34 CHAPTER III: SOLUTIONS TO IMPROVE THE QUALITY OF STOCK BROKERAGE ACTIVITIES AT VPS SECURITIES JOINT STOCK COMPANY .... The level of development of a brokerage company is not only meas
The urgency of the Study
The stock market is a fundamental part of the modern market economy Most developed countries with strong economies have stock markets Stock market movements strongly reflect public opinion and can also be understood as investor’s opinions on market prospects and economic trends
The market scale is increasingly expanding, leading to the development of intermediaries and financial institutions, especially securities companies In addition, the number of investors participating in the market also increased significantly The level of development of a brokerage company is not only measured by the size of its market share but also by the quality of service it provides to customers This is also an important factor contributing to the sustainable development of the market According to the state Securities Commission of Viet Nam as of the end of February
2024, Vietnam had nearly 7.5 million individual securities accounts, equivalent to about 7.5% of the population so it means that more and more people interest in stock market nowadays With the number of investors continuously increasing, the number of securities companies will not stop at the current number
Currently, VPS still affirms its leading position in market share among securities companies By the end of the fourth quarter of 2023 and the whole year
2023, VPS once again made its mark on the gold board when continuing to achieve the largest market share in the stock brokerage segment on both HOSE and HNX exchanges Specifically, VPS reached a market share of 19.92% in the fourth quarter of 2023 and 19.06% for the whole year on HOSE, an increase of 5.11% over the same period last year and 1.68% over 2022, respectively
However, in order for the company to continue to make new strides and maintain its current leading position, the company team needs to constantly develop and innovate service quality to retain and attract more customers products during the current volatile market period
During the internship in VPS and have a chance to experiencing their working’s environment and operating activities, I realize that there’s still some remaining limitations of the brokerage activities Based on the above practical context, I decided and selected the topic” Improve the quality of stock brokerage activities at VPS” With this topic I suppose it will help administrators partly understand customers’s thoughts and come up with appropriate service policies to help customers have the best experience.
Research objective and questions
In this essay, I will analyze the current state of operations and brokerage services at VPS, thereby pointing out positive points and limitations from the perspective of an investor using VPS services
To actualization the topic, I will need to complete the following parts: Which is systematize the theoretical basis related to brokerage activities efficiency and qualitative criteria to evaluate the effectiveness of brokerage activities, collect database and use suitable research methods and finally analyze and evaluate the current state of efficiency of brokerage activities at VPS securities company then provide appropriate and feasible solutions to improve operations and improve the efficiency of brokerage activities at VPS
2.2 Research questions What is the stock trading situation at VPS Securities Joint Stock Company?
What factors affect stock trading activities at VPS Securities Joint Stock Company?
Propose solutions that can help develop stock trading activities and improve service quality at VPS Securities Joint Stock Company?
Subject and scope of the study
3.1 Subject Quality of stock brokerage activities at VPS
Research on brokerage activities at VPS Securities Joint Stock Company and proposals and solutions to develop the quality this activity In addition to clarifying and understanding the assignment, the writer also researched stock market activities related to brokerage activities
Time frame of research is from 2020-2024.
Research Methodology
This article uses qualitative methods to collect, synthesize and present data, then uses methods to analyze the collected data
Collect figures and data from the Internet and financial reports, annual reports from stock magazines, investment magazines, stock channels, etc Books and newspapers are systematized and recorded in reports by accessing the relevant websites of the National Securities Commission, Department of Statistics, National Supervisory Commission, etc - In addition, the author also collected information from many foreign websites to expand the persuasiveness of this topic
Using the descriptive statistical techniques presented in the table showing the operating profits of brokerage businesses, I need to have selected and calculated statistics that can be used to explain the results obtained - Comparison with actual data: Competition is unavoidable because the securities industry has many enemies and comparison is inevitable To evaluate the position of securities companies in the market, the author uses a comparative method to highlight the advantages and
7 outstanding performance of securities companies - There are also tables and graphs to make the numbers clearer and easier to understand.
