VPBank’s ATM card services current situations and solutions

VPBank’s ATM card services: Current situations and solutions Introduction The years 2006 and 2007 marked new steps in the process of world and regional integration with great opportunities and challenges in place for Vietnam’s reform and development In this trend, the financial and banking also obtained impressive results, banks have been expanding continuously Vietnam’s ATM market has begun booming with 15 commercial banks moving aggressively to identify promising services providers, provide perfect services and diversify their ATM cardholders Therefore, in coming time, this market will certainly become more competitive and active all cardholders will enjoy unprecedented services Vietnam Joint-Stock Commercial Bank for Private Enterprises (VPBank) is in that race, and its abilities has unexplored, its market share is not strong enough So after learning and researching about this issue, I have decided to choose the following topic as the subject of my report “VPBank’s ATM card services: Current situations and solutions” Apart from introduction and conclusion sector, the report is divided into three chapters as following: Chapter 1: General understanding of ATM card service Chapter 2: Situation of Vietnam Joint-Stock Commercial Bank for Private Enterprise’s ATM card services Chapter 3: External environment evaluations and solutions to improve VPBank’s ATM card services Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions Chapter 1: General understanding of ATM card service 1.1 Introduction to the ATM card service Card definition: The ATM card is a non-cash based means of payment issued to customers by commercial banks or other financial institutions It is also known as cash card or plastic money At certain points where cards are accepted, cardholders can withdraw cash or pay for bills, goods, services The first real ATM card with a magnetic strip and a personal ID number was developed by Wetzet, Barnes and Chastain in 1973 It is issued in form of a debit card, and it can be used only when the cardholder has money in his account Convenience is the key property of an ATM card because ATMs are self-service machines and available 24 hours a day, day a week Essentially, an ATM card allows the customer to “go banking” anytime An ATM card made by plastic ABS or PC with the following uniform contents:  Rectangle shaped with two slides and round corners  Card name, symbol, and the logo of the card issuer  Card number: 16 digits,  Issuing date  Class,  Magnetic stripe: it stores uniform codes of card number, PIN (personal identification number), some information of a cardholder and other security factors 1.2 Card functions An ATM card is issued based on the cardholder’s own money Whenever the cardholder makes any card transaction, it will be completed by debiting directly from his account and transferred to the seller’s account This means Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions the card can be accepted as long as its cardholder’s account balance is positive or the cardholder spends only what remain in his pocket As for a customer, obtaining an ATM card is easy A key condition that he has to meet is to open an account with sufficient money After having an ATM card, the cardholder can go banking anytime at his convenience, conduct many transactions such as checking their account balance, transferring money, withdrawing cash, paying bills, etc and also enjoy some interest on his savings, account at the same time As for the bank, issuing an ATM card is safe because it doesn’t worry about bad credit and unpaid transactions Besides, it can acquire more capital to invest and reinvest Furthermore, the issuing bank can expand its business scope without the cost of opening new branches, but only by installing more ATM’s nationwide 1.3 The role of an ATM card in the economy As a matter of fact, cash, either in the form of note or coin, is not always the best means of payment, especially in business because using cash poses some risks for customers such as money losses, fake note, and physical damage Thus, the application of non-cash payment is essential Up to now, ATM cards has still been considered an effective tool that deals with the inconvenience of cash payment and allows more transactions with the higher value to be made in the economy They take an important role because of some reasons:  Reducing cash in circulation: ATM cards have been developed in the form of a non-cash instrument of payment and clearly, it is used to replace cash In an economy using huge volume of cards, the circulation of cash is certainly limited Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions  More transactions, less time: Conducting a card transaction is much more quickly than making cash transaction The reduced time allows more transactions with higher value to be made  Higher transparency: Every ATM card transaction is recorded by the bank data centre for later reference  Improving business environment, drawing international investment and international interests A mature and modern environment will also attract more