Chuyên đề thực tập tốt nghiệp: A study on some factors affecting customer satisfaction in e-banking service and some recommendations for its development at a commercial joint stock bank in hanoi from 2020-2022

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NATIONAL ECONOMICS UNIVERSITYFACULTY OF FOREIGN LANGUAGESDEPARTMENT OF BUSINESS ENGLISH

VU THI THU HUONG

A STUDY ON SOME FACTORS AFFECTINGCUSTOMER SATISFACTION IN E-BANKINGSERVICE AND SOME RECOMMENDATIONS FORITS DEVELOPMENT AT A COMMERCIAL JOINTSTOCK BANK IN HANOI FROM 2020-2022

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NATIONAL ECONOMICS UNIVERSITYFACULTY OF FOREIGN LANGUAGESDEPARTMENT OF BUSINESS ENGLISH

VU THI THU HUONG

A STUDY ON SOME FACTORS AFFECTINGCUSTOMER SATISFACTION IN E-BANKINGSERVICE AND SOME RECOMMENDATIONS FORITS DEVELOPMENT AT A COMMERCIAL JOINTSTOCK BANK IN HANOI FROM 2020-2022

Hanoi, March 2023

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I would like to express my great gratitude towards Tien Phong Bank Hoan

Kiem branch, especially Mrs Doan Thuy Linh (the Manager of Customer Service

Department) for providing me with helpful advice on how to finish my thesis Also,I would like to express my gratefulness to my colleagues who supported me and

gave me considerable knowledge about a subject in which I possess experience.

Secondly, I want to express my sincere appreciation to Associate ProfessorDoctor Pham Thi Thanh Thuy for giving me the chance to research and write thisreport in order to gain deeper insight into Tien Phong Bank Hoan Kiem branch andthe problem I have been encountering Furthermore, I would never forget the threemonths you spent reading and commenting on my work so I could get better at my

study Without them, I never would have been able to complete my paper.

In the process of doing the internship, due to limited knowledge and practicalexperience, the report cannot avoid its shortcomings Therefore, I look forward toreceiving comments from teachers so that I can learn more skills and experience

and will better complete this graduation assignment.

Sincerely

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Vụ Thi Thu Huong — 11192353- Business English

EXECUTIVE SUMMARY

Future banking will be networked, invisible, insight-driven, and purposeful;to keep up, it will need to develop swiftly Major banks successfully navigate theirdigital transformation while other banks struggle to implement a coherentapproach Customer experience is now one of the most significant success

elements in banking as empowered digital consumers continue to elevate their

expectations Over the next ten years, financial services will likely change as aresult of open banking and accessible economics, as business models also evolve.In order to navigate these dynamics, banks must alter their operational strategy to

one that is based on an ecosystem with reliable partnerships As a pioneer bank inthe integration of scientific and technological developments into business

operations, product and service development, according to TPBank’s officialwebsite, TPBank is proud to have achieved various remarkable accomplishmentsand contributions during its development journey However, based on the userfeedbacks from two operating systems iOS and Android which are presented on awebsite evaluating service quality of TPBank, security concerns, login issues, andtransaction mistakes are just a few of the problems that still need to be resolved,thereby allowing commercial banks to provide best perceived values to customer

Therefore, based on the findings, the author therefore suggested appropriaterecommendations to enhance and develop E-Banking service in the future

including boosting reliability, security, convenience, and effectiveness of the bank

app as well as promoting information technology to modernize the features of Banking service Since today’s society is becoming more and more developed, theneeds for rising living standards are gradually increasing As a result, utilizingmobile phones to make transactions and payments would be much more effective

E-when TPBank focuses on building a speedy and well-functioning app Furthermore,upgrading brand position and credibility in the market and applying a professional

staff training strategy play an essential role With the higher credibility and skillful

employees, TPBank could approach high quality sources of customers such as bigcorporations and even potential individual customers, which leads to promotion of

service packages and brings high profits for the whole organization.

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TPBankUS

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LIST OF TABLES

Table 1.1 TPBank Hoan Kiem Branch’s Departmens - «+ -s<++ 8

Table 2.1 Summary of factors adopting E-Banking serVICe€ - -‹ 21

Table 3.1 Factors affecting customer satisfaction from previous research 23Table 3.2 Description of each independent varIabÌe «+ +-««++s<++ss+2 26Table 3.3 Hypothesis regarding customer satisfactions in e-banking service 28Table 4.1 Descriptive Statistics of Reliability factor affecting customer

SENG ES) £216] 6 (0) 6 G0 nTHng T Hu H ọ nhn 34Table 4.2 Descriptive Statistics of Security factor affecting customer satisfaction 35Table 4.3 Descriptive Statistics of Convenience factor affecting customer

SAUISLACTION 0111 35Table 4.4 Descriptive Statistics of Effectiveness factor affecting customer

C03105 36Table 4.5 Descriptive Statistics of Ease of Use factor affecting customer

K81): 0110787 36Table 4.6 Descriptive Statistics of Fee factor affecting customer satisfaction 37Table 4.7 Mean Average of 6 factors affecting Customer satisfaction 38

Table 4.8 The reliability test result of Reliability factor eee 39Table 4.9 The reliability test result of Security ÍaCfOT «<5 << <<++< s2 40

Table 4.10 The reliability test result of Convenience acfOr -«+- 41Table 4.11 The reliability test result of Effectiveness facfOT - 42Table 4.12 The reliability test result of Ease of Use aCfOr -«++ 43Table 4.13 The reliability test result of Fee ÍaCfOT 5-5 +s << x+sssssrrs 44

1H

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LIST OF FIGURES

Figure 1.1 Governance structure of TPBank - 5-5 5s x+sx+svesersererrrke 6Figure 3.1 Research Model 0 ee eeeeccssceseceeceeeeseessecseesseceseeeaesssesseeeaeeeseesaes 26Figure 4.1 Evaluation of customers when using TPBank mobile app 33

