strategy quires corporates to have a dynamic and efficient distribution system, especially sufficient resources to promote this activity such as capital, human resources, and at the same time the corporates must also be capable of production to meet the demand of new

market

-Developing new services for existing markets: This strategy is called as service development - which means seeking growth through the development of new services for consumption in the markets where the business is operating This new service may be self-produced or contracted by the corporates, or imported by merging or acquiring a model of another firm This strategy requires corporates to have a strong research and development ability in era nowadays With the strong development of science and technology, the services often have short cycles due to the rapid new service, so this strategic allows firms to create new markets within existing markets

- Developing new services for new markets: This strategy is called as product diversification – which means seeking growth through the development of new products for consumption in markets that the corporates have not yet served This strategy is risky, requiring corporates to have strong research and development capabilities in era nowadays as well as have sufficient resources and knowledge of the new market to serve this market

1.2.3.2 The criteria for evaluating e-banking development

- The number of provided e-banking services

As the competitive pressure for market share in the service provision market is increasing, the Commercial banks must race to apply modern banking technology to continuously launch new products and services to meet the needs of customers The large number of e-banking services of a commercial bank proves that the commercial bank has not stopped concentrating, investing in developing modern distribution channels for products and services, innovating the method of service delivery attracting customers and affirming the high level of commercial bank's e-banking development In contrast, the low number of e-banking services shows that the commercial banks still focus mainly on all resources to exploit the traditional banking service segment and the low level of development of e-banking services

- The number of customers using e-banking services

Services are provided by the bank to meet the needs of customers The more

increasingly perfect the quality of service is, the longer time the customers will become fond of the bank Besides, the compliments, the satisfaction of existing customers' service quality will be communicated to other customers who also need the service to come to the bank for transactions Therefore, the number of customers using the service will constantly increase, increasing the bank's service revenue, proving the success of the services provided by the bank In contrast, that the number of customers using the service is small and tends to decrease means an indication of service failure

- Transaction amount of e- banking services

The number of customers is large but the frequency of customers using is low, the service fees collected by commercial banks are not much and the service

is not effective for the bank Therefore, apart from the target of the number of customers using the service, the success of each service depends on the number and actual transaction amount performed by customers The number of transactions and transaction amount are big and fluctuating in an increasing trend, which proves that customers have trusted and satisfied with the service quality of the bank In contrast, he number and transactions value is small and tends to decrease, which proves that the services have not met the needs of customers and unefficient and the level of e-banking services development at the commercial bank is low as well

- Income from the service and the operation and maintenance cost

When opertating e-banking service, income and cost are also an important economic problem If the income from the service is higher than the cost, which proves that the investment efficiency in the service is high On the contrary, if the income from the service is low while the cost of operation and maintenance is high which proves that the investment in the service is not really efficient This helps the bank decide whether to continue to invest in service implemetation or not

1.2.4 Factors impacting on e-banking services development

1.2.4.1 Internal factors

The subjective factors that affect the development of e-banking services

of banks, helping customers make transactions fast and convenient

E-banking services development is also affected by the priority of financial resources, technology and human resources of each bank in each business stage

E-banking service development is impacted by the bank's capacity to manage risk in developing e-banking services to bring security and safety for customers' and banks’ assets as well

In addition, E-banking services development is also affected by other related activities such as accounts, payments, deposits, securities, Therefore, it is vital to synchronously coordinate between stages so that the whole process is going on smoothly, contributing to the best development of e-banking services

Then, the scale and the growth in the number of customers using e-banking services as well as the increase in profits from e-banking business is a measure of the success of the operations, the implementation method to develop e-banking services mentioned above

- Qualification of human resources

When developing e-banking services, banks can significantly reduce the human resources due to many automated stages and support of technology machines, which requires the quality of the bank's human resources improved in the information technology sector

In order to well develop e-banking services, staff need to self-study and do depth research on e-banking products and services, have a certain level of

in-information technology and be always up to date, the latest changes and improvements in banking products and services to introduce, advise and guide customers and overcome arising problems

In addition, Developing E-banking services also requires the high qualification in information technology of the computing staff at the banks to operate the system of services and products well of e-banking services, perform security related activities, troubleshoot software problems, transmission lines and etc

- Marketing and customer policies

To develop E-banking services, banks need to create a sense of their willingness to provide e-banking products and services in time, the willingness of bank staff in support as well as solve problems quickly, safely and effectively for customers