foreigners, both businessmen and tourists 1.4 Card-related factors 1.4.1 Card transactions equipment: Automatic teller machines (ATMs) Card transactions are safe, simple and quick Thus modern and hi-tech equipment are required The ATM is an inseparable equipment of an ATM card By this combination, services are provided The ATM allows a bank customer to conduct their banking card transactions It is first introduced in the 1960s and was considered a breakthrough in the banking business Don Wetzel was the co-patentee and chief conceptualist of the ATM an idea he thought of while waiting a line at a Dallas bank Thanks to its many advantages, the ATM has been quickly adopted by many banks around the world Nowadays, the ATM can be seen not only in front of banks but in numerous public locations for the convenience of its customers In general, instead of being constrained by the limited working hours of banks, the cardholders could “go banking” outside by using the 24- hour services of an ATM at their convenience 1.4.2 Card transaction participants There are three main participants involved in a card transaction: cardholder, Card issuer and Merchants Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions  The cardholder: a cardholder is an individual who want to have an ATM card to go banking anytime at his convenience When using ATM card services, he will enjoy some advantages such as convenience, safety, time-saving, responsiveness and accuracy, etc  The card Issuer: A card issuer is a commercial bank, or a financial institution who wants to offer ATM card services to customers While providing these services to a card user, it will gain the fooling benefits: income from card issuance fees, capital from savings accounts, business expansion, etc  The merchants (ATMs): they are located outside the bank, help card transactions occur promptly, easily and accurately The introduction of these machines brings benefits for the economy because they reduce risk and lower costs Having an ATM on the premises can reduce the number of bad cash and cut costs of setting up more banks’ branches 1.4.3 Card transactions process Figure card transactions: Card transactions process Cardholders 2+3 ATMs Issuing Banks This card transactions process involves five steps: Step1: the cardholder finds an ATM to conduct card transactions Step 2+3: After the card and Pin code are presented, the ATM automatically checks its validity by asking the bank’s server installed at VPBank’s head Office If all information is correct, the cardholders are permitted to select his transaction Step 4: After the transactions is selected, the ATM will automatically complete it, and provide what he asks for Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions Step 5: Data of the completed transaction will be transferred from the ATM to the issuing bank After checking the data, the issuing bank will balance the payment (e.g: debiting the cardholder’s account and crediting the bank’s account when the transaction is to withdraw cash) 1.5 The development of ATM system in Vietnam 1.5.1 ATM card market According to the Vietnam Bank card Association, Vietnam’s ATM market became blooming two years ago Currently, the ATM card market is growing very quickly both in terms of quantity and quality The leader is Vietcombank (VCB) with 1,200,000 cards, accounting for 55% of the ATM card market Next to VCB is Vietnam Bank for Agricultural and Rural Development (VBARD) or Agribank (12%), BIDV (7%), it has been offering the ATM card service nationwide and has obtained good results The industrial and Commercial Bank of Vietnam (ICB or Vietinbank) make up for 6%, Eastern Asia Bank (EAB) becomes a runner with 5% Vietnam JointStock Commercial Bank for Private Enterprises only accounts for nearly 4% and other banks 11% (See the figure 2.2)However, some analysts state that Vietnam’s ATM potential market of ATM cards has not been fully exploited; it is a “big cake” How to “eat” the rest of this “cake” in the most effective way is the matter for all bankers, it requires them to have specific strategy, offer more services, bring more benefits for customers, so forth 1.5.2 ATM network In recent years, Vietnam banks have promoted their investment in information technology (IT) applications to offer modern banking services The ATM system is one of these services It has operated effectively, making a major contribution to modernizing the local banking industry Besides, the ATM has been considered a leap in banking payment and has become a popular product of Vietnamese commercial banks In particular, 15 banks have issued ATM Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions cards so far and have installed to total of 1,107 ATMs nationwide (2005) Up to now, there are 5625 ATMs nationwide (2008) Back to the year 2000, “ATM” was still a strange word to the majority of customers in Vietnam There were only six ATMs throughout Vietnam-three from Australia and New Zealand banking group (ANZ), the rest from Hongkong and Shanghai Banking Corporation (HSBC) Alongside with the increase in the number of ATMs, the building of a switch centre for ATM connection and end