INTRODUCTION
Background
International integration has created both opportunities and challenges for banking service providers in Vietnam Organizations must navigate intense competition from foreign banks, which possess robust financial resources and extensive experience in modern banking service development.
In 2012, Vietnam's population was estimated at 89 million, with rising income and education levels; however, only 20% of citizens utilized banking services, highlighting the country's potential for retail banking growth Amidst competitive pressures and rapid technological advancements, commercial banks are increasingly focusing on modernization and leveraging scientific innovations to tap into the retail banking market.
Asia Commercial Bank (ACB) is adapting to the essential trend of enhancing retail banking services by focusing on diverse, professional, and convenient products tailored to meet customer needs The bank aims to establish a high-quality, safe, and economically efficient retail banking system to satisfy the growing demand for banking services and to compete effectively with other commercial banks ACB is expanding its network, diversifying its retail offerings, and improving service quality to position itself as a leading retail bank in Vietnam, aligning its services with regional standards Additionally, ACB is gradually boosting its competitiveness and reputation in the international financial market.
This article focuses on evaluating the quality of retail banking services at Asia Commercial Bank (ACB) and suggests measures to enhance service quality, ultimately aiming to boost customer satisfaction The research is titled “Improving the Quality of Retail Banking Services in Asia Commercial Bank.”
Objectives
The thesis aims at evaluating the actual quality of retail banking services and proposing some solutions to improve the quality of retail banking services in Asia Commercial bank.
Research questions
The discussed problem will answer the following questions:
What are RBS and their roles?
Why the quality of RBS should be enhanced?
How was the performance of RBS in ACB from 2009 to 2012?
What were achievements an limitations of the bank over that period?
What solutions should be proposed to promote the quality of RBS of the bank?
Scope
Currently, commercial banks, particularly ACB, provide a diverse array of retail banking services This thesis will focus specifically on five key retail services offered by ACB, including fund mobilization services.
Lending services, Card services, Settlement services and E-banking services.
Methodology
To find out the performance of retail services in ACB over the period 2009 –
In 2012, secondary data, including financial reports, annual reports, bank introductions, and online information, was utilized to analyze the factors influencing the retail performance of the bank Subsequently, potential solutions for enhancing this performance were proposed.
Disposition
Chapter 3: Retail banking services in Asia Commercial Bank
Chapter 4: Solutions to improve the quality of retail banking services in Asia Commercial Bank.
THEORETICAL FRAMEWORK
Definition of retail banking services
Depending on different points of view and approaches, there are now some concepts of “Retail banking services” (RBS):
Economists from The Asian Institute of Technology (AIT) emphasize that retail banking services (RBS) are essential for delivering products and banking solutions to individuals and small to medium enterprises (SMEs) by utilizing a network of branches, telecommunications, and modern technology.
According to the World Trade Organization (WTO), retail banking services (RBS) are essential offerings provided by banks, allowing retail customers to visit branches or transaction points for various financial activities, including deposits, account inquiries, mortgage services, and borrowing options.
In summary, retail banking services can be defined as follow: “Retail banking services are banking services provided for personal customers, SMEs through network of branches or telecommunications”.
Characteristics of retail banking services
RBS serves a diverse clientele, including individuals, households, and SMEs, with relatively low transaction values resulting in a lower risk profile To effectively cater to this large customer base, RBS focuses on developing multiple distribution channels supported by modern information technology and skilled professionals, enhancing service quality Their offerings, which include deposits, payments, loans, and card services, are straightforward and easily implemented The foundation of RBS's business development lies in delivering high-quality services, which are crucial for driving revenue and attracting customers However, the average operating costs remain high due to the dispersed nature of the customer base, complicating transactions and increasing the costs associated with online trading Additionally, the nationwide customer network necessitates diverse and complex management and marketing strategies.
Roles of retail banking services
RBS transforms a cash-based economy into a cashless system, significantly improving the efficiency of state management and lowering social payment costs Furthermore, RBS optimizes the cash cycle process, effectively harnessing capital potential to boost business activities, enhance consumption, and elevate the quality of life for individuals.
RBS plays a crucial role in diversifying product offerings, expanding market reach, and enhancing competitiveness It contributes to the creation of medium and long-term capital for banks, transforms their income structure, minimizes risks, and strengthens national finance.
RBS bring convenience, safety and efficiency to customers in their payment process and in using their own income
RBS plays a crucial role in providing stable income and risk diversification for commercial banks, establishing a strong foundation for their operations Initially, banks prioritize RBS as a core activity to build and enhance their customer base, which then allows them to expand into other banking services In Vietnam, commercial banks are actively improving the quality of RBS, aligning with global and regional banking trends.
Some main retail banking services
Commercial banks play a crucial role in mobilizing funds for loans and investments, primarily by attracting capital from individual customers and small to medium-sized enterprises (SMEs) They achieve this through various means, including term deposits, the issuance of valuable papers such as promissory notes and bank bonds, and other deposit forms Despite the relatively small idle capital of individual customers and SMEs, banks can effectively harness a significant and abundant pool of funds due to their extensive customer base.
