THE IMPACT OF INFORMATION TECHNOLOGY ON BANKING SALES PERFORMANCE CASE STUDY IN TECHCOMBANK

1.1.Rationale Banking can simply express as the business of keeping, lending, exchanging and issuing money. The Key business priorities of the banking and financial services industry are Efficiency, Growth and Resilience. The technology helps the sector to fulfill the requirements of the business priority areas. Implementation of information technology began in right earnest in the sector. Starting from back office automation, which was aimed largely at processing of voluminous data and automation of cheque clearing operations; the technology moved to the front desk in the form of total branch automation. At the same time, the development in communication technologies made technology implementation more widespread and it became cost effective to network bank branches. Investments in information technology also helped cut down operational costs drastically. Technology means application of knowledge or a technical process method or emerged as powerful tool to reduce operating costs, making it viable for financial institution to expand into rural and low-income areas. Technology plays an important role in Financial Services for monitoring and controlling of their services; currently some of the technology use by financial institutions (FSIs) These help FSIs to provide efficient, better customer service, greater product variety, shorter response time, enhanced product quality and better customization of products and services. There are about 4 billion unbanked people in the world which is more than two third of the population of low- and middle-income countries financial institution such as commercial bank is still unable to reach poor population, because of high cost for building and maintain branch network and developing. According to Nielsen''''''''''''''''s Insights 2017 Report, Vietnam thein Vietnam in 2017 was 84%, an increase of 6% from the previous year. More notably, in rural areas, 68% of the population now use smartphones. The above figures show an impressive trend – the ubiquity of smartphones and tablets. Habits and behaviors of people in all regions, of all classes and ages are changing. Online services, whether for shopping, making friends, exchanging information, or dating, are becoming more popular. The Banking sector is no different. Users expect to be able to access and use banking services at anytime, anywhere and on any device. Each bank has its own approach to digital banking, which focuses on the customer experience or the ability to provide online services. However, these options can only be successful when delivering the best value to the customer. Right from the start, Techcombank has focused on technology, believing it to be the best way to serve customers and promote business development. During 26 years of operation, Techcombank has continuously strengthened its systems and capacity to best meet the needs of customers. In recent years, Techcombank’s application of technology has delivered remarkable progress, creating breakthroughs to improve operational efficiency and customer satisfaction. The aim is to identify and understand the changes that IT is causing on the banking sector, in order to examine in detail how the recent (and foreseeable) advances in IT are affecting the sector and can affect its future evolution. As IT is having a strong influence on the evolution of the banking, the study investigates the influence IT has on the banking sector and the payments system. Therefore, the purpose of this study was to investigate the relationship between IT and Banking sales performance, and case study in Viet Nam Technological and Commercial Joint stock Bank (Techcombank) 1.2.Research objectives -To review theoretical backgrounds of Information Technology on Banking Sales performance -To analyze the impact of Information Technology adoption on the Sales performance of TCB. -To give some solutions and recommendations based on the findings emanated from the study 1.3.Research questions -What is theoretical framework of information technology applied for the Sales Performance at Techcombank? -How is the impact of Information Technology factors influencing on Techcombank Sales performance? -What are the main factors which affect to Sales performance at Techcombank? -What should Techcombank do to improve Sales Performance via Information Technology? 