OVERVIEW OF E-BANKING SERVICES
According to Zeithaml and Bitner (2000),
“Service is the behavior, process, and implementation to create use-value for customers, to meet their needs and expectations”.
According to David Cox's "Modern Banking" (1997), the primary activities of commercial banks are referred to as banking services, which encompass capital, currency, and payment operations These services are designed to fulfill customers' business needs, enhance profitability, and facilitate daily financial management and asset storage Consequently, banks generate revenue through interest rate differentials, exchange rates, and service fees charged to customers.
In the article "Banking Services in the Era of Information Technology and Economic Integration," author Do Xuan Hong emphasizes that banking services serve as intangible means and tools essential for facilitating various banking operations, utilizing tangible instruments such as machines, equipment, and technology.
Banking services can be categorized into broad and narrow definitions Broadly, they encompass all monetary, credit, payment, and foreign exchange activities conducted by the banking system with businesses and the public, reflecting the banking sector's role in a country's economic structure Conversely, in a narrower sense, banking services refer specifically to non-traditional activities that focus on the development and structure of innovative banking operations.
In short, it can be understood that banking services include all the services that banks provide to customers.
Banking service is a special product with many different characteristics. Banking products are described as services, therefore they share the same basic characteristics as other types of services:
Services differ from physical products in that they cannot be directly experienced before purchase, making it essential for clients to rely on their usage to evaluate service quality To mitigate perceived risks, buyers often seek evidence of service quality through various indicators such as personnel, equipment, documentation, and pricing To foster customer trust in its offerings, a bank should focus on enhancing service quality, improving the tangible aspects of its products, and strengthening its overall image.
Service distinctiveness refers to the variability in service performance influenced by factors such as the method of service delivery, the service provider, execution time, the object of service, and the location The involvement of numerous personnel and machines in the service process significantly impacts service quality, particularly in labor-intensive services As a result, ensuring consistent quality from employees is challenging, leading to potential discrepancies between the bank's intended service and the actual experience received by consumers.
The inseparability of services highlights the challenge of separating them into distinct phases of production and consumption, as these processes typically occur simultaneously This concurrent creation and utilization of a service exemplifies the collaborative interaction between consumers and providers, such as banks and financial institutions.
Banking services differ significantly from traditional goods, as they cannot be stored or sold in the same manner While we can prioritize the deployment of these services, they are not subject to retention or future use; once a banking service is completed, it cannot be archived or reused.
"reuse" or "restore" As a result, banking service is a product that is generated and then used instantly.
When demand progressively stabilizes, the Unstored character of financial services will not be an issue.
Bank activities are increasingly attracting the focus of researchers and regulators due to their significance to both the banking sector and the broader economy With economic growth, banks are diversifying their products and services, broadening their offerings to include areas such as real estate, securities, and insurance.
A bank serves as a professional organization dedicated to delivering management services to the public while fulfilling various essential roles in the economy, including fiduciary, credit, payment, savings, cash management, broking, and insurance functions.
Currently, most products offered by Commercial Banks are categorized as services, making the distinction between traditional and modern services somewhat subjective This perspective allows us to systematically classify the traditional and modern services provided by Commercial Banks.
Receiving deposits: Receiving deposits is considered one of the important activities of a bank It is a source of "input materials," which is the primary source of capital for banks.
Lending serves as the primary and most profitable activity for commercial banks, but it also carries the highest level of risk To ensure sustainable growth and stability, it is essential for banks to conduct their lending activities in a safe and effective manner.
Provide trading account: A new service, a trading account can be any investment account containing securities, cash or other holdings Most commonly, trading account refers to a day trader's primary account.
Foreign currency exchange is one of the earliest banking services, where banks facilitate the buying and selling of different currencies This service not only enables customers to trade currencies but also generates revenue through service fees.
Discount commercial paper and commercial loans: Actually local businessmen have been loaned, then their customer's debts (receivables) are resold to banks for cash.
Banks have long provided fiduciary services, managing assets and financial operations for both individuals and businesses These services typically involve fees based on the value of the assets or the scale of management Most banks offer a range of trust services, including general trust services for individuals and commercial trust services for enterprises.
Since ancient times, banks have provided safekeeping services for customers' gold and valuables through safe deposit boxes The certificates issued by banks, detailing the assets held, served as early forms of currency, paving the way for checks and credit cards Today, the treasury department of banks is tasked with preserving these valuables, highlighting that the safekeeping of assets is a foundational service that predates modern credit offerings.
Banks are often required to purchase government bonds as a condition of their operating license, with this investment typically mandated to be a specific percentage of the total deposits they collect.
DEVELOPING E-BANKING SERVICES AT JOINT STOCK
1.2.1 Types of e-banking service development
Electronic banking, or E-Banking, enables users to conduct financial transactions online without visiting a bank branch or using an ATM card This convenient service allows for seamless money transfers and a range of financial activities, all accessible via internet-connected devices.
Inquiries about information balances, and perform other operations on their accounts in the online form.
Wells Fargo Bank - the first bank to provide the first online banking service in the US in 1989.
The development of an ideal electronic banking system for customers has involved numerous trials and testing phases E-banking services have evolved through several key stages, each contributing to the enhancement of convenience and efficiency in online financial transactions.