E-banking products and services of banks are basically similiar and little different so banks need to create other factors to enhance their competitiveness in order to well develop e-banking services Through marketing and customer policies, banks will draw customers' attention, thereby attracting customers to use the service and retain them as well

- Technology and equipment serving e-banking services development

The development of E-banking services requires banks to have a qualified information technology infrastructure including two aspects: one is advanced, modern in technology and equipment and the other is economic universality (cheap enough to be access for a large number of people)

Due to the extremely important nature of technology and equipment for banking development, banks need to have an important initial source of capital to invest and improve the information technology infrastructure of their bank to develop this type of service

e-In addition, the development of the telecommunications network as well as the quality, the stable operation of this network, the level of computer equipment in agencies, organizations, businesses and people, have a great impact on e-banking services development

On the contrary, when the economy is underdeveloped, business activities stagnate, and incomes fall, banks will not be able to promote e-banking services development

Therefore, the stable development of the economy and improved people's living are essential conditions for e-banking services development

- Legal environment

In order to develop e-banking services well, the legal system of the government must be completed to ensure the legality of e- transactions as well as e-contracts and documents The legal infrastructure of e-banking services also contributes to ensuring the legality of intellectual property and technology transfer, personal secrets of participants in e-transactions

- Factors from the customers

Factors from the customers include: age, income, education background, habit

of using cash, and unfamiliarity with banking

User-side factors are one of the most influential factors in e-banking services

development, including the adoption and development of new ideas as well as new products Despite the low qualification of users will limit the ability to absorb new things, especially for modern banking technology products and services nowadays

The understanding of e-banking customers helps them to trust and feel in security when using services and realize the utility, safety and security of e-banking services

- The competitiveness between banks

As the competition to develop traditional banking services is gradually saturated, banks turn to invest in e-banking services to provide customers with the highest transaction convenience

Competition for advantages in the development of e-banking services helps banks digitalize 100% of paper transactions, reduce the number of branches and transaction offices, reduce the costs of branch construction and operation, employee salaries, infrastructure and etc That money is transferred to invest in upgrading customer services such as not charging transaction fees, raising savings interest rates, improving and creating many new features, etc

In order to attract new customers and retain old customers, the banks offer a variety of e-banking services to meet customers' needs, simplify implementation processes, and speed up transactions, security level as well as continuously add new features, etc to increase the number of customers using e-banking services, market share and competitiveness

1.3 Experience s in e-banking services development of some commercial banks and lessons

1.3.1 Experience s in e-banking services development in the world

1.3.1.1 Experience in e-banking services development in Europe and North America

In 2013, AT.Kearney consulting company conducted a survey of some leading banks to survey the digital banking situation of some countries in the world and learn about banking digital transformation experiences of some countries in Eastern Europe, Western Europe, Southern Europe and North America According to AT.Kearney, in e-banking sector, Mobile banking is changing the game with the increasing number of customers using and banks are increasingly interested in

mobile banking The banks surveyed in the AT Kearney’s study had: (i) changed the business model in the digital age; (ii) enhanced the role of the branch in advising customers towards improving digital customer service skills; (iii) more flexible technology transition; (iv) changed the organizational model such as forming divisions including operations and technology centers to ensure rapid development

of products and services

1.3.1.2 Experience in e-banking services development in Thailand

Siam Bank and Krung Thai Bank are two of the banks in Thailand that are gradually applying technology to digitize their banks Siam Bank Thailand allows customers to create pre-orders from Mobile channel, help them scan QR code to make transactions without having to re-enter information when going to the teller counter In addition, this bank raises the issue of paperless transactions with customers as well Krung Thai Bank has transformed from a traditional banking model to a digital banking model including: integrated multi-channel management system, card management system, Internet Banking system, Mobile Banking syste and transaction system at the branch The transition period is 3 years In 2015, the bank was equipped with integrated multi-channel management solution (Omni-Channel) and an independent card management solution Card management system was integrated with OmniChannel system In 2016, the bank integrated the Internet banking and Mobile banking systems into the Omni-channel system In 2017, the bank integrated its branch teller transaction system into its Omni-channel system (Vu Hong Thanh, 2016)

1.3.2 Experience s in e-banking services development in some Domestic Commercial Banks

1.3.2.1 Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) – Chuong Duong Branch