1V

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TABLE OF CONTENTS

EXECUTIVE SUMMA RYY - 5 HH TH TH ng HH ng nh nh ng 1LIST OF ABBREYVTIA TIONS - -L HH ng HH HH Hit iLIST OF TABLES TH HH ng HH TH HH HH iiiLIST OF FIGURES - - LH HH TH HH HH ivINTRODUCTION | ccceccecceseceesseessecesecaeesceeaeeeaessceeseceaesaesseesseesaeeeneeaeeeas 1

1 Rationale 0 ỐỐ 12 Research ObDjectives ccccesccsessesssecesceeenseessecsseeceeeceaeceesececeseeeeeeeseaeeseeeeesees 23 Research Questions 12 ::(ỒỒÔÒ 2

— Error! Bookmark not defined.1.4 The current problems of E-banking Service at Tien Phong Commercial JointStock 5) 1 9CHAPTER IT: LITERATURE REVILEW HH re 102.1 Conceptual DefIn1fIOINS - - 11x HH HH 102.1.1 History of E-Banking - - «se kh HH HH nh ngư 102.1.2 E-Banking S€TVIC€ c 11111 H1 HT TH ng ng key 102.1.3 Customer SafISfaCfIOH - - ng nh HH ngự 12

2.1.4 E-Banking Service and Customer Satisfaction - «« - 13

2.1.5 Benefits of E-Banking Service for Banks and Customers 132.2 Factors of adopting e-banking S€TVICC 5 c1 sisesrereerrrre 16

2.2.1 ACC€SSIDIÏIVY Ăn TH HH TH HH HH ky 162.2.2 ›)) 00) 17"800/2 17

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2.2.9 Fee and ChaTØ€ - s19 9 HH TH HH ni He 20CHAPTER II: RESEARCH METHODOLOGY 25c 23

3.1 Conducting Exploratory Study to Identify Types of Factors AffectingCustomer Satisfaction in E-Banking S€TVIC© - s55 + +ssksseeeeses 233.2 Research Model, Variables Description, and Research Hypothesis 25

3.2.1 Research Model - - - -s + k1 HH ng ky 25

3.2.2 Variables ID€SCTIPfION - - - 5 2c 1921113911 88911 9 11 811 g1 1 ng rry 263.2.3 Research Hypothesis sgk re, 28

3.3 Research Method - cv HH kh 293.3.1 Building Likert SCaÏe ĩ5 + 413 1 9 vn ng ng ng 30

3.3.2 Design 00)).2 00000 1n “44a 303.3.3 Research Sample - + 1 1H HH ng ng key 303.3.4 can 313.4 0,003 313.4.1 Descriptive SfAfIS{ICS c TH TH TH HH HH key 313.4.2 Test reliability of the SCaÌÏ€- - G c 1v HH ng re, 32CHAPTER IV: SOME FACTORS AFFECTING CUSTOMER

SATISFACTION IN E-BANKING SERVICE AT A COMMERCIAL

JOINT STOCK BANK IN HANOI HH ke, 33

4.1 Real Situation of Customer Satisfaction when using E-Banking service 334.1.1 General Evaluation of Customer about TPBank mobile app 334.1.2 Customer Satisfaction Evaluation through each factor 344.2 Factors most affect customer satisfaction when using TPBank mobile app

2 Error! Bookmark not defined.4.2.1 Factors most affect customer satisfaction in E-Banking service Error!Bookmark not defined.

4.2.2 Test reliability of the Likert scale Error! Bookmark not defined.CHAPTER V: SUGGESTED RECOMMENDATIONS TO IMPROVE

CUSTOMER SATISFACTION WHEN USING E-BANKING SERVICE

OF TIEN PHONG COMMERCIAL JOITN STOCK BANK 455.1 Boosting reliability and security to prevent risks while making{TATISACẨIOTNS 5 2 + kg Error! Bookmark not defined.5.2 Enhancing the convenience of E-Banking for customersError! Bookmarknot defined.

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5.3 Promoting information technology (IT) to improve the features of the app"— Error! Bookmark not defined.5.4 Upgrading brand image and credibility Error! Bookmark not defined.5.5 Establishing a professional staff training strategyError! Bookmark notdefined.

REFERENCES

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1 Rationale

According to a book named “Service quality at Vietnam Entrepreneur”published by Ass Prof Dr Phan Chi Anh (2015) through the research of VietnamNational University, the service quality in Vietnam has not yet been getting enoughconsideration A wide range of real problems including service quality, customersatisfaction and the close-knit relationship between both of them has beendiscussed in that book, especially in the banking industry.

Customers in particular are crucial to the bank's continued existence andgrowth For that reason, the bank that captures the interest and devotion of itsclients will prosper and expand Therefore, the customer-oriented strategy isbecoming the leading strategy of commerce today The challenge that banksconstantly strive to solve is how to provide consumers with the highest level ofsatisfaction Whether a business is small or huge, customer satisfaction is the

primary factor determining its success.

Real situation: In the age of technological development, Vietnamesecommercial banks must put every effort into catching up with the modernizationof banking to satisfy the demands of growing competition, integration, anddevelopment As a result, concentrating on establishing contemporary bankingapplications by constantly diversifying and enhancing the quality-of-serviceofferings could allow commercial banks to achieve this goal According toTPBank’s official website, TPBank is a commercial joint-stock bank founded in2008 and has been offering e-banking services for nearly 10 years with the use oftechnology solutions like eCounter, eGold, and multi-utility consumer cardsolutions This type of digital banking enables customers to automatically transactremotely and integrates internet banking and mobile banking; money transfers,withdrawals, transaction authentication by face and fingerprint, and QR codes.Moreover, TPBank was the initial bank to introduce an eBank version in the lightof modern technology in 2014 To develop and enhance service quality throughthe system, however, TPBank's e-banking service quality is a topic of particularimportance and needs to be tested and evaluated on a regular basis through the

digital banking system The nature of the service environment has changed

dramatically resulting from the implementation of E-banking service at

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Vietnamese banks, specifically the shift from the conventional setting to an onlineenvironment with a technological platform.