Many banks have adopted the simplest form of e-banking by creating advertising websites that showcase their services, products, and essential information While these platforms provide valuable insights and guidance, all banking transactions continue to be conducted through traditional channels, such as branches and transaction offices.
Banks leverage the internet as a modern distribution channel to enhance traditional services, allowing customers to easily access account information and receive stock transaction receipts This digital platform serves as a valuable tool for customers, enabling them to efficiently monitor their financial transactions.
This stage marks the advancement of the bank's offerings and operations, emphasizing product differentiation driven by consumer needs and relationships Additionally, enhanced coordination and data sharing between bank headquarters and branches through internet and wireless networks facilitate quicker and more accurate processing of customer requests.
In the electronic economy, online banks represent a transformative business model and management structure, leveraging the global network to deliver top-quality financial solutions By utilizing various communication channels, these banks offer a range of current products and services, allowing clients to choose options tailored to their specific needs.
1.2.2 Contents of development of e-banking services
Commercial banks are prioritizing the development of e-banking services to enhance customer engagement and improve competitiveness in the banking sector This initiative involves promoting and integrating electronic means into banking services, ensuring they align with technological advancements The ongoing evolution of e-banking services is grounded in specific strategic foundations aimed at meeting the growing demand for accessible and efficient banking solutions.
The evolution of e-banking services has progressed steadily, marked by significant breakthroughs that foster rapid growth This development strategy focuses on sustaining the current market while simultaneously expanding into new markets and nurturing potential opportunities for future growth.
E-banking services develop in the direction of combining the interests of customers with the interests of the bank and bring benefits to the economy Investment to develop e-banking services requires large capital while the socio- economic environment has not yet developed, the demand for service use is not high, requiring banks to aim for long-term benefits, harmoniously combine between the interests of the bank and that of the economy as a whole In the first stage, banks accept investment costs to provide customers with advanced products and services with a fee that is guaranteed to offset a part of the investment capital, but enough to attract customers, occupy market domination.
The synchronized development of e-banking services enhances user convenience and is aligned with other banking offerings Effective collaboration with various departments, such as the business service team, is essential to boost service efficiency, attract more customers, and ultimately increase profits while fostering a strong relationship between the bank and its clients.
1.2.3 Evaluation criteria development level of e-banking services
- The number of provided e-banking services
As competition intensifies in the service provider market, commercial banks must swiftly adopt modern banking technologies to introduce innovative products and services that cater to customer needs A robust array of e-banking services indicates a bank's commitment to developing advanced distribution channels and enhancing service delivery methods, thereby attracting more customers and showcasing their e-banking capabilities Conversely, a limited selection of e-banking services reflects a bank's reliance on traditional banking practices and highlights a lack of focus on the growth of digital banking solutions, ultimately resulting in fewer customers utilizing e-banking services.
- The number of customers using e-banking services
Banks provide essential services to meet customer needs, and enhancing service quality fosters customer loyalty Satisfied customers often share their positive experiences, attracting new clients and boosting transaction volumes This increase in service usage not only elevates the bank's revenue but also signifies the effectiveness of its offerings Conversely, a decline in customer engagement indicates potential service shortcomings, highlighting the importance of maintaining high service standards in e-banking.
- Transaction amount of e- banking services
Despite a large customer base, commercial banks face low service usage frequency, resulting in minimal service fees and ineffective operations Thus, the success of banking services relies not only on attracting customers but also on the volume and value of transactions they conduct Currently, both transaction numbers and amounts are showing a significant and upward trend.
FACTORS IMPACTING ON E-BANKING SERVICES DEVELOPMENT
- Income from the service and the operation and maintenance cost
In e-banking services, the balance between income and costs is crucial for assessing economic viability High income relative to costs indicates efficient investment, while low income coupled with high operational expenses signals inefficiency This analysis aids banks in determining whether to persist with their investment in these services.
1.3 FACTORS IMPACTING ON E-BANKING SERVICES DEVELOPMENT
The objective factors that affect the development of e-banking services include:
E-banking services development is also influenced by the economic environment.Economic development will create favorable conditions for the development of business activities in general and the development of e- banking services in particular At that time, corporates and individuals have many business opportunities, production and business activities were expanded, and inflating income make an increase the demand for e-banking services. Economic development makes the payment of money transfer more often, then businesses and individuals using e-banking services will find that transferring money quickly and conveniently is cost-saving and time-saving, which also increases the demand for using e-banking services At that time, banks will promote 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.
To effectively develop e-banking services, it is essential to establish a comprehensive legal framework that guarantees the legitimacy of e-transactions, contracts, and related documents A robust legal infrastructure not only supports the legality of e-banking operations but also safeguards intellectual property rights, facilitates technology transfer, and protects the privacy of individuals involved in electronic transactions.
Social trends, lifestyle choices, and educational levels significantly influence the financial and banking systems in developing countries, impacting the growth of e-banking services Cultural shifts can either hinder or facilitate the advancement of e-banking, presenting both challenges and opportunities for its development.
Cultural traditions and social practices;
Demographic situation, population growth rate, population structure.
Advancements in information technology, particularly the Internet, play a crucial role in the evolution of e-banking services These technological improvements have led to the emergence of various e-banking options, including home banking, phone banking, and online banking, which facilitate the globalization of banking services.
