Improving customer service quality management at tien phong commercial joint stock bank TPBank

SUMMARY OF THE THESIS IMPROVING CUSTOMER SERVICE QUALITY MANAGEMENT AT TIEN PHONG COMMERCIAL JOINT STOCK BANK TPBANK HANOI, 2021 1 SUMMARY OF THE THESIS Thesis Title Improving customer service quality.

SUMMARY OF THE THESIS IMPROVING CUSTOMER SERVICE QUALITY MANAGEMENT AT TIEN PHONG COMMERCIAL JOINT STOCK BANK - TPBANK HANOI, 2021 SUMMARY OF THE THESIS Thesis Title: Improving customer service quality management at Tien Phong Commercial Joint Stock Bank – TPBank Graduate Student: Nguyen Thi Hong Advisor’s name: Dr.Nguyen Thi Hong Hanh Background of the study Customers are considered as the key successful factor in every business, including banks and it is even more critical in case of the banks face poor customer database management, lack of sufficient infrastructure and technologies to improve customer experience (Amoako, 2012) By providing high-performance in customer service, the banks are able to achieve and to enhance customer satisfaction since the customer expectation is well-fulfilled (Sakwa&Oloko, 2014) Customer service is important context in banking and finance industry Modern and large banks today have millions of customers and they have to interact with different customers’ requests and queries every day Understanding the importance of customer service, many banks in Vietnam have initiated their customer service process such as the establishment of call center with hotline services so that the customers are able to call and to meet the banks’ staffs for a particular problem Behind of that, the banks in Vietnam also creates communication portals such as through email, social networking services (e.g Facebook) in order to create a quick connection with their customers Few banks such as Viet A Bank has adopted new technology to create a chatbot based on artificial intelligence and machine learning to provide the interest rate, exchange rate, product features, and banking service fees to the customers Rationales Customer service quality is important context in service area Given to the fact that, the commercial banks are providing services to the clients such as deposit services, lending services, payment services, customer service quality must be taken into account The study is about customer service quality at TPBank Live Bank Live Bank is a service initiated by TPBank since 2016 and now the bank successfully opens 150 transaction points nation-wide, with million customers Live Bank services which are offered by TPBank are innovative banking services in Vietnam It is described like a small bank’s branch but without the employees Instead of that, the bank relies on the new technologies to further improve customer experience and customer self-services Moreover, the customers who transact through TPBank’s Live Bank are not able to complete banking transaction in 24 hours and it is not limited by normal working times A competitive advantage of TPBank’s Live Bank is that it allows the customers to open new ATM card, current accounts immediately through the computer screen The customers are able to receive new physical ATM card after inputting all required information Currently, TPBank’s Live Bank has million customers and it is continuously increasing in coming years Beside of that, the customers need to conduct the services by themselves In this context, customer service is important The bank needs to provide adequate customer service performance to assist the customers and therefore leveraging positive customer experience After more than years of doing business, TPBank does not develop any assessment of customer service performance and quality for Live Bank Behind of that, Vietnamese banking system consists of 31 commercial banks and the competition is happened not only in the area of competitive interest rate but also those who are able to deliver excellent customer service quality to the customers The banks with low customer service quality receives adverse impacts such as lowered customer satisfaction and loosing current customer base Research objectives and research questions Main objective of the study is to enhance customer service at TPBank’s Live Bank This research objective is fulfilled by following research questions:  What are the factors affecting the customer satisfaction and customer loyalty with TPBank’s Live Bank services?  