Understanding the reality of how the service works and the difficulties thatcustomers are experiencing, the author has conducted a study on particular factorsthat E-banking services bring to customers, thereby finding some solutions toovercome difficulties, and propose recommendations to develop E-Banking

service at Tien Phong Bank All of these contents will be included in a study named

“A Study on Some Factors Affecting Customer Satisfaction in E-BankingService and Some Recommendations for its Developments at a Commercial JointStock Bank in Hanoi from 2020 to 2022”.

2 Research Objectives

There are three desirable outcomes that the study aims to produce Firstly,this study aims to identify the real situation of customer satisfaction when usingE-Banking service of TPBank in recent years The second goal of the study ispointing out and assessing factors affecting the satisfaction of TPBank Hoan KiemBranch when using E-Banking service, thereby proposing possiblerecommendations based on opinions of experts in banking industry to improve

customer satisfaction when using E-Banking service of TPBank.

4 Scope of the Study

The author would limit the research objects of the study which only focus onfactors affecting satisfaction of TPBank customers when using E-Banking service,which could lead to much more profound results when investigating Additionally,the research geographical scope is Tien Phong Commercial Joint Stock Bank Hoan

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Kiem Branch in accordance with the time for collecting data is within 3 years whilethe primary data is gathered in the year 2022 The main contents that the study

clarifies is E-Banking, customer satisfaction, and some outstanding factors which

have a substantial implication on customer satisfaction when using E-Bankingservice.

5 Organization of the Study

The study consists of 5 main chapters:

Chapter 1: An overview of Tien Phong Commercial Joint Stock Bank

This chapter provides general information about Tien Phong Commercial

Joint Stock Bank in terms of foundation and development, governance structureand a brief summary about Customer Service Department at Tien Phong BankHoan Kiem Branch.

Chapter 2: Literature Review

The second chapter illustrates the basic theoretical background relevant tothe concept “E- banking” which consists of definition, the history, and the benefitsof e- banking service bring to users Moreover, this chapter also defines the termcalled customer satisfaction, the relationship between E-banking service andcustomer satisfaction together with a wide range of factors of adopting E-bankingservice.

Chapter 3: Research Methodology

This chapter aims at giving and explaining the methodology used to

accomplish the study objectives In this chapter, the introduction of participants aswell as the research sample, research model, data gathering methods, and data

analysis procedures would be mentioned.

Chapter 4: Some Factors Affecting Customer Satisfaction in E-bankingService at a Commercial Joint Stock Bank in the period from 2020-2022

The fourth chapter would present and analyze data collected fromparticipants to assess the real situation of customer satisfaction when using E-banking service supplied by Tien Phong Bank as well as their opinions regardingfactors which are associated with E-banking service As a result, the author would

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be able to find out the existing problems and difficulties By that way, somepossible elements influencing the current status of the service will be identified as

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CHAPTER I: AN OVERVIEW OF TIEN PHONG COMMERCIAL JOINTSTOCK BANK

The general information about Tien Phong Commercial Joint Stock Bankwill be presented in the first chapter Moreover, the issue with the state of E-banking service operations will be highlighted.

1.1 Foundation and Development

Based on the official website of TPBank, TPBank was a commercial joint

stock bank established in May 5", 2008 and officially became a public company

and went into operation in September this year Only a month later, TPBank

launched the E-Banking service for individual customers and enterprises In

December 2008, this bank received ISO 9001:2000 certificate for all of their

products and services This is an important milestone contributing to promoting

comprehensive governance and management activities in accordance withinternational management standards for the company After one year of operation,the first General Meeting of Shareholders of TPBank was held in March 2009 withthe adoption of important reports and resolutions as well as orientation fordevelopment of TPBank in 2009 and the following years In this year TPBankopened many branches in Can Tho, Hai Phong, and Da Nang For the next year,TPBank was officially connected with the system of 1,100 ATMs of Dong A Bank.Thanks to this connection, ATM cardholders of TPBank can make additionaltransactions at 1,100 ATMs of Dong A Bank Moreover, in July 2010, TPBankreceived the Award for Standard Electricity Ratio in International Payments in

2009 from Wells Fargo Bank (USA) This year was also the time Tien Phong Bankopened Transaction Office at both Hanoi and Ho Chi Minh City branch InNovember 2012, TPBank was presented “Vietnam”s Trust and Use Service Award”by the readers of the Vietnam Economic Times based on Spending and

Consumption Consulting Magazine.

In January 2013, according to TPBank official website, TPBank officiallyentered the gold market A year later, TPBank launched an E-Bank version basedon Hyper Text Markup Language 5 technology, which could merge in both MobileBanking and Internet Banking versions This event marked a major turning pointin the operation of TPBank, which could be considered as the first bank to take the

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lead in the digital banking market In 2017, they officially launched the 24/7 LiveBank automatic transaction point system TPBank successfully listed 555 million

shares on the Ho Chi Minh Stock Exchange in 2018, the year that represented its

tenth anniversary This marked a significant turning point in the company'sapproach for steady and sustainable operation Furthermore, TPBank has been alsoappreciated with a great number of prestigious awards from both domestic andinternational organizations In November 2022, TPBank was proud to berecognized as the Vietnam National Brand for the first time by the Minister ofIndustry and Trade Currently, after nearly 15 years of operation, TPBank hasreached popularity in the market with totally 65 branches and transactional offices

and become one of the fastest growing banks in Vietnam.