E-banking is one of the consequences of the development of information technology and digitalisation Therefore, a solid technology foundation will ensure the development of e- banking services In order to develop e-banking,the technology base must ensure availability.
National technical facility standards are integral to the global network of e-banking systems It is essential that the technological infrastructure not only meets safety requirements but also remains economically viable This means that the costs associated with technical equipment and communication must be kept at reasonable levels Additionally, e-banking services should offer competitive pricing, ensuring that both organizations and individuals can afford them without exceeding the costs of traditional banking services.
In the development of e-banking services, banks can significantly reduce their reliance on human resources through automation and advanced technology, highlighting the need for improved IT skills within the banking sector A skilled network administrator is essential to address issues related to network transmission, safeguard the network's integrity, and protect customer accounts from potential cyber threats Ultimately, having competent human resources is crucial for banks to successfully implement e-banking services Additionally, customers play a vital role by providing input data that informs goal-setting, environmental analysis, and the formulation and execution of the bank's development strategies.
To effectively develop e-banking services, employees must engage in self-study and conduct thorough research on e-banking products A solid understanding of information technology is essential, along with staying current on the latest developments This knowledge enables them to enhance banking products and services, provide informed advice, guide customers, and address any emerging challenges.
The successful implementation of e-banking services relies heavily on the advanced information technology skills of the bank's IT team, ensuring effective operation of the e-banking system This includes managing products and services, as well as addressing security concerns, software troubleshooting, and maintaining reliable transmission lines.
Financial capacity is crucial for a bank's operations, as a robust financial foundation enables the acquisition of essential assets and a modern information technology system Additionally, capital supports various practical activities, including market control, product research, and advertising campaigns A bank with substantial and stable capital not only fosters customer trust but also attracts domestic and foreign partners.
The bank's brand serves as its representative face in the market, embodying an intangible yet valuable asset in banking activities A bank's reputation is shaped not only by its historical legacy and extensive operational network but also by its solid business philosophy This brand identity is crucial for the bank's growth and significantly impacts the advancement of e-banking services.
CONDITIONS FOR DEVELOPMENT OF E-BANKING SERVICES
The banking sector has emerged as a leader in integrating science and technology into its operations, particularly in response to the Covid-19 pandemic Prior to the pandemic, the adoption of technology in banking effectively addressed consumer needs for various financial products and services, notably enhancing electronic payment systems and promoting non-cash transactions In recent years, the industry has proactively established legal frameworks governing e-banking services, including specialized legal documents, risk management strategies, safety standards for information technology systems, and security regulations for online banking activities.
The legal frameworks of countries are continuously evolving to facilitate the liberalization of trade in services, particularly in banking and financial markets, which is essential for the growth of e-banking services A robust legal foundation for e-banking will enable banks to effectively implement these services and provide support for customers in dispute resolution Ongoing adjustments to policies and legal systems will align with the commitments required within this framework.
E-banking services are deeply rooted in science and technology, necessitating significant investments in material and technical infrastructure Banks utilize a centralized database managed by compatible software, alongside essential equipment like ATMs, POS machines, and core banking systems to facilitate e-banking services The development of these services demands substantial capital investment, which is crucial for their growth Additionally, banking professionals must not only possess strong professional skills and experience but also have a solid understanding of information technology With the continuous evolution of diverse banking services, staff must consistently enhance their skills, professionalism, and knowledge of both products and technological applications in the banking sector.
Three basic issues need to be focused when implementing e-banking services specifically as follows:
Information encryption is the process of converting data into a different format to protect its meaning, ensuring that only authorized individuals can access the original information through decoding This technology enhances security for applications and is particularly vital in e-banking transactions.
In today's evolving economy and digital age, electronic payment transactions rely heavily on digital certificates, which users employ to sign electronic messages By utilizing a digital signature, users encrypt their messages before transmitting them over the Internet An electronic signature represents data that has been uniquely signed and encrypted by its owner, utilizing asymmetric encryption technology to secure data during transit.
When engaging in electronic transactions, many individuals express concerns about safety and security This apprehension arises from the rise in internet attacks, fraudulent card activities, and the use of counterfeit cards due to advancing technology Consequently, it is essential to prioritize safety and security in the development of e-banking services.
The residential standard of living is a key concept that encompasses the overall development and fulfillment of societal and individual human needs It is measured through various indicators, including household income levels, household spending patterns, and per capita household expenditure Additionally, it is important to consider the distinctions in living standards between urban and rural areas, as well as among different regions and communities.
An effective electronic payment system relies on a skilled and knowledgeable workforce proficient in information technology This team is essential for providing necessary applications, addressing support requests, and transferring vital technical knowledge to ensure seamless operations.
- Reliability and understanding of e-banking services
For customers to effectively utilize e-banking services, it is essential that they recognize and trust the advantages these services offer Consequently, banks must establish a robust product distribution system and actively promote their offerings to clients To achieve this, banks should employ a skilled marketing team that possesses both computer expertise and a deep understanding of banking services.
To build customer trust and demonstrate the safety and convenience of e-banking services, it is essential to utilize diverse promotional strategies and advertising methods.