Which factor has highest effect on customer satisfaction and customer loyalty with TPBank’s Live Bank services? Research models & research hypothesis Tangibles Reliability Responsivene ss Customer satisfaction Customer loyalty Staff quality Easy to use Figure 1: Research Model H1-1: Tangibles affect significantly customer satisfaction with Live Bank services provided by TPBank H1-2: Tangibles affect significantly customer loyalty with Live Bank services provided by TPBank H2-1: Reliability affects significantly customer satisfaction with Live Bank services provided by TPBank H2-2: Reliability affects significantly customer loyalty with Live Bank services provided by TPBank H3-1: Responsiveness affects significantly customer satisfaction with Live Bank services provided by TPBank H3-2: Responsiveness affect significantly customer loyalty with Live Bank services provided by TPBank H4-1: Staff quality affects significantly customer satisfaction with Live Bank services provided by TPBank H4-2: Staff quality affect significantly customer loyalty with Live Bank services provided by TPBank H5-1: Easy to use affects significantly customer satisfaction with Live Bank services provided by TPBank H5-2: Easy to use affect significantly customer loyalty with Live Bank services provided by TPBank H6: Customer satisfaction with Live Bank services provided by TPBank affects significantly customer loyalty Research method This study employs quantitative method It is applicable due to quantitative method supports the deductive approach Moreover, quantitative method brings data-driven solutions to extract the findings and it reduces the biases as often found in case of using qualitative method The direction of quantitative method adheres that the data must be numerical and it drives the process of collecting the data In addition, quantitative method is the only option in case of there are hypotheses and the need of hypothesis validation It is true since quantitative method allows the researchers to employ mathematical or statistical analyses and they enable the opportunity of verifying a hypothesis whether it is accepted or rejected in line with relevant test statistics and the p-value Although, it is perceived that the employment of quantitative method brings a concern as it does not bring in-depth information since all findings are produced from number-based process However, this cost is subtracted by the benefit as quantitative method can provide quick research results compared to qualitative method and the findings are less biased The primary data is collected from a survey with the customers of Live Bank of TPBank.The benefit of using survey is that it enables the chance of collecting relevant data in order to capture the findings that support research objective and/or research questions Survey was widely used by other researchers in the past when they evaluated customer perceived service quality in banking services, their satisfaction, and their loyalty The choice of survey is relevant because it supports the deductive approach and quantitative method They are both in demand of the numerical data and this data is obtainable through a structured survey with the customers of TPBank’s Live Bank services The survey requires the questionnaire and it is designed in structured way and the respondents must provide their evaluation given to a Likert’s scale of points These points are “strongly disagree”, “disagree”, “neither agree nor disagree”, “agree” and “strongly agree”, in which, “strongly disagree” receives the lowest point at while “strongly agree” has the highest point at It means the higher point provided by the respondents; the higher agreement level is captured When design the survey, the researcher also wants to collect their demographic characteristics such as gender, age, education, frequency of using TPBank’s Live Bank services, the length of the service relationship with the bank, and the most exciting product provided by TPBank’s Live Bank services The main part of the survey is designed to capture the respondents’ evaluation of tangibles, reliability, responsiveness, assurance, and empathy as key aspects of customer service quality In addition, this part is also used to capture their satisfaction and loyalty level with TPBank’s Live Bank services Research Results 6.1 Descriptive statistics Table 1: Descriptive statistics result Variables Description Mean SD D N A SA 13 63 52 2.1% 9.3% 45.0% 37.1% 6.4% 15 70 40 13 1.4% 10.7% 50.0% 28.6% 9.3% 23 42 44 30 0.7% 16.4% 30.0% 31.4% 21.4% TPBank’s Live Bank REL1 services are well- 3.36 recovered from the errors I satisfied with the REL2 problem handling in 3.34 TPBank’s Live Bank TPBank’s Live REL3 Bank operates well in 24 3.56 hours per day TPBank’s Live RES1 Bank has response 3.30 16 52 50 13 6.4% 11.4% 37.1% 35.7% 9.3% 10 16 63 34 17 7.1% 11.4% 45.0% 24.3% 12.1% 14 22 54 38 12 10.0% 15.7% 38.6% 27.1% 8.6% 14 64 46 11 3.6% 10.0% 45.7% 32.9% 7.9% 53 60 15 2.9% 6.4% 37.1% 42.9% 10.7% servicing time TPBank’s Live RES2 Bank has short turn-around 3.23 time The RES3 time to resolve my problem in 3.09 TPBank’s Live Bank is quickly EMP1 TPBank’s 3.31 employees provides Bank to Live services me best interest at heart EMP2 The employees provide 3.52 promptly notice in case of operational errors EMP3 The employees 3.48 help me to get 14 56 47 20 2.1% 10.0% 40.0% 33.6% 14.3% 12 55 51 14 5.7% 