As one of the first established banks in Vietnam with a history of more than

40 years, Vietcombank is currently one of the leading banks in Vietnam in all aspects During its development process, Vietcombank has branches in most of the provinces and cities nationwide including primary branch, secondary branch and

system of transaction offices In 2003, it marked a turning point and an outstanding development of Vietcombank- Chuong Duong Branch when transforming from a branch with level II of Vietcombank Hanoi to the branch with Level I under Vietcombank Vietnam under Decision No 413 / QD .NHNT.TCCB> with many difficulties from building facilities, supplementing human resources to set up a development foundation Up to now, Vietcombank - Chuong Duong Branch has affirmed its position in the capital area On the basis of Vietcombank's achievements, Vietcombank Chuong Duong has been developing overall e-banking products and services Factors that have brought success for Vietcombank Chuong Duong are analysed as belows:

Strength in direction and strategy: Vietcombank currently has 14 million individual accounts With the strategy towards customer experience, Vietcombank has been developing products towards each customer segment to meet and satisfy the needs of each individual customer Vietcombank has diversified in product supply, especially products (integrating products and technologies) for example: card services, Vietcombank Priority software for priority customer segments, applications via mobliephone apps, Vietcombank Pay, SMS banking and etc

Strong financial resources: Paralleling with e-banking services development is the growth in the number of personal and savings accounts As a result, the bank has

a large source of cheap capital mobilization, increases the strength of its mobilization and the profits from the Branch's account services

1.3.2.2 Asia Commercial Joint Stock Bank (ACB)

As a Joint stock commercial bank, ACB is one of the banks that has early orientation of e-banking services development ACB has built itself a goal of becoming a leading retail joint-stock commercial bank in Vietnam Currently, ACB

is considered as one of the banks providing rich customer services based on modern technology with more than 200 products and services to serve the needs of customers Specifically, in terms of card operations, ACB has been a member of Visa International since 1995 and Master since 1995 ACB has issued many international credit and debit cards such as ACB visa, Visa election, ACB Master

card Market share of ACB's international card takes account for more than 50% Domestic credit cards are associated with companies such as ACB - Mai Linh, ACB

- Phuoc Loc Tho ACB has the right direction to develop credit cards, international debit cards before focusing on the domestic market to attract customers who regularly go abroad, international students and etc

ACB also focuses on developing early the network of POS, SMS banking, WAP banking (banking transactions via web on mobile phones), Mail Banking, Fax Banking, Video Banking (banking transactions via email, Fax, and Video banking.)

to optimally occupy the number of young customers (representing individual customers) and existing corporate customers

1.3.2.3 Some other commercial banks

Currently, most domestic banks in Vietnam have digital strategies and strong development orientations to promote e-banking service channels All banks consider digital transformation to be of vital importance 96% of banks have been building development strategies based on 4.0 technologies and 92% of banks have developed application services on Internet and Mobile Many banks have set up blocks or centers, step by step converting their operating models and trading products and services towards digitalization Most of the banks have digitized their payment services and are doing this with the rest Many banks consider e-banking as a focus

of development, such as Tien Phong Commercial Joint Stock Bank (TPBank) launching a LiveBank application On the media, TPBank has also clearly demonstrated its e-banking development strategy through the message of the General Director: "With the strategic direction of becoming a digital bank, applying technology to all In all areas of operation and all banking operations, we have been investing a considerable amount of resources to meet the needs of innovation and the application of the latest technologies in products and services to creating a competitive advantage for the bank "

In 2016, Vietnam Prosperity Joint Stock Commercial Bank (VPBank), in association with Lifestyle Project Management Vietnam Co., Ltd., launched Timo Digital Bank

as the first digital bank in Vietnam, marking a milestone for the towards developing e-banking channels in a more advanced way in our country Timo has all the features

of a bank, with ATM cards and payment and savings accounts The difference of Timo is the creative experience: No branches, no traditional transaction offices, Internet application and Mobile Banking is optimized with smart design, providing maximum convenience and unique features for users In September 2018, Yolo Bank was launched by VPBank and was the first bank to operate on the cloud web service Amazon, allowing rapid development in both quality and number of users In particular, Yolo allows users to buy insurance packages online without medical examination, and at the same time, new customers of the bank can register to open a prepaid card (virtual card) just by email and phone number phone