EXPERIENCE IN DEVELOPING E-BANKING SERVICES OF
1.5.1 Experience in developing e-banking services of commercial banks in the world
According to a study by the GartnerInstitute for Analytics (2008), online banking has become a trend for retail customers in the UK and
Internet banking in the US has significantly boosted other transaction channels like ATMs and phone banking, with young and affluent customers being the primary users Banks in the UK and US have swiftly adapted to this consumer trend, leveraging the opportunity to enhance their e-banking services They have redefined the Internet not just as a separate delivery channel but as a vital tool for strengthening customer relationships and distinguishing themselves from competitors Additionally, British and American banks are focusing on improving coordination among various service channels and business divisions to optimize their offerings.
In December 2006, Singapore implemented a Two-Factor Authentication (2FA) system to enhance the security of its Internet banking services The Central Bank of Singapore established regulations to ensure the safe and effective operation of banks, fostering user trust and satisfaction By analyzing the security frameworks of other countries, the Central Bank developed tailored standards for Singapore and assisted commercial banks in their implementation This initiative not only safeguarded the reputation of banks against cyberattacks but also encouraged user confidence in online services, promoting the growth of e-banking across Asia-Pacific nations, including Hong Kong and Thailand.
In 2013, AT Kearney conducted a survey on the digital banking landscape across various countries, focusing on the experiences of banks in Eastern, Western, and Southern Europe, as well as North America The study highlighted that mobile banking is revolutionizing the e-banking sector, with a growing number of customers and increasing interest from banks Key findings from the survey revealed that participating banks had adapted their business models for the digital age, enhanced branch roles to improve digital customer service, embraced more flexible technology transitions, and reorganized their structures to include operations and technology divisions, facilitating rapid product and service development.
In Thailand, Siam Bank and Krung Thai Bank are leading the way in banking digitization Siam Bank enables customers to make pre-orders via mobile channels and scan QR codes for seamless transactions, promoting paperless banking Meanwhile, Krung Thai Bank has evolved from a traditional to a digital banking model over three years, implementing an integrated multi-channel management system, card management, and both Internet and Mobile Banking The bank's transformation began in 2015 with the introduction of an OmniChannel solution and independent card management, followed by the integration of Internet and Mobile banking in 2016, and the incorporation of branch teller transactions into the multi-channel system in 2017.
1.5.2 Lessons for Vietnamese Commercial Banks.
Based on a comprehensive analysis of the successful implementation of e-banking services across various countries and banks globally, key lessons for Vietnamese commercial banks have been identified.
Commercial banks must develop a strategic roadmap to transition from traditional banking to e-banking services, as e-banking has become essential in the context of digital transformation To successfully implement these services, banks need a prudent business plan, as the initial stages often require significant investments in technology, advertising, and promotion, which can lead to initial losses A well-defined business strategy will enable banks to navigate these early challenges effectively, achieve profitability, and maintain capital adequacy.
- In the process of developing e-banking services, it is necessary to fully and harmoniously combine 3 factors: users (customers), service providers (banks) and environmental factors (technology, internet, politics, etc….)
To enhance data accessibility and integrity, the bank is prioritizing the development of a centralized database This initiative will facilitate easier and more comprehensive data collection for various departments while ensuring that access rights to sensitive information are properly assigned.
Commercial banks should establish a specialized business data management and mining center to enhance their data warehouse analysis capabilities This center would effectively manage data projects and coordinate information sharing across various business units, including product research and development, services, information technology, and banking management.
With the rapid advancement of science and technology, e-banking services have emerged as a vital payment method, showcasing their significant advantages The development of e-banking is essential to meet societal demands, offering numerous benefits to customers and enabling banks to increase service fees, mobilize capital from the public, expand payment options, and diversify their customer base Chapter 1 outlines key concepts and theoretical foundations for e-banking development, including common issues, development content, evaluation criteria, influencing factors, necessary conditions, and global lessons applicable to Vietnam’s commercial banking system The inherent advantages of e-banking products align with global trends, positioning them as a crucial foundation for the growth of these services in Vietnam's commercial banks These theoretical insights will serve as a basis for analyzing the current status of e-banking development at VPBank – Nui Thanh transaction office in Chapter 2.
OVERVIEW OF VIETNAM PROSPERITY JOINT STOCK COMMERCIAL
OFFICE – DA NANG BRANCH 2.1 OVERVIEW OF VIETNAM PROSPERITY JOINT STOCK COMMERCIAL BANK VPBANK - NUI THANH TRANSACTION OFFICE – DA NANG BRANCH
2.1.1 History of establishment and development of Vietnam Prosperity Joint Stock Commercial Bank VPBank
Full name : Vietnam Prosperity Joint Stock Commercial Bank
International transaction name: Vietnam Prosperity Joint Stock Commercial Bank
VPBank, officially known as Vietnam Prosperity Joint-Stock Commercial Bank, was established on August 12, 1993, under business license No 0042/NH-GP Initially operating with a charter capital of VND 20 billion, the bank commenced operations on September 4, 1993 Over more than two decades, VPBank has significantly increased its charter capital to VND 5,770 billion, representing a growth of 288.5 times By June 30, 2021, the bank had expanded its network to over 233 transaction points and employed nearly 25,000 staff As a member of Vietnam's top 12 banks (G12), VPBank is recognized for its dynamic approach, stable financial capacity, and strong reputation.