1.4.Research methodology 1.4.1.Research process The research conducts with the following process: Figure 1.1 Research process Source: author 1.4.2.Data collection To achieve the research objectives, several data collection methods were applied in the research, including secondary data collection methods and primary data collection method. Secondary data collection Secondary data was collected in this research from: -Textbooks, journals, magazines and newspapers, publish researches, internet, etc. -Relevant documents, reports from TCB from 2016 to 2019 Primary data collection Staffs survey: Survey objectives: To evaluate the importance of information technology on TCB sales performance Respondents: Staffs of TCB with positions: + IT Manager + Financial Manager + Business Manager Sample size: 200 Sampling method: Convenience sampling by directly surveying staffs who have been working at TCB are concerned to introduce their evaluation on the importance of information technology on TCB Sales Performance. Questionnaire design: questionnaire is designed with 2 main parts including survey content and personal information as Annex attached. In order to make convenience for staffs who answer the questionnaires, all questions were designed with closed questions under 5-point-Likert-scale (in which 1 indicating very no extent to 5 indicating very great extent). Respondents who answered the questionnaires only circle on the suitable levels that reflected truly the situation asked. Among 200 questionnaires sent, there were 170 valid answers, reaching the ratio of 85%. Questionnaire distribution: The researcher distributed customers questionnaire papers at TCB offices. The researcher helped them to fulfill the questionnaire papers. Then the researcher got back immediately. 1.4.3.Data analysis Findings data are systematically linked to the format of self-developed questionnaire attached in the appendix. Data are collected by using questionnaire and distributed with link through Email and also hard copies around the area of Ha Noi. Collected data are analyzed to identify, describe and test the impact of Information Technology in banking sector via survey TCB’employees. The author use “Excel” and “Word” software to process the data. 1.5.Research scope Research object: The impact of information technology on TCB Sale Performance as the research object. Research location: the research was implemented in Hanoi. All the primary data was gathered in Hanoi, Viet Nam. Timing for research: -Secondary data was collected from the Viet Nam Technological and Commercial Joint stock Bank in the range from 2016 to 2019 -Primary data was gathered from the 15th of June, 2020 to 20th of August, 2020. 1.6.Thesis Structure outline The thesis includes 4 chapters: Chapter 1: Introduction Chapter 2: Theoretical background on IT Chapter 3: Current Information Technology at TCB Chapter 4: Some solutions and Recommendations for TCB

NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL NGUYEN VAN HAI THE IMPACT OF INFORMATION TECHNOLOGY ON BANKING SALES PERFORMANCE CASE STUDY IN TECHCOMBANK MASTER OF BUSINESS ADMINISTRATION THESIS HÀ NỘI-2020 NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL NGUYEN VAN HAI THE IMPACT OF INFORMATION TECHNOLOGY ON BANKING SALES PERFORMANCE CASE STUDY IN TECHCOMBANK MASTER OF BUSINESS ADMINISTRATION THESIS SUPERVISOR: Assoc.Prof Dr VU DINH HIEN HÀ NỘI-2020 ACKNOWLEDGEMENT First, I would like to send thanks to my thesis supervisors, Associate Professor Doctor Vu Dinh Hien, who instructed and taught me a lot, gave me his valuable time and preciuos comments to contribute much to my thesis Second, I send my sincere thanks to managers and colleagues at Techcombank Vietnam for catering me in collecting full and accurate data in research process Finally, I also would like to thank my family and friends for their support in finishing this thesis Thank you very much! October 2020 Nguyen Van Hai TABLE OF CONTENTS ABBREVIATION CRM: Customer relationship management EFA: Exploration Factor Analysis FSIs: Financial institutions IT: Information Technology NFI: Net fee income NII: Net interest income ROA: Return on Asset ROE: Return on Equity Techombank (TCB): Viet Nam Technological and Commercial Joint stock Bank TOI: Total operating income LIST OF TABLES Table 2.1 Aspect of Performance 28 Table 3.1 TCB business results from 2015 to 2019 .46 Table 3.2 Response Rate 47 Table 3.3 Time works with current bank .49 Table 3.4 Adoption of IT in the Improvement of Banking Sales Performance .52 Table 3.5 Importance of Adoption of IT Innovation in the Improvement of Banking Sales Perfomance 52 Table 3.6 Extent to Which IT Adoption has Improved the Sales Performance of the Bank .54 Table 3.7 Rating the Adoption of Various Technological Innovations 54 Table 3.8 Cronbach alpha of IT (Time 1) .56 Table 3.9 Cronbatch’s Alpha Banking Sales Performance (Time 2) 56 Table 3.10 EFA 57 Table 3.11 Regression Analysis .58 Table 3.12 Coefficient Results 59 LIST OF FIGURES Figure 1.1: Research process 12 Figure 2.1 TOI Structure .26 Figure 2.2 NFI Structure .27 Figure 2.3: Model of Organization 31 Figure 2.4: The theory of Technology Acceptance Model .33 Figure 2.5: Research Model 34 Figure 3.1: Oganizational structure of TCB 39 Figure 3.2 Working Experience in the Banking Industry .48 Figure 3.3 Position Held in the Organization 50 Figure 3.4 Level Education 51 EXECUTIVE SUMMARY The increased demand for information technology (IT) in banking sector became imminent and unavoidable in the world at large and Vietnam in particular Invariably, the future lies in the IT driven banking systems and services Banks have embarked on deployment of IT based banking products and services such as automated teller machine (ATM), internet banking, mobile