Upgrading the quality of customer services in agribank of vietnam,graduation thesis

STATE BANK OF VIETNAM BANKING ACADEMY FOREIGN LANGUAGE FACULTY - - GRADUATION THESIS UPGRADING THE QUALITY OF CUSTOMER SERVICES IN AGRIBANK OF VIETNAM STUDENT : NGUYEN THI THUY HANG SUPERVISOR : NGO TUNG ANH (MR), MA, MBA COURSE : 2012 - 2016 CLASS : K15-ATCA STUDENT’S CODE : 15A7510067 May, 2016 ii STATE BANK OF VIETNAM BANKING ACADEMY FOREIGN LANGUAGE FACULTY - - GRADUATION THESIS UPGRADING THE QUALITY OF CUSTOMER SERVICES IN AGRIBANK OF VIETNAM STUDENT : NGUYEN THI THUY HANG SUPERVISOR : NGO TUNG ANH (MR), MA, MBA COURSE : 2012 - 2016 CLASS : K15-ATCA STUDENT’S CODE : 15A7510067 May, 2016 i DECLARATION I hereby declare that this submission is my own work and that, to the best of my knowledge, it contains no material previously published by another person nor material which has been accepted for the award of any other degree of the University, except where due acknowledgement has been made in the text ii ACKNOWLEDGEMENTS This graduation thesis was written in part fulfillment of the English For Finance and Banking program at the division of Foreign Languages, Banking Academy Of Vietnam First of all, I would like to express my sincere gratitude to my supervisor, Mr Ngo Tung Anh, for his enthusiastic guidance and valuable advices during the whole process of the thesis writing Additionally, I sincerely express my gratitude to all of lecturers of Foreign Language Faculty at Banking Academy for shedding the light to my study path at Banking Academy Unforgettable thanks will go to my parents for the love, affection, and support; they have extended me every step of my life iii ABSTRACT Banking is a service based industry, which means that their most crucial factor is customer service, since most of their operational activities involve serving and interacting directly with customers The success of a bank depends mostly on the experiences that bank‟s employees create for customers These experiences leave a meaningful and powerful impression; therefore, differentiation in this area could determine a bank‟s survival and profitability The thesis was, therefore, performed to study on the quality of customer service provided by Agribank in general and Aribank East Branch of Hanoi in particular Roughly one hundred respondents who experienced interactions with the Big Four Banks of Vietnam were chosen to participate in this study They were encouraged to respond online questionnaires and expressed their comments regarding the quality of customer service The results has shown that Agirbank received the most negative feedbacks of customer The thesis has analyzed data and information the main products provided in Aribank East Branch of Hanoi and illustrated the merits and demerits of each products Additionally, though conducting research and using the combinations of dialectical materialism method, historical materialism method, statistical method, financial analysis method, inductive method, the thesis has suggested some feasible solutions and recommendations for the current situation iv TABLE OF CONTENTS DECLARATION i ACKNOWLEDGEMENTS ii ABSTRACT iii TABLE OF CONTENTS iv LIST OF TABLES AND FIGURES vii LIST OF ABBREVIATIONS viii PART A: INTRODUCTION 1 RATIONALE TO THE RESEARCH OBJECTIVES OF THE STUDY 2.1 General Objectives 2.2 Specific Objectives SCOPE OF THE STUDY METHODOLOGY OF THE STUDY SIGNIFICANCE OF THE STUDY STRUCTURAL ORGANIZATION OF THE STUDY PART B: DEVELOPMENT CHAPTER 1: THEORETICAL BACKGROUND 1.1 Definition 1.1.1 The concept of commercial bank 1.1.2 The concept of customer services v 1.2 The aspects studied by the thesis 11 1.2.1 The psychology of customers when choosing commercial banks’ services 11 1.2.2 1.3 Benefits of customer services 13 Other similar studies and their focus 14 1.4 Summary 18 CHAPTER 2: THE REALITY OF CUSTOMER SERVICES 20 2.1 In Viet Nam 20 2.2 In Agribank and Its East Branch of Hanoi 21 2.2.1 In Agribank 21 2.2.2 In Agribank East Branch of Hanoi 22 2.3 Summary 29 CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS TO 31 3.1 Economic development orientation of Agribank 31 3.1.1 The development strategy of Agribank 31 3.1.2 The development orientation of Agribank 32 3.1.3 The credit activities orientation of Agribank 33 3.2 Solutions and recommendations to upgrading the customer services in Agribank Eastern Branch of Hanoi 35 3.2.1 The strategy to develop and strengthen customer base 35 3.2.2 Enhancing staff’s professional competence 36 3.2.3 Creating convenient products and services for customers 36 3.2.4 Applying successful methods of other world banks 37 vi 3.2.5 Determining the relationship between banks and customers 38 3.2.6 Understanding customer’s requirements and satisfactions 39 3.2.7 Upgrading the technological system and product stability 39 3.2.8 Offering knowledge to customers 40 3.2.9 Providing Immediate Support 40 3.3 Summary 41 PART C: CONCLUSION 43 Recapitulations and concluding remarks 43 Implications of the thesis 47 Limitations and proposals for further study 48 REFERENCES 49 vii LIST OF TABLES AND FIGURES List Of Tables Table 1.1: Two views of customer service – Source: Disend 1991, p 19 Table 2.1: International payment and currency