CHAPTER 2: ELECTRONIC BANKING SERVICES AT AGRIBANK TAY DO
2.2. Assessment of electronic-banking services at Agribank Tay Do branch in the period of 2017-2019
2.2.1. Qualitative norms
2.2.1.1. Fast and simple procedures
With electronic banking, customers can transact anytime and anywhere without going to the branch. Therefore, branches can reduce manpower at the counter, reduce operational errors and use staff more effectively. Moreover, e-banking helps the Branch increase transaction speed. With access speed is relatively fast, according to Ms. Dam Thi Tuyet, expert customer care at service counters , "Internet Banking service at Agribank Tay Do can get 60,000 visitors access to the website at the same time to query information, make transactions, help reduce unnecessary paperwork, reduce cumbersome procedures” .
2.2.1.2. Customer satisfaction level Customer trust
Customers know Agribank Tay Do quite long because it is a branch level I, convenient geographical location, in My Dinh new urban area, near My Dinh Stadium, My Dinh bus station and Thang Long Boulevard and some trade centers such as Vincom Pham Hung, Landmark 72,... create positive advantages for Agribank Tay Do, from which the branch can easily do business and earn customers' trust when deploying new services.
Recently, electronic banking service at Agribank Tay Do branch has attracted a large number of customer warehouses due to characteristics of the population in areas is that mostly residents have a high level of education, high income, foreigners, they have great demand for using e-banking services because of its convenience. According t direct interview about the satisfaction level of customers for service electronic banking by asking 225 customers to a service in one month, the results showed that 180 guests goods (equivalent to 80%) feel satisfied with the service provided by Tay Do branch. Meanwhile, the rest 20% feel not completely satisfied by a number of reasons such as the time to resolve complaints is not fast (18 people ), network errors and losses (15 people ), response attitude with customers (3 people ), complaints were not resolved (9 people). Accordingly, the majority of transactions take place quite quickly, conveniently and safely.
The response
Nowadays, the more digital market develops, the more competitions among banks, and customers have many choices. Customer's preference is directly proportional to the speed with which the bank needs its customers as well as the utility of the services.
Table 2.4: Comparing Mobile Banking service utilities of some banks Function Agribank Vietcombank BIDV Techcombank
Transfering x x x x
Payment via QR Pay x x x x
Phone recharging x x x x
Pay the bill x x x x
Movie ticketing, hotel
reservation x x x
Booking flights, trains,
ticket x x x x
The sale of goods available
online sales or market x x x
Transfer money to the card x x
Looking up exchange rate, securities and stock
information
x x x x
Source: Aggregating information from websites of Agribank, VCB, BIDV, TCB Table 2.5: Comparing Internet Banking service utilities of some banks
Function Agribank Vietcombank BIDV Techcombank Looking up account
information x x x x
Look up transaction history x x x x
Transfering x x x x
Opening/closing of online
deposit account x x x x
Bill payment x x x x
Electronic tax payment x x x x
Recharge E-wallet, phone x x x x
Source: Aggregating information from the websites of Agribank, VCB, BIDV, TCB Table 2.6: Comparing SMS Banking service utilities of some banks
Function Agribank Vietcombank BIDV Techcombank Notice of changes in account
balance x x x x
Checking information, notice x x x x
fluctuations of deposit accounts and loan accounts Inquiry account balance, statement of the last 5 most transactions
x x x x
Looking up ATM location x x x
Transfer via SMS in IPCAS
(ATRANSFER) x
VnTopup x x x x
Bill payment (APAYBILL) x
Source: Aggregationg information from the websites of Agribank, VCB, BIDV, TCB Table 2.7: Comparing BankPlus service utilities of some banks
Function Agribank Vietcombank BIDV Techcombank Account balance inquiry x
Stop providing
x x
Looking up transaction
history x x x
Transfer within the system x x x
Payment of
telecommunication service of Viettel
x x x
Source: Aggregating information from the websites of Agribank, VCB, BIDV, TCB 2.2.1.3. Accuracy
As digital banking services are increasingly expanding, online transactions must also increasingly meet the requirements of the accuracy of transactions and payment orders. Sometimes there are even small errors related to computer systems, network connections or transmission lines that interrupt transactions, which also significantly affects customers' trust in commercial banks. Understanding this problem, transactions at Agribank Tay Do are encrypted with electronic data to ensure accuracy and security for
customers. In addition, in order to speed up transaction information, Agribank also offers encryption solutions using advanced algorithms, applying data security policies, e.g.... to minimize errors in customer transactions. If there are any errors in the transaction process, customers can contact the hotline of the branch 024.62872246 or 024.62872664 printed on ATMs, on the bank's website for timely processing, ensuring the implementation process is the best.