banking solutions, point of sale terminals… TCB has to recognize the current impact of information technology on Sales Performance so that the author decided to my final research named “The impact of information technology on Banking Sales performance Case study in Techcombank” The aims of this study were (1) To review theoretical backgrounds of Information Technology on Banking sales performance; (2) To analyze the impact of Information Technology adoption on the Sales performance of TCB; and (3) To give some solutions and recommendations based on the findings emanated from the study In order to get the research objectives above, the author implemented the study based on the Model of Organization (Leavitt, 1965) and Technology Acceptance Model (TAM) (Davis, 1989) to develop the survey with independent variables to measure current information technology components, dependent variable to measure overall TCB Sales Performance The research also used both quantitative methods and qualitative methods to analyze the impact of information technology to TCB sales performance From doing this research, the author found out the adoption of IT had improved TCB operations, not only increased their market coverage but also remained competitive in the market The usage of IT can lead to lower costs, but the effect on profitability remains inconclusive, owing to the possibility of IT effects that arise as a result of consistence high demand of skilled work force, issues of increasing demand to meet customer's expectation for customer service delivery, trustworthiness of the information system and competition in financial Through understanding deeply, the impact of information technology on TCB sales performance, the author proposed to implement following solutions in order to improve TCB Sales performance: TCB seeking to improve Sales performance should embrace IT Some financial innovations decrease risk and volatility associated with globalizing markets With greater globalization, firms, investors and governments are exposed to new risks such as exchange, interest rate and political risks which IT seek to manage TCB should proactively monitor customers preferences with regard to technological innovations such as ATMs and try to implement these preferences in their features in order to enhance their functionalities leading to enhanced Sales performance TCB should Improve the current the information technology services to help customer get better experience and more using the information technology products TCB shoul also invest more in human resources in order to enhance responsiness factor, should focus on training staffs as well as constantly improving the ability of serving customers of employees The author hopes that this study will be considered and implemented in TCB to invest move in Information technology in the future to increase its Sale performance 10 CHAPTER 1: INTRODUCTION 1.1 Rationale Banking can simply express as the business of keeping, lending, exchanging and issuing money The Key business priorities of the banking and financial services industry are Efficiency, Growth and Resilience The technology helps the sector to fulfill the requirements of the business priority areas Implementation of information technology began in right earnest in the sector Starting from back office automation, which was aimed largely at processing of voluminous data and automation of cheque clearing operations; the technology moved to the front desk in the form of total branch automation At the same time, the development in communication technologies made technology implementation more widespread and it became cost effective to network bank branches Investments in information technology also helped cut down operational costs drastically Technology means application of knowledge or a technical process method or emerged as powerful tool to reduce operating costs, making it viable for financial institution to expand into rural and low-income areas Technology plays an important role in Financial Services for monitoring and controlling of their services; currently some of the technology use by financial institutions (FSIs) These help FSIs to provide efficient, better customer service, greater product variety, shorter response time, enhanced product quality and better customization of products and services There are about billion unbanked people in the world which is more than two third of the population of low- and middle-income countries financial 65 service, the bank has positioned itself as a leader in digitalizing banking services and products Techcombank was the first bank in Vietnam to implement a core banking system, provide Internet banking services and provide Mobile banking services In 2019, the bank continued to focus on customer needs in delivering a market leading digital platform, enhancing our cyber security, and transforming through digitalization The bank’s digital platform provides customers with the ability and convenience to bank “anywhere” The system is available 24/7 The dependable service level is supported by investments