Total Operating Income VND 39,000 Billion
Customer Deposits & Valuable Papers VND 296,273 Billion
Earnings Before Interest And Taxes VND 13,019 Billion
In line with its "All for customers" philosophy, VPBank has transformed its transaction points, enhancing both appearance and customer service The bank continuously improves its products and services, integrating additional utilities to maximize consumer benefits, which helps retain existing customers and attract new ones, thereby expanding its customer base To ensure sustainable growth, VPBank has implemented comprehensive solutions to establish a robust foundation, positioning itself as a market leader in advanced information technology for its offerings The bank has also successfully developed core human resource management systems and a centralized, specialized risk management system that meets international standards and aligns with its business strategy Furthermore, VPBank is committed to refining its organizational structure in accordance with a clear and transparent corporate governance policy.
Associated with difficulties and challenges caused by the Covid-19 outbreak, which impacts not only the market economy but also the Finance
VPBank is committed to enhancing customer experience by offering a diverse array of financial products and services The bank closely aligns with government and State Bank regulations to adapt flexibly to market changes, ensuring it meets its responsibilities effectively Throughout its development, VPBank has consistently established clear goals and strategic plans that contribute to the broader societal progress All business activities at VPBank and its branches adhere to established guidelines, reinforcing its dedication to operational integrity.
VPBank, one of Vietnam's earliest joint stock commercial banks, has experienced significant growth since 2010, driven by a comprehensive transformation strategy developed in collaboration with a leading global consulting firm This ambitious strategy aims to position VPBank among the top 5 joint stock commercial banks and the top 3 retail commercial banks in Vietnam by 2017.
The above vision is realized by a strategy of two pincers:
- Aggressive organic growth, focusing on individual customer segments and SME customers, while exploiting opportunities in large corporate and consumer credit segments.
- Build solid foundation systems in terms of organization, personnel, technology, operation, etc.
Supporting the implementation of the above strategy is VPBank's corporate culture, built and cultivated based on 6 core values:
VPBank is committed to its vision and strategy, aiming to deliver maximum benefits to customers while prioritizing the interests of employees and shareholders The bank focuses on fostering a robust corporate culture and making meaningful contributions to community development.
2.1.2 Overview of VPBank - Nui Thanh Transaction Office – Da Nang Branch
On July 22, 1995, the State Bank of Vietnam granted License No 0026/GCT, allowing Vietnam Prosperity Commercial Joint Stock Bank (VPBank) to establish a branch in Da Nang City Consequently, VPBank Da Nang Branch was officially established under Decision No 140/QD-HĐQT on August 15, 1995, and commenced operations on September 14, 1995, at 112 Phan Chau Trinh Street, a prime location in Da Nang With a vibrant and promising market, VPBank Da Nang has significantly contributed to the bank's overall performance Over the past two decades, the branch has strengthened its brand and expanded its range of products and services to meet the growing demands of its customers.
VPBank has significantly broadened its market presence by establishing eight new transaction points in addition to its central head office located on Hoang Dieu Street The new transaction offices include Hai Chau, Ham Nghi, Son Tra, Nui Thanh, Nguyen Tri Phuong, Dong Da, and Dien Bien Phu, enhancing accessibility for customers across the city.
On January 28, 2008, Vietnam Prosperity Commercial Joint Stock Bank (VPBank) inaugurated its transaction office at 407 Nui Thanh, Hai Chau, Da Nang, marking its fourth location in the city This new office aims to leverage local resources and strengths to enhance capital availability while offering high-quality banking products and services to businesses, business households, and other customers The establishment of VPBank Nui Thanh is designed to contribute to the socio-economic development of both VPBank and the Da Nang region.
Since its inception, the VPBank - Nui Thanh transaction office has consistently expanded its transaction network and diversified its business offerings, including currency and credit products, while enhancing its capital sources The branch is dedicated to improving staff qualifications in expertise and professionalism, alongside stabilizing employee living conditions It has invested in modern facilities, particularly in information technology, to enhance business operations The branch has maintained profitability since its establishment, achieving annual revenue growth and increasingly contributing to the State budget, thereby building a strong reputation among customers.
VPBank - Nui Thanh Transaction Office offers a comprehensive range of banking and financial services for both individual and corporate clients, including online payments, capital mobilization, loans, international payment services, foreign currency exchange, and e-banking solutions The office features a spacious environment and a team of dedicated professionals Additionally, it is seamlessly connected online with other transaction points within the VPBank system, ensuring that all customer needs are met quickly, efficiently, and securely.
VPBank's Nui Thanh transaction office has significantly expanded over the years, boasting a workforce comprised of individuals with bachelor's degrees or higher in economics, banking, or finance This highly skilled and educated team is a fundamental asset for VPBank, contributing to the establishment of a robust and sustainable branch.
DIAGRAM 2.1 ORGANIZATIONAL STRUCTURE OF VPBANK – NUI
THANH TRANSACTION OFFICE – DA NANG BRANCH
(Source: Human resource report at VPBank - Nui Thanh Transaction Office on
The individual responsible for overseeing the Bank's operations has the authority to delegate signing and management responsibilities to employees, typically to department heads.
- The person handling or recommending to the competent authority to handle organizations and individuals that violate the branch's monetary, credit and payment branch.
- Manage and administer all activities of the branch in accordance with the law and legal documents of the State of Viet Nam.