equipment of banks is ongoing Thus, no one can deny that the ATM service market is beginning to take flight, as ATMs become increasingly prevalent and widespread throughout the country Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions Chapter 2: Situation of Vietnam Joint-Stock Commercial Bank for Private Enterprise’s ATM card services 2.1 Overview of Vietnam Joint-Stock Commercial Bank for Private Enterprises VPBank stands for Vietnam Joint-Stock Commercial Bank for Private Enterprises Website: www.vpbank.com.vn Founded in 1993, VPBank is present the seventh largest joint-stock commercial bank in Vietnam by assets Its Headquarter is in Hanoi and has a network of 130 branches and sub-branches across Vietnam Its business is focused on SMEs and private consumers Its initial chatter capital when first established was 20 billion VND Subsequently, due to the growth demands, VPBank has increased its chatter capital multiple times At present, the charter capital of VPBank has grown to 750 billion VND The year 2006 witnessed many breakthroughs, with a series of activities building a foundation for the renovation and growth of VPBank in the future In February 2006, VPBank officially moved to a new headquarters at No Le Thai To, Hoankiem District – one of the most beautiful locations in Hanoi In March, VPBank signed a strategic cooperation agreement with OCBC Bank, one of Singapore’s leading banks 2.1.1 VPBank’s Capital Its assets reached VND 12 trillion (USD 750 million) in June 2006 In the first quarter of the year, VPBank was listed by the Navigos Group and AC Nielsen of the US as one of the two Vietnamese banks among the top 50 businesses in the country in term of working environment and personnel management It was regarded by the State Bank of Vietnam to be one of the banks among all commercial joint stock banks in the northern Vietnam Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions At the beginning of quarter in 2007 the charter capital of VPBank will increases to 1,500 billion VND VPBank is privately held by Vietnamese individuals and companies Approximately 30% of VPBank’s staff is shareholders of the bank It currently has one foreign shareholder, Dragon Capital Holdings- a British fund management company with focus on the Vietnam market, with a 10% stake Table 1: Balance sheet summary (31st Dec 2007) Unit: billion VND Balance sheet summary 2005 2006 2007 Total assets 6,090 10,159 18,137 Mobilized Funds 5,638 9,065 15,204 Loans 3,014 5,031 13,324 309 756 2,000 Shareholders’ equity Source: VPBank Annual Report 2007, p6 According to the Balance sheet summary, it’s easily to see that VPBank’s finance is rather good There is an increasing tendency in all factors of the balance sheet In 2006, its total assets were 10,159 billion VND, increased 166.8% compared to that period time of year 2005 Moreover, the mobilized Funds of VPBank also had increase much and had some bright signs In 2006, its mobilized were funds were 9,065 billion VND, with the high mobilized funds like that, there would have many advantages for VPBank to push its level of outstanding loans The more outstanding loans VPBank has, the more profit it can obtain In fact, it raised the level of loans in 2006 about twice as many as that in the time of 2005 It increased sharply and reached 13,324 billion VND in 2007 With a good Balance sheet, it’s no doubt that VPBank business result is rather high in next year Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions 2.1.2 Network In the entire process of formation and growth, VPBank has always focused on boarding its scale and strengthening its operating network in large cities In its first two years of operation, VPBank’s network had only 53 branches and transaction points, with 28 branches and 27 transaction offices In 2006 alone, VPBank brought 20 new transaction points in top operation VPBank is operating in many provinces and large cities throughout the country Up to now, VPBank has 128 branches and transaction points 2.1.3 Business performance Table 2: Business results Unit: billion VND Business results 2005 2006 2007 Total operating income 470 995 1,460 Total operating expenses 394 838 1,146 76 157 314 Pre-tax profit Source: VPBank Annual Report Mr Le Dac Son, VPBank General Director, revealed that his bank reached the goals that are set in early 2008 By the end of September, VPBank’s total raised capital had risen by 60%, expected to be 90% by the year’s end The bank’s overdue debt is also controlled at 0.86% At the end of fiscal year 2006, VPbank achieved result in pre-tax profit of 157 billion VND, an increase of 81 billion VND compared to it of 2005 After setting aside risk reserves of 11.36 billion VND, pre-tax profit after risk reserves was 157 billion VND, surpassing the plan by 36% In 2007, the pre-tax profit rose twice compared to that of 2006, which is impressive result Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions  Safety Safety is a very important factor that ensures all cardholders conducting card transactions never suffer damagers of risks All VPBank’s client gets this advantage for the following reasons:  Technology protects