Thesis Title:Improving customer service quality management at Tien Phong
Commercial Joint Stock Bank - TPBankPages: 81
University：International school - Vietnam national university, Hanoi
Graduate School：Master in financial management
Graduate Student:Nguyen Thi Hong
Your advisor‟s name: Dr.Nguyen Thi Hong Hanh
The study aims to improve customer service at TPBank's Live Bank by evaluating service quality across five key factors: tangibles, reliability, responsiveness, staff quality, and ease of use Data was collected from 140 Live Bank customers, who assessed various aspects of customer service quality, along with their overall satisfaction and loyalty.
The author presented 11 hypotheses to validate the impact of five key factors on customer satisfaction and loyalty, while also examining how customer satisfaction influences customer loyalty.
The study reveals that five key factors account for 45.6% of the variance in customer satisfaction and 55.1% in customer loyalty through multiple linear regression analysis While all five factors positively and significantly influence customer satisfaction, reliability and ease of use do not significantly affect customer loyalty.
CHAPTER 2: Literature Review
Chapter 2 Literature Review 2.1 Customer service
Customer service is an organizational process aimed at achieving customer satisfaction and operational efficiency By engaging in customer service activities, service providers seek to attract entrepreneurial opportunities, boost profits, enhance market accessibility, and foster customer loyalty It is crucial for firms to ensure that customers understand the efficiency of their products and services, as this understanding is key to building customer trust.
2017) Herein, customer service aims to bring better customer experience with service encounters (Becker & Jaakkola, 2020)
In the banking and finance industry, effective customer service is crucial for maximizing customer satisfaction As highlighted by Kanwal & Yousaf (2019), integrating service innovation with customer value creation is essential To enhance customer convenience and drive profitability, banks must implement simplified, standardized, and technology-driven customer service processes (Amoako, 2012) Additionally, reducing waiting times by streamlining customer service procedures is vital for achieving higher levels of customer satisfaction (Sakwa & Oloko).
In 2014, it was highlighted that banks must implement effective marketing communication strategies to enhance customer service performance (Zephaniah et al., 2020) Recently, the adoption of new technologies, particularly digital banking services, has significantly transformed how banks interact with their customers (Mbama).
In 2018, technological innovations like artificial intelligence, machine learning, and cloud computing have enabled banks to effectively anticipate and respond to customer needs and issues, thereby improving customer interactions (Okoye et al., 2019).
Service quality, conceptualized since the 1980s by Parasuraman et al (1985, 1988), is defined as the difference between customer expectations and their perceived service performance This definition highlights that service quality is fundamentally based on customers' prior experiences and their perceptions of the service provided.
Service quality is defined by its ability to meet customer expectations (Wang et al., 2020) Customers assess service quality based on the performance and distinct advantages of the services compared to alternatives (Setiawan et al., 2020) This evaluation is primarily conducted through customer self-assessment (Albari, 2020) Ultimately, high service quality is closely linked to increased customer satisfaction (Prakash & Mohanty).
Achieving exceptional service quality offers numerous advantages for service providers, as it directly correlates with enhanced business performance; the higher the service quality, the greater the performance outcomes for firms.
Research by Akroush & Khatib (2009) demonstrated that service quality dimensions significantly impact financial performance, customer indicators, and overall banking performance Additionally, the influence of service quality on business performance is further highlighted by its effects on customer satisfaction and loyalty For example, Afthanorhan et al (2019) found that a one-unit increase in service quality resulted in a 0.619 unit increase in customer satisfaction, underscoring the positive relationship between service quality and customer perceptions.
Numerous studies have highlighted the significant impact of service quality on customer satisfaction across various industries, particularly in banking and finance Khatab et al (2019) demonstrated a positive correlation between service quality and customer satisfaction in both private and public banks in Iraq Similarly, research by Pakurár et al (2019) involving 825 banking customers in Jordan confirmed this positive influence Raza et al (2020) also identified a notable impact of service quality on customer satisfaction within Islamic banking services Furthermore, superior service quality fosters customer loyalty, as evidenced by Boonlertvanich (2019), who found a strong association between service quality and both behavioral and attitudinal loyalty among customers of a major commercial bank in Thailand Additionally, Omoregie et al (2018) provided further support for this relationship, revealing a significant positive impact of service quality on customer loyalty among 565 customers of leading banks in Ghana.