exchange trading in 23 2014 and 2015 – Source: Agribank East Branch of Hanoi Table 2.2: The quantity of customers opening cards (counted until 25 2015) – Source: Agribank East Branch Of Hanoi List of Figures Figure 2.1: The factors mattering most to customer, Source: Pega 20 survey, November 2015 Figure 2.2: Customers feedbacks among The Big Four Banks of Viet Nam - Source: Online questionnaire conducted by researcher 22 viii LIST OF ABBREVIATIONS WB World Bank Agribank Vietnamese Agriculture and Rural Development Bank Vietcombank Vietnamese Commercial Bank BIDV Vietnamese Commercial Bank for Investment and Development Vietinbank Vietnamese Industry and Trade Bank CEO Chief Executive Officer ATM Automatic Teller Machine USD United State Dollar VND Vietnamese Dong 35 3.2 Solutions and recommendations to upgrading the customer services in Agribank Eastern Branch of Hanoi Banks have to set up a customer services system in order to provide them with the best and the most satisfactory services during any periods of transaction This system will help bank find it easier to take care of customers, enhance customer services, upgrade the relationship between banks and customers Only when banks can create a good customer services, banks will easily build their reputation and customers will firm their belief in them This will contribute to an expected revenue and position in market To fulfill this task, we need some practical solution to tackle with the current situation 3.2.1 The strategy to develop and strengthen customer base First and foremost, we need to attract customers to use our services Agribank has set up and rolled out some sollutions to all of branches, however, Agribank Eastern Branch of Hanoi needs to find out other specific and practical ones that are suitable to current situation in there Firstly, we need to vary our products and services and focus on our main ones For example, bank should invest in installing more modern ATMs that allow customers to receive their deposits immediately Secondly, we have to find out the best developing customers strategy Agribank Eastern Branch of Hanoi should expand the marketing campaign to potential and current customers Besides, bank needs to investigate some developing areas such as Thanh Xuân, Đống Đa to find out the most suitable marketing strategy 36 3.2.2 Enhancing staff’s professional competence The most important element in upgrading customer services is human, therefore, the quality of staff should be considered as the initial criteria  Employ staff strictly according to the requirements of government Focus both on their intensive training course at university and their own experiences related to banking and communication  Check staff‟s language ability, computer skills, communication skills  Retraining current staff, encourage them to follow self study schedule, and support each other to enhance professional competence  Strict assessments should be applied to all of tasks Fair reward and fair punishment  Appoint staff to survey, investigate and inquire experiences from other domestic and foreign companies  Have attracting talent policies that provide them with the best treatment policy, reward policy and professional working environment 3.2.3 Creating convenient products and services for customers Firstly, we need to enhance the facilities of private accounts and credit cards This can be done by installing more ATM at populous areas, colleges and universities, supermarket zone, new urban areas, large corporations Besides, banks need to vary acceptable places for credit cards Secondly, we need to create detail plan for the development of attracting foreign currency savings such as accumulation savings and installment savings 37 3.2.4 Applying successful methods of other world banks Customers are the targets of any businesses, bank is not an exception Banks not only want to maximize their profits but also want to bring benefits to customers Some big banks such as Citibank and Chifonbank are successful in maintaining a great number of customers depositing as well as borrowing money These banks often concentrate on keeping the good relationship with customers by providing a good customer service Chifon Bank not only supports their customers by allowing them to deposit or borrow money but also help them to quickly payback, deal with capital demand, meet all customers‟ need by their professional, accurate, in time payment on account system Citibank has invested in customer services by demonstrating that they will play an important role in supporting and assisting to the development of enterprises Citibank has enlarged and expanded their services such as making receipts and payments for customers and Charly Kerson securities According to Europe‟s security experts, if banks can not immediately meet customers‟ needs, or have too many complicated procedures, unprofessional attitude toward customers, they will gradually lose their frequent customers ABQ is a well-known bank in China, their target customers are those who have quite low income Commencing with 10,000 USD of charter capital, ABQ then promptly developed and supported the poor to struggle with their financial difficulties ABQ has set up an organization for the