the clients’ card In contrast to cash, an ATM card is embossed with advanced technology and is difficult to counterfeit There is a magnetic stripe on the back of an ATM card This magnetic stripe contains an account number and other information about a clients’ account All this information is encoded by the bank When a client uses his ATM card to withdraw money or to use other services, the entire transaction is also electronically safeguarded to keep the information about his account completely confidential Anytime a cardholder uses his PIN, it is scrambled electronically and only his bank can decode it Each cardholder is given a PIN code, which is a secure code including six-digits known only by him He can choose and change the number his convenience When a client withdraws cash, or uses other services from ATMs, the machine will ask him to input his code The cardholder must input the correct number in order to conduct his transactions If he inputs his PIN code incorrectly more than three times, the card status will be changed or even captured inside the machine This is an effective way to protect the card holder in case his card is lost or stolen, the thief cannot conduct unauthorized transactions if they cannot know the PIN exactly Thus, a cardholder’s PIN is certainly kept secret if it ids not observed why someone watching as he uses the machine  An ATM card is safer to carry than cash In case a VPBank clients’ card is lost and stolen, his cash amount in his ATM account still stays confidential, because the others who try to use his card might not know his secret PIN He can also get his card replaced and prevent the loss of his money by making a simple phone call to Card Center or Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions VPBank’s s branches However, when his money (cash) is lost or stolen, he himself is responsible for the damages as no one can help him pay for it This feature is especially advantageous for people who often go on business in dangerous areas because in some unlucky cases, they can lose their money or their lives Thus, to some extent, using ATM cards protects cardholders not only with property but also safeguards their lives Carrying a card is also safer than carrying cash because all VPBank’s ATMs are installed in secure, busy areas Many are located in clean, well-lit and comfortable places such as commercial centers, supermarkets, restaurants Some machines are also monitored or patrolled by security officers who allow clients to make their card transactions with their mind at peace It is also very convenient in case clients not know how to use ATMs correctly or want to withdraw a large amount of money to go shopping in the evening  All cardholders are protected in case of card loss or PIN code disclosure In case a user forgets his PIN, he can request VPBank to re-provide him with his PIN In case his card is lost or stolen, he can immediately report this to Card Center or VPBank’s branches VPBank will then promptly stop all transaction on this card In case he receives the statement in which the questionable activity appears and he can prove that his ATM card has been used fraudulently, he will not be liable for the unauthorized amount because VPBank is willing to share with damages The reason why VPBank sets daily limits on ATM cash withdrawals is also for safety While some people may think that limits of this kind may seem like an inconvenience to them, they are there in fact to safeguard a cardholder and his money from the unauthorized use of his account For example, to withdraw a maximum amount of VND 20,000,000, the thief must conduct card transactions at least ten times If the owner of this card checks or makes Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions his card transactions each day, he can easily discover the use of stolen or fraudulent cards and report to VPBank to stop the use of this card Therefore, all VPBank clients can be confident going out with their cards in pocket, because VPBank always takes care of them and protects their interest 2.3.2 The limitations of VPBank’s ATM card services Although VPBank’s ATM card services are improved day by day, the effectiveness of these services is still limited Recently, some articles have criticized some poor services of VPBank’s ATM card For example, technical problems have caused some customers dissatisfaction, they must queue up a long time to withdraw money and after banking hours, ATMs are not in operation, etc Unfortunately, that causes some clients to view VPBank’s ATM system with suspicious eye That is why some experts in Vietnam are not enough to allow Vietnamese people to reshape the habit they use their money and that is why out of 10 million Vietnamese people who can afford to use payment cards, only 2.5 million want to possess card Thus, beside some benefits that card users gain, there are some limitations of VPBank’s ATM card services that scare them away  Incompetent ATM network Although VPBank has 400 ATMs in 30 cities, its ATM network is not so strong One of the reasons is that a sudden growth in the number of card users is faster than the growing number of