- Main responsibility for all activities of the sales department in managing, assigning tasks to controlling activities in the room as assigned by the Board of
Customer Services Department Customer Services Department
Cash Receiving System (CSR) Cash Receiving System (CSR)
- Organize the development of annual plans and business strategies for individual customers at the branch in accordance with the development orientation of the system.
- Manage, control, approve credit facilities, control loan balance growth and mobilize capital from individual customers to ensure revenue growth, profit and safety in business activities.
The implementation site for job programs and capital mobilization activities serves as the primary location for receiving loan applications from customers in need This site is responsible for processing these applications and submitting them to the leadership for loan approval consideration.
- A credit specialist is the direct contact for most customers looking to borrow from a financial institution.
- Looking for customers who need to use banking services such as borrowing capital, making cards, depositing money
Our consulting services assist potential customers by guiding them through document preparation and procedural steps while addressing any inquiries they may have A credit officer will verify personal information and conduct a preliminary assessment to determine if the customer meets the bank's criteria If they do, we will provide instructions for completing the application; if not, we will promptly inform the customer to save time Additionally, we will help customers prepare the necessary documents and procedures for applying for a bank loan.
- Appraise customers with loan needs according to the types of loans they use.
- Appraisal reports to superiors to notify customers of loan applications that have been approved or rejected.
- Make a credit contract and related documents.
- Monitor and advise customers in cases where customers want to pay or disburse loans.
- Perform contract liquidation or transfer insolvency contracts to bad debt group so that the bank can have a solution.
- Managing relationships with customers and managing after-sales transactions, ensuring the best customer care, bringing balances and profits to the bank and managing risks for the bank.
- Cross-selling banking products and services for other customers of VPBank.
- Searching for customers who need to use products or services of the bank.
Engaging directly with customers, we provide expert guidance on our products and services, helping them understand their benefits and utilities Our team assists clients in navigating the application process, ensuring compliance with bank regulations while aligning with their individual needs and financial capabilities.
CURRENT SITUATION OF E-BANKING DEVELOPMENT AT VPBANK –
2.2.1 Introducing e-banking products and services at VPBank - Nui Thanh Transaction Office
As technology advances, the ownership and use of telecommunications and internet services have become increasingly prevalent, with many individuals utilizing smartphones, laptops, or public internet access This shift has led to a growing trend among commercial banks to offer banking services via mobile phones and the internet In response to this trend, VPBank has successfully launched its e-banking services, including the popular VPBank Nui Thanh product lines.
VPBank Mobile Banking is an innovative e-banking application developed by VPBank, enabling individual customers to conduct both financial and non-financial transactions conveniently on their smartphones Available for Android, iOS, and Windows operating systems, this service requires an internet connection for optimal use With a focus on efficiency, VPBank Mobile Banking allows for quick and secure financial transactions, significantly reducing the need for in-person visits and wait times at bank counters The application is equipped with a range of valuable features to enhance user experience.
- Open a savings account, close the savings account;
- Service bill payment, postpaid phone bill payment, phone recharge for prepaid subscribers;
Online banking is a convenient service that enables customers to manage their accounts and execute transactions like money transfers, online savings, bill payments, and tax payments through any Internet-connected device To ensure security, transactions require the customer to enter a one-time password (OTP) sent by the bank With internet banking, users can enjoy various services, including QR code payments and cardless ATM withdrawals VPBank's Internet Banking offers a range of useful features to enhance customer experience.
SMS Banking is a convenient service offered by VPBank that delivers banking information directly to customers via text messages With SMS Banking, users receive notifications about changes to their account balance and can easily inquire about their balance, exchange rates, interest rates, or locate the nearest VPBank branch or ATM This service is available 24/7, ensuring that customers have access to essential banking information at any time.
- Detailed statement of the last 5 transactions;
- Receive notifications of account balance fluctuations;
- Providing VPBilling service which is bill payment service via SMS;
- Providing VPBank service VnTopup is a phone top-up service via SMS.
2.2.2 The process of installing and activating e-banking services at VPBank - Nui Thanh Transaction Office
To access VPBank's Mobile Banking service, customers must have an existing payment account with the bank If you do not have an account, you will need to register for one to utilize the service.
- Citizen identity card/Identity Card/Passport;
- Application form for registration of using Mobile Banking service.
- Directly: Customers must go directly to the counter at the bank and register to use the service;
- Indirect: Customers can register online through the VPBank Online website,and manipulate and fully follow the instructions at the application. b Activating
To activate the Mobile Banking application after installation, customers must log in using their username and the temporary password provided by VPBank Once the activation is complete, users are encouraged to change their password to enhance the security of their personal accounts.
The first condition to be able to use Internet Banking is that the customer already has an account and has used a VPBank account before. Registration documents include:
- Citizen identity card/Identity Card/Passport;
Upon arriving at the nearest PGD, customers will be provided with a set of documents and assigned a number Staff members at the counter will assist customers in completing the required information and guide them to wait for their turn.
- All information from password as well as login information customers will receive via email or personal phone number. b Activating
After successfully registering, the customer will be given a username and password byVPBank To perform transactions via InternetBanking, customers must activate Internet
In banking, your username is the phone number you registered with, while your password or PIN is a sequence of numbers issued by your bank The customer PIN code will be sent to the phone number or email previously provided during registration.
To activate your internet banking account, start by changing your old PIN code Once you have completed this step, simply wait a few minutes for the bank to activate your account.