poor to borrowing money To have the allowance to participate in, each individual has to put $5-$7 as a deposit and they can borrow fivefold this deposit amount Banks will not charge them any 38 interests, they just charge 30/0 for operation expenses This money will be used for the establishment of organization that supports the ones who not meet the requirement to join ABQ The kindness and enthusiasm are all about ABQ Their staff not wait for customers in the offices, they go directly to customers‟ addresses to meet and persuade them instead High quality of services combining with their kindness help them to strengthen their position in the market and become one of the most well-known bank in China The surprising development of ABQ is an evidence for the fact that capital is not the decisive element for the success of bank The most crucial factor is that bank‟s development orientation and the quality of services The right attitude toward customers is demonstrated by the ability to satisfy them Wood Forest National Bank in Southwest Region ranked first in customer services - a reward of J.D Power and Associates 2007 When be asked about their keys to success, they said it was based on six elements: transactions, account opening, declaration forms, conveniences, fees, and customer services 3.2.5 Determining the relationship between banks and customers Customer services are a determining element for the banks‟ prosperity and the best way to upgrade customer services is building the relationship between banks and customers If there is any flaw in taking care of customers, bank‟s reputation and image will rapidly be ruined An excellent customer service will result in a good customer base - a large number of frequent customers, it then increases profits If we can raise the number of these customers, we can save money on marketing and advertisements It will also contribute to a high reputation and an impressive image 39 3.2.6 Understanding customer’s requirements and satisfactions  The requirements The customers‟ requirements often are good products and services, friendly and caring attitudes Besides, they want to be heard, to raise their own voices, and to receive supplemental services Their requirements are uncountable If we can satisfy them, they will be a loyal one The belief is the most crucial factor to build up a long term relationship with customers “Customers are banks‟ universe” is a modern pattern, we should focus on customers instead of products as usual since many banks can offer customers with the same products  The satisfactions Conducting investigation is a good way that banks should take into consideration By doing this, banks can acknowledge the requirements of customers and whether they are satisfying or not with current products and services As a result, banks can gradually enhance their services by eliminating elements leading to negative customers‟ feedbacks By asking for their opinions after using services, creating a suggestion box, banks can easily know the satisfaction levels of customers 3.2.7 Upgrading the technological system and product stability By conducting distance training from other foreign banks, banks can enhance staff‟s ability in technology If they can use computer and high technological tools themselves effectively, they can increase productivity dramatically Additionally, banks should invest more on technological systems since it will help banks to save time and money For example, a queue machine will help banks to 40 number customers, then banks‟ staff not need to directly deliver them an order number, they can other tasks instead A good technological system also contributes significantly to the stability of products For example, if we have an excellent transmission line, we can tackle with the disconnecting errors that usually happen at ATMs Customers will not assess banks basing on their feeling after the first transaction, they will rely on the long term usage result instead Therefore, enhancing product stability is also good method to narrow down the path to customers‟ belief 3.2.8 Offering knowledge to customers Building strong relationships with our customers is crucial, however we also need to offer and provide them with knowledge When we‟re speaking with customers, we spend the majority of time talking about the bank itself, demands in the market, and the customer‟s requirements Afterward, we are able to negotiate a deal 3.2.9 Providing Immediate Support For customers who interact with this department via e-mail or phone should also be treated professionally The representatives should provide prompt reply in resolving their issues They should use proper language and ensure the customers understand the content of the e-mail Phone calls should be answered within the first few rings and it should be transferred to person who can resolve the issue In conclusion, providing exceptional customer service in banking industry is crucial, helping to attract and retain customers in a competitive environment As technology development soars dramatically and customer-buying habits shift, 41 banks must be constantly looking for areas of innovation and ways to meet the demands of a 21st-century customer base Besides, banks should know