ATMs That’s why some latest articles ask VPBank to widen the reach of ATMs According to the news on the website of Global IT investment and trade services, his company has saved expenses and time since it started to pay more than 1,000 workers directly into their bank accounts Also on the plus side, people not have to worry about carrying a large amount of cash when going away for business or travel However, as some trading places generally only accept cash, or not offer alternate methods of payment, all his employees must withdraw cash from ATM Five industrial parks and expert processing zones in HoChiMinh City Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions have many thousands of workers but a total of only 19 ATMs, so workers must queue up to take their pay from the machine Because of the long wait, a group of workers sometimes asks one representative to withdraw their money, so their passwords are known and they can lose their money Besides, VPBank encourages students as potential clients because they will likely continue using ATM services after graduation However on Vietnam style enewspaper, few universities currently have ATM services available There have been three to four machines installed in well-known universities so far, the others are even far from ATM locations; therefore, student cannot use ATMs after their school is closed Additionally, on Thanh Nien newspaper, some cardholders complained that it was difficult for them to find an ATM in remote areas, including some in tourist locations They said they did not enjoy any benefits of ATM services, because they could not withdraw cash promptly or find any stones to accept their cards In reality, some ATM card services are not completely available 24 hours a day, days a week to serve cardholders, although in theory cardholders can withdraw cash from ATMs around the clock Most of VPBank’s ATM machines are inside the bank branches, supermarkets, restaurants, commercial centers in big cities, so withdrawals can only be made depending on opening hours Furthermore, according to the last news on Thanh Nien website, the ATMs have not become fully accessible and convenient after the bank branch’s working hours, as VPBank’s ATM network sometimes suffers unusually blackouts The reason is that the bank’s host computer experiences some technical problems, ATM cash machines run out of currency on holidays and the network is overloaded with too many customers trying to make transactions at the same time In short, VPBank’s ATM network is not strong enough to ensure that the benefits of VPBank’s ATM card services are fruitful Thus, VPBank should continue expanding and improving its network nationwide Currently, the best Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions way for VPBank is to co-operate with other commercial banks’ ATM networks to make VPBank’s ATM cards accept everywhere when necessary  Deficient ATM card services Its ATM services are not diversified because of the following reasons:  ATMs run out of money on special days All cardholders use ATM cards mainly for cash withdrawals; however, ATMs sometimes run out of money Thanh Nien newspaper reports that such shutdowns often happen at the beginning and of the month when customers check their account balances and withdraw cash or before special days, (Lunar New Year) when they buying power increases substantially This causes cash machines to have to work non-stop, and cash in each machine’s storage is not enough to meet withdrawal transactions while only a few number of VPBank’s employees assigned to 24-hour duty during the holiday in order to ensure ATMs are always refilled with cash Thus, the situation “withdrawal transaction is not available now” often occurs What a pity, cardholders are always losers They must directly go to VPBank branches to make their transactions when all the machines says “sorry” to all cardholders  Payment services via ATM are in pilot According to the banking news newspaper, VPBank has sign many contracts with many non-bank organizations so far, diversify the uses of its ATM cards and as such lure more customers It means that customers can make bill payments for some monthly purchases such as adding minutes to their Internet and Mobile telephone accounts, buying minutes for pre-paid Internet service, prepaid phone service …however, some of these are mainly in pilot in HoChiMinh city, others such as pre-paid mobile service have not put into the place Only a post-paid phone service is being offered to al VPbank clients buying minutes from MobiFone Company Thus, currently, VPBank’cards mostly offers basic deposit and withdrawal services via ATM are still poor, new and strange to all VPBank’s cardholders Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions Chapter 3: external environment evaluations and solutions to improve VPBank’s ATM card services 3.1 External environment evaluations As above mentioned, VPBank has not maximized the benefits of its ATM card services to its customers yet Along with many advantages, some disadvantages on these services stills exits As Vietnam’s ATM market is taking fight and the usage of ATM