2.3 Factors of customer servicequality affecting customer satisfaction and customer loyalty in banking services
Parasuraman et al (1985, 1988) introduced a model for measuring customer service quality based on five key dimensions: tangibles, reliability, responsiveness, assurance, and empathy This study aims to apply this model, discussing the definitions and impacts of each service quality dimension From this analysis, relevant hypotheses are formulated, grounded in prior empirical evidence that explores the relationship between service quality dimensions and customer satisfaction and loyalty within the banking sector.
Tangibles, which encompass physical assets such as machinery, tools, and equipment, are vital resources in the service sector (Kamasak, 2017) They play a crucial role in service production and delivery (Schürnsleben, 2019), providing direct sensory experiences—such as taste and smell—and perceived functional values like utility and economic worth (Quest, 2019) According to Parasuraman et al (1985), tangibles are a key dimension of service quality, defined as the physical evidence of a service, including the facilities, tools, and equipment used in delivery, as well as the appearance of service personnel.
Research has consistently demonstrated the positive impact of tangibles on customer loyalty within the banking and finance sector Liu & Wang (2017) revealed through a study of 250 bank customers in Taiwan that tangibles significantly enhance customer loyalty Similarly, Leninkumar (2016) provided empirical evidence from 300 customers of major Sri Lankan banks, confirming a strong link between tangibles and customer loyalty Siddiqui (2011) also supported this finding, noting a robust correlation in a study of 100 retail banking customers in Bangladesh Furthermore, the influence of tangibles extends to customer satisfaction, as evidenced by Rahman et al (2017), who found a significant positive effect on customer satisfaction with mobile banking services.
A study conducted in 2018 revealed that tangible elements have a significant and positive impact on customer satisfaction within the banking industry Furthermore, it was established that customer satisfaction plays a crucial mediating role in the relationship between tangibles and customer loyalty.
In their 2014 study, Khan and Fasih examined a dataset of 270 banking customers, revealing the significance of physical banking kiosks in enhancing customer interaction TPBank's introduction of Live Bank aimed to improve customer satisfaction and loyalty by providing tangible evidence of its services Based on these insights, two initial hypotheses have been proposed to further explore this relationship.
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
Reliability of a service refers to a firm's ability to deliver promised services consistently and accurately, as emphasized by Parasuraman et al (1985) and Kheng et al (2010) A service is deemed reliable when the provider fulfills commitments and implements dependable operational practices (Dawi, 2016) This aspect is crucial in customer service, as clients expect services to be executed without errors, within agreed timelines, and with effective solutions to their issues (Agbor, 2011; Kobbekaduwa et al., 2019).
CHAPTER 4: Research Results 1 Overview of TPBank 34
Duties: comply with working time, ensure the safety of the engine room, actively welcome customers and consciously preserve the image of the engine room
Communicating - dealing with customers: polite, respectful, friendly, enthusiastic
4.2.1 Tangibles of Live Bank of TPBank
At first, the author conducts the frequency and the descriptive statistics for three variables of the tangibles of Live Bank of TPBank Obtained result is presented below:
Table 4.26: Evaluation of tangibles of Live Bank of TPBank
Variables Description Mean SD D N A SA
The assets used in TPBank‟s Live Bank are visually appealing
TPBank‟s Live Bank services are delivered with up- to-date technological equipment
The statement issued by TPBank‟s Live Bank is visually clear
SD: Strongly Disagree; D: Disagree; N: Neutral; A: Agree; SA: Strongly Agree
A recent survey revealed that 18.5% of customers expressed strong disagreement or disagreement regarding the visual appeal of Live Bank assets, while 42.1% maintained a neutral stance Conversely, 39.3% of respondents showed strong agreement or agreement with the visual appeal of the assets.
39 overall, the mean score for this item is 3.24 which is not so high and not so low score
The study evaluates the technological advancements of Live Bank, revealing that only 25 respondents disagreed with the statement regarding its equipment, while 62 respondents expressed strong agreement Additionally, 53 participants provided a neutral response The significant number of neutral assessments resulted in a mean score of 3.34, indicating a moderate perception of Live Bank's technological capabilities.