how to interact professionally with the customer In addition, banks must also have product knowledge to ensure customers receive proper information Agribank Eastern Branch of Hanoi also needs to improve the facilities and the service attitude needs to be changed Customers need a comfortable environment and priority should be given to older citizen and disabled people In addition, they need to review all the procedures and eliminate unnecessary ones to expedite the process All the important information the customer needs to have should be readily available anytime The department could provide more handouts, posters, pamphlet, etc for customers 3.3 Summary Both solutions and recommendations for Agibank in general and for Agribank East Branch of Hanoi in particular have been suggested in this chapter Regarding Agibank, the thesis has depicted some development strategies either about market orientation and processing method Besides, the general aims and specific aims have also been given in order to enhance bank‟s customer services Furthermore, the credit activities which contain numerous specific objectives for bank have also been analyzed in this part Turning to Agribank East Branch of Vietnam, the thesis has concentrated on providing bank with some practical solutions to tackle with current situation The strategy to develop and strengthen customer base Enhancing staff‟s professional competence 42 Creating convenient products and services for customers Applying successful methods of other world banks Determining the relationship between banks and customers Understanding customer‟s requirements and satisfactions Upgrading the technological system and product stability Offering knowledge to customers 43 PART C: CONCLUSION Recapitulations and concluding remarks Other similar studies related to customer service quality might have been accomplished by other researchers However this study definitely has its own uniqueness and is different in some areas This study itself could be a mirror for Agribank Eastern Branch of Hanoi to know their current level of customer service quality This study indicates the concepts of commercial bank, customers, and customer services though many aspects of views Additionally, the psychology of customers is analyzed to contribute to the development of bank‟s awareness about customers Significant benefits of customer services are also illustrated in order to demonstrate the importance and significant influence it can make on banks Additionally, I have also conducted a survey by sending out an online questionnaire to make a comparison between the Big Four Banks of Viet Nam about customers‟ feedbacks The fact that Agribank is the one receiving the highest number of negative feedbacks has demonstrated that enhancing customer services should be the first priority target The thesis focuses on investigating Agribank Eastern Branch of Hanoi where the researcher has chance to the internship The actual numbers and figures are collected to analyze under the permission of bank International payment and currency exchange trading, automatic bank utilities are two main services used frequently by customers; therefore, the thesis concentrates on these services 44 On the one hand, the thesis has demonstrated the shortcomings and its reasons so as to find out the best solution to tackle with current struggle  Shortcomings The quality of products is not as excellent as that of other top banks in Hanoi Customers are living in the world of choices In the market economy, many different banks offer customers the same products Therefore, if Agibank does not have an outstanding quality, it is more difficult to attract customers At first, it is products that attract customers, and later on, customer services build up a long term relationship The staff‟s manipulation and professional competence are not vocational The most crucial element that determines a success of any business is human Agibank‟s staff are not extremely friendly, sociable, and enthusiastic to customers Additionally, their communication skills and ability in persuading customers are not good enough The competitive ability is quite weak This shortcoming is caused by numerous factors Although Agribank is among the most famous banks in Viet Nam, evidences have shown that Argibank fall behind other banks in term of customer services The stability of product‟s quality has just reached average level The connection of E-banking system and ATMs machines are not stable 45  Reasons The knowledge and awareness of developing and upgrading customer services are not well-known and familiar The mindset of many staff is the most crucial factor being products‟ quality As a result, they are not aware of the importance of customer services Besides, staff are trained about banking related skills in stead of soft skills to communicate efficiently with customers The difficulties in changing staff‟s attitudes and behaviors As the aforementioned mindset has shaped from their early stages, it is extremely challenging to make a difference The inconvenience of transaction offices For instance, many offices are overloading because of an exceeding number of customers Customers not have waiting room and they have to stand