in a more resilient, high availability infrastructure and architecture The digital platforms for both retail and commercial clients have received many new features and capabilities so customers can more banking, investing, and financial management digitally The past recent years, Techcombank has become more digitized, significantly strengthening their online transaction services The total amount of money transacted online has increased tenfold in the last two years, and TCB have set aside $300 million for comprehensively investing in our new technology systems The hardest part in execution include preparing internal resources, and adjusting their processes and operating methods to take advantage of the technology system and improve operational efficiency This requires a long period of thorough preparation TCB will only invest in their technology infrastructure when having human resource and other resources ready TCB corporate culture enables alignment in mindset, fostering an environment where everyone works together to ensure that customers’ (internal and external) value and benefits are maximized The Bank benefits as well, for when TCB customers use electronic transactions, they don’t need to be in the branches physically, and TCB staff’s resources are freed up to work on more demanding tasks like advising customers Individual and corporate customers want to have a more comprehensive, flexible, secured, real-time electronic financial management system that allows them to track their savings and manage their cash flow as well as their upcoming payments and transactions TCB technology must meet these legitimate demands Techcombank’s strategy is to provide a system in which TCB are helping customers to automate their financial 66 statements and manage cash flows, and to maximize customer benefit and financial convenience with one-stop/one-touch service Being truly digital involves a massive transformation of the Bank, from the frontline to the back end 4.2 Suggested solutions to help TCB improve Sale Performance 4.2.1 Investing more in Information Technology Based on the findings and conclusions of the study, the following recommendations have been suggested in relation to IT There is need for TCB to adopt IT since this will provide the benefits of constant access to certain core services and reducing the need for one to go to the banking hall IT adoption by the banks has prompted agreements to share systems through between banks and the development of cash points being installed in non-branch locations such as supermarkets; this means that a proportion of a particular banks customer base may no longer use the bank's branch network at all Continuous IT innovation will lead to increased customer satisfaction due to more choices created of transacting business Like many businesses, turnover in banks is high but liquidity is not necessarily high Adoption of IT enables operations of TCB to be more efficient through making financial services more available and reducing their costs This was mostly achieved by technological innovations such as ATMs, Internet Banking, Mobile Banking Financial products that are delivered through IT are user friendly and promote banks revenues, increased profits, increase liquidity and lower the risks related to the usage of financial services 4.2.2 Improve the current the information technology services TCB should find ways of making their electronic services more accessible Installing more ATMs outlets is an issue, which customers consider very important and which is not being addressed to the customers' satisfaction TCB should also provide customers with free call 24/7 This service could handle customer complaints and general feedback about the electronic banking services This would not only provide a service to consumers that are free, but also provide the banks with valuable trends for future development on electronic services 67 TCB must ensure that they have a stable network system and if possible, adopt the best and fasters network system for their operations with customers and adopt the mobile banking system of banking to serve customers The Internet Banking system shoub be built closely to enhance the security of customer information and banking data In addition, the internet banking system must be compatible with most of browsers and operating systems, giving customers the flexibility to choose the technology and device Moover, Internet Banking should be integrated, using more services of payment partners such as VNPay, Payoo, Napas…customers can access anytime, anywhere with internet connection 4.2.3 Investing in human resources Addiontionally, In the increasingly integrated banking and financial market, the human factor is one of the most impact on banking sale performance This element is reflected in the aspects of professional qualifications, professional service, communication ability and staff’s style Therefore, TCB, in order to enhance responsiness factor, should focus on training staffs as well as constantly improving the ability of serving customers of employees: - Designing professional