Today, commercial banks provide a diverse range of savings products with flexible terms and competitive interest rates, alongside traditional deposit offerings, to enhance their brand presence and cater to customer needs.
Retail lending services provide individuals and small to medium-sized enterprises (SMEs) with a variety of loan options, including short, medium, and long-term loans These services encompass overseas study loans, real estate loans, stock trading loans, consumer loans, and overdrafts, catering to diverse financial needs.
Loans for individuals and SMEs have become a significant part of banks' total debit balances, driving higher revenue and profit However, these borrowers are sensitive to interest rates, terms, and procedures, prompting banks to carefully evaluate their competitiveness and the benefits offered to customers.
A bank card is a versatile personal finance tool issued by banks, offering numerous benefits to users These cards enable individuals to withdraw and deposit funds, make payments, and transfer money While there are various types of cards available today, the two primary categories are debit cards (both domestic and international) and credit cards.
Card services are crucial for mobilizing funds, collecting service fees, and enhancing the public image of banks They leverage technology and foster collaboration among banks to effectively tap into the market.
Settlement services are a lucrative activity for banks, encompassing current accounts, checks, money transfers, collection orders, and payment orders Banks facilitate payments for goods and services on behalf of their customers using clearing systems or electronic payment systems Notably, services such as salary payments through personal accounts and the payment of utility bills—like electricity, water, and telephone—are experiencing significant growth and contributing substantially to the revenue of commercial banks.
In addition, remittance services have been increasing and expanding, and a lot of commercial banks have cooperated and become agencies of international financial institutions like Western Union and Money Gram
In the rapidly evolving landscape of financial markets and banking integration, foreign banks are increasingly poised to enter Vietnam's market This dynamic necessitates that domestic banks innovate and diversify their services and products to enhance their competitiveness Consequently, the emergence of technologically advanced banking services is a natural development in this context.
In today's fast-paced world, SMS Banking, e-banking, and Mobile Banking services have gained immense popularity among customers, allowing them to perform transactions like transferring funds, checking account balances, making payments, and applying for loans without the need to visit a bank in person, ultimately saving them valuable time.
The integration of E-banking services is crucial for the success of banks in the evolving landscape of Retail Banking Services (RBS) Key modern E-banking offerings include call centers, which provide 24/7 customer support for inquiries and complaints, exemplified by ACB and Eximbank's dedicated services Additionally, phone banking allows customers to access information about bank services, interest rates, and personal account details through automated telephone systems Mobile banking, accessible via internet-connected devices, further enhances customer convenience and engagement with banking services.
With GPRS technology, customers can easily manage their banking needs, such as checking account balances, paying electricity bills, and making online transfers, simplifying their busy lives Internet banking allows users to conduct various transactions through the bank's website by logging in with their customer number and password In addition to essential banking tasks like transferring funds and making investments, users can also access non-transactional features, including viewing recent transactions and downloading account statements.
Beside above services, banks also offer other convenient services, such as valuable assets keeping, personal financial consulting, foreign currency or treasury services…
The quality of retail banking services
2.5.1 Overview of the quality of RBS
The performance of a bank is significantly influenced by the quality of its services, which serves as a competitive marketing tool to enhance customer satisfaction and loyalty Customers can assess the effectiveness of these services only after visiting the bank and utilizing its products.
The quality of Retail Banking Services (RBS) hinges on several key factors: first, the retail staff, ranging from senior managers to junior employees, must possess qualifications, strong communication and professional sales skills, enthusiasm, attentiveness, and agility Second, retail products should be tailored to meet diverse customer needs, each with unique characteristics Third, the processes involved must be efficient, accurate, and straightforward, supported by modern technology Lastly, distribution channels must be convenient and easily accessible for customers.
2.5.2 The importance of enhancing the quality of RBS
The banking industry is highly competitive and sensitive, as even minor changes in socio-economic conditions can significantly impact currency values Retail banks face intense competition due to the diversified and easily imitated nature of their products To survive in this market, banks must enhance their service quality, as providing superior service leads to greater advantages and improved market positioning.
High-quality retail banking services (RBS) are essential for meeting customer needs and fostering loyalty, as satisfied clients are more likely to recommend their banks to others With the increasing number of banks, customers are becoming more discerning, comparing options, and making informed decisions about their banking relationships By enhancing the quality of RBS, banks can retain existing clients, attract new ones, increase market share, diversify risks, improve competitiveness, and stabilize their operations.
In the era of international economic integration, developing a robust and efficient Risk-Based Supervision (RBS) system is essential for commercial banks to expand their market reach, including internationally, and to better serve diverse customer needs By 2015, Vietnamese banks aim to establish an RBS system that meets regional standards, thereby enhancing Vietnam's standing in the global economic landscape.
In recent years, Vietnamese commercial banks have embraced modernization and technological advancements to enhance their retail market strategies amidst intense competition They are striving to improve service quality, expand their development scale, and strengthen capital resources and network systems This proactive approach aims to build a robust infrastructure for retail services that meets the growing demands of customers while addressing the challenges posed by international economic integration.