card is beginning to increase, a complete service will be a prime factor in determining a bank’s competitiveness With that in mind, the winter decides to provide possible solutions in order to improve VPBank’s ATM card services Before providing suggested solutions; however, the writer would like to point out some opportunities and challenges for VPBank in its ATM service improvement process 3.2 Some future solutions to improve ATM card services 3.2.1 Improve and expand card services VPBank should improve and expand card services so as to facilitate best the diverse demand of customers because currently, VPBank’s ATM cards mainly offer basic deposit and withdrawal services If the customers buy or pay for something, they must withdraw money first, and then pay later, or if they deposit their money into their accounts, they must enter a branch This process is inconvenient for the users, and partly explains why the number of users is still small (1.5 million out of 10 million who can afford to buy a card) Thus, VPBank should offer more card services to make its ATM cards more multi-functional, more multi-purpose and more convenient to customers Additionally, it should establish and manage efficiently the network of providing banking services The writer thinks that there are three ways to solve this problem Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions 3.2.1.1 Expanding payment services visa ATM In addition to basic deposit, withdrawal, bill payment services, VPBank should team up with more non-bank organizations to launch joint payment card services For example, VPBank can sign a contract with the Hanoi Post Offices, the Electricity of Vietnam, water supply companies, and insurance companies to allow customers to make monthly payments for bills of telephone, electricity, water, insurance premium, and more directly from ATMs without any fee Furthermore, as the high demand in using the Internet and cell phone, VPBank should co-operate with more Internet service suppliers (ISP), Vinaphone, Viettel to offer its cardholders to add minutes to their Internet and mobile telephone accounts from ATMs without entering each branch 3.2.1.2 Expanding the number of retail locations (POS) that accept ATM cards for payment Many trading centers have developed rapidly in big cities but they generally only accept cash, and not offer alternative methods of payment It is inconvenience for all shoppers because they must conduct withdrawal transactions before going shopping Therefore, to encourage local people to use ATM cards for making everyday purchases, VPBank needs to promote the wholesalers, and retailers or other points of sales at stores, shops, restaurants, supermarkets, tourist companies, and big payment centers to accept its client cards for payments Each location will install PIN pads into its cash machines, so the cardholders just punch their PIN and the amount of the purchase, this amount will be deducted automatically from their account Besides, “a payment gate” or central computerized system should be created to ensure security for domestic payments; otherwise, hackers could corrupt the system Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions 3.2.1.3 Exploiting and boosting up e-banking VPBank needs to exploit e-banking to meet the customers’ demand Because E-banking or PC-based banking enables the customers to go banking at home and make their purchase through the Internet The Connect 24 ATM card is not as multi0functional as the Visa or Master card; therefore, Plank should make its ATM cards more multi-purpose by offering the customers to buy products or services in the domestic market via the Internet and make payment directly from the ATMs With such e-banking services, VPBank’s card users would be served anywhere at anytime, while the bank reduces the cost of opening new branches, labor and operation cost 3.2.2 Ensure a smooth and efficient VPBank’s ATM operation An important step that needs to be taken in order to improve ATM card services is to ensure the smooth and efficient ATM operation Regular checkup and maintenance of all ATMs to assure well-functioning machines are very important tasks, since breakdowns can cause damages to the customer accounts or seriously, have an adverse impact on the entire ATM system To ensure that all machines always go smoothly, in my opinion, VPBank should:  Have a professional maintenance crew working 24 hours a day, days a week  Physically inspect ATMs on a regular basis,  Have a system managing all ATMs installed in the VPBank’s head office, signaling for any mistakes,  Encourage customers to report any non-working ATM, or any machine that appears to be acting strangely,  Replacement of outdated, inefficient and broken machines with high- tech, modern ones Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions Additionally, VPBank should regularly renovate this self-service technology should invest more investment in technology and enhance communication to catch up with the technological progress in the world 3.2.3 Guarantee the availability of ATM card services To ensure that customers can “go banking” outside the bank at their