training courses regularly for the staffs: thanks to these training courses, employees are improved the level of understanding of the bank's products and services, as well as customers needed, with the main purpose to consult and answer customers' questions which related to using information technology products such as ATM, Internet Banking, Mobile Banking - Organizing skills training programs of marketing, customer consulting, customer care to improve the quality of customer service, especially of Technology Products such as : ATM, Internet Banking , Mobile Banking The goal is to generate human resoure with professional expertise, enthusiastic and professional service style, creating satisfaction for customers To be successful, TCB should invest in training our people and in redesigning technology infrastructure From that, Techcombank will offer the best services to their customers, and understand that superior technology is the backbone of this 4.3 Recommendation for TCB 68 Information technology is an indispensable development for all commercial banks in the trend of global integration The research therefore recommends that TCB seeking to improve Sales performance should embrace IT Some financial innovations decrease risk and volatility associated with globalizing markets With greater globalization, firms, investors and governments are exposed to new risks such as exchange, interest rate and political risks which IT seek to manage Therefore, in order to improve Sale Performance effectively, TCB should synchronously implement the following solutions: - TCB should modern information technology components such as: ATM, internet banking, mobile banking, research, apply and implement new technologies - TCB should proactively monitor customers preferences with regard to technological innovations such as ATMs and try to implement these preferences in their features in order to enhance their functionalities leading to enhanced Sales performanc - TCB should invest in R&D and improve the quality of information technology product at a higher level and bring more profits for individuals and corporations, digitalize registration documents - TCB should enhance human resource of both banking and information technology in order to ensure that the human resources of the banking system are always updated with new technologies, new scientific and technical advances, creating high competitiveness TCB 4.4 Recommendations for the State Bank of Vietnam From the findings of the study and evaluate of information technology to TCB sale performance, the author has also some recommendation for SBV: - The SBV should encourage commercial banks to invest in Information technology, increase scale, develop sales, reduce the gap between joint stock commercial banks and state-owned commercial banks or between banks 69 - The SBV has also enhanced the communication task to disseminate the knowledge, improve the awareness, change the behaviors and payment methods of the people, thereby improving the access to banking products and services, encouraging the use of non-cash payment methods, with the vision of cashless society in the future - The SBV should also look forward to coordinating with the ministries, agencies, payment service providers, payment intermediaries, socio-political organizations, local authorities and press agencies to implement the Government's schemes, including the Scheme on Non-Cash Payment Development in Vietnam, on enhancing to use internet banking services CONCLUSIONS From the study, it can be concluded There is a positive impact of IT on Sale performance of TCB Competition among banks has led to continuous innovation in IT products The improved performance was as a result of reduced costs of financial transactions that can be attributed to IT TCB have invested their resources in new products and technology innovations such as Automated teller machines, Internet Banking, Mobile Banking These aspects of IT have helped TCB in carrying out 70 business activities more effectively and efficiently The importance of IT by TCB was rated high Adoption of IT by TCB also improved banks' performance To successfully cope with the challenge of the IT, TCB must understand the nature of the changes that revolves around them, changes in terms of IT, Innovation and Demography Without this understanding, attempts to migrate to IT may be doomed to failure Today, banks that are well equipped with a good grasp of the electronic banking phenomenon will be more able to make informed decisions on how to transform IT and to exploit the opportunity in electronic banking In today's competitive market, establishing core capabilities can help the banking industry reorganize their product and customer service delivery, so as to sustain competitive advantages and to achieve congruence whilst shifting from the conventional banking to electronic banking and hence enhance the financial performance of the institutions REFERENCES Dr K Mala, (2017) In the impact of technology in the banking sector in India International Journal of Pharmaceutical Sciences and Business, 