Affective and instrumental commitment a special referece to self service technologies in domestic and foreign banks

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Hoang Thi Bich Chi AFFECTIVE AND INSTRUMENTAL COMMITMENT: A SPECIAL REFERENCE TO SELF-SERVICE TECHNOLOGIES IN DOMESTIC AND FOREIGN BANKS MASTER OF BUSINESS (Honours) Ho Chi Minh City- Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Hoang Thi Bich Chi AFFECTIVE AND INSTRUMENTAL COMMITMENT: A SPECIAL REFERENCE TO SELF-SERVICE TECHNOLOGIES IN DOMESTIC AND FOREIGN BANKS ID: 22120043 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr LE NHAT HANH ACKNOWLEDGEMENT Firstly, I would like to express my gratefulness to my supervisor Dr Le Nhat Hanh for her professional guidance, intensive support, valuable suggestions, instructions and continuous encouragement during the time of research and writing this thesis I would like to express my deepest appreciation to ISB Research Committee for their valuable time as their insightful comments and meaningful suggestions were contributed significantly for my completion of this research My sincere thanks also go to all of all of my lecturers at International Business School- University of Economics Ho Chi City for their teaching and guidance during my Master course Last but not least, I would like to thanks my family, whom were always supporting me and encouraging me with their best wishes ABSTRACT The purpose of this research is to investigate the factors that influence customer satisfaction and their commitment with self-service banking technologies In particular, this field study conducted in Vietnam focuses on making a comparison on customer satisfaction and commitment of foreign banks and domestic banks with self-service banking technologies The research indicated perceived usefulness, perceived convenience, privacy and security positive effect customer satisfaction As result, such positive effects lead to a significantly affective and instrumental commitment of customer with banks in Vietnam However, there are some differences between domestic banks and foreign banks Based on the findings presented, this study will provide bankers and policy makers with a greater understanding of customer assessment to compose the appropriate future strategies Key words: Self-service banking technologies, customer satisfaction, affective commitment, instrumental commitment TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Research gap 1.3 Research objectives 1.4 Research methodology and research scope 1.5 Research contribution 1.6 Research structure CHAPTER 2: LITERATURE REVIEW 2.1 Expectation-confirmation model in the context of IT (ECM-IT) 2.2 Self-service banking technologies 2.3 Customer satisfaction 2.4 Affective commitment 10 2.5 Instrumental commitment 11 2.6 Hypotheses development 12 2.6.1 Perceived usefulness 12 2.6.2 Perceived convenience 13 2.6.3 Security and privacy 14 2.6.4 Overview on customer satisfaction and commitment 15 2.7 The conceptual model and hypotheses of the research 16 CHAPTER 3: RESEARCH METHODOLOGY 17 3.1 Research process 17 3.2 Questionnaire design 18 3.3 Sample 21 3.4 Data collection 21 3.5 Data analysis method 22 CHAPTER 4: DATA ANALYSIS 23 4.1 Respondents’ demographics 23 4.2 Reliability Analysis 25 4.3 Exploratory Factor Analysis (EFA) 30 4.3.1 EFA for independent variables 30 4.3.2 EFA for Dependent variables 32 4.4 Regression Analysis 33 4.4.1 Simple Regression analysis 34 4.4.2 Multiple Regression Analysis 38 CHAPTER 5: CONCLUSION, IMPLICATIONS, AND LIMITATIONS 47 5.1 Conclusion 47 5.2 Managerial Implications 48 5.3 Limitations and future research 50 REFERENCES 52 APPENDICES 64 LIST OF FIGURES Figure 2.1: A theoretical