Chapter 2 of the thesis refers to a theoretical overview of RBS Through researching the related issues of the quality of RBS and the need to improve it, it is a foundation for analyzing the actual situation of RBS and proposing solutions to enhance RBS in Asia Commercial Joint-Stock bank (ACB) in next chapters.
RETAIL BANKING SERIVES IN ASIA COMMERCIAL BANK
Introduction of ACB
Asia Commercial Joint-Stock Bank (ACB) was founded on April 24, 1993, under Business License No 0032/NH-GP by the State Bank of Vietnam and received its Establishment Permit from the People’s Committee of Ho Chi Minh City on May 13, 1993 Officially commencing operations on June 4, 1993, ACB emerged during Vietnam's economic "Renovation - Doi moi" period, transitioning from a centrally planned to a market-oriented economy Starting with a modest charter capital of VND 20 billion (less than USD 3 million) and a workforce of 27, ACB's growth has been remarkable, reaching a charter capital of 9,377 billion and a staff of 10,000 by December 31, 2012 The bank has significantly expanded its presence, now boasting 345 branches and transaction points nationwide.
Headquarters: 442 Nguyen Thi Minh Khai, District 3, Ho Chi Minh city
Website: www.acb.com.vn
ACB primarily engages in mobilizing capital through various forms of deposits and investment funds, while also securing funding from both domestic and international financial institutions The bank offers a range of loan options, including short, medium, and long-term loans, and provides services such as discounting commercial paper, bonds, and valuable documents Additionally, ACB invests in securities and companies, offers settlement services, and conducts foreign exchange and gold transactions The bank also acts as an agent for securities investment consultancy, provides securities deposit services, corporate finance consultancy, underwriting, asset management, leasing, and other banking services.
ACB aims to leverage the emerging opportunities in Vietnam's new development phase to solidify its status as a premier domestic financial institution The bank is committed to fulfilling its role as a family bank, ensuring profitability for investors, and providing exceptional service to customers ACB focuses on delivering high-quality products and services while fostering a supportive environment for staff career growth Additionally, it seeks to be a reliable partner in the financial community and make significant contributions to society.
During 20 years of operation, ACB has always been in the group of large-scale commercial banks and gained many achievements:
Table 3.1 : Rewards ACB received from 2006 to 2012
Best Retail Bank in Vietnam 2005
State President The Asian Banker Euromoney
2007 Leadership Achievement Award for the
Financial Services Industry in Vietnam in 2006
“Most Admired Enterprises of ASEAN” under employment category
Best Bank in Vietnam FinanceAsia, Asiamoney,
Global Finance, The Banker, Euromoney, and The Asset
Strongest Bank in Viet Nam
FinanceAsia, Global Finance, Asiamoney, and The Asset
2011 Best bank in Vietnam Global finance, Asia
Money, Euromoney and World Finance
Top 10 annual report of the year
(Source: www.acb.com.vn)
Established early in Vietnam's banking sector, ACB has emerged as one of the largest commercial banks in the country, earning widespread recognition for its commitment to enhancing both the quality and quantity of banking services.
ACB is well-positioned to become one of Vietnam's leading retail banks, thanks to its experienced management and skilled, enthusiastic workforce.
Analysis of ACB's the retail banking activity over the period 2009 – 2012 12
In response to market fluctuations, ACB has introduced competitive deposit rates designed to benefit customers Additionally, ACB offers a variety of deposit products to meet the diverse needs of its clientele.
The "flexible saving account" and "Loc Bao Toan saving and insurance account" offered by ACB provide numerous benefits, including the automatic transfer of principal and interest from time deposit accounts to non-term accounts Additionally, ACB features appealing promotional programs such as bonus interest and lucky draws, demonstrating the bank's commitment to customer satisfaction and innovative financial solutions.
The enhancement of service quality and staff professionalism has positively influenced individual deposits, leading to increased fund stability and attracting new idle capital within the community.
Until 31 December, 2012, deposits of private customers reached 110,452 billion VND, increased by approximately 39,000 billion (equal 35%) compared to 2009
Table 3.2: ACB’s retail fund mobilization in the period 2009 – 2012
Proportion in total fund mobilized (%)
(Sources: ACB’s annual report from 2009 to 2012)
Figure 3.1 : ACB’s retail fund mobilization in the period 2009 – 2012
(Sources: ACB’s annual report from 2009 to 2012)
Figure 3.2: Structure of retail deposit by types of money in 2012
( Sources: ACB’s annual report from 2009 to 2012)
ACB effectively demonstrates its fund mobilization services through attractive promotion programs, competitive and flexible deposit interest rates, excellent customer care policies, and a streamlined transaction process, all of which contribute to a positive customer experience.