convenience, VPBank should assure that:  ATMs are available 24 hours a days a week,  Customers can find ATMs around 500m,  ATMs never run out of money: VPBank always makes sure that its ATMs have enough money to be withdrawn by its cardholders because the main purpose of total respondents using the ATMs is to withdraw their money,  Customers not have to queue up to use the ATMs 3.2.4 Improve marking and customer care to popularize ATM card services As the general population persistently uses cash for making payments, developing marketing, sales promotion, personal selling strategies plays an important role To expand ATM card services and increase overall consumer demand, VPBank’s employees should often hold direct talks in businesses, universities, hospitals, households, and individuals who have high-income to introduce and help them understand the benefits of using ATM card services and persuade them to open accounts and use ATM card transactions Additionally, VPBank should also pay more of its attention to aspects of after-sale services to make it friendlier to them by offering a special promotion, promptly informing changes in service and giving specific instructions to such changes It is also good channel for VPBank to help customers understand that VPBank is taking extreme cares of them and especially help them use ATM card services in an exact way Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions 3.2.5 Improve the security for ATMs card This should be considered the priority, as the safety of ATM cards is closely linked to the interests of cardholders To raise customers’ trust in the issuing bank, VPBank should find the best way to keep its customers’ accounts secret In my opinion, there are three ways to prevent a possible crime boom 3.2.5.1 Setting up a risk management centre In order to hinder a possible ATM crime boom in Vietnam ATV market, VPBank should promptly set up a risk management centre This centre specialized in:  Doing regular researches on risk levels and finding good solutions to response to them,  Regularly investigating and discovering unauthorized card transactions and taking prompt actions to minimize looses  Having regular contacts with international card organizations to update information about risk management 3.2.5.2 Educating cardholders to protect their PIN As mentioned, while the current number of card users of VPBank has been 885,000 not many of them know how to use their cards correctly Some misunderstanding has caused some users not to secure their PIN numbers, leading to some unexpected damages Therefore, popularizing the use of ATM cards and educating cardholders to protect their PIN are essential; VPBank should concentrate more of its attention and money on aspects of marketing and sales promotion to make it more popular in the market This is an important step in making its users feel more confident and secure when using their cards Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions The following suggestions should be given to customers to help them to keep their accounts safe as follows:  Always protect their PIN  Don’t write the number down  Cover the keypad while they enter the number  Don’t give the number out to anyone  Never keep their PIN with their card Do not use birthdays, telephone or NRIC numbers as these numbers can be easily found in their wallet  Treat an ATM card like cash Never leave it unattended and check it often to see that it is safe,  Whenever possible, not let the card be out of sight while making payment,  Be wary to any offers of “help” with their ATM transaction,  Use a different machine if they feel uncomfortable about the ATM instructions,  Report a lost or stolen card to VPBank immediately Most fraudulent use of cards occur within the first few days of being lost or stolen,  Report anything that seems suspicious or strange about the ATMs to their bank 3.2.5.3 Tightening ATM card security chip Switching from magnetic cards to chip cards is an inevitable trend All card companies in the world have set a roadmap to switch to chip cards to curb fraud because these cards allow larger data storage and are difficult to be forgotten Apart from the current conveniences, chip cards will also be used to develop new conveniences such as identifying holders and storing information about health care and promotional programs Therefore, in my opinion, VPBank together with its affiliates should plan to develop chip-bases Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions cards as one good measure to prevent a possible crime boom/ Even shifting from magnetic cards to chip-based cards requires high investment for upgrading the card system and returns from card issuance are not so profitable, thus it is something that requires further study 3.2.6 Human solutions Last but not least, we know that the human resource of any company is the ones who run it and is its most valuable resource Human resource is special important for a service oriented organization like banks There are several motivational programmers, competency building measures, training, etc given to personnel working in the banks these days This