model 16 Figure 3.1: Research Process 17 Figure D1: Histogram of Customer Satisfaction (Domestic/Foreign/Overall) .76 Figure D2: Normal Plot of Customer satisfaction (Domestic/Foreign/Overall) .77 Figure D3: Scatter Plot of Customer satisfaction (Domestic/Foreign/Overall) 78 LIST OF TABLES Table 3.1 Source of measurement scale 18 Table 4.1 Respondent’s characteristics 23 Table 4.2 Reliability test result .28 Table 4.3 KMO and Bartlett’s Test of Independent Variables 30 Table 4.4 Rotated Component Matrix of Independent Variables 31 Table 4.5 KMO and Bartlett’s Test of Independent Variables 32 Table 4.6 Rotated component Matrix of Dependent variables 32 Table 4.7 Model summary of simple regression analysis .34 Table 4.8 ANOVA of simple regression analysis 35 Table 4.9 Coefficients of simple regression analysis 35 Table 4.10 Model summary of simple regression analysis .36 Table 4.11 ANOVA of simple regression analysis 37 Table 4.12 Coefficients of simple regression analysis 37 Table 4.13 Correlations matrix .40 Table 4.14 Model summary of multiple regression analysis 41 Table 4.15 ANOVA of multiple regression analysis .42 Table 4.16 Coefficients of multiple regression analysis 42 Table 4.17 Summary of hypothesis testing result 45 CHAPTER 1: INTRODUCTION This chapter presents the introduction to the study It contains the research background, research gap, research objective, research methodology, research scope, contribution of research and research structure 1.1 Research background “Today fast-paced world is becoming increasingly characterized by technologyfacilitated transactions” (Meuter et al., 2000, p.50) Customers tend to interact with technology to complete given task instead of interacting with a customer service employee According to Meuter et al., (2000) self-service technologies (SSTs) are technological interfaces that allow customers to offer their own service independent of interaction with a firm’s service personnel through the use of technology SSTs represent a variety of different services, ranging from the common automated teller machines (ATMs), online book tickets, automated hotel checkout, banking by telephone To illustrate, most recently, a 24-hour ATM sells cupcakes on street in New York City, America and Egold services which you can by gold via internet has just been launching by TP Bank in Vietnam at the beginning of this year The rapid development of SSTs in recent years means that customers have changed the way in which they deal with many services, including banking services (Bobbitt & Dabholkar, 2001) Since the mid-1990s, there has been a fundamental change in banking service channels toward using SSTs such as ATMs These days, with the adoption of technologically enhanced service delivery methods, an increasing number of financial institutions are using technology in order to facilitate their services A large and growing number of consumers interact with these Self-service banking technologies (SSBTs) that include online banking, ATMs, electronic funds transfer at the point of sale, mobile banking, telephone banking, SMS banking, which are so prolific Affected by global economy crisis since 2008, economy of Vietnam has been facing various challenges and the banking industry is not an exception According to General Statistics Office, a lot of companies have had to shut down in this year Therefore, the demand of loans and capital of those companies is shrunk resulting in the reduction in the revenue of banking industry To solve this problem, banks have to develop their non-credit services in order to balance and diversify their sources of revenue In addition, integration into WTO has also boosted Vietnamese economy to develop