ACB has offered a great number of loan products with reasonable time, interest rates to finance the customers’ capital needs
Table 3.3: ACB’s retail loans between 2009 and 2012
Proportion in total debit balance (%)
(Sources: ACB’s annual report from 2009 to 2012)
The proportion of retail loans in the total lending revenue over the period 2009 –
2012 increased dramatically, i.e from 35% to nearly 43% By 31 December 2012, individual debit balance reached 44,348 billion VND, rose by 8,502 billion VND (equal 23.7%) in comparison with 2011
Figure 3.3 : ACB’s retail loans in the period 2009 – 2012
(Sources: ACB’s annual report from 2009 to 2012)
ACB has experienced positive growth in retail loans, becoming a vital source of income To meet increasing customer demand, ACB has introduced a variety of lending products, including loans for house construction and renovation, overseas study loans, automobile loans, T-day securities loans, and agricultural development loans In addition to secured loans, ACB offers unsecured options like consumption loans for employees and overdraft facilities With its strong reputation, dedicated customer service, straightforward application process, and competitive interest rates and fees, ACB has solidified its position in the credit market.
Overall, thanks for a strict retail credit management, credit quality of ACB has been under control and bad debt ratios has not exceeded the regulated level of the State Bank
With over a decade of experience in card payment services, ACB has successfully served more than 4,000 businesses across Vietnam, including hotels, restaurants, air-ticket agencies, supermarkets, hospitals, art galleries, and jewelry shops in major commercial and tourist areas ACB has partnered with various trading entities to offer domestic cards such as ACB - Saigon Co-op for the CO-opmart supermarket chain, ACB - Saigontourist for the Saigontourist system, ACB - Mai Linh for Mai Linh taxi services, and ACB - Phuoc Loc Tho for the Mien Dong supermarket chain, Citimart, and Maximark This collaboration allows ACB cardholders to enjoy numerous payment benefits through promotional programs launched by these partners.
ACB's card payment system currently supports three major international card types: Visa, MasterCard, and JCB, along with ACB's own credit and debit cards This service ensures that customers can make secure payments for their bills without the need for cash.
The number of cards issued in 2012 was 205,427 increased by approximately 45,000 cards (or 28%) compared to 2011
Table 3.4: Number of cards issued of ACB in 2011, 2012
Since mid-2010, ACB has enhanced card service quality by implementing EMV chip technology across all international cards, ensuring user safety and minimizing transaction risks Additionally, the bank promptly addresses customer complaints and transaction issues, prioritizing swift resolutions.
ACB provides a comprehensive range of remittance services, including outward remittance to domestic banks, which allows customers to transfer money swiftly and securely throughout Vietnam, supported by the advanced TCBS (The Complete Banking Solution) technology for seamless online transactions Customers can easily send money to various locations, receive funds elsewhere, or transfer to bank accounts within the system instantly Additionally, ACB offers outward remittance to overseas banks via the SWIFT network, ensuring fast and safe transfers for legal purposes in compliance with the State Bank of Vietnam's foreign currency regulations Customers can deposit foreign currency or transfer funds from their accounts in multiple currencies Furthermore, ACB facilitates inward remittance from domestic banks, enabling customers to receive transferred funds quickly and securely at any ACB branch across the country.
ACB offers a convenient cash transfer service for customers, allowing them to receive funds via ID card without the need for a bank account or reporting the source of the money The bank promptly notifies customers through correspondence or phone when cash is available for pickup With a comprehensive network of branches nationwide, ACB ensures quick and secure access to inward remittances from abroad Customers can receive foreign currencies such as USD and EUR, or choose to exchange them for VND For foreign currencies other than USD or EUR, customers have the option to convert their funds into USD or EUR if they prefer not to exchange them for VND.
ACB has partnered with Western Union to provide customers with the ability to transfer or receive money to and from numerous countries worldwide in just 10 minutes, significantly enhancing customer convenience and utility.
ACB offers a convenient Electricity Bill payment service, ensuring fast and secure transactions for customers using their current accounts Additionally, the bank's payment service for real estate transactions benefits both buyers and sellers, as buyers can feel secure knowing their funds are protected until the process is complete, while sellers gain confidence in the buyer's payment capability.
In response to the growing demand for high-tech banking services, ACB has enhanced its e-banking platform, ACB Online, enabling customers to conduct transactions swiftly and conveniently from anywhere at any time This innovative service offers a range of retail options that are simple, secure, and time-efficient, eliminating the need for in-branch visits ACB Online encompasses various services, including Internet banking for transactions via connected laptops or desktops, Mobile banking for access through smartphones or tablets using Wi-Fi, 3G, or GPRS, SMS banking for quick transactions via text messages sent to 997, and Phone banking, which provides automated information about banking products.
With a personal account, customers can press the button to be clear more about the wanted services
Besides, ACB also offers Bill payment services to help customers settle their electricity bill or phone bill of Mobiphone and Viettel
Along with the product diversification and technology enhancement, ACB has continuously expanded the network The increase in the number of branches and
Figure 3.4: The number of branches and transaction points from 2009 to 2012
(Sources: ACB’s annual reports from 2009 to 2012)
ACB boasts an extensive international correspondent banking network, featuring over 1,000 banking relationships globally This includes partnerships with renowned financial institutions such as Citibank, Deutsche Bank, Standard Chartered Bank, JP Morgan Chase, and Wachovia.