Figure 1.1 Governance structure of TPBank

Source: TPBank’s official websiteThe aforementioned hierarchy provides a clear illustration of TPBank’spresent organizational structure (Figure 1) The General Meeting of Shareholders,which has the responsibility of overseeing corporate operations, holds the mostsignificant position in the management system of TPBank The Board of Directors,which consists of six departments (Executive Committee (EXCO), Strategy

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Committee, Human Resources Committee, Risk Management Committee, Assets/Liabilities Supervisor Committee, Investment and Credit Supervisor Committee),

occupies a lower place in the management apparatus After Board of Directors isBoard of Management and Chief Executive Officer which include many other

separate smaller departments.

The highest governing body of TPBank is the General Meeting ofShareholders, which is comprised of all shareholders with voting rights TheGeneral Meeting of Shareholders is responsible for the following duties andpowers: approving development orientations; amending and supplementing thecharter; approving rules for the structure and functioning of the Board of Directorsand the Supervisory Board; determining the number of members of the Board ofDirectors by electing, dismissing, resigning, or replacing Board of Directors

members and Supervisory Board members in accordance with the provisions ofthe charter With the exception of subjects that fall under the purview of the generalmeeting of shareholders, the Board of Directors is the governing body withcomplete ability to make decisions and carry out the rights and obligations of thecredit institution.

According to the 2021 Operation and 2022 Plan Report of the Board ofDirectors, TPBank Board of Management is in charge of sustaining and expandingthe company's commercial operations across all divisions and branches in order tosupport the enterprise's development, strength, and achievement of a prominentposition in the market This division is crucial to the Chief Executive Officer's

oversight and financial management of TPBank This department will offer adevelopment plan for professional accounting operations that is appropriate to the

overall operational environment of the company at any given time.

1.3 Introduction of Transaction Room at Tien Phong Bank Hoan Kiem

According to the official website of TPBank, TPBank Hoan Kiem stoppedoperating at 82-84 Nguyen Huu Huan and began operating at a new location, 12-

14 Tran Nhat Duat, Dong Xuan Ward, Hoan Kiem District, Hanoi, on May 5, 2022,

with the approval of the State Bank of Vietnam, Hanoi branch in accordance with

Official Letter Decision from Headquarter Office.

Only less than 1 km from the old location, TPBank’s late location Hoan Kiemis still located in a busy area of Hoan Kiem District, which can be convenient formaking all transactions not only for old customers but also easily serving new ones.After nearly 15 years of construction and development, TPBank Hoan Kiem has

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met thousands of customers’ transaction needs with quality banking and financialproducts With a wide transaction area, a cutting-edge technological platform, anda variety of top financial services, moving to the new location intends to furtherimprove service quality and satisfy all of the growing client expectations.

Departments at TPBank Hoan Kiem branch

Table 1.1 TPBank Hoan Kiem Branch’s DepartmentsDepartments Name of Rooms

Corporate Customer room |Corporate Customer room 2

Business Department Individual Customer room |

Individual Customer room 2Risk management Risk management room

Service Department Transaction room

International Payment room

Source: TPBank’s internalWith the position of intern in the Service Department, namely Transactionroom, in this general report, the author will provide specific and complete tasksthat any officer of this department must perform The mission of the TransactionRoom is Managing accounts and transactions with customers At counters withclients, staff members directly sell goods and services and carry out tasks such astaking consumers’ requests for banking services, withdrawing money, and

transferring money Another responsibility is to manage accounts, collect and save

customer data, record transactions, open deposit accounts, process account

transactions, receive deposits, credit card and other payment card payments thatare within the deposit limit, currency exchange, exchange, loan balance

confirmation, and other services Moreover, the employees working in thisdepartment have to take responsibility for disbursing customer's loans on the basisof approved disbursement dossiers, collecting debt and interest based on therequest of the credit administration department The staff also directly perform

card transactions, receive instructions for use, handle operations and make reportsaccording to regulations together with receiving customer feedback on productsand services, procedures, and transaction styles so that the leaders can absorb andimprove service styles to continuously meet customer satisfaction.

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1.4 The current problems of E-banking Service at Tien Phong CommercialJoint Stock Bank

While having several advantages over traditional banking and E-banking interms of making account operations simple and convenient, clients nonethelesshave various issues with E-Banking service when using it The author has outlined

three key difficulties that users of the Smart-banking service have addressed, based

on a website regarding service quality evaluation of TPBank coming originallyfrom user inputs of two operating systems—iOS and Android—in the App Store

and UC Play.

According to a website regarding service quality evaluation of TPBank, thefirst problem is referred to as a transaction mistake because of banking systemmaintenance Customers have unfairly lost money due to a technical malfunction

when the bank proclaims a successful transfer but the money in the account has

already been taken out However, the beneficiary account was not credited with

the transferred amounts As a result, customers will undoubtedly feel quite anxious

and unsure of what to do at this moment.

Based on a website evaluating service quality of TPBank, the second issue isa security brought on by con artists In one instance, con artists send phony bankemails to clients claiming that they have received money from the bank they arecurrently using In order to access the link or attached file that contains harmfulcode and appropriate funds from the recipient's account and personal data, thesubject will ask the recipient to confirm the transaction.

Another problem according to a website evaluating service quality of

TPBank is a login error This error message appears when a user is logged in but

is unable to access Before the program returns to the home screen, the system willthen show a failed login notice This can be because the bank is having servicemaintenance done, or because the system was temporarily down due to overload.The user has no recourse in these problem situations; they are left with no choice

except to wait until the maintenance interval is over.

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CHAPTER II: LITERATURE REVIEW

2.1 Conceptual Definitions

2.1.1 History of E-Banking

Internet banking service was first made available in the early 1980s by theBank of Scotland and the Nottingham Building Society (Tait and Davis, 1989).Unfortunately, due to the lack of widespread client acceptance, these services werequickly stopped However, commercial banks started to reintroduce onlinebanking services in the early 1990s as a result of the explosive rise of information

technology and electronic services.