2.2.1.4. The safety of electronic banking services
Safety factor is always placed on top of the time the e-commerce services to the throne. Transactions, personal information about the account, transaction history of bank customers must be strictly confidential. As the growing e-commerce services also lead to the increasing trend of high-tech crimes of all kinds and sophisticated methods with the aim of appropriating customers' properties through data theft. personal data, customer account information and above all the money in the account, so customers feel that e- banking services are not really safe for them. Agribank branch Tay Do as well as other branches grasp is this mentality should always try to find solutions to protect the interests of customers using the service.
Demonstrating this effort is Agribank's use of firewalls (PIX Fire Wall) to ensure that access is legal. Agribank was the first completed project plan to modernize the payment system and customer accounting IPCAS (The Modernization of Interbank Payment and Customer Accounting System) by the World Bank funding. This project has a very important contribution to the security policy of the whole Agribank banking system in general and Agribank Tay Do branch in particular.
Figure 2.2: The security policy of IPCAS in Agribank Tay Do branch
(Source: IPCAS data from General Department of Agribank Tay Do branch) 2.2.2. Quantitative norms
2.2.2.1. The number of customers using the service
Table 2.8: The number of customers using electronic banking services at Agribank Tay Do branch in the period of 2017-2019
(Unit: customers) Electronic banking
services
2017 2018 2019
Agribank E-mobile Banking
8,560 9,998 10,859
Internet Banking 401 497 555
SMS Banking 9,861 10,677 11,833
BankPlus 335 402 421
Total 19,157 21,574 23,668
Source: Summary report of electronic banking services in the period of 2017-2019 The statistical data in table above shows the number of customers interested in electronic banking services of affiliates increased according to time. In all 3 years, the proportion of customers registering to use Agribank E-mobile banking and SMS banking
services remained at the highest level in the structure of e-banking services. Specifically, Agribank E-mobile Banking always maintained at 44-46% of the total number of customers (a slight increase from 8,560 customers in 2017 to 10,859 customers in 2019), while SMS Banking also accounted for about 50% of users. According to my quick observation, most customers who come to the branch to register for a bank card or open a savings account also require a teller to register with a message notification service, account balance fluctuations about phone, which is part of the reason why the proportion of Agribank E-mobile Banking and SMS Banking users leads the 4 types of electronic banking services in Tay Do. Another reason leading to the largest percentage of users of texting services is that they are easy to understand annd use, just need to declare basic information such as name, phone number, etc…, suitable for middle-aged and elderly customers.
Although Internet Banking and Bankplus have a small proportion of customers who register to use divided by the total number of customers registering for the service, the number of people using the service is relatively stable and the current growth rate is marginally better than Agribank E-Mobile Banking and SMS Banking services. For Internet Banking, the number of customers registering to use increased to 96 people, equivalent to an increase of 23%, and in 2019, although this increase decreased to 12%, it is still a high increase. The number of customers registering to use Bankplus also increased by over 5% during the period of 2017-2019, showing that customers have gradually paid more attention to the offers of the service package related to bank accounts. In short, in recent years, customers are increasingly interested in e-banking products and services because it does not take too much time to learn the application or go directly to the bank but can completely transact whenever, anywhere, especially during the time when COVID-19 outbreak is booming and spreading like today, the online payment transactions via electronic banking service packages will definitely be the customer's top priority.