Overall, ACB’s network allocation is quite favorable and relatively national wide to serve retail customers
When interacting with banks, customers assess their capabilities and professionalism through the evaluation of their facilities and design As a service-oriented sector, first impressions are crucial in influencing customer decisions ACB has developed a distinctive building model that allows for immediate brand recognition, featuring modern and appealing interior and exterior designs However, it is noteworthy that 85% of ACB's business locations are leased from residential properties, which often results in smaller buildings with limited parking and advertising space.
Evaluating the quality of ACB’s RBS
3.3.1 Comparing the quality of RBS in ACB with that of some other banks
In 2011, Eximbank conducted a survey to assess customer satisfaction among clients who also engaged with competing banks The survey evaluated six key factors: staff attitude, staff qualifications and skills, transaction time, service utility, and overall comfort and satisfaction levels.
Table 3.5: The quality of ACB’s RBS compared to that of other banks
Service utility Comfort Satisfaction level
(Source: Eximbank’s survey of customers’ satisfaction in 2011)
The RBS quality at ACB was exceptional, characterized by employees' positive attitudes and excellent service, which fostered a welcoming atmosphere for clients However, the transaction speed at ACB did not meet expectations.
3.3.2 Some ACB’s achievements in the retail services section
ACB has garnered recognition from esteemed international organizations such as Euromoney, World Finance, and The Banker for its exceptional service quality The bank's retail operations are both secure and efficient, significantly enhancing its capital and financial capabilities.
ACB enhanced its retail services by offering a diverse selection of products at competitive prices, attractive deposit interest rates, and additional benefits such as gifts or bonus interest for savings accounts The bank also partnered with reputable businesses to issue co-branded cards, further enriching its service offerings.
ACB highlights the importance of modern banking solutions that streamline customer transactions, offering services such as e-banking, online bill payments for utilities, and mobile banking through their website.
ACB has successfully enhanced its organizational structure to boost the retail sector by establishing dedicated customer service areas for individuals and businesses at its branches Additionally, the bank has focused on promoting business activities at transaction points to meet the minimum requirements for loans and deposits set by the Head Office.
ACB prioritizes after-sale services by classifying customers to maintain strong relationships with existing clients while attracting new ones The bank offers appealing policies on deposit and lending interest rates, along with regular updates on new products Notably, ACB has tailored retail product packages specifically for VIP customers, enhancing their overall banking experience.
The bank's facilities and workspaces were impressive, featuring professional and well-organized internal and external decor Equipped with modern technology and convenient parking, these elements created a favorable environment for customer service, which received high praise from clients.
Retail staff consistently demonstrate exceptional skills and professionalism, leaving a positive and lasting impression on customers Their qualifications and dedication to their roles ensure that they are attentive and eager to meet customer needs, enhancing the overall shopping experience.
Finally, ACB since 2010 has launched an attractive, impressive and meaningful advertisement on TV which obviously will bring the bank come closer to the citizens
3.3.3 Some ACB’s limitations in the retail services section
In a competitive market filled with diverse products, ACB primarily focused on traditional offerings such as demand deposits, time deposits, and savings accounts with both tiered and floating interest rates In contrast, Techcombank distinguished itself by introducing innovative products like the "Tich luy Tai Tam" savings account, which required a minimum monthly deposit, provided attractive interest rates, and included free insurance for enhanced financial security during the saving period.
ACB's card market shows significant potential; however, its usage remains limited, with a relatively small number of card salespeople Non-cash payments are not yet widely embraced, as evidenced by the infrequent use of personal checks due to people's concerns about risks Additionally, e-banking services predominantly cater to urban areas and modern residential neighborhoods, leaving them less popular among the general public.
Third, other banking services such as assets keeping, personal financial consulting or investment consulting which served high-income customers were not greatly developed
Despite significant investments in branches, transaction points, ATMs, and POS systems, these services remain predominantly located in major cities such as Hanoi, Ho Chi Minh City, and Da Nang As a result, residents and visitors in remote, mountainous regions and rural areas encounter numerous challenges when attempting to conduct banking transactions For instance, provinces like Bac Can, Cao Bang, Dak Nong, Hoa Binh, Lang Son, Phu Tho, and Ninh Binh lack ATM installations altogether.
The quality of customer care policies was inadequate, primarily focusing on large dealers and VIP customers, while neglecting the needs of small and low-income customers.
Finally, staff who were responsible for selling and introducing retail products were not trained of marketing skills, convincing customers and consulting the most suitable services to them
ACB struggles to transition from traditional banking services to more modern offerings, focusing primarily on achieving its annual growth targets rather than leveraging market opportunities for product development Its strategy aligns with industry trends, emphasizing service diversification, scale expansion, and improvements in human resources, technology, and management However, this common approach may hinder ACB's ability to establish a unique identity in a competitive landscape.
Second, the Vietnamese people’s cultural and technological level is not high
Many elderly individuals and residents in rural areas face challenges and psychological barriers when accessing banking services Their reliance on cash significantly hinders the adoption of non-cash payment methods Additionally, there is a widespread preference for in-person transactions at bank branches over using e-banking services via the internet or mobile devices, as technology is often viewed as unreliable Consequently, high-tech banking services do not achieve the popularity and effectiveness that banks anticipate.