Orient Commercial Joint Stock Bank (OCB) has also launched OCB OMNI Bank; using the website Bankstore.vn supports the convenient sale of many personal e-banking products and services to customers

Technological and Commercial Joint Stock Bank of Vietnam (Techcombank) in its development strategy has determined to focus on developing customer experience on online banking services

As can be seen, Vietnam Commercial Banks have been determined to transform their operating model and digitize their banks through a series of key projects, develop their products in the direction of promoting services digitized and automated, to quickly reach and attract customers in the technology segment The application of the 4.0 Technology Revolution in all sectors of the economy in general and especially in the e-banking sector in particular is an inevitable and irreversible trend

in the context of globalization

1.3.3 Experienced Lessons for BIDV – Thanh Do Branch

Through researching experiences in e-banking services development of some domestic and foreign organizations, some lessons to speed up e-banking services development can be deployed as follows:

- Completing products and products’ supply structure on the basis of applying modern technology

- Promote the development of infrastructure and information technology network

- Diversify the product portfolio to suit each type of customers

- Strengthen to broaden connection with major partners in the area and diversify customers’ network

-Build the bank's image and brand name on the market with unified brand design, action slogans Affirm market position with quality, smart, convenient of e-banking services and products, competitive and attractive fee schedule

On the basis of some overview of domestic & foreign theories and experiences

on e-banking service development, it is possible to propose an analytical framework for the thesis as following

First of all, the Author will analyze the current operation status of e-banking service development at BIDV in general and Thanh Do branch in particular After that, the Author will analyze the factors affecting e-banking services development at this branch, based on which, propose some solutions to develop e-banking services

at BIDV – Thanh Do Branch

Conclusion of Chapter 1

Thus, along with the rapid development of science and technology, e-banking services have become a wide mean of payment and increasingly show its preeminent features Therefore, E-banking services development is an indispensable thing to meet the demands of society E-banking services bring not only many benefits to customers in payment but also great benefits for banks in increasing service fees, taking advantage of capital mobilized from the population, opening wide payment range and diversifying customers

Chapter 1 of the Thesis presented the general definition, advantages, disadvantages and types of e-banking services including: BIDV Online, BIDV Mobile, BIDV BSMS, Card service, ATM, POS and the theories on e-banking services development

Then, it also mentioned to the research on concepts, evaluation criteria as well

as subjective and objective factors that impact on e-banking services development of commercial banks

The theoretical contents of e-banking services development mentioned above will be the premise for the analytical assessment of the current status of e-banking service development at BIDV- Thanh Do Branch in Chapter 2

CHAPTER 2: THE CURRENT DEVELOPMENT SITUATION OF

E-BANKING SERVICES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - THANH DO BRANCH

2.1 BIDV- Thanh Do Branch Introduction

2.1.1 Foundation and development

JSC BIDV, formerly known as the Bank for Construction of Vietnam, was found in

1957 under Decree No 177 / ND-TTg dated April 26, 1957 of the Prime Minister

In 1982, with the aim of improving the efficiency of capital investment management for basic construction, the Government issued 259/CP Decision to transfer the Bank for Construction of Vietnam from the Ministry of Finance to the State Bank of Vietnam and establish the Bank for Investment and Construction of Vietnam

On April 27, 2014, BIDV implemented equitization through initial public offering (IPO) and was licensed to transform the model to a joint stock commercial bank under the Establishment and Operation License No 84/GP - NHNN issued by the State Bank and the Business Registration Certificate No 0100150619 issued by Hanoi Department of Planning and Investment

On September 12, 2006, BIDV-Thanh Do Branch was founded as a level 1 branch, the 89th member of BIDV system and the 12th organization in Hanoi capital area and established under 127/2005 / QĐ-HĐQT Decision of the Board of BIDV Directors BIDV Thanh Do Branch is headquartered at 469 Nguyen Van Linh, Phuc Dong ward, Long Bien district, Hanoi

2.1.2 Organizational chart

Organizational model at BIDV Thanh Do includes 5 divisions by functions:

- Customer management division includes:

+ Wholesale customer management: including 03 professional departments as follows: Corporate Customer 1, Corporate Customer 2, Corporate Customer 3 These departments are responsible for accessing, developing, and meeting the transaction needs of business customers In the devision, depending on the strengths of each unit

to devide the main tasks to serve large enterprises, SME, FDI customers

+ Retail customer management: including 02 professional departments: Individual customer 1, Individual customer 2 Both departments are parallel in coordination to access and develop retail customer base at the Branch