The quality of the banking statement provided at the Live Bank counter after a transaction is a crucial aspect of customer experience Among the respondents, 26 expressed strong disagreement or disagreement, while 60 remained neutral, and 54 indicated strong agreement or agreement with this statement The mean score for this item was 3.29, reflecting a moderate perception of statement quality among customers.
The average scores for TAN1, TAN2, and TAN3 are 3.24, 3.34, and 3.29, indicating that respondents displayed a neutral stance towards the statements regarding Live Bank's tangible aspects.
The author suggests that respondents might overlook the quality of tangible assets utilized at Live Bank counters, indicating that the bank's tangible asset quality may only meet standard levels, which could fail to impress customers.
4.2.2 Reliability factor of Live Bank of TPBank
Then, the respondents perform the frequency analysis and the descriptive statistics analysis for the reliability factor of Live Bank Obtained result is presented as below:
Table 4.27: Evaluation of reliability of Live Bank of TPBank
Variables Description Mean SD D N A SA
40 well-recovered from the errors
I satisfied with the problem handling in TPBank‟s Live
Bank operates well in 24 hours per day
SD: Strongly Disagree; D: Disagree; N: Neutral; A: Agree; SA: Strongly
According to survey data, the reliability of Live Bank services is significantly influenced by their error recovery processes The survey revealed that 26 respondents strongly disagreed or disagreed with the effectiveness of these services, while 63 had a neutral stance, and 61 respondents expressed strong agreement or agreement The mean score for this aspect was calculated at 3.36, indicating a moderate perception of reliability among users.
The reliability of Live Bank services is significantly influenced by how issues are addressed, with 53 respondents expressing strong agreement or agreement regarding the handling of problems, while 17 strongly disagreed or disagreed Additionally, 70 respondents remained neutral in their assessment, resulting in a mean value of 3.34 for this aspect of reliability.
The reliability of Live Bank is highlighted by its ability to facilitate banking transactions 24 hours a day Designed for customer convenience, Live Bank aims to provide round-the-clock service However, feedback from 24 respondents indicates some disagreement regarding the effectiveness of its 24-hour operation.
The survey results indicate that many respondents may lack familiarity with Live Bank's service characteristics, as evidenced by their feedback Specifically, 74 respondents expressed strong agreement or agreement with the statement regarding Live Bank, while 42 provided neutral assessments The mean score for this variable stands at 3.56, reflecting a relatively high level of reliability compared to other variables assessed.
The respondents recognize the advantages of Live Bank services, particularly the convenience of conducting banking transactions at any time However, there is a need for improvement in system recovery after errors and the quality of problem handling, which is currently only at an adequate level.
4.2.3 Responsiveness of Live Bank of TPBank
The responsiveness of Live Bank services is put into the frequency and the descriptive statistics analysis Obtained result is presented as below:
Table 4.28: Evaluation of responsiveness of Live Bank of TPBank
Variables Description Mean SD D N A SA
Bank has response servicing time
Bank has short turn-around time
The time to resolve my problem in
SD: Strongly Disagree; D: Disagree; N: Neutral; A: Agree; SA: Strongly Agree
Service time is a critical factor in determining the success of a service A recent survey revealed that 63 respondents either strongly agreed or agreed that the servicing time of Live Bank is responsive, while 25 expressed strong disagreement or disagreement Additionally, 52 respondents remained neutral in their assessment The mean score for this variable was calculated at 3.30, indicating a moderate perception of service responsiveness.
The author assesses the turn-around time of Live Bank, finding a mean score of 3.23, which indicates a normal performance level Additionally, the survey results reveal a range of responses, with some respondents strongly disagreeing and others agreeing on the efficiency of the turn-around time.
26 while 63 others neutralized with this statement and 51 remaining persons strongly agreed and agreed
The final factor influencing service responsiveness is the time taken to resolve customer issues Out of the respondents, 36 expressed strong disagreement or disagreement, while 50 showed strong agreement or agreement Additionally, 54 respondents maintained a neutral stance The mean score for this variable is 3.09.
The overall mean scores for the responsiveness levels of Live Bank's services are relatively low, indicating that the bank's service responsiveness is merely at an adequate level To enhance customer satisfaction, it is essential for Live Bank to focus on improving service responsiveness and to identify key areas for improvement.