Many people believed that internet banking services including the ability toengage in financial activities, pay bills, and even apply for loans online would soonbecome industry norms in the late 1990s These anticipations were fulfilledconsiderably faster than anticipated As a way of illustration, according to aresearch of (Furst et al, 2000), it was found that 88.8% of US national banks

offered "balance enquiry" and "money transfer" services via their websites, along

with bill payment and credit application services for 78% and 60%, respectively.

The three services listed above were the most in-demand across all bank categories

(Furst, 2000).

E-banking, understood simply, is the provision of banking products and

services over an electronic medium In order to meet the growing needs ofcustomers, electronic banking has been implemented via telephone and automatedteller machines (ATMs) Banking has been more successfully changed by theinternet, a new delivery channel that has simplified transactions for bothindividuals and institutions No matter the customer's location, the internet offersquicker access and more accessible service, according to Furst (2000).

2.1.2 E-Banking Service

Electronic banking Service has been defined in a wide abundance of ways.Firstly, E-banking is the delivery of bank information and services to customersthrough a variety of platforms that can be used with a variety of terminal devices,including a personal computer, a mobile phone with desktop software or a browser,a phone, or a digital television, according to (Daniel, 1999) Moreover, E-banking

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was described as an "online portal, through which users may access numerous sortsof banking services ranging from making investments to paying bills," by

(Pikkarainen, 2004) With the exception of cash withdrawals, consumers can dopractically every form of banking transaction online with just a few mouse clicks.

Based on the view of (Sathye, 1999), E-Banking relates to the provision of

"transactional" services, such as online account access, money transfers, and

purchases of financial goods or services.

According to (Toufaily, 2009), E-banking refers to the procedure throughwhich customers can control a bank's electronic transactions without having tovisit the physical location of the bank By doing this, the bank is able to offer avariety of services through straightforward electronic applications, enabling usersto access financial services without requiring outside assistance Another

definition coming from (Thulani & Chitura, 2009) is that e-banking is a servicegiving bank customers access to their accounts via the bank's website, where theycan also complete any financial activities and get the most recent information aboutthe bank, its products, and services Customers benefit from this service by havingaccess to their accounts 24/7 from anywhere, transferring money, paying bills

online, and downloading statements and transaction reports directly (Lioyd, 2007).

Offering financial services and goods to customers via electronic deliverychannels, such as internet banking, mobile banking, ATMs, and credit cards, iswhat meant by electronic banking (Chavan, 2013) In addition, E-banking is atechnology that enables users to access financial services from a personal computerby dialing into the bank's computer, thereby helping banks by cutting fees andgaining access to customers in the most rural places Moreover, customers whouse e-banking could obtain benefits from having access to banking servicesaround-the-clock and even at their homes or workplaces Electronic money

transfers, online bill payments, anytime cash withdrawals from ATMs, credit card

capabilities, and online account access through internet banking are furtheradvantages Another definition from research of Gupta (2008) is that E-banking isessential to banks' efforts like the way to deliver products and services to clients.As a result, it is regarded as a useful and potent tool for the development,

encouragement of innovation, and improvement of banks' competitiveness.

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2.1.3 Customer Satisfaction

For the majority of marketers and client researchers, satisfaction has beenregarded as one of the most crucial theoretical as well as practical challenges(Jamal, 2004) First and foremost, Oliver (1981, p 29) described it as "the overallpsychological state ensuing when the emotion surrounding disconfirmedexpectations is paired with the customer's earlier thoughts about the consumptionexperience" in the context of consumption In other words, given pre-purchaseexpectations, this author concluded that contentment represents a post-purchaseappraisal of product quality.

Customer satisfaction is one of the most important concepts in the field ofmarketing research (Jamal, 2004) Generally speaking, it links pre-purchaseprocedures with post-purchase phenomena including attitude changes, repeatpurchases, and brand loyalty (Churchill & Surprenant, 1982) Customers have asense of satisfaction when they compare their perceptions, according to Oliver(1980).

Several definitions of customer satisfaction have been offered in an effort tomake it more clear Nonetheless, it seems that the idea of contrasting post-productand service performance with previously established expectations is present in the

majority of definitions Oliver (1981) defined satisfaction as an emotional

evaluation of a product or service made after utilizing it The similar explanationof what constitutes client happiness was given by (Tse and Wilton, 1988), whodefined it as "the consumer's response to the appraisal of the apparent differencebetween expectations and ultimate outcome after consumption" (p 204).

In contrast, other investigations have found that the influence usedthroughout the product's or service's consumption stage may also have a significantimpact on the customer's perceptions of satisfaction (Hoyer, 2006) When acustomer evaluates how well a product or service performed in comparison to whatthey had anticipated, they will either feel satisfied or unsatisfied (Keller &Lehmann, 2006).

These definitions and the setting of the study indicate that customersatisfaction relates to the mindset that a consumer adopts following the use of any

kind of E-Banking services Thanks to the advantages of using E-Banking,

customer satisfaction may therefore increase, decrease, or stay the same.

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2.1.4 E-Banking Service and Customer Satisfaction

Satisfaction of customers is described as results of perception, appraisal, andpsychological responses to the experience of consuming a good or service (Sahaand Zhao, 2005) The authors went on to say that customer satisfaction is the resultof a cognitive and affective appraisal in which some benchmark performance iscontrasted with the performance that was actually received Customer satisfactionhas the capacity to grow a company's clientele, utilize more unpredictablecustomer demographics, and enhance the company's brand awareness (Fornell,1992, as cited in Alabar, 2012) Therefore, sustaining customer happiness throughimproved products and services is necessary to maintain a competitive edge Thisis done by intelligently identifying and addressing consumer desires earlier andmore effectively than competitors In order to provide customers with services thatare speedier and more efficient, e-banking is essential because it brings financialservices directly to customers’ places of work or residence, thereby strengtheningthe relationship between enterprises and their customers Those that use electronic

banking, according to Ovia (2002), have a significant impact on customersatisfaction Based on the study's findings, customer care and customer retention

should be considered because convenient, simple, and quick banking services areconnected to e-banking and human-based delivery processes, which in turn areconnected to how customers perceive how these bank services are provided tothem.