8.6% 39.3% 36.4% 10.0% 15 57 45 18 3.6% 10.7% 40.7% 32.1% 12.9% 8 54 46 24 5.7% 5.7% 38.6% 32.9% 17.1% 87 50 0% 2.1% 62.1% 35.7% 0% 21 71 46 0% 15.0% 50.7% 32.9% 1.4% out of problem quickly ETU1 It is easy to 3.36 learn how to use TPBank’s Live Bank services ETU2 I not need to 3.40 put a lot of metal effort when interacting with TPBank’s Live Bank screen ETU3 The instruction in Live 3.50 TPBank’s Bank screen is clear and understandable CS1 TPBank’s Live Bank 3.34 was satisfying me CS2 TPBank’s Live Bank services 3.21 are good as I expected CS3 I felt comfort when 3.69 using 41 81 12 1.4% 2.9% 29.3% 57.9% 8.6% 102 34 0% 2.9% 72.9% 24.3% 0% 0 114 26 0% 0% 81.4% 18.6% 0% 116 22 0% 1.4% 82.9% 15.7% 0% TPBank’s Live Bank services CL1 I am likely to 3.21 continue to use TPBank’s Live Bank in the future CL2 I will 3.19 recommend TPBank’s Live Bank to my peers CL3 TPBank’s Live Bank is the best 3.14 interest in mind SD: Strongly Disagree; D: Disagree; N: Neutral; A: Agree; SA: Strongly Agree The mean scores for TAN1, TAN2, and TAN3 are 3.24, 3.34, and 3.29 that are not so high value It means the respondents had a central tendency of neither agreed nor disagreed with three statements of Live Bank’s tangibles The author considers that the respondents may not take into account the quality of tangible assets used in Live Bank counter or the bank’s tangible asset quality is only at the normal level and it may not impressive to the customers The author perceives that the respondents have been aware of a benefit of Live Bank services as they can conduct banking transactions any time However, the system recovery after error and the quality of the problem handling is only at adequate level or there is still a room for the services improvement The mean scores for three variables of the responsiveness level are not so high The author considers that the service responsiveness of Live Bank is only at adequate level The bank needs to pay attention to the responsiveness of the services and identify the improvement sources It is perceived that Live Bank services are delivered with quite good staff quality level The employees who are allocated for Live Bank services promptly notify operational errors to the customers during the support onscreen call and they provide good supports to help the customers overcoming the problem quickly although the attitude of the employees is still questionable The author understands that Live Bank service is easy to use given to the clear and understandable instruction Although, the bank still needs to pay attention to user interface in order to make this service easier to learn and to use to the customers The customer satisfaction with Live Bank is mixed It is identified that Live Bank brings the comfortability to the customers although it may not highly satisfy them due to their expectations are only partially fulfilled Behind of that, the customer loyalty level towards Live Bank services is not so high but it is not so low In other words, the customer loyalty level is only at normal level TPBank must be aware of this phenomenon and identify the ways to further improve customer loyalty 10 6.2 Reliability test Table 2: Reliability test result Corrected item- Cronbach’s alpha total correlation if item deleted 0.595 0.636 0.634 0.587 0.497 0.744 0.631 0.558 REL2 0.523 0.674 REL3 0.521 0.698 0.655 0.725 RES2 0.702 0.674 RES3 0.594 0.790 0.624 0.644 EMP2 0.569 0.705 EMP3 0.585 0.689 0.746 0.756 ETU2 0.726 0.776 ETU3 0.673 0.828 0.604 0.604 CS2 0.563 0.611 CS3 0.505 0.695 0.489 0.696 CL2 0.479 0.684 CL3 0.652 0.484 Items Cronbach’s alpha TAN1 TAN2 0.746 TAN3 REL1 RES1 EMP1 ETU1 CS1 CL1 0.729 0.803 0.761 0.847 0.722 0.713 It is concluded that all factors meet the minimum requirements related to the reliability test, including the Cronbach’s alpha larger than 0.7, the 11 Corrected Item-Total Correlation greater than 0.3, and the Cronbach’s alpha if Item Deleted smaller than the Cronbach’s alpha 6.3 Exploratory factor analysis Table 3: EFA analysis for customer satisfaction KMO = 0.675; Bartlett’s test of Sphericity = 92.58; P-value = 0.0000 Component Initial % Variance eigenvalue CS1 CS2 Factor loading 0.840 1.973 65.781% CS3 0.823 0.769 After performing EFA analysis, the author obtains some important results First, the EFA is good to use for the data set of customer satisfaction due to KMO is higher than 0.5 and the Bartlett’s test is statistically significant at 5% Second, items of customer satisfaction is grouped into a single component that explains for 65.781% of total variance and this component has initial eigenvalue above 1.0 The factor loadings for CS1, CS2, and CS3 are 0.840, 0.823, and 0.769 that are all above the minimum threshold of 0.5 Table 4: EFA analysis for customer loyalty KMO = 0.624; Bartlett’s test of Sphericity = 91.815; P-value = 0.0000 Component Initial % Variance eigenvalue CL1 CL2 Factor loading 0.764 1.933 