goes a long way in equipping them better to deal with customers The way of the employee dealing with the customer is an important factor in winning over and retaining them ATMs are self-services technologies that enable customers to produce services for themselves without assistance from firm employees However, it doesn’t mean that employees not join in the services process They are still responsible when there are some technical problems with these self-service technologies leading to customers’ damages or dissatisfactions Therefore, a bank’s employees must be always responsive, reliable, able to answer their customers’ questions and understand their requirements and treat them with respect, etc Besides, as ATMs are technological tools, the employees are also required to have enough professional knowledge about IT, network and international laws and regulations Thus, to compete well in card market, VPBank should have:  A Research and Development Department specializes in card services,  Training IT staff: IT staff will take care of the whole ATM and POS system of the bank,  Card marketing Department: The marketing staff will provide the best customer services and also develop marketing and sales promotion programs Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions  24-hour support team: Since card transactions can be made everywhere at anytime, a 24-hour support team will provide both the ATMs and cardholders timely support This team will also deal with customer complaints and claims In short, the writer thinks with six suggested solutions, VPBank’s ATM card services will be promptly improved and increasingly expanded These prefect services in the future will help VPBank attract more customers, acquire more capital and have a larger market share To that end, VPBank should get more and more active, flexible in its ATM service improvement process next time Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions Conclusion In Vietnam, ATM card was introduced in 2000, but it has also promptly become part of every life for 2.5 million people Some experts say that although this number is too small compared to 12 million people who can afford to buy an ATM card, it partly means that Vietnamese people has gradually changed the way they often handle their money.VPBank also makes a major contribution to develop this market The number of ATM machine and ATM cards are growing rapidly, many more modern ATMs are imported and more new services are offered However, VPBank’s ATM card services are still perceived to be of low quality, ineffective and not diverse The effectiveness of basic services such as cash deposit, cash withdrawal is limited That is reason why in this report, the writer analyzes the strong and weakness points of VPBank’s ATM card services and more importantly, tries to find some feasible solutions for VPBank to improve and expand its services in the future Based on the above analysis and these suggested solutions, the writer hopes that VPBank will have a deeper look into its current situations of ATM card services and promptly find comprehensive solutions to tackle its difficulties Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VPBank’s ATM card services: Current situations and solutions TABLE OF CONTENS Introduction Chapter 1: General understanding of ATM card service 1.1 Introduction to the ATM card service 1.2 Card functions 1.3 The role of an ATM card in the economy 1.4 Card-related factors 1.5 The development of ATM system in Vietnam Chapter 2: Situation of Vietnam Joint-Stock Commercial Bank for Private Enterprise’s ATM card services 2.1 Overview of Vietnam Joint-Stock Commercial Bank for Private Enterprises 2.2 Situation of Vietnam Joint-Stock Commercial Bank for Private Enterprise ATM’s card services 11 2.2.1 Situation of VPBank's ATM card services 10 2.2.2 ATM system and ATM card services in Vietnam 12 2.3 The benefits and limitations of VPBank’s ATM card services 13 2.3.2 The limitations of VPBank’s ATM card services 20 Chapter 3: external environment evaluations and solutions to improve VPBank’s ATM card services 23 3.1 External environment evaluations 23 3.2 Some future solutions to improve ATM card services 23 3.2.1 Improve and expand card services 23 3.2.2 Ensure a smooth and efficient VPBank’s ATM operation 25 3.2.3 Guarantee the availability of ATM card services 26 3.2.4 Improve marking and customer care to popularize ATM card services 26 3.2.5 Improve the security for ATMs card 27 Conclusion 31 Bui Thi Van – Class 4D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... VPBank’s ATM card services: Current situations and solutions Source: www.vpbank.com.vn 2.3 The benefits and limitations of VPBank’s ATM card services 2.3.1 The benefits of VPBank’s ATM card services. . .VPBank’s ATM card services: Current situations and solutions Chapter 1: General understanding of ATM card service 1.1 Introduction to the ATM card service Card definition: The ATM card is... ATM? ??s card services 11 2.2.1 Situation of VPBank's ATM card services 10 2.2.2 ATM system and ATM card services in Vietnam 12 2.3 The benefits and limitations of VPBank’s ATM card services