2.1.5 Benefits of E-Banking Service for Banks and Customers

2.1.5.1 Benefits of E-Banking Service for Banks

According to the Banking Review website, a government banking website ofthe State Bank of Vietnam, the advantages of e-banking were explicitly stated,which are Fee reduction, transaction speed increase, full service offeringpossibility, scope of activities expanding, and competitiveness increase,respectively.

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Fee deduction

Because there is no longer a need to interact directly with clients, fewerprocesses need to be repeated during a transaction, which in turn assists banks tocut expenses The remarkable benefits of e-banking allow commercial banks tooperate more profitably, quickly, and efficiently, which benefits clients by

lowering Fee and enhancing convenience Commercial banks have been

proactively and resolutely developing e-banking over the past few years to keepup with the changes, as well as to satisfy the demands of competitiveness and

global integration.

Transaction speed increase

When compared to traditional banks, transactions on e-banks are executedmuch faster The human resources team will be able to streamline challengingpaperwork, administrative procedures, and daily operations as a result of these

occupations having been digitized on the e-banking system Based on thedevelopment of the digital transformation process, all of these operations are nowdone thanks to the use of information technology Because of this, the State Bankand other commercial banks in many nations have the capacity to use digitalbanking to promote productivity, raise prices, and boost profits.

Full service offering possibility

Commercial banks can work with securities companies, insurance companies,and other financial institutions to develop synchronous utility products that willmeet clients’ need for connected services, investment, banking, and insurance.Commercial banks may quickly provide customers with all the information theyneed about the banks via Electronic Banking, as well as swiftly create programs to

offer new products, services, or promotions Banks are able to attract a large

number of customers in the current era of electronic transformation by providinga choice of remarkable and distinctive services through mobile banking on theirapplications.

Scope of activities expanding and competitiveness increase

In the 4.0 era, E-Banking has emerged as a major trend that will assist toimprove service quality and increase competitiveness for banks Commercial

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banks confirm e-banking as a method to raise competitiveness, reduce Fee, andimprove operational effectiveness and service quality Also, commercial banks canutilize e-banking as a tool to carry out their globalization strategy without havingto establish international offices Owners of online lending platform portals areable to replace traditional financial middlemen between customers and banks

because they can now provide a wider range of services than just traditional

lending As a result, financial institutions are more competitive with one another,which helps customers by allowing them to buy high-quality products at reducedprices Conventional banks will stop offering services and limit their offerings to

operational and financial tools.

2.1.5.2 Benefits of E-Banking Service for Customers

According to the writers of the "Digital Banking Research Document"(Kagiso Mothibi and Awelani Harulani, 2021), "Customers are no longerconstrained by their geographical location but can more freely choose the financialinstitution of their choosing to acquire a service," as they claim, because electronicoffered financial services can be accessible from anywhere They also emphasizedhow technology has made it possible for consumers to access financial services

and solutions that are customer-focused, easy to use, safe, frictionless, paperless,

inexpensive, and always available The benefits of E-Banking that these twoauthors found for customers are listed below.

Digital Identity and Biometrics

With the utilization of e-banking, customers may access the application thateach bank offers more quickly and easily Before the advent of e-banking, logginginto an application required inputting both a username and a password Users maynow instantly log in by combining fingerprint biometrics or Face ID scanning.Moreover, they can safeguard their accounts from being taken by bad guys moreeasily thanks to the use of electronic identity and biometrics As a result, significantrisks will be reduced, resulting in a positive user experience.

Big Data and AI

Kagiso and Awelani claim that by using AI to process the data, it is possibleto personalize the customer experience and boost consumer value propositions.

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Data has become essential for creating rich client experiences Take Indonesia asan example, where the e-banking revolution first gained traction in the early 2000swhen numerous national banks began offering Internet and mobile bankingservices In Indonesia, the proportion of banking transactions has varied up untilthis point Transactions that were once made through branches are now made

through internet banking channels Because of how quickly technology isdeveloping, it is easily predicted that Indonesian banking clients would move

toward a society where there is less cash in circulation in the near future Also, itis hoped that this trend would become widely adopted across the world.

Automation and personalization

The vast majority of banks claimed that they have automated and customizedthe client journey to some extent as a result of electronic transformation in thebanking industry Due to their remote locations, some clients find it difficult to getbanking services through digital channels, while others prefer a brick and mortar

banking environment It is challenging to fully automate the client journey due to

these issues To those tech-savvy customers, banks provide a fully automated andpersonalized client journey.

Increase in customers’ experience

A small number of banks said that they had digitized customer-facingprocesses and this created advantages such a drop in human error rates, animprovement in customer service timeliness, an increase in customer satisfaction,trust, and loyalty.

2.2 Factors of adopting e-banking service

2.2.1 Accessibility

There are several variables that affect accessibility, which is defined as users'ability to access information and services on the website The contact methodincludes user settings, hardware, and software; internet connections;

environmental factors; and the user's abilities and impairments Reliable prompt

responses, attentiveness, and ease of use were found to have significant effects onboth consumers’ perceptions of overall service quality and satisfaction, accordingto Godwin (2001) In the context of online services, Yang and Jun (2002)

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reinterpreted the conventional service quality criteria and proposed an instrumentwith seven service dimensions (reliability, accessibility, ease of use,

personalization, security, credibility and responsiveness) In regard to the usage of

technology, such as ATMs, phones, and the internet, Joseph et al (1999) examinedbanking service quality and identified six factors including accessibility,customization, feedback handling, queue management effectiveness, ease of use,and accuracy As a result, it is assumed that accessibility increases customersatisfaction (Ahmad and Hassan, 2011:51).

