Solutions to expand card services at petrolimex group bank

1 NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAM  Bachelor Thesis TOPIC: SOLUTIONS TO EXPAND CARD SERVICES AT PETROLIMEX GROUP BANK Student’s name Class Intake Internship guide Supervisor : : : : : NGUYEN VIET HAI ADVANCED FINANCE 50 Mr NGUYEN VIET HUNG ASSOC.PROF.DR BUI HUY NHUONG Hanoi, 2012 Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 TABLE OF CONTENTS ACKNOWLEDGEMENT ABBREVIATION LIST OF TABLES LIST OF FIGURES CHAPTER 1: INTRODUCTION 1.1 Rationale 1.2 Research objective 1.3 Research methodology 1.4 Scope of research CHAPTER 2: THEORITICAL FRAMEWORK 2.1 Bank card 2.2 Factors affect the expanding of card services 12 2.3 Expanding the card services .14 CHAPTER 3: OVERVIEW OF PETROLIMEX GROUP BANK .19 3.1 The establishment of PG Bank 19 3.2 Vision and Culture .21 3.3 Organizational structure of PG Bank 23 3.4 Strategic Shareholders 24 3.4 Products and Services 25 3.4 Overview of Hanoi Card Centre 28 CHAPTER 4: CURRENT SITUATION OF CARD SERVICES AT PG BANK 30 4.1 Types and benefits of PG bank cards 30 4.2 Flexicard Issuing Procedure .32 4.3 Fees and Charges of Flexicard 33 4.4 Quality of Flexicard .37 4.5 Distribution and Promotion of Flexicard 37 4.6 The results of Card services of PG Bank in comparison with other banks 38 Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 CHAPTER SOLUTION TO EXPAND CARD SERVICES AT PETROLIMEX GROUP BANK 48 5.1 Overall assessment of card services at PG Bank 48 5.2 Solution to expand card services 52 5.2 Recommendations 55 CHAPTER 6: CONCLUSION 57 COMMENTS Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 ACKNOWLEDGEMENT It is a great pleasure for me to work with the report based on the topic “Solution to expand card services at Petrolimex Group Bank” which is very significant for economy I hope working on the topic will help me to gather various exposures to practical field So, at the very beginning, I would like to express my gratitude to several people who help me to complete this thesis First of all, I would like to thank National Economics University (NEU), especially Advanced Program, for providing much precious opportunities to know real nature of the banking activities through this internship Equally important, I am sincerely grateful for all the help and advice I received from my supervisor Assoc.Prof Dr Bui Huy Nhuong, Director of Advanced Educational Programs of National Economics University I appreciated all time and effort Mr Bui Huy Nhuong put into guiding and encouraging me during the time of marking this thesis Also, I sincerely thank all of the staff at Petrolimex Group Bank who gave me favorable conditions, helps and guidance in the days of internship at the bank Lastly, I would especially like to thank all my friends in Advanced Class Intake 50 for all their encouragement and intellectual support that has made this report possible Student Nguyen Viet Hai Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 ABBREVIATION PG Bank Petrolimex Group Bank ATM Automated Teller Machine POS Point of sale EDC Electronic Data Capture MOIT Ministry of Industry and Irade Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 LIST OF TABLES Table 4.1: Charges for Debit Cards 33 Table 4.2: Charges of withdrawal cash at the Petrolimex petrol stations 34 Table 4.3: Charges for Prepaid Cards 35 Table 4.4: Charges for Debit Cards of Commercial banks 36 Table 4.5: Market share of Total number of bank cards in 2011 39 Table 4.6: Market share of Total Used Turnover of bank cards n 2011 .41 Table 4.7: Market share of Total Payment Turnover of Domestic cards in 2011 .43 Table 4.8: Market share of ATMS and POSs in 2011 46 Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 LIST OF GRAPHS Graph 2.1: Process of issuing card Graph 2.2: Process of paying card Graph 2.3: 4Ps Marketing mix .15 Graph 3.1: Organizational Structure of PG Bank .23 Graph 3.2: Organizational Structure of Hanoi Card Centre .28 Graph 4.1: Total number and Market share of PG Bank Flexicards 38 Graph 4.2: Total Used Turnover & Market share of PG Bank Flexicards 40 Graph 4.3: Total Payment Turnover & Market share of Domestic bank cards 42 Graph 4.4: Total number of ATMs and POSs 44 Graph 4.5: Market share of PG Bank ATMs & POSs 45 Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 CHAPTER 1: INTRODUCTION 1.1 Rationale