2.2.2.2. Structure of customers using electronic banking services during the period
Table 2.9. Structure of customers using electronic banking services at Agribank Tay Do 2017-2019
(Unit: customers)
Targets 2017 2018 2019
Student 1,655 1,832 2,016
Enterprises 624 717 882
Individuals 16,878 19,025 20,770
Total 19,157 21,574 23,668
Source: Accounting – Treasury Department The same general trend with the number of customers registered to use the service, the structure and size of customers are using E-banking services were expanded. The number of customers using the services of e-banking is divided into three categories:
students - students, enterprise and individual customers, in which individual customers are still accounting for the overwhelming proportion, fluctuated stably around 88-90 % of total customers using E-banking service packages. The number of customers who are students using the service has increased steadily over the years, in 2018, the statistics showed that the number of students using the service increased to 177 customers compared to 2017, In 2019, this increase compared to 2018 was 184 customers, the average increase for the whole period was about 10.5%. The reason for the growth of the student segment is that a lot of schools now have applied the form of online tuition collection and payment through banks. Schools no longer hold cash fees, so students and parents need to equip themselves with a certain amount of awareness about transactions and online payments to capture revenues and expenditures.
Business customer segment accounts for a low proportion in the structure of customers using E-banking service packages but has significantly increased over the years. By the end of 2018, the number of business customers increased by 93 people (equivalent to an increase of 14.9%) and continued to increase by about 23%, reaching 882 people by the end of 2019. This result was thanks to The branch has found a way to approach and exploit the strengths of corporate customers, helping the bank to achieve
significant revenue growth and making the gap between businesses and banks increasingly narrowed.
Table 2.10: The proportion of customers using E-banking service in the customer structure at Agribank Tay Do branch in the period of 2017-2019
Number of customers using E-
banking services (customers)
Total customers use all the services
at the branch (customers)
Ratio (%)
2017 19,157 92,103 20.8
2018 21,574 95,645 22.5
2019 23,668 101,796 23.2
(Source: Summarized by Marketing & Services Department) The number of customers using e-banking services over the total number of customers using the service during this period had a slight increase (from 19,157 customers, accounting for 20.8% in 2017 to 23,668 customers accounted for 23.2% in 2019). However, with only less than 30% of customers of the branch using e-banking services, it shows that customers are still hesitant, not really putting complete trust in the utilities of this service or the banking software is not really suitable for users. Therefore, in order to achieve its goal of electronicizing banking payment transactions, Tay Do branch needs to solve this problem, propose more measures for e- banking services to develop in the future.
2.2.2.3. Fluctuations in revenues from electronic banking services compared to other service groups
Table 2.11: Fluctuation in E-banking revenues compared to other service groups at Agribank Tay Do branch 2017-2019
Unit: mil VND
Targets 2018/2017 2019/2018
Absolute Percentage Absolute Percentage
(+/-) (%) (+/-) (%) Domestic
payment
674 10.2% (232) -3.2%
International payment
59 2.8% 207 9.7%
Remittances (57) -20.1% (68) -29.8%
Card 2.069 128.2% 1,657 45.0%
E-banking 529 22.6% 1,226 42.7%
Authorized agents
(18) -11.5% 139 100.1%
Treasury services 687 133.5% 259 21.6%
Other 25 65.9% 9 14.5%
Foreign exchange trading
341 32.0% 2.358 167.8%
Source: Summary report on products and services in the period of 2017-2019 The result above indicated that there were 7/9 service groups tending to grow, in which the growth index of E-banking service group was one of the strong growth indices. If in 2018, the revenue of electronic banking services increased by VND 529 million (equivalent to 22.6%) compared to 2017, by 2019, revenue from this service group doubled (an increase of VND 1.2 billion, equivalent to VND 1.2 billion (or 42.7%). If compared with the growth rate of other industries, this increase may not be too high, but it has shown the stability and sustainability of revenue from e-banking services in the time of digital banking market. increasingly expanding in size, quality as well as becoming popular in the service structure at current and future commercial banks, especially when the growth rate of revenue of Payment services In the country, there is a downward trend. In addition, the revenue of E-banking services belonging to the service group with good growth also contributed to the motivation for the branch to develop this
service more strongly in the future, getting closer to the conversion from payments, traditional transactions to payments, complete transactions via digital banking.