64.433% CL3 0.766 0.873 12 The EFA analysis is suitable with the dataset of customer loyalty, showing through the fact that the KMO value is 0.624 and the p-value of the Bartlett’s test is smaller than 0.05 Only one component is extracted with the capacity of explaining for 64.433% of total variance and this component has initial eigenvalue of 1.933 Also, items of customer loyalty have factor loadings above 0.5 Table 5: EFA analysis for tangibles, reliability, responsiveness, empathy, easy to use KMO = 0.656; Bartlett’s test of Sphericity = 691.594; P-value = 0.0000 Factor Components Items Initial eigenvalue % Variance loading after Varimax rotation ETU1 Component Component Component Component ETU2 0.887 2.738 18.254% 0.876 ETU3 0.839 RES1 0.858 RES2 2.534 16.896% 0.871 RES3 0.788 EMP1 0.844 EMP2 2.081 13.874% 0.803 EMP3 0.814 TAN1 0.821 TAN2 1.768 TAN3 11.784% 0.848 0.748 13 REL1 Component REL2 0.860 1.514 10.093% REL3 0.783 0.760 The last EFA analysis is performed for 15 items of tangibles, reliability, responsiveness, staff quality, and easy to use At first, the author guarantees the suitability of this analysis through the check of the KMO and the Bartlett’s test of sphericity Both indicators come up with the results that satisfy the requirements of the KMO value above 0.5 and the Bartlett’s test is statistically significant at 5% The EFA outputs components with the factor loading of each item after Varimax rotation These components have initial eigenvalues more than 1.0 and the accumulate variances explained by these components is 70.9% It is identified that all items have factor loading values above 0.5 Through the EFA analysis, the author reduces 24 items in the questionnaire to components It is also identified original research model and questionnaire are kept since none item which is belonged to a factor at the conceptual research model design step is grouped to other items The author uses the average function in the SPSS to create new components before performing the correlation analysis and the multiple linear regression analysis 6.4 Multiple linear regression analysis Table 6: Model regression analysis R-Square = 0.456; F-test = 22.474; P-value = 0.0000 Variables Constant Unstandardized coefficient 0.327 T-Test 0.993 14 VIF (0.323) Tangibles 0.249 Reliability 0.170 Responsiveness 0.179 Staff quality 0.206 Easy to use 0.117 5.908 (0.000) 3.585 (0.000) 4.570 (0.000) 4.536 (0.000) 2.938 (0.004) 1.065 1.060 1.071 1.008 1.050 Then, the author validates proposed hypotheses as below: H1-1: Tangibles affect significantly customer satisfaction with Live Bank services provided by TPBank The tangibles factor has unstandardized coefficient of 0.249 and standardized coefficient of 0.388 T-test of this factor is high at 5.908 and p-value is smaller than 0.05 Hence, the null hypothesis is rejected while H1-1 is accepted This result is similar to the findings of Khan &Fasih (2014), Rahman et al (2017), Alafeshat&Alola (2018) It is explained by the fact that TPBank takes into account the tangible quality with the decoration that remarks the bank’s brand identification Moreover, TPBank dedicates team to clean the Live Bank counter every day such as removing all unused banking statement paper TPBank also focuses on the new technology integration, showing through the fact that the bank successfully deployed finger print and facial recognition technologies into 15 Live Bank services Recently, TPBank also introduced a new function of Live Bank as it helps the customers to acclaim lost physical card instantly H2-1: Reliability affects significantly customer satisfaction with Live Bank services provided by TPBank The reliability factor has unstandardized coefficient of 0.170 and standardized coefficient of 0.235 T-test of this factor is high at 3.585 and p-value is smaller than 0.05 Hence, the null hypothesis is rejected while H2-1 is accepted This result is similar to the findings of Al-Azzam (2015), Salihu&Metin (2017), Gobena (2019) This factor is positively and significantly impacting on customer satisfaction with Live Bank because of this service allows the customers to perform banking services in small timeframe Moreover, Live Bank services are designed to support the customers any time and it is not limited as physical branches where the employees only serve the customers during working time H3-1: Responsiveness affects significantly customer satisfaction with Live Bank services provided by TPBank The responsiveness factor has unstandardized coefficient of 0.179 and standardized coefficient of 0.301 T-test of this factor is high at 4.570 and p-value is smaller than 0.05 Hence, the null hypothesis is rejected while H1-1 is accepted This result is similar to the findings of Lau et al (2013), Md Arfiff et al (2013), Iberahim et al (2016) In fact, TPBank has strong commitment of Live Bank customer service, confirming through the fact that