Next, technical infrastructure for settlement is not synchronized: ATM and POS systems were mainly on urban cities and industrial zones
Last, ACB’s staff training of retail customer relationship is initially researched and carried out Therefore, employees in retail section are lack of sales skills and marketing skills
SOLUTIONS TO THE IMPROVEMENT OF THE QUALITY OF
Promoting research and development of RBS
Chapter 3 highlights a key drawback of ACB's service development policy: the reliance on traditional services that lack distinctiveness, ultimately hindering the bank's competitiveness To address this issue, ACB must prioritize research and expand its retail services to diversify offerings, enhance utility, and reach a broader customer base.
4.1.1 Strengthening and improving existing retail services:
ACB should assess its product positioning to implement timely improvements that enhance the quality of high-potential products by fostering a positive staff attitude and streamlining processes Additionally, it is essential to phase out products that attract minimal customer interest.
4.1.2 Doing research on development of new RBS: a Strengthening the role and function of the R&D Department who conduct market research about customers’ needs, tastes and afterwards, develop new products according to different market segments of age or occupation b Building a diverse, multi-utility and attractive list of RBS to have ACB’s own differences in the competitive market c Focusing on strategic, high financial efficiency and safe services such as deposit services, card services, e-banking services, consumer loans and housing loans d Designing products and services on the principle of simple, accessible, simple, friendly processes and procedures to meet the needs of customers flexibly
4.1.3 Developing new RBS : a Individual deposits: ACB should have competitive deposit interest rates, launch as many promotions as possible and provide new products for new customer groups For example, ACB should provide saving accounts which have differences of interest rates, customer care policies and regular promotions for retired people b Retail loans: processes should be customer orientation (i.e simple, short time, better and satisfy their new demands In addition, ACB should issue a credit policy to staff of enterprises who hold salary account in ACB, so when they borrow money, after that, their salary account would be automatically debited Thus, ACB has opportunity to provide a full packaged services for them: issuing ATM cards, raising capital from companies and lending to them Lastly, ACB should also have policies that increase access to borrowers, give them advice and consult them about loan procedures at home c Card products: more features of cards and ATM should be added like allowing users to recharge money to their cards at ATM or limiting withdrawal problems At the same time, the bank should issue cards applying high technology, being more outstanding than current cards in the market, which ensure card holders’ safety, decrease risks and help ACB to be a formidable competitor Furthermore, co- branded cards with universities, supermarkets or transport companies should be focused more because with these cards, ACB can utilize existing customers of the co- operators to lift up its market share, serve more customers and enhance the reputation d Other services: Personal financial service should be paid greater attention as customers coming to the bank for not only transacting traditional services (borrowing, depositing) but also for being fully served With this service, ACB’s staff suggest clients of effective use of fund or optimal financial solution to preserve the sources and develop them more feasibly Together with, asset keeping and managing services which comprise valuable papers keeping, real-estate broker, stock trading as customers’ authorization and so on need to be developed more.
Expanding the distribution network
A robust network serves as a crucial link between customers and banks, enabling institutions to capture significant market share Therefore, ACB must focus on developing an effective working network Traditional retail distribution channels, such as branches and transaction points, play a vital role in meeting all customers' financial needs.
ACB currently faces challenges due to its limited transaction points across various provinces and cities, hindering dealer access and customer engagement To address this issue, ACB must expand its network by developing branches, trading rooms, and retail service centers in key urban and agricultural areas Additionally, establishing foreign distribution channels, including representative offices, branches, and subsidiaries, will enhance the promotion and supply of retail products.
Beside the traditional distribution network, it is necessary for the bank to develop a modern one and strengthen distribution management to maximize the roles of each channel
To enhance customer experience, ACB should focus on improving ATM efficiency and convenience by strengthening the connections between Banknet and Smartlink systems This will enable the provision of diverse services at reduced costs Additionally, upgrading ATMs to function as "mini banks" across various provinces and cities will further broaden access to banking services.
Then, the bank should continue the implementation of e-banking services (Phone banking, Mobile banking, Internet banking ) to save time and costs for both customers and the bank
Currently, ACB primarily operates from rented residential properties, which lack optimal facilities for retail services To create an appealing, professional, and convenient retail environment, ACB should consider expanding its leased spaces or renting office buildings that offer suitable parking, open layouts for effective poster displays, and ample room to accommodate all departments serving retail customers.
Incorporating decorative elements like a flower vase and displaying magazines related to the bank's operations can enhance the customer experience Additionally, offering small services while customers wait contributes positively to their overall satisfaction Thoughtful interior design, including the selection of colors, furniture, and spatial arrangement, fosters a welcoming atmosphere that effectively bridges the gap between clients and employees.
Workspaces can be categorized into two primary areas: one designed for high-speed transactions, such as cash withdrawals and deposits, which should prioritize efficiency and minimize waiting times, and another focused on discreet and luxurious settings for services like card payments, account management, and loan applications to capture customer interest Additionally, a dedicated VIP room is essential for hosting important deals, staffed with professionals ready to meet the specific needs of high-profile clients.