Figure 2.3: Growth rate of E-banking and other service at Agribank Tay Do branch in the period of of 2017-2019
Source: Summary report on products and services 2017-2019 The chart has a preliminary assessment of the growth rate of E-banking and banking service packages of the entire branch within 3 years from 2017 to 2019. It is possible to see the group of card products and services. E-banking and forex trading services had relatively good growth, while the international payment and treasury services group grew but slowly. Domestic payment group accounts for the highest proportion but the trend is declining due to the shift of customers from traditional banking products to modern banking products and services such as E-banking. The steady growth of e-banking services has been shown in recent years, showing that the long-term goal of the branch in the future is to build a modern and convenient banking service platform. Benefit for the bank's products to reach customers quickly.
2.2.2.4. Revenue from electronic banking services Agribank Tay Do branch Table 2.12: Revenue from electronic banking services under the package of
Agribank Tay Do branch period 2017-2019
0 2000 4000 6000 8000
Toàn CN 2017 Toàn CN 2018 Toàn CN 2019 Thanh toán trong nước Thanh toán quốc tế
Kiều hối Thẻ
E-banking Ủy thác đại lý
Dịch vụ ngân quỹ Khác Kinh doanh ngoại hối
Unit: mil VND
Targets 2017 2018 2019
Growth 2018/2017
(%)
2019/2018 (%) Agribank E-mobile
Banking
835 958 1,319 14.7 37.7
Internet Banking 472 715 1,194 51.5 67.0
SMS Banking 876 995 1,267 13.6 27.0
BankPlus 157 201 315 28.0 56.7
Service income E-banking
2,340 2,869 4,095 22.6 42.7
total income 14,678 18,987 24.543 The proportion of E-
banking income / Total income (in percentage)
16.0% 15.0% 17.0%
Source: Summary report of electronic banking services 2017-2019 For each specific service group in the structure of E-banking services, the largest revenue growth rate belongs to Internet Banking and Bankplus services. In general, the revenue generated by all service packages increased by over 13% over the period, but the revenue from Internet Banking in 2018 increased by more than 50%
compared to 2017 and in 2019 increased by 67% Compared to 2018, it is an incredible increase, even if the service has not collected many users before, the increase of 2018- 2019 is nearly double compared to the increase of 2017-2018 (from 28%-56 %). It can be said that at present, the revenue contribution from services of banks mainly comes from electronic payment services such as Mobile Banking, Internet Banking, because the service fees in areas such as ATM cards, credit cards are mainly just enough to maintain the service and not earn interest. The proportion of revenue from E-banking services over the years tending to increase slightly also somewhat evaluated the level of customer interest. As mentioned above, 80 % of customers feel quite satisfied with the E-banking
service of Tay Do branch along with the annual increase in the proportion of E-banking services, we can consider the results of the increase in revenue. Electronic banking services are "mutually beneficial". However, revenue from E-banking still accounts for less than 20% of total income, which is still not a high rate compared to other banks such as Vietcombank (27%), BIDV (25.3%) and Techcombank (25%). It means that the revenue from e-banking services at Agribank Tay Do branch must be at least 25% of total income to be able to increase the level of competition in the electronic banking market at this time. Therefore, in order to work towards payment transactions with digital banks in the future, Agribank Tay Do branch still needs a lot of work to do.