2.2.2 Reliability

According to Uyoga (2018), reliability increases customer satisfaction Thisindicates that customer satisfaction can be impacted by an organization's capacityto deliver promised services swiftly, accurately, and satisfactorily According to(Yousuf, 2017), satisfaction of customers is impacted by the service quality

reliability factor The ability of the business to deliver services in accordance with

what is promised accurately and reliably was also highlighted by Famiyeh et al(2018) It proves that reliability has a beneficial impact on customer satisfaction,according to the link between the two variables The higher the level of customer

satisfaction is, the more trustworthy the bank values are perceived by consumers.

2.2.3 Convenience

Customers can use e-banking anytime, anywhere just with Internetconnection, which offers a better level of convenience Apart from that, availabilityto computers is viewed as a relative advantage According to (Johnston, 1997),there are some service quality determinants that tend to satisfy customers are themain sources of satisfaction being attention to detail, responsiveness, concern, andfriendliness Meanwhile, integrity, dependability, responsiveness, availability, andfunctionality are the key causes of dissatisfaction (ibid source pg 52).

2.2.4 Privacy

Customers have doubts about the trust ability of the e-bank's privacy policies(Gerrard and Cunningham, 2003) Trust has a significant impact on a user'swillingness to participate in online transactions involving money and sensitive

personal information (Friedman et al, 2000; Wang et al, 2003) Users’ intentions

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to utilize e-based transaction systems may be influenced by a number of criticalfactors, including privacy The most widely favored security measure at all bankwebsites is encryption technology, which is complemented by a combination ofdifferent unique identifiers, such as a password, mother's maiden name, amemorable date, or a timer that automatically logs users out of their accounts after

a short period of inactivity.

In addition, a Java applet that runs inside the user's browser, a Personal

Identification Number, as well as an integrated signature and certificate linked toa smart card system are all used in conjunction with the Secure Socket Layer, awidely used protocol on online credit card payments (Hutchinson and Warren,2003) Hence, a smart card and fingerprint biometric recognition system providesa more secure and user-friendly form of computer access management than thepassword approach For evaluating the quality of e-services, Zeithaml et al (2000)created the eeSERVQUAL scale, which included 11 criteria: accessibility, ease of

use, flexibility, reliability, personalization, security, privacy, responsiveness, trust,

site aesthetics, and value knowledge As a result, it is hypothesized that privacyhas a positive effect on customer satisfaction.

2.2.5 Security

The degree to which the website guarantees the security of users’ financial

and personal information is related to assurance regarding security, a topic that hasseen a rise in academic interest (Kimery and McCord, 2002; Miyazaki and

Krishnamurthy, 2002) By including a privacy statement, details on the security ofthe shopping cart, and the logos of reputable third parties, security can be

guaranteed For instance, showing a trusted third party emblem ensures a particularlevel of security protection and has been demonstrated to have a substantial impact

on how consumers see the credibility of online suppliers (Jiang et al, 2008).

Web browsers’ development made it possible to conduct online banking.Consumers who use this method of online banking do not need to buy anyadditional software, save any data on their computers, create a backup copy of anydata, or wait for software updates or new versions Instead, all they need is abrowser (Kolsaker and Payne, 2002) All transactions take place online through abank's secure server The software and data needed to complete the transactions

are both on hand at the bank Account access and review, money transfers across

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accounts, bill payment, and an ever-expanding range of additional services andproducts round out the typical bank services The importance of security in onlinebanking has led to the development of a number of protocols for the protection of

encrypted data packets (Kolsaker and Payne, 2002) Consumers are unaware of theencryption, however, some banks will only allow specific versions of popularinternet browsers due to their security restrictions It confirms that it is

hypothesized that privacy increases customer happiness.

2.2.6 Ease of Use

Aesthetic web design aims to create visually appealing and pleasant websites,but requires simplicity so that customers could easily understand all theinformation updated on the website In their discussions on content preparation ingeneral, Proctor et al (2002, 2003) distinguished four of its components:knowledge elicitation, information organization and structure, information

retrieval, and information presentation.

It is highly advised that a wide variety of languages should be enclosed in thewebsite and bank app, therefore, customers from different geographical locationscould understand the usage of operation Thus, it is hypothesized that ease of useenhances customer satisfaction.

2.2.7 Content

Online banking website content is one of the elements impacting banking acceptance, according to Jayawardhena and Foley (2000) and Pikkarainenet al (2004) On the other hand, good designs, graphics, or colors, together with atendency to present a positive picture of the bank, would boost the navigation's

There is a growing amount of studies in the area of internet banking that hasexamined factors that may affect consumer satisfaction The level and type ofcustomer participation, according to (Broderick and Vachirapornpuk, 2002), hadthe greatest influence on the quality of the service experience and issues, whileJayawardhena and Foley (2000) demonstrated that features of websites like speed,website content and design, navigation, interactivity, and security have a greatinfluence on user satisfaction It is discovered that effectiveness and ease of use,

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based on research of (Yang and Fang, 2004), are crucial considerations whenassessing the quality of an online service Previously, Doll and Torkzadeh (1988)

identified five quality dimensions consisting of content, correctness, format,

usability, and timeliness that affect "end-user" satisfaction in an online context Asa result, it is hypothesized that content has a positive implication on customer

2.2.8 Effectiveness

A strong relationship between user satisfaction and response time isdiscovered through research of (Hoffman and Novak, 1996) More specifically,

slow response times following any electronic interaction frequently cause service

delivery to be delayed and leave customers wondering whether or not thetransaction was successful According to Johnston (1997), some actions, such as

speeding up information and customer processing, are likely to have significanteffects on bringing customer satisfaction; however, other actions, such as

increasing equipment reliability, will lessen dissatisfaction rather than delight

customers, and this suggests that it is more crucial to address the dissatisfiedcustomers before the satisfiers Thus, it is hypothesized that consumer satisfaction

could be perceived positively with effectiveness.