remarkably A significant amount of inflows of investment has been poured into the market by foreign investors Many foreign companies have taken part in different industries including banking The globalization of banking industry has encouraged many developing countries including Vietnam into opening their markets to foreign banks and built up the industry infrastructure to international standards Those foreign banks own various advantages in terms of not only capital and effective management system but also high technology The foreign banks perform better than domestic banks because of their ownership advantages (Claessens, 2001; Harylchyk & Jurzyk, 2011) On the other hand, due to the benefit of local market knowledge and longevity, domestic banks, especially the state owned commercial banks dominate the market (Nahm, 2008) However, this situation will change when the market opens freely Therefore, to become more competitive, domestic banks have to focus on improving their own service quality such as professionalism of services provided and modernization in equipment and tools In today’s business environment, customers have become the center of all business decisions right from the conception of product to the delivery of product In the highly competitive banking industry, service becomes one of the most important elements for gaining a sustainable competitive advantage in the market place Understanding the potential impacts these SSBTs facilities may have on consumers’ satisfaction and their ongoing commitment is the challenge for service managers and researchers APPENDICES Appendix A: Questionnaire (English version) Dear sir/madam, I am graduating MBus program at the University of Economics in Ho Chi Minh City This questionnaire is designed to survey in banking sector Participation in this survey is voluntary The information is used for academic purpose only and strictly confidential If you have concerns or questions about this study, please contact me with email address: bicihoang.due@gmail.com, or phone number: +84 986.999.707 So I would like to thank you in advance for your indispensable cooperation I Demographic information Please provide your personal information as below: Gender □ Male □ Female Age □ 18-25 □ 26-30 □ 36-45 □ 46-60 Occupation □ Student □ Officer □ Worker □ Business man/ Manager □ Retirement □ Others… Average income per month □ Under million VND □ From 5-10 million VND □ From 10-15 million VND □ Above 15 million VND Which bank are you now using Self-service banking technologies? □ Domestic banks: Vietcombank, BIDV, ACB, MB, DongA Bank, Techcombank, others… □ Foreign banks: ANZ, HSBC, Citibank, Standard Chartered, Shinhan Bank, others… You choose either domestic or foreign bank refer to your bank in this questionnaire Which type of Self-service banking technologies are you using now? □ ATMs □ Mobile Banking □ Internet Banking □ Telephone Banking □ Queue management systems □ Others… How long have you used self-service banking technologies? □ Below one year □ From 1-2 years □ From 2-4 years □ From 4-5 years □ Above years II Compulsory questions Strong disagree To what extent you agree with each of the following statements, please indicate your answer using the following 5-point scale where: = Strongly disagree = Disagree = Neutral = Agree = Disagree Question Using Self-service banking technology (SSBT) allows me to improve my service transaction ability Using SSBT enhances my effectiveness in my service transaction Using SSBT is useful in handling my service transactions Using SSBT increases my productivity of handling my service transactions Using the SSBT is a convenient way to conduct service transactions The SSBT allows me to conduct