Bank cards payment comes from the purchase on credit of retail goods and the application of technology in banking While bank cards have played an important role in daily life of many people all over the world, especially in the developing countries by dint of their usage and convenience, that mean of payment is really attracted Vietnamese people and commercial banks in recent years Seeing the born of bank cards in 1995, facts show that bank cards services of Vietnam increase in services quality to satisfy customer needs Realizing the benefits of development in bank card services, Petrolimex Group Bank with their craft strategies has penetrated that new market in order to meet the customer needs It is undeniable that despite gaining much specific achievement, the bank card services of PG Bank still be inadequate in some circumstances in reality Being a collaborator of Retail Banking at PG Bank, I have experienced in their campaign of issuing cards That is the reason why I choose the topic “ Solution to expand card services at Petrolimex Group Bank ” for my internship report to understand the situation and find the solutions to improve the quality of card services as well as the competitive ability with other commercial banks Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 1.2 Research objective Through this research, I would like to  Study the basic overview of card services of PG Bank  Interpret and evaluate the real situation of card services quality of PG Bank  Propose the solutions to improve the quality of card services as well as the competitive ability of PG Bank with other commercial banks 1.3 Research questions  What is the current situation of card services at PG Bank?  What are the factors affecting card services at PG Bank?  What are the existing problems of card services at PG Bank?  What are solutions and recommendations should be carried on to overcome these existing problems and to expand card services at PG Bank? 1.4 Research methodology The methods I would like to use in this report are  Statistical method  Analytical method  Summary and comparative method 1.5 Scope of research All my research is about the development of card services of Petrolimex Group Bank during 2010 to 2011 Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 10 CHAPTER 2: THEORITICAL FRAMEWORK 2.1 Bank cards 2.1.1 Definition of bank cards Bank cards, the non-cash instrument, are issued by banks for customers A standard bank card must be required with its three dimensions 8.5cm x 5.5cm x 0.7cm The front of bank card needs to have bank trademark, bank logo, embossed card number and user name Equally important, magnetic stripe with encoded information and signature of user must be included at the back of bank card 2.1.2 Main types of bank cards Based on technical features, there are three types of bank cards: Embossed card, Magnetic card and Smart card All information is encoded in each type, but in different levels For instance, embossed card is no longer used because of low level of data security Whereas, magnetic card with the magnetic stripe for encoding is the most popular at the present, while smart card with all information encoded and secured by a microchip is modern with high level of data security Based on payment methods, bank cards are classified in three types: Debit card, Credit card and Prepaid card To specify, debit card allows drawing of funds up to the available balance in cardholder’s account By comparison, credit card allows drawing of funds up to an approved credit limit based on the prestige and payment ability of customers The last type is prepaid card, which is normal card without issuing procedure but limited numbers of money and time period Supervisor: Assoc.Prof Dr Bui Huy Nhuong Nguyen Viet Hai – Class: AF Intake 50 ... SOLUTION TO EXPAND CARD SERVICES AT PETROLIMEX GROUP BANK 48 5.1 Overall assessment of card services at PG Bank 48 5.2 Solution to expand card services 52 5.2 Recommendations... collaborator of Retail Banking at PG Bank, I have experienced in their campaign of issuing cards That is the reason why I choose the topic “ Solution to expand card services at Petrolimex Group Bank. .. card services at PG Bank?  What are the existing problems of card services at PG Bank?  What are solutions and recommendations should be carried on to overcome these existing problems and to