4.2.4 Staff quality of Live Bank of TPBank
The staff quality of Live Bank is analyzed in this section Obtained result is presented as below:
Table 4.29: Evaluation of staff quality of Live Bank of TPBank
Variables Description Mean SD D N A SA
Bank services to me best interest at heart
The employees provide promptly notice in case of operational errors
The employees help me to get out of problem quickly
SD: Strongly Disagree; D: Disagree; N: Neutral; A: Agree; SA: Strongly
A recent survey conducted among Live Bank employees highlights their commitment to serving customers with their best interests in mind The results indicate that 19 respondents selected "Strongly Disagree" or "Disagree," while a significant 57 participants expressed a more favorable view.
CHAPTER 5: Conclusion and Recommendation 1 Conclusion 61
Customers using TPBank Live Bank services may encounter minor issues, which could lead them to overlook these errors and seek assistance at different TPBank Live Bank counters for their banking needs.
The ease of use of TPBank's LiveBank services has not significantly impacted customer loyalty, as clients prioritize other factors such as service convenience and the level of support provided by the bank Furthermore, clear instructions during transactions at the LiveBank counter diminish the importance of the ease of use, leading customers to focus on more critical aspects of their banking experience.
To improve the quality of tangible assets at the Live Bank counter, TPBank should ensure that both the internal and external environments are clean and aligned with the bank's brand identity Regular diagnostics of machines and equipment are essential to guarantee their optimal functioning, and any outdated devices should be replaced with new ones Additionally, positioning the Live Bank counter in high-traffic areas, such as downtown locations, will help attract more customers.
TPBank needs to enhance the reliability of its services by developing a comprehensive business continuity plan that includes Live Bank services This plan should be established this year to ensure seamless operations during any significant disruptions Additionally, the bank should analyze the problem handling processes at Live Bank counters by collecting relevant data, which will be evaluated by the customer service department to identify the root causes of issues.
By analyzing customer service data, the bank can determine the average time taken to resolve customer issues This insight allows the bank to propose solutions aimed at reducing handling times, such as implementing automated customer service processes.
TPBank should enhance its system responsiveness quantitatively by regularly updating its network capacity information, particularly for Live Bank services Currently, there is no dedicated team to analyze this data or provide support during prolonged network outages To improve transaction speed, it is recommended that TPBank assesses and upgrades its system components, including CPU and RAM.
TPBank should prioritize enhancing the quality of staff dedicated to Live Bank services by developing a comprehensive staff quality checklist Employees must meet specific criteria, including professional appearance, knowledge, positive attitude, and emotional intelligence, before serving customers To further improve staff performance, the bank should implement a performance-based pay and bonus system linked to customer evaluations following service interactions Additionally, TPBank must focus on ensuring that Live Bank services are user-friendly and accessible for all customers.
The bank has focused on improving its user interface through research and development; however, it has not adequately assessed customer demand and perceptions of usefulness across various regions Customers in major cities like Hanoi and Ho Chi Minh City may have distinct user interface needs compared to those in rural areas, where users might require more detailed guidance for transactions To enhance customer support, the bank should consider assigning at least one employee to assist clients at new Live Bank counters, particularly in less urbanized locations.
66 developed regions where the customers‟ information technology knowledge is still limited
To enhance customer loyalty, the bank should incorporate Live Bank services into its overall loyalty program Customers utilizing the bank's services should be introduced to Live Bank services at no cost The loyalty program must allow customers using Live Bank services to accumulate loyalty points for future rewards To further boost loyalty among Live Bank users, TPBank could consider increasing the loyalty score for transactions conducted at Live Bank counters.
The study's primary limitation lies in its reliance solely on quantitative assessment, lacking in-depth interviews with customers and bank managers to gain a deeper understanding of the Live Bank service and customer perceptions Additionally, the data collection method, which involved hand-distributed surveys, raises concerns about the accuracy of respondents' assessments Furthermore, data was only gathered from Live Bank customers at the bank's headquarters, potentially leading to data concentration and limiting the diversity of insights from other geographical locations Future researchers should consider employing qualitative methods, such as in-depth interviews, and expanding their data collection locations to enhance the richness and reliability of their findings.
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