service transactions whenever I choose 5 5 5 SSBT allows me to save time on money transactions The SSBT allows me to conduct money transactions wherever I choose I am not worried about the security of an SSBT 10 Using an SSBT is financially secure 11 I trust in the technology an SSBT is using 12 I trust in the ability of an SSBT to protect my privacy 13 Overall, I am satisfied with the SSBT offered by the 5 5 bank 14 The SSBT offered by the bank exceeds my expectations 15 The SSBT offered by the bank is close to my ideal SSBT 16 I feel a sense of belonging to SSBT service of my bank 17 I am loyal to my bank 18 I am committed to my relationship with my bank 19 I would like to develop a long-term relationship with my bank 20 I feel strongly attached to my bank 21 I feel more attached to this bank than other banks 22 It would be difficult for me to find another bank of equal standard 23 I not have a good alternative to my bank 24 I would cost me a great deal to use SSBT of another bank 25 I am concern about what would happen if I used SSBT of another bank 26 Moving to another banks is not worth the effort 5 5 Appendix B: Questionnaire (Vietnamese version) Kính chào anh/chị, Tơi học viên cao học Chương trình MBus Đại Học Kinh tế Thành phố Hồ Chí Minh Bảng câu hỏi thiết kế để khảo sát lĩnh vực ngân hàng Tham gia vào khảo sát hoàn tồn tự nguyện Mọi thơng tin dùng cho mục đích nghiên cứu hồn tồn giữ bí mật Trong q trình thực phiếu khảo sát này, Anh/chị có thắc mắc nào, xin vui lịng liên lạc với tơi qua địa email: bicihoang.due@gmail.com số điện thoại 0986.999.707 Chân thành cám ơn hỗ trợ Anh/Chị, I Thông tin sơ Xin anh chị vui lịng cho biết số thơng tin cá nhân sau Giới tính □ Nam □ Nữ Xin vui lòng cho biết tuổi Anh/Chị □ 18-25 □ 26-35 □ 36-45 □ 46-60 Nghề nghiệp Anh/Chị □ Sinh viên □ Nhân viên văn phịng □ Cơng nhân □ Doanh nhân/ Nhà quản lý □ Nghỉ hưu □ Khác Xin vui lòng cho biết thu nhập trung bình tháng Anh/Chị □ Dưới triệu VNĐ/tháng □ Từ triệu- 10 triệu VNĐ/tháng □ Từ 10 triệu – 15 triệu VNĐ/tháng □ Từ 15 triệu VNĐ/tháng trở lên Anh/Chị sử dụng Dịch vụ ngân hàng tự phục vụ Ngân hàng nào? □ Ngân hàng nước: Vietcombank, BIDV, ACB, MB, Ngân hàng Đông Á, Techcombank, khác… □ Ngân hàng Quốc tế Việt Nam: ANZ, Citibank, HSBC, Standard Chartered, Shinhan bank, khác… Anh/chị chọn Ngân hàng nước, Ngân hàng quốc tế xem Ngân hàng anh/chị bảng khảo sát Anh/Chị sử dụng dịch vụ ngân hàng tự phục vụ đây? □ ATMs □ Ngân hàng qua điện thoại di động □ Ngân hàng trực tuyến □ Ngân hàng qua điện thoại □ Hệ thống xếp hàng tự động □ Khác… Thời gian sử dụng dịch vụ ngân hàng tự phục vụ Anh/Chị □ Dưới năm □ năm ->dưới năm □ năm ->dưới năm □ năm ->dưới năm □ Hơn năm 5 5 5 phát biểu sau cách đánh dấu (X) vào tương ứng, với: Ơ số 1: Hồn tồn khơng đồng ý Ơ số 2: Khơng đồng ý Hồn tồn đồng ý Khơng đồng ý Trung dung Xin cho biết mức độ đồng ý Anh/ Chị Đồng ý Hồn tồn khơng đồng ý II Câu hỏi bắt buộc Ô số 3: Trung dung Ô số 4: Đồng ý Ơ số 5: Hồn tồn đồng ý Sử dụng Công nghệ ngân hàng tự phục vụ cho phép cải thiện khả giao dịch Sử dụng Công nghệ ngân hàng tự phục vụ giúp nâng cao hiệu giao dịch Sử dụng Công nghệ ngân hàng tự phục vụ hữu ích cho việc xử lý giao dịch Sử dụng Công nghệ ngân hàng tự phục vụ giúp tăng cường hiệu suất việc thực giao dịch Sử dụng Công nghệ ngân hàng tự phục vụ giúp thuận tiện thực giao dịch Công nghệ ngân hàng tự phục vụ cho phép thực giao dịch lúc muốn Công nghệ ngân hàng tự phục vụ giúp tiết kiệm thời gian giao dịch Công nghệ ngân hàng tự phục vụ cho phép thực 5 11 Tôi tin vào công nghệ mà ngân hàng tự phục vụ sử dụng 12 Tôi tin vào khả Công nghệ ngân hàng tự phục vụ để bảo vệ riêng tư 13 Trên tất cả, cảm thấy thỏa mãn với công nghệ tự phục vụ Ngân hàng 14 Công