The first condition to be able to use Internet Banking is that the customer already has an account and has used a VPBank account before. Registration documents include:
- Citizen identity card/Identity Card/Passport;
Upon arriving at the nearest PGD, customers will receive a set of documents and a number Staff members at the counter will assist customers in completing the required information and guide them to wait for their turn.
- All information from password as well as login information customers will receive via email or personal phone number. b Activating
Currently, VPBank does not offer online registration for SMS Banking services To register, customers must visit a transaction counter in person, where they will meet with a teller who will provide detailed instructions and assist them in completing the registration process efficiently.
2.2.3 Current status and scale of e-banking services at VPBank - Nui Thanh Transaction Office
2.2.3.1 Diversity of service types and increase in service payment sales
TABLE 2.4: STATISTICS OF RESULTS OF IMPLEMENTATION OF SERVICE STANDARDS AT VPBANK – NUI THANH TRANSACTION
OFFICE IN THE PERIOD OF 2019-2021
Paym ent servi ces (bill paym ent, paym ent via e- banki ng chan nel)
(Source: Business report of report activities in 2019-2021 VPBank - Nui Thanh
VPBank - Nui Thanh's Transaction Office offers a diverse range of services that effectively meet customer needs and capture their interest in various products and services Overall, the gradual increase in service indicators reflects the bank's successful development and diversification efforts.
However, the revenue brought in between types of services is not equal.
Besides, it can be seen that card service business at VPBank - Nui Thanh Transaction Office this year has also recorded remarkable developments compared to card growth in 2019.
2.2.3.2 Number of customers using e- banking services
In recent years, there has been a notable shift in the customer base towards prioritizing quality and efficiency, evidenced by an increase in active customers and higher usage rates of products and services VPBank – Nui Thanh Transaction Office has actively promoted the cross-selling of e-banking products, encouraging customers to transition from traditional counter services to modern technological applications To enhance customer experience, the office regularly organizes e-banking festivals at various locations, including payroll units, residential areas, and schools.
TABLE 2.5 THE GROWTH IN THE NUMBER OF CUSTOMERS USING E- BANK SERVICES AT VPBANK – NUI THANH TRANSACTION OFFICE
Number of customers using ebanking services 44,485 53,915 59,584 9,430 21.20% 5,669 10.51%
(Source: Business report of report activities in 2019-2021 VPBank - Nui Thanh
2.2.3.3 Income from the service, and the cost of operating and maintaining the service
TABLE 2.6 REVENUE FROM ELECTRONIC BANKING SERVICES
Revenue from ebanking services 1.73 2 3 0.27 15.61 1 50 Internet Banking
(Source: Business report of report activities in 2019-2021 VPBank - Nui Thanh
The VPBank - Nui Thanh Transaction Office has demonstrated significant growth in e-banking services, with total proceeds rising from 1.73 million in 2019 to 3 million in 2021 This increase reflects the transaction office's commitment to enhancing e-banking services, thereby contributing positively to the overall income of the branch.
E-banking services generate income through various channels, including Mobile Banking, Internet Banking, and SMS Banking Revenue streams include issuance fees, annual fees, text message fees, and payments for taxes, electricity bills, train tickets, and air tickets Additionally, e-banking facilitates the collection of school and hospital fees, enhancing convenience for both individual and business customers.
ASSESSMENT OF THE CURRENT SITUATION OF E-BANKING
Over the past three years, VPBank, particularly the Nui Thanh Transaction Office, has prioritized the enhancement of e-banking services alongside its credit activities and product offerings, emphasizing their development and importance in the banking sector.
As a result, revenue from these services has also continuously increased, which is a stable source of income for the bank.
Revenue and profit of e- banking services play an increasingly important role and contribute to the operation of VPBank -
The office is committed to rapidly enhancing both the quality and variety of its card offerings and services to cater to the diverse needs of various customer segments, particularly individual clients and small to medium-sized enterprises.
Thereby creating diversity and convenience for customers in using services at VPBank - Nui
Between 2019 and 2021, the VPBank - Nui Thanh Transaction Office experienced significant advancements in the development of E-services, achieving remarkable breakthroughs and growth that surpassed previous years.
The Office's initiatives have played a crucial role in sustaining VPBank's prominent status among Joint-Stock Commercial Banks Notably, the VPBank Transaction Office achieved significant milestones in the development of E-Banking Services from 2019 to 2021.
The E-Banking services at the Transaction Office have experienced significant growth, with a marked increase in the number of customers utilizing these services Notably, a substantial portion of these customers are now engaging with card services, highlighting their importance within the overall E-Banking landscape.
- The efficiency and quality of E-Banking services are increasingly improved and play an important role in the income of the Transaction Office.
Transaction Office is enhancing its customer base in both size and quality by actively promoting marketing efforts targeted at the workers, officers, and employees of large-scale companies in the Hai Chau district.
- Transaction Office conducted regularly marketing campaign to promote VPBank’s image, and E-banking products and services with continuous creation and synchronization.
VPBank prioritizes risk control in e-banking by regularly sending SMS alerts and OTPs to ensure safe transactions for customers The Transaction Office collaborates with intermediaries, beneficiary banks, and investigative agencies to prevent and address potential issues, continuously upgrading the system to maintain seamless service From 2019 to 2021, VPBank reported no security breaches or losses related to e-banking services, reflecting their commitment to transaction safety By implementing strict controls on fraud risk during periodic card operations, VPBank effectively minimizes the incidence of risk in its e-banking products and services.