up during their wait The low technological ability Technological ability, especially computer skills of staff, is not very good Therefore, they find it difficult to take advantage of technology to save time and increase productivity as well The time-consuming and complicating process in conducting projects Other things giving a negative impact were insufficient number of transaction offices opened, too many unnecessary procedures, bureaucracy, and slow response time 46 On the other hand, the thesis has also suggested about how to improve the quality of Customer Service The orientation for both Agribank in general and Agribank Eastern Branch of Hanoi is both recommended in the thesis  In case of Agribank The thesis depicts development strategy, development orientation, and credit activities for Agribank This study also suggests some solutions to achieve and fulfill the tasks To sum up, Agribank should enlarge the economic scale, focus on both rural and urban areas, be aware of centralized investment, vary the products and services and upgrading the quality of current ones  In case of Agribank Eastern Branch of Hanoi Developing and strengthening customer base Initially, Agribank Eastern Branch of Hanoi needs to invest in creating new products and services as well as upgrading the previous one Furthermore, we need to investigate the current market demand to have proper strategy Enhancing staff‟s professional competence Distance training, in-offices training, intensive training have to be applied to all of staff It is not only in banking related skills but also in communication skills, technological skills, teamwork skills, and so on Creating convenient products and services for customers 47 Eliminating unnecessary process to save time for customers, provide them with many functional tools to check their balances, transactions themselves such as application on their cellphone Applying successful methods of other world banks The thesis has demonstrated the importance of customer services through many evidences of large banks in the world Determining the relationship between banks and customers Customers have numerous choices in choosing a bank while banks can not survive without customers Therefore, bank‟s staff should be aware of this fact and have right attitude toward customers Understanding customer‟s requirements and satisfactions Six main requirements of customer are analyzed in Chapter 2, bank should conduct a survey to understand properly about customers‟ demands and satisfactions Upgrading the technological system and the stability of products High-tech machines can help banks save time, increase productivity and maximize profit Additionally, it also contributes greatly to the product stability Implications of the thesis The main purpose of the thesis is to gain a better understanding of the customer services and aim to demonstrate some recommendations and solutions to upgrading customer services for Agribank By investigating and analyzing the figure and number of the two main products of Agribank Eastern Branch of Hanoi, the thesis has provided bank with a general 48 view about their pros and cons Some feasible solutions and recommendations have been made to help Agribank tackle with current difficulties The outcome of the study will be useful for Agribank to enhancing customer services Limitations and proposals for further study With the development of banking industry, some areas which are not covered in this study are interesting and need to be explored In addition, the limitation and shortcoming of this study also provide implications for the further research Future research could make several extensions of the current study The future research needs to be enhanced and validated by using more diversified random customers since the main limitation for quantitative data collection that restricts the development of the findings is the small scale of samples Therefore, a greater number of samples might give a more reliable and different finding a larger sample size should not effect the conclusions drawn from this research Finally, since the time limitation, the thesis conducted in Agribank could not investigate all of the products and services, the future research can be conducted in others and a different picture might be offered 49 REFERENCES Cook, S (2002) Customer Care Excellence: How to Create an Effective Customer Focus Cook, S (2004) Measuring Customer Service Effectiveness Vermont: Gower Publishing Dean, A., & Terziovski, M (2000) Quality practices and customer/supplier management in Australian service organizations: Untapped potential Working Paper Series: Monash University Department of Management Disend, J E (1991) How to Provide Excellent Service in Any Organization Pensylvania: Chilton Book Company Vietnamese Law Amending and Supplementing A Number of Articles of The Law on Credit Institutions (No 20/2004/QH11) http://moj.gov.vn/vbpq/en/lists/vn%20bn%20php%20lut/view_detail.aspx? itemid=7851 Ward, S (2008) Rules for Good Customer Service Retrieved May 25, 2008, from http://sbinfocanada.about.com/od/customerservice/a/custservrules.htm67 Wikipedia 2007 Customer Service Retrieved March 3, 2008, from http://en.wikipedia.org/wiki/Customer_service