ACB should employ a friendly receptionist at the entrance to enhance customer service This role involves welcoming guests, assessing their needs, providing informational pamphlets, assisting with necessary forms, engaging in conversation during wait times, and expressing gratitude before their departure Such thoughtful arrangements significantly improve customer impressions and contribute to the overall quality of service.
Investing in technology development
Developing information technology is essential for retail banks like ACB to thrive in a competitive global landscape To enhance their retail banking systems, ACB must invest in modern technology and foster collaborations with domestic and international banks and economic institutions to leverage financial and technical support This includes modernizing banking technology, innovating security measures, and ensuring data safety Additionally, completing the Core-banking program will upgrade their transmission systems for high-capacity, high-speed processing, resulting in improved e-banking services and reduced transaction congestion Furthermore, ACB should prioritize continuous training for all staff levels to enhance their technological skills, ensuring that personnel are equipped to embrace new technologies and meet the demands of service development and network expansion.
The integration of modern information technology will enhance ACB's retail product quality, operational safety, and management capabilities, thereby boosting its competitiveness in the market This advancement positions ACB as a leading retailer in Vietnam, demonstrating its readiness to engage in global and regional economic integration.
Enhancing the quality of human resources
Human resources play a crucial role in retail banking operations, making effective recruitment, training, and employee treatment essential for maximizing workforce potential Therefore, enhancing personnel quality is a strategic priority for banks to ensure long-term growth and development.
ACB is advised to establish a comprehensive and professional recruitment process that carefully evaluates each vacant position Currently, candidates undergo two assessment rounds: an initial multiple-choice test covering IQ, English, and specialized knowledge, followed by an interview To enhance this process, it is essential to include additional practical skill indicators, such as computer proficiency, customer care abilities, and effective communication skills.
The quality of each recruitment is dependent on the potentiality of attracting many good candidates involved Thus, propaganda and advertising of recruitment are really essential
ACB recognizes that training is essential for enhancing staff professionalism and equipping them with new skills and specialized knowledge While the bank has established a Training Center for short-term courses, it must address several key issues Firstly, it should offer training sessions for new employees to familiarize them with the organizational structure, retail strategies, business processes, service design and development, management, communication, negotiation skills, corporate culture, and basic employee benefits and obligations Secondly, ACB needs to evaluate training outcomes by assessing learners' progress and work efficiency systematically, which will inform the development of improved training policies Lastly, the bank should conduct annual assessments of employees to identify talents and nurture them into future leaders.
ACB should implement an appealing reward policy that aligns with business performance and customer service, including a thirteenth-month salary and incentives for employees excelling in technical skills, customer service, and sales, as well as those proposing valuable initiatives for service improvement To attract and retain senior officers, ACB must maintain competitive compensation policies based on unit effectiveness and achievements, offering benefits such as bonus shares, company cars, accident insurance, and healthcare programs for managers and their families Additionally, the company should provide periodic medical check-ups, rewards, and opportunities for international travel to recognize leaders with exceptional performance throughout the year.
4.4.4 Concentrating on professional style of retail staff
Clients prefer bank staff who are attractive, well-dressed, graceful, agile, polite, and attentive to their needs To enhance its external image, ACB should implement standardized uniform and makeup regulations that promote a friendly and professional appearance.
ACB must transform its staff's approach to retail transactions by shifting from passive compliance with requirements to actively engaging in trading This change aims to better meet clients' financial service demands and enhance their overall satisfaction.
Strengthening the customers care
Customer satisfaction is vital for a bank's survival, especially in today's competitive landscape Satisfied customers are more likely to return and recommend the bank to others, which ultimately boosts sales, market share, and profitability For ACB and other commercial banks, prioritizing customer satisfaction is essential for retaining clients and driving revenue growth.
To build a strong and sustainable brand, ACB must prioritize customer care, as failing to satisfy customers can lead to losing not only them but also potential clients Implementing appropriate policies by classifying customers and service sectors is essential for enhancing customer satisfaction and loyalty.
Designing a room for VIP customers and a counter for those who want to open new accounts
Giving bonus deposit interest rates and reducing lending rates for customers having a great amount of transactions or using the products frequently
Giving flowers, gifts or cards for customers on holidays, November 20 th , March 8 th (for female customers), on July 27 th (for military customers), on February
27 th (for those who are doctors, nurses) and on their birthdays… A minor attention of the bank can unexpectedly promote customers’ loyalty
Our dedicated staff is available to assist potential clients directly at their homes or offices Additionally, we have established a Customer Care Department, which plays a crucial role in performing various functions aimed at fostering long-term relationships with our bank's customers.
Setting a specific time for processing retail products like lending, account opening, card opening, complaint solving…
Collecting feedback from users and evaluating their opinions timely, sending thankful letters and gifts to those contributing valuable comments
Organizing conferences and promotions for customers.
Promoting Marketing activities
Beside solutions for improving products, distribution network, technology and personnel, another measure needed for retail services development is promoting marketing activities
To enhance its brand identity, ACB should focus on establishing a strong trust in service quality among customers, particularly in retail services, to boost competitiveness Additionally, creating a dedicated budget plan for brand development is essential ACB must also implement a comprehensive and professional brand identification system, which includes graphic elements, publications, promotional materials, and staff uniforms, to ensure consistent representation across all platforms.