2.2.2.5. Fluctuations in the proportion of E-banking services of the whole Tay Do branch and affiliated transaction offices
a. Headquarters and transaction offices directly under the Tay Do branch
Figure 2.4: Proportion of service groups at the headquarters of Tay Do branch in the period of 2017-2019
Source: Summary report on products and services 2017-2019 Figure 2.5: Proportion of service groups at the transaction office No.1 of Agribank
Tay Do branch in the period of 2017-2019
Source: Summary report on products and services 2017-2019 Figure 2.6: Proportion of service groups in the transaction office No.2 of Tay Do
branch in the period of 2017-2019
Source: Summary report on products and services 2017-2019
Figure 2.7: Proportion of services group in the transaction office No.5 of Agribank Tay Do branch in the period of 2017-2019
Source: Summary report on products and services 2017-2019 For the branch office located at 36 Nguyen Co Thach St, E-banking product group is the most stable group, always maintaining at 14-16 % in the whole period. The reason for this regularity is maybe the application of technology to suit the needs of the market,
so the number of customers using is increasing, and in the software, there are many applications (payment), money transfer, deposit, recharge,…should be more and more popular with customers. Recognizing the positive signal in the trend of using E- banking services of current customers, Agribank Tay Do branch has continued to implement more solutions to improve service quality and human resource quality to solve outstanding issues of e-banking services, bring information to customers quickly, completely to ensure customers can use the service.
At directly transaction offices, most customers only focus on domestic payment products (ranging from 79% to 88%) and card services (3% to 15%) depending on location. transaction offices. Transaction office No. 5 is a place with a convenient address, close to the school units, large centers (Student Support Center, Academy of Policy and Development, Vietnam University of Commerce....), however e-banking services has not been widely disseminated, furthermore, according to the Summary report on products and services in 2019, the e-banking service group has developed well, but the Computing Department has not separated data at the transaction offices under the branch.
Figure 2.8: The proportion of service groups at the second-level branch Dan Phuong in the period of 2017-2019
Source: Summary report on products and services 2017-2019 At Dan Phuong branch office (secondary branch of Tay Do), the situation of using electronic banking services seems more positive. Revenue from E-banking product has always accounted for over 20% of all the revenue at the branch andthis percentage tends to increase over the years. If in 2017, e-banking services accounted for 22% of service
revenue, by the end of 2019 this figure reached 26%. Although Dan Phuong branch is located in rural agriculture, the E-banking service group has pursued fiercely with the domestic payment product group. Although it is a level II branch belonging to Tay Do branch and in an area with not as high development level as Tay Do level I branch, it is possible to confirm that customers in the area have learned a lot of information and are quite important. pay attention to E-banking service packages that branches provide. E- banking service business results of the whole branch are relatively good, but of course, the transaction offices of this branch (including Tho An and Tan Hoi) have not yet disseminated the form of E-banking services, same as the transaction offices of Tay Do branch (Transaction No. 1, No. 2 and No. 5) was mentioned before so I do not give specific diagram of this two transaction offices. This also set the task for Computing Department of problem data.
2.2.2.6. Compare the proportion of e-banking services of Agribank Tay Do branch with several branches in Hanoi
Table 2.13 Proportion of e-banking services revenue of some Agribank branches in Hanoi in the period of 2017-2019
Branch name Proportion of revenue from E-banking service
2017 2018 2019
Tay Do Branch 16.0% 15.0% 17.0%
Thang Long Branch 20.2% 22.5% 25.3%
Thanh Tri Branch 17.1% 17.6% 19.4%
Tay Ho Branch 18.9% 20.6% 23.3%
Source: Summary report of e-banking services of some branches 2017-2019 Among the combined branches, there are two branches which is located in the central districts of the city: Thang Long branch (Dong Da district) and Tay Ho branch (Tay Ho district). The table also shows that these two branches have revenue from e- banking services account for the largest proportion in the service revenue structure when compared to the other two branches. While the growth rate of electronic banking service