5(1), 1-7 G Tulasi Rao, T Lokeswara Rao, (2015) Role of Information Technology in Indian Banking Sector IOSR Journal of Business and Management (IOSR- JBM), 17(5), 80-84 H K Singh, Amar E Tigga, (2012) Impact of information technology on Indian bankingservices Ibha Rani, (2016) A study of the impact of information technology in the Indian bankink industry Abhinav National Monthly Refereed Journal of Research in Commerce &Management, 4(6), 23-30 N M Nair, (2014) Role of Information Technology in Banking Sector in India IBMRD's Journal of Management and Research, 3(1), 334-346 Rajesh Tiwari, Rakesh Kumar, (2012) Information technology in the banking sector Asia Pacific journal of marketing and management review, 1(1), 25-33 Research Gate, 2(1),https://www.nielsen.com/pk/en/insights/report/201/ Rebeena Alavudeen28 Dr Sr Rosa K D., (2015) Impact of Technological vadvancements in the banking sector International Journal of Information Technology & Computer Sciences Perspectives, 4(3), 1621-1629 S Gnana Sugirtham, (2014) Impact of Information Technology on the Profitability of Banking Sector in India International Journal of Management and Commerce Innovations, 2(1), 311-341 10 Sahem A Nawafleh, (2015) The Effect of Information Technology on the Bank Profitability Empirical Study of Jordanian Banks International Journal of Business and Management, 10(2), 170-175 11 Thyaga Raju N (2016) Impact of information technology (IT) on the banking sector International Journal of Current Advanced Research APPENDIX 1: QUESTIONNAIRE SECTION A: BACKGROUND INFORMATION OF THE RESPONDENTS What is your total experience in the banking industry? 1 year 2 - years 5 - 10 years Over 10 years How long have you worked with your current bank? 1 year 2 - years 5-10 years Over 10 years Kindly indicate your job designation  Financial manager  Business Manager  IT manager Others (Please Specific) Please indicate the level of education Diploma First Degree Advance diploma Master’s Degree SECTION B: IT AND BANKING SALES PERFORMANCE To what extent does this bank make use of the following technological innovations in its operations? Use a scale of to where is to a very great extent and is to no extent Technological innovation Mobile banking technologies Online Banking (Internet banking transactions) ATMs deposits and withdrawals 6.Would you agree that the adoption of IT is very important in the improvement of Sales Performance of commercial banks? Strongly Agree Agree Neither Agree nor Disagree Disagree Strongly Disagree Please give reasons for your answer How would you rate the importance of IT in the improvement of the Sales performance in the organization? Very high High Moderate Low Neglible Please explain To what extent has IT improved the Sales Performance of the bank? Very great extent Great extent Moderate extent Low Extent No extent Please explain APPENDIX DEMOGRAPHIC STATISTICS OF RESPONDENTS Demographic Education level Experience in Banking Working time at current Bank Job designation N=170 Diploma Bachelor Degree Master Degree Doctor year From to years From to 10 years Over 10 years Under year From to years From to 10 years Over 10 years 140 24 18 91 42 19 76 39 17 Percentage (%) 2% 82% 14% 1% 11% 54% 25% 11% 22% 45% 23% 10% Financial manager Business Manager IT manager 38 108 24 22% 64% 14% (Source: Survey of author) APPENDIX SPSS EXPLORATION FACTOR ANALYSIS AND REGRESSION ANALYSIS RESULTS Cronbach Alpha and Exploratory factor analysis to Adjust motivational scale 1.1 Cronbach Alpha analysis The research will retest the scales through impact of IT to Banking Sales Performance (Questionnare survey) To ensure the reliability of the scale, this study will remove the scales which have Cronbach Alpha less than 0.6 Also, retaining only those variables which have Corrected Item- Total Correlation greater than 0.3 Mobile banking, Internet Banking, ATMs X Adoption IT Important of IT Extent IT P1 P2 P3  IT (X) Scale: Table 1: Cronbach alpha of IT (Time 1) Reliability Statistics Cronbach's Alpha N of Items 839 Item-Total Statistics Scale Mean if Scale Variance Item Deleted if Item Deleted 5.25 3.844 Mobile banking Corrected Cronbach's Item-Total Alpha if Item Correlation Deleted 809 668 Internet banking 5.45 4.001 731 748 ATMs 4.02 4.881 581 886 After testing, the index is 0.839, high reliability and show that these variables are reliable to analyzing and there is no variable removed to increase Cronbach’s Alpha Table 2: Cronbach alpha of Banking Sales Performance (P) Reliability Statistics Cronbach's Alpha 918 P1 P2 P3 N of Items Item-Total Statistics Scale Cronbach's Scale Mean Variance if Corrected Alpha if if Item Item Item-Total Item Deleted Deleted Correlation Deleted 4.19 4.142 846 878 3.92 3.633 815 901 3.99 3.663 853 866  Cronbach’s Alpha of the scales is 0.918> 0.6 And Corrected Item-Total Correlation of P1, P2, P3 >0.3 1.2 Exploratory factor analysis  KMO and Bartlett’s Test Tables 3: KMO and Bartlett’s Test KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Approx Chi-Square Sphericity df Sig .654 242.701 000 KMO=0.654, satisfied requirement: 0.5