- Risk management division includes: 01 Risk management department, which

is divided into 2 distinct areas: credit risk management and operational risk management

- Operational devision includes

+ Credit Administration Department: Responsible for managing credit records, guarantees, TF; making contracts on SIBS network system according to credit records, guarantees and TF

+ Customer Transaction Department: perform customer services

+ Treasury Management and Service Department: Perform transactions related

to large volume cash collections/ expenditure transactions; internal cash coordination transactions among departments in the Branch; among Branches and Head Office of BIDV / SBV (State Bank of Vietnam) in Hanoi city

- Internal Management Division: Financial Planning Department, Administration Department, Computing Team

Affiliated units: including 05 transaction offices (Duc Giang Transaction Office, Viet Hung Transaction Office, Tran Khat Chan Transaction Office, Ly Nam

De Transaction Office; newly operating Co Linh Transaction Office from April 2/2019) Affiliated transaction offices perform a variety of financial banking services yet, mainly focus on retail banking segment; including retail credit

Figure 2.1: Organizational chart at BIDV, Thanh Do Branch:

(Source: Human resource report at JSC BIDV - Thanh Do Branch on March

31, 2019)

2.1.3 Human resource current situation of the Branch

Upto December 31, 2019, the Branch has 135 staff, of which: masters: 30 staff, bachelors: 99 staff and associates: 6 staff

Table 2.1: Number and qualifications of Branch staff

(Unit: person)

Items 2017 2018 2019

2018/2017 Growth

2019/2018 Growth

Figure 2.2 Proportion of staff by level

(Source: Branch summary report for 2017, 2018, 2019)

The number of the Branch’s employees has increased regularly every year, in 2018 increased by 10 staff, in 2019 increased by 3 staff Thereby, the number of staff with master degree accounts for an average of 22% in the period and with bachelor degree accounts for an average of 73% in the period (2017-2019) This is a good advantage

of the Branch to have a well-trained and full-time human resource

2.1.4 Business performance results for the period of 2017 - 2019

2.1.4.1 About capital mobilization

In the area of Long Bien District (where BIDV Thanh Do is headquartered), most

of the state-owned and large-shares commercial banks are located In that context, BIDV Thanh Do has gradually approached, actively attracted and exploited inactive capital sources and applied fairly effective lending policies in addition to expanding the types of accompanying services as : domestic payment, international payment, foreign currency trading, card business and treasury activities, guarantee, budget collection, salary payment through banking accounts, etc to aim at brand development and business efficiency Capital mobilization is a part of money trading and is of a great significance to the bank itself as well as to the society The result for this operation is to generate capital to meet the capital needs for the economy’s production, business or consumption

Table 2.2: Capital mobilization for the period of 2017-2019

Unit: Billion dong, %

Increase/D ecrease in

2018 vs

2017

Increase/D ecrease in

2018 vs

2019 +/- % +/- %

In banks’ monetary business, mobilization is on top priority Mobilized capital not only plays an important role but also is decisive to the scale and stability of the bank business

At Thanh Do Branch, the branch's capital mobilization has increased over the years, the average growth rate of capital in the period 2017-2019 is 3%/year, mainly from individual customers, accounting for 73-79% of the capital

Specifically, the mobilized capital in 2018 increased by 110 billion VND compared

to 2017, in 2019 increased by 210 billion VND compared to 2018 It can also be seen the branch is promoting the increase of capital mobilized from the residents to increase the stability and sustainability of the total mobilization source, minimize the sharp decrease in the amount due to the large volume withdrawals of economic organizations as well as minimize the arising costs of mobilizing capital It’s clearest that the total mobilization of residential capital in 2019 keeps increasing steadily, while the capital of corporate customers shows signs of decline (compared to 2017)

(Unit: %)

Figure 2.3: Structure of customer-based capital mobilization

(Source: The Branch’s summary report for 2017-2018-2019)

Figure 2.4: Structure of term-based capital mobilization

(Source: The Branch's report for 2017-2018-2019)