2.2.9 Fee and Charge

Being the primary means of service delivery and communication in the

e-banking sector, human-internet contact is crucial E-e-banking may have acompetitive edge by providing high-quality services to meet customers’ needs atreduced prices E-banking has successfully decreased operation and administrativeFee, according to several studies (Devlin, 1995; Siriluck and Speece, 2003) Dueto Fee reductions, in the light of (Gerlach, 2000; Jun and Cai, 2001), e-based banksprovide reduced or even no service fees and better interest rates on interest-bearingaccounts than traditional banks It follows that fees and levies should have afavorable effect on consumer satisfaction.

Based on the theoretical framework of the previous research, the authorcreates a table that lists the summary of factors affecting customer satisfactionwhen using E-Banking service.

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Table 2.1 Summary of factors adopting E-Banking service

Privacy Friedman et al (2000), Gerrard and Cunningham (2003),Zeithaml et al (2000), Wang et al (2003), HuRhinson andWarren (2003),

Security Parasuraman (1985), Elliot & Fowell (2000); Szymanski & Hise(2000), Kimery and McCord (2002), Jiang et al (2008),Christian & France (2017)

Convenience Johnston (1997), Ibrahim (2006), Duong Tri Thao & NguyenHai Bien (2011)

Effectiveness Parasuraman et al (1988), Hoffman and Novak (1996), Johnston(1997), Liao & Cheung (2008), Gerrard & Cunningham (2015),Nguyen Hong Quan (2019)

Content Doll and Torkzadeh (1988), Jayawardhena and Foley (2000),Broderick and Vachirapornpuk (2002), Yang and Fang (2004),Pikkarainen et al (2004)

Ease of UseProctor et al (2002, 2003), Liao & Cheung (2008), Francisco(2013), Gerrard & Cunningham (2015)

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Fee Devlin (1995), Woo & Henry (1999), Gerlach (2000); Jun andCai (2001), Siriluck and Speece (2003), Pham Duc Ky & BuiNguyen Hung (2007), Duong Tri Thao & Nguyen Hai Bien

(2011), Shah (2011)

Source: Author’s summary from literature reviewAfter the process of systematizing the theoretical framework of the previousresearch, the author decides to follow the SERVQUAL model of Parasuraman atel (1988) which consists of 5 factors including tangibles, reliability, effectiveness,security, and empathy with 22 observation variables However, based on theresearch objectives, the author would remain 3 factors composing reliability,

effectiveness and security in accordance with adding 2 elements includingconvenience, and ease of use following the research of Gerrard & Cunningham

(2015) In addition, one more important factor comes originally from the research

of Shah (2011) Specifically, this research would utilize a 6-factor model identifiedby 29 observation variables affecting customer satisfaction when using E-Banking

service provided by TPBank.

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CHAPTER III: RESEARCH METHODOLOGY

In Chapter 3, the research methodology, the model and variables, the datacollecting strategy, and the tools, techniques, and processes that allow data analysis

to address the research questions are all presented.

The steps that make up the complete study technique are as follows:Step 1 Identifying problems and aims of the study

Step 2 Conducting exploratory study

Step 3 Building models and variables for the studyStep 4 Building scale and designing questionnaireStep 5 Conducting survey and collecting data

Step 6 Using statistical tools to process the data

Step 7 Concluding problems of the study and giving some suggestions

3.1 Conducting Exploratory Study to Identify Types of Factors AffectingCustomer Satisfaction in E-Banking service

The following table lists the summary of factors affecting customer satisfactionwhen using E-Banking service from previous reports.

Table summary of factors affecting customer satisfaction when using Banking service

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3.2 Research Model, Variables Description, and Research Hypothesis

3.2.1 Research Model

From the SERVQUAL model of Parasuraman (1985) and Parasuraman et al(1988) with the correction of the author, the research model is proposed withdependent variables- the customer satisfaction and independent variablesincluding reliability; security, convenience, effectiveness, ease of use, and fee.

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satisfaction inE-Banking

3.2.2 Variables Description

The research model is based on the SERVQUAL model of Parasuraman et al(1988) combined with the author’s correction of adding 3 more factors includingconvenience, ease of use, and fee from other researchers to reflect customersatisfaction when using E-Banking service more appropriately From the aboveresearch model, the factors would be described in the light of the following table:

Table 3.2 Description of each independent variable

Factors Independent Variables

R1: E-banking service is precise and speedyReliability

(R) R2: The Liveness Check of Live Bank can remember customers’face accurately

R3: E-banking service performs customers need right on the firsttime

R4: E-Banking service is more favourable than visiting the branchfor making transactions

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RŠ: E-Banking service is associated with notifications right aftermaking transactions

S5: E-Banking services offers secure personal privacy

S6: E-Banking site does not share any personal informationConvenience

C1: Live Bank and E-Banking service is available 24/7

C2: Customers can easily pay transactions through Face pay

C3: Live Bank system can play a key role as a traditionaltransaction counter such as recharging cash into accounts, openingonline savings

C4: The system of ATM is distributed densely to serve customers’needs

C5: The ATM system allows customers to withdraw money even ifcustomers leave bank cards at home

EOU2: E-Banking services are provided in various languages

EOU3: Interaction with the E-Banking system is clear andunderstandable

EOU4: The design of the app is friendly for users

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