To enhance promotional activities, banks should focus on increasing advertisements across various media platforms, including TV, newspapers, radio, and the Internet, while also engaging in charitable sponsorships and major events Implementing regular initiatives such as fee reductions, free ATM issuance, lucky draws, and gift programs can attract more customers Personalized advertising through emails, phone calls, or faxes, along with timely updates about services, promotions, and changes, will reinforce customer relationships Additionally, segmenting the market by demographics and job types will enable the bank to tailor retail products and pricing strategies effectively Finally, providing thorough training for marketing staff on retail products and sales techniques, along with annual meetings to share experiences among branches, will strengthen overall marketing efforts.
Improving the quality of inspection of the service quality
To enhance service quality inspection, the bank should implement a customer inspector group to evaluate staff knowledge, attitude, and facility conditions at sales points Additionally, conducting regular customer satisfaction surveys through various channels—such as questionnaires, emails, phone calls, and interviews—will provide valuable insights and allow customers to voice their opinions Timely complaint resolution and effective solutions will help identify root causes for improvement in products, procedures, and employee performance Furthermore, consistently monitoring customer-related indicators and comparing them to benchmarks—such as processing times for card openings, deposits, and lending, along with staff friendliness and responsiveness—will ensure ongoing enhancement of service quality.
Recommendations to the Government and the the State Bank
To enhance the quality of retail services in ACB, along with its own efforts, radical support of the State bank and the Government is really important
Government support is essential for the growth of all sectors, particularly in enhancing the operations of commercial banks like ACB To foster this development, the Government should establish a comprehensive support mechanism, including regulations for banking transactions and tax incentives for businesses engaged in frequent banking activities Local authorities must also assist banks in securing prime locations and reducing public marketing costs for new products Additionally, policies promoting non-cash payments, such as salary disbursement through bank accounts and the installation of automatic vending machines, are crucial to encourage a cashless culture Improving Vietnam's technological infrastructure is vital, as it currently lags behind other countries; this can be achieved by facilitating technology transfers from developed nations and implementing training programs for technical experts Finally, addressing the high costs of Internet usage and phone calls is necessary to popularize e-banking services, highlighting the need for advancements in the Posts and Telecommunications sector.
4.8.2 Recommendations to the State Bank
The State Bank of Vietnam (SBV) plays a pivotal role in leading Vietnamese commercial banks, particularly in enhancing retail banking services at ACB and beyond To achieve this, the SBV should collaborate with commercial banks and the General Statistics Office to develop a Retail Banking Services (RBS) list aligned with international standards, facilitating effective management and reporting Additionally, the SBV must strategically allocate credit institutions and branches to support socio-economic development while ensuring RBS effectiveness Beyond expanding networks in developed areas, it is essential for the SBV to implement policies that promote service accessibility in less developed regions Furthermore, the SBV should encourage and assist commercial banks in investing, collaborating, and securing funding to improve infrastructure and modernize banking technology.
Retail banking services in commercial banks are experiencing significant growth and depth, driven by the competitive pressure from large, experienced foreign banks This environment presents both challenges and opportunities for domestic banks, particularly ACB, to expand their scale, enhance management practices, and improve retail service quality to satisfy the increasing demands of customers ACB has focused on strengthening and enhancing service quality, leveraging it as a competitive advantage to build a solid foundation for development and to address the urgent needs of global economic integration.
Chapter 4 of the thesis provides strategic solutions for enhancing ACB's Retail Banking Services (RBS) by focusing on the development of new RBS, optimizing distribution channels, advancing technology, improving human resources, refining customer care policies, and enhancing marketing activities and inspections Implementing these measures will enable the bank to overcome existing challenges, seize growth opportunities in retail services, and boost its competitiveness in a highly competitive market.
Commercial banks are increasingly adopting Relationship Banking Services (RBS), aligning with global and regional banking trends RBS primarily cater to individual customers, focusing on high-quality service and meeting customer needs This approach not only enhances customer satisfaction but also aids banks in effective risk management and optimizing business performance.
The provision of Relationship Banking Services (RBS) is driving increasing revenue for commercial banks Economic experts predict continuous growth in this service sector, intensifying competition and fostering differentiation among banks Consequently, enhancing the quality of banking services has become crucial for banks striving to succeed in this evolving landscape.
ACB recognizes the significance of the retail market and is committed to enhancing the quality of its Retail Banking Services (RBS) To reach its objective of becoming a leading multi-functional retail bank, ACB must implement a comprehensive strategy focused on improving retail service quality.
The thesis titled "Enhancing Retail Banking Service Quality at Asia Commercial Bank" focuses on evaluating the current quality of retail banking services at ACB It examines the factors influencing service quality, identifies existing limitations, and proposes strategic measures for future improvements.
During the research process, the thesis still has some certain restrictions
I look forward to the contributions and comments of teachers, lecturers and other readers to help the content be better and more complete