Regarding terms, the Branch's medium and long-term capital mobilization accounted for a low average portion of the period (2017-2019) at 32.7%/ total capital mobilization), partly due to the impact from short-term interest rates for this period attract more depositors than medium and long-term ones This is an affordable source of capital but not highly stable for the bank in ensuring its liquidity, causing certain difficulties for the Branch in providing financing for medium and long-term credit contracts to customers and increasing costs due to internal medium and long term loan

The capital scale is stable, in 2017 - 2019, the growth rate of capital mobilization slightly is slight and maintained Although the Branch's mobilized capital has been constantly growing over the years, the fact that the growth rate of capital has not kept pace with credit growth at the Branch recently and the amount of capital mobilized at the Branch is only able to meet about 50% of the demand for capital use This can be said to be one of the reasons pressuring on Branch's leaders in executive direction and business policy making

- The branch has a right policy in implementing savings mobilization programs as: Round-trip bonus savings, promotional gift savings, security accural deposits, bond issuance, interest rates incentives with savings in the form of online savings,

establishing capital mobilization groups in wards and communes in the district (according to land compensation), encouraging all staff and their family members to fully use the Bank's utility services, etc under the direction of the Central Bank for Investment and Development of Vietnam (hereinafter referred to the Central BIDV)

- During the capital mobilization phases, the branch applies new products such as: issuing certificates of deposit, mobilizing bonus savings, issuing bonds, .etc Every term, the Branch keeps conducting promoting on mass media, hanging slogan banners, distributing leaflets, giving gifts to customers who send a large amount of money and customers who regularly have transactions on deposits, etc to attract and promote marketing to customers in the District area From the capital management directed by the Central BIDV in combination with actively following up the fluctuation of mobilization interest rates in the market of the Branch to give proper capital mobilization products, deposit and loan interest rates Ensure the Central BIDV’s permitted limitation and direction Ensure fast, timely payment, gradually improve the local capital balance ratio, use the internal capital transfer limit effectively, and bring a high profit to the Bank

Through the above data and analysis, it can be seen that the capital mobilization recently at BIDV Thanh Do is prettily stable in the context of the competition between commercial banks in the Long Bien District in particular and the entire banking system

in Vietnam in general The key in capital mobilization in the upcoming time of BIDV Thanh Do is to keep promoting capital mobilization from individuals, further mobilizing capital sources from residents and economic organizations, and at the same time organizing medium and long-term capital mobilization to increase financing medium and long-term credit contracts to customers and costs increase due to middle and the Branch’s medium and long-term internal loans

2.1.4.2 About credit activities

- Loaning is an activity accounting for the largest portion in business activities and is also the main source of income for the Vietnamese banking system, including JSC BIDV – Thanh Do Branch With autonomy and self-responsibility in their loans, credit activities of Commercial Banks in general and JSC BIDV- Thanh Do Branch

in particular are increasingly focused and in a good growth in order to meet the capital needs for the economic development goals

- In the common situation, at Thanh Do Branch, short-term lending activities and diversification of short-term loan products also increase quite rapidly in the period of

- In the period of 2017-2019, the branch's loan outstanding balance had a slight increase compared to 2017 Closing loan outstanding balance in 2017 reached VND 8,150 billion Outstanding balance in 2017 had a pretty strong growth to VND 8,490 billion, an increase of VND 310 billion compared to 2017 and in 2018, outstanding loans reached VND 8,280 billion, an increase of VND 130 billion compared to 2017 Credit outstanding balance has increased on average by 1% per year for the 2017-

2019 period

- In the credit outstanding balance at the Branch, customer outstanding balance makes up a high proportion, up to 76.7%/ total outstanding balance Loaning corporate customers at the Branch mainly are state-owned enterprises, lending under the state plan, and also provide business loans in the fields of commerce, transportation, loading and unloading, delivery, construction materials trading and farming, fruit trees planting, etc Some big enterprises are in good relationship with crediting at BIDV Thanh Do listed as Bridge Company 12, 14, 5 - Thang Long, garment companies as 10 garment company (GARCO 10., JSC) , Duc Giang garment company (MDG CO , LTD); Duc Giang Detergent Company (DGC), Matches Unified Company (TMJCO), .etc some private enterprises: Hoang Long private enterprise, Minh Phu steel enterprise, Meanwhile, retail balance accounts for 23 , 3% / total outstanding balance This is a relatively low rate In the period of

2020 - 2023, the branch will gradually shift to retail credit development, increase the portion of retail credit in the total outstanding balance in order to disperse risks and create stable revenue for banking business