each Live Bank counter is connected directly with the bank’s staffs so that the customers’ problems are effectively handled by people in case of the instruction and guidance of the monitor are not helpful to the customers The bank also established the service level agreement (SLA) 16 and it clearly regulates the time required for one customers’ problem request is less than hours H4-1: Staff quality affects significantly customer satisfaction with Live Bank services provided by TPBank The staff quality factor has unstandardized coefficient of 0.206 and standardized coefficient of 0.290 T-test of this factor is high at 4.536 and p-value is smaller than 0.05 Hence, the null hypothesis is rejected while H1-1 is accepted This result is similar to the findings of Sadiq et al (2013), Khan &Fasih (2014), Yadav & Rai (2015) The positive and significant effect of this factor on customer satisfaction is explained by the fact that the bank’s employees are trained very well before they deliver the services to the customers Each newly recruited employee must qualify mandatory trainings about the products and the bank’s regulation The existing employees are also retained in case of their service performance ratio is dropped Behind of that, TPBank allocates the best customer service staffs for Live Bank since the bank considers Live Bank as a competitive product H5-1: Easy to use affects significantly customer satisfaction with Live Bank services provided by TPBank The easy-to-use factor has unstandardized coefficient of 0.117 and standardized coefficient of 0.192 T-test of this factor is high at 2.938 and p-value is smaller than 0.05 Hence, the null hypothesis is rejected while H1-1 is accepted This result is similar to the findings of Kumbhar (2011), Dondolo & Madinga (2016), Banu et al (2019) Indeed, Live Bank was initial developed in 2014 and it had three years of research and development before officially delivering to the customers Moreover, 17 TPBank dedicates a special team inhouse to take care of Live Bank services’ characteristics and performance Customer satisfaction = 0.327 + 0.249 x Tangibles + 0.170 x Reliability + 0.179 x Responsiveness + 0.206 x Staff quality + 0.117 x Easy to use Table 7: Model regression analysis R-Square = 0.55.1; F-test = 32.929; P-value = 0.0000 Variables Unstandardized coefficient Constant 1.384 Tangibles 0.157 Reliability 0.025 Responsiveness 0.141 Staff quality 0.192 Easy to use 0.025 T-Test VIF 7.259 (0.000) 6.460 (0.000) 0.909 (0.365) 6.210 (0.000) 7.281 (0.000) 1.069 (0.287) 1.065 1.060 1.071 1.008 1.050 H1-2: Tangibles affect significantly customer loyalty with Live Bank services provided by TPBank The tangibles factor has unstandardized coefficient of 0.157 and standardized coefficient of 0.386 T-test of this factor is high at 6.460 and p-value is smaller than 0.05 Hence, H1-2 is accepted This finding is 18 similar to the empirical evidences provided by Siddiqui (2011), Liu & Wang (2017) H2-2: Reliability affects significantly customer loyalty with Live Bank services provided by TPBank The reliability factor has unstandardized coefficient of 0.025 and standardized coefficient of 0.054 T-test of this factor is small at 0.909 and p-value is greater than 0.05 Hence, H2-2 is rejected This finding is contradicted to the empirical evidences provided by da Silva Fragata & Muñoz-Gallego (2010) and Malik et al (2011) H3-2: Responsiveness affect significantly customer loyalty with Live Bank services provided by TPBank The responsiveness factor has unstandardized coefficient of 0.141 and standardized coefficient of 0.372 T-test of this factor is high at 6.210 and p-value is smaller than 0.05 Hence, H3-2 is rejected This finding is similar to the empirical evidences provided by Suleiman et al (2012) and Suharto &Ligery (2017) H4-2: Staff quality affect significantly customer loyalty with Live Bank services provided by TPBank The staff quality factor has unstandardized coefficient of 0.192 and standardized coefficient of 0.423 T-test of this factor is high at 7.281 and p-value is smaller than 0.05 Hence, H4-2 is rejected This finding is similar to the empirical evidences provided by Wang &Chaipoopirutana (2014) and Islam (2015) H5-2: Easy to use affect significantly customer loyalty with Live Bank services provided by TPBank 19 ...SUMMARY OF THE THESIS Thesis Title: Improving customer service quality management at Tien Phong Commercial Joint Stock Bank – TPBank Graduate Student: Nguyen Thi Hong Advisor’s name:... service quality at TPBank Live Bank Live Bank is a service initiated by TPBank since 2016 and now the bank successfully opens 150 transaction points nation-wide, with million customers Live Bank services... interest rate, exchange rate, product features, and banking service fees to the customers Rationales Customer service quality is important context in service area Given to the fact that, the commercial