nghệ ngân hàng tự phục vụ vượt kỳ vọng 15 Công nghệ ngân hàng tự phục vụ lý tưởng 16 Tôi cảm thấy thuộc Cơng nghệ tự phục vụ Ngân hàng 17 Tôi trung thành với ngân hàng 18 Tôi cam kết mối quan hệ với ngân hàng 19 Tôi muốn phát triển mối quan hệ lâu dài với ngân hàng 20 Tơi cảm thấy gắn bó với ngân hàng tơi 21 Tơi cảm thấy gắn bó với ngân hàng ngân hàng khác giao dịch nơi đâu muốn Tôi không lo lắng bảo mật Công nghệ ngân hàng tự phục vụ 10 Sử dụng Công nghệ ngân hàng tự phục vụ an tồn tài 22 Thật khó cho tơi để tìm đến ngân hàng khác đạt tiêu chuẩn tương đương 23 Tôi khơng có lựa chọn khác ngồi ngân hàng 24 Tôi phải trả mức phí khơng nhỏ chuyển sang sử dụng công nghệ tự phục vụ ngân hàng 5 khác 25 Tôi lo lắng liệu điều xảy tơi chuyển sang sử dụng công nghệ tự phục vụ Ngân hàng khác 26 Chuyển sang sử dụng công nghệ tự phục vụ ngân hàng khác không tiêu tốn điều 74 Appendix C: Total variance explained in Exploratory Factor Analysis Domestic/ Foreign/ overall Table C2: Total Variance Explained of Independent Variables Domestic/ Foreign/ overall Component 4.055/ 5.736/ 4.792 % of Variance 33.791/ 47.802/ 39.931 2.071/ 1.785/ 1.815 1.473/ 873/ 1.339 17.256/ 14.873/ 15.126 12.277/ 7.274/ 11.159 Total Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Cumulative % of % of Total Cumulative Total Cumulative % Variance Variance 33.791/ 4.055/ 33.791/ 33.791/ 2.932/ 24.435/ 24.435/ 47.802/ 5.736/ 47.802/ 47.802/ 3.316/ 27.636/ 27.636/ 39.931 4.792 39.931 39.931 3.030 25.250 25.250 51,047/ 62.675/ 55,057 63.324/ 69.949/ 66.216 Initial Eigenvalues Extraction Method: Principal Component Analysis 2,071/ 1.785/ 1,815 1.473/ 873/ 1.339 17,256/ 14.873/ 15,126 12.277/ 7.274/ 11.159 51,047/ 62.675/ 55,057 63,324/ 69.949/ 66.216 2,563/ 2.878/ 2,619 2,104/ 2.199/ 2.297 21,355/ 23.985/ 21,822 17.534/ 18.328/ 19.144 45,790/ 51.621/ 47,072 63.324/ 69.949/ 66.216 Table C2: Total Variance Explained of Dependent Variables Domestic/ Foreign/ overall Component Initial Eigenvalues Total 4.055/ 5.824/ 6.340 2.071/ 2.302/ 2.125 1.473/ 1.059/ 1.040 % of Variance 33.791/ 44.799/ 48.766 17.256/ 17.705/ 16.344 12.277/ 8.149/ 7.997 Extraction Sums of Squared Loadings Cumulative Total Cumulative % of % Variance 33.791/ 4.055/ 33.791/ 33.791/ 44.799/ 5.824/ 44.799/ 44.799/ 48.766 6.340 48.766 48.766 51.047/ 2.071/ 17.256/ 51.047/ 62.504/ 2.302/ 17.705/ 62.5042/ 65.111 2.125 16.344 65.111 63.324/ 1.473/ 12.277/ 63.324/ 70.653/ 1.059/ 8.149/ 70.653/ 73.108 1.040 7.997 73.108 Extraction Method: Principal Component Analysis Rotation Sums of Squared Loadings Total % of Cumulati Variance ve 2.932/ 24.435/ 24.435/ 4.566/ 35.123/ 35.123/ 4.412 33.936 33.936 2.563/ 21.355/ 45.790/ 2.467/ 18.978/ 54.101/ 2.789 21.458 55.394 2.104/ 17.534/ 63.324/ 2.152/ 16.552/ 70.653/ 2.303 17.714 73.108 Appendix D: Histogram, Normal Regression & Scatter plot of Dependent Variable: Customer satisfaction Figure D1: Histogram of Customer Satisfaction (Domestic/Foreign/Overall) Figure D2: Scatter Plot of Customer satisfaction (Domestic/Foreign/Overall) Figure D3: Normal Plot of Customer satisfaction (Domestic/Foreign/Overall) ... factors influencing customer satisfaction and then affective and instrumental commitment, differences between domestic banks and foreign banks about customer satisfaction and commitment, particularly... their markets to foreign banks and built up the industry infrastructure to international standards Those foreign banks own various advantages in terms of not only capital and effective management... security and privacy, customer satisfaction, affective commitment, instrumental commitment of domestic banks customer sample, foreign banks customer sample and overall have the Crobach’s alpha coefficient