VPBank prioritizes information security, ensuring that customer accounts and related data are fully protected in compliance with regulatory standards The confidentiality of customer information is paramount, and all financial transactions undergo rigorous validation through at least two-factor authentication to maintain data integrity.
Besides the achieved results, the development and provision of banking products and services at Nui Thanh transaction office still have limitations As follows:
Between 2019 and 2021, the customer base utilizing services has grown; however, it remains unsustainable and lacks diversification The transaction office has yet to effectively engage a significant proportion of corporate customers compared to the individual customer base, which is primarily utilizing capital mobilization, payment, and various e-banking services In contrast, corporate clients present a valuable opportunity for cross-selling a range of products, including payment services, banking solutions, insurance, and capital mobilization, among other related services.
Despite the modernization efforts in banking technology and payment systems, many banks still fall short in delivering satisfactory products and services to customers While advancements aim to streamline transactions and improve customer accounting, the inadequately trained staff often struggle to meet customer needs and effectively guide them in using these products A bank that is recognized for high-quality services, particularly in electronic payments and e-banking, must prioritize robust security measures to ensure customer trust and satisfaction.
Despite the high issuance of virtual cards at VPBank - Nui Thanh Transaction Office, the actual usage remains low, as many customers open cards without the necessary conditions to utilize them This issue arises from a promotional focus on quantity rather than quality, leading to insufficient collection of customers' personal and financial information by the staff.
OPPORTUNITIES AND CHALLENGES FOR VPBANK IN DEVELOPING E-BANK SERVICES IN THE NEXT TIME
The rise of financial technology is driving the global trend of digital banking, with Vietnam, particularly Da Nang, experiencing this shift The Covid-19 pandemic has significantly influenced banking activities, accelerating the push for digital banking solutions However, the development of digital banking in Da Nang is still in its early stages, presenting various challenges for local banks Adapting to the changing consumer habits, which now favor online transactions over face-to-face interactions, has become essential This shift has compelled businesses and banks, such as VPBank, to prioritize digital transformation in response to the pandemic.
Amid the ongoing challenges of the Covid-19 pandemic, movement restrictions and limited contact have prompted a significant shift towards remote work and a surge in e-commerce Consequently, online transactions have become increasingly prevalent, with financial and banking institutions prioritizing online solutions over traditional over-the-counter services This shift not only aims to enhance customer safety during the pandemic but also reflects a broader trend towards digital transformation Investing in online trading platforms and integrating advanced technology into products and services are now seen as essential strategies for banks and businesses to achieve their long-term digital aspirations.
Before the Covid-19 pandemic, customers primarily used bank Mobile Banking applications to pay for utilities and purchase airline tickets However, during the peak of the pandemic in September 2021, as city activities came to a halt, consumers shifted to online shopping, with the majority opting to make payments through email banking apps.
Despite many opportunities, the development of the banking industry during the Covid-19 epidemic still has many challenges, specifically:
VPBank's development strategy closely mirrors that of other banks, focusing on the enhancement of retail and corporate services, as well as the money market The bank is also prioritizing the expansion of its network, human resources, technology, and governance However, these similarities may pose challenges for the advancement of VPBank's e-banking services.
The legal framework plays a crucial role in shaping the development of banks in the digital era, presenting challenges such as regulations on electronic transactions, the authentication of electronic signatures, and the validity of electronic contracts in banking operations.
- Infrastructure limitations, related to the construction of synchronous and centralized digital infrastructure, connection technical standards, data standards, shared databases, security infrastructure, security secret….
- The development of science and technology poses a big problem to the bank.
Investing in new technologies necessitates significant capital and a skilled workforce Banks must possess the knowledge and expertise required to effectively adopt and integrate these advanced technologies and skills.
Ensuring confidentiality and safety while protecting customer information presents a significant challenge for the development, investment, and operation of e-banking services at VPBank - Nui Thanh Transaction Office.
Chapter 2 highlights the inevitable trend of e-banking services driven by advancements in information technology and international economic integration, with Vietnam being no exception The emergence and growth of e-banking services, particularly through the application of modern technology, are evident in Vietnamese commercial banks Specifically, the e-banking services at VPBank - Nui Thanh Transaction Office are currently in a developmental phase.
In the near future, VPBank's Nui Thanh Transaction Office faces various challenges, but the development of e-banking services is a strategic focus for leadership This initiative not only supports the industrialization and modernization of the banking sector but also positions VPBank for successful integration into the regional and global economy It is crucial to establish a comprehensive strategy for deploying e-banking services, which will cater to existing customers while attracting new ones By integrating e-banking with traditional banking services, VPBank can diversify its offerings, boost revenue, and enhance service quality, thereby improving competitiveness in an increasingly integrated economy Ultimately, prioritizing e-banking services will maximize customer benefits and strengthen the bank's market position, ensuring sustained income and market share in the domestic landscape.
This article introduces solutions for enhancing e-banking services at VPBank's Nui Thanh transaction office, focusing on effective development strategies from 2019 to 2021 The aim is to boost the competitiveness of VPBank's other transaction offices during this period.