Thesis organization
In addition to the introduction and conclusion, the content of the research paper includes three main chapters:
THEORETICAL BACKGROUND OF SECURITIES
Securities company
According to decision No 27/2007/QD-BTC we can simply understand that a securities company is an organization operating with legal status and a business license Securities trading license is issued by the State Securities Commission Securities trading activities can be some or all of the following activities: securities trading, securities brokerage, securities investment consulting, and securities underwriting
Securities companies play a very important role in our country's developing economy today, especially in the stock market as an intermediary for buying and selling stocks and distributing capital to help promote market liquidity make the market grow more and more
According to luatminhkhue, securities company have many important roles for different entities in the Vietnamese economy
We often hear the phrase IPO or Initial Public Offering, which is understood as a business issuing shares to the public for the first time Issuing shares of a business is an activity to mobilize capital, all of these activities are carried out through an intermediary, which is securities companies In business stock issuance deals, securities companies play a consulting and underwriting role to ensure that sales transactions take place smoothly
1.1.2.2 For individuals who are investors
One of the first steps for investors to trade on the stock exchange is to have a stock trading account These hidden accounts will be opened at securities companies Securities companies also have the role of providing assessments and financial reports on the "health" of the business to give investors an overview before making investment decisions
A securities company is an intermediary unit but also an indispensable unit and component to constitute the stock market
In the primary market, the role of securities companies for IPO businesses is to issue and price shares at the first offering
In the secondary market, the role of securities companies is to regulate the market through self-trading activities, including increasing income for their own companies by creating liquidity value and regulating stock prices promissory note
Management agencies must have the function of observing the securities market and making reasonable adjustments in accordance with current regulations of the Securities Law and State agencies These activities of the management
9 agency are partly based on information about the stock market provided by securities companies The information provided by securities companies can be information about stocks, transaction information, dividends, industry and business data Securities companies will have to cooperate with regulatory agencies to limit or prevent misconduct in the securities market that may be caused by individuals or organizations
Securities companies can be considered an important sanction in the stock market
According to Article 72, Securities Law 2019, it is stipulated that securities companies are licensed to perform one, several or all of the following business operations:
Stock brokerage is the act of a securities company acting as an intermediary to buy and sell securities for customers
(Securities Law 2019) 1.1.3.2 Securities Investment Advisory
Securities investment consulting is a securities company providing investors with analysis results, publishing analysis reports and recommendations related to securities
Self-trading of securities means a securities company buying or selling securities for itself
(Article 4, Clause 30 - Securities Law 2019) 1.1.3.4 Underwriting
Securities underwriting is a commitment to the issuer to purchase part or all of the issuer's securities for resale or to purchase the remaining undistributed securities or to make maximum efforts to distribute the number of securities to be issued by the issuing organization
Pursuant to Article 175 of Decree 155/2020/ND-CP has the following regulations:
Minimum charter capital for business operations of securities companies in Vietnam is as follows: a) Stock brokerage: 25 billion VND; b) Proprietary trading: 50 billion VND; c) Underwriting: 165 billion VND; d) Securities investment advisory: 10 billion VND
* Minimum capital granted to branches of foreign securities companies in Vietnam is 10 billion VND
* The minimum charter capital of a fund management company and the minimum capital granted to a branch of a foreign fund management company in Vietnam is 25 billion VND
Brokerage activities of securities companies
In many country, stock brokerage activities play an extremely important role in the stock market, bringing many benefits to both investors and the economy According to “corporatefinanceinstitute”, they describe brokerage as a person who provides intermediary services in various areas, e.g., investing, obtaining a loan, or purchasing real estate A broker is an intermediary who connects a seller and a buyer to facilitate a transaction and according to “Lawinsider” securities brokerage means the operation of a securities company acting as an intermediary to carry out securities buying or selling orders on behalf of the customers Stock brokerage is an intermediary that buys and sells securities for customers (Clause 20, Article 6 of Securities Law No 62/2010/QH12, 2010) It can be understood that the brokerage business is completely based on the customer's investment capital, and they receive income in the form of commissions for each such transaction
Stock brokerage is a securities business activity in which a securities company represents a customer to conduct transactions through a trading mechanism on the basis of stock trading or the OTC market, for which the customer will have to bear the responsibility responsibility for the results of that transaction Brokers only carry out transactions according to customers' orders to earn commission fees, they do not have to bear the risks from that trading activity (Thai Ba Can et al., 2014)
According to the IMF, stock brokerage services are part of financial services According to Saga, in a very narrow sense, it is a group of services related to: capital mobilization, capital arrangement and capital management
Stock brokerage service has its own characteristics compared to other services when it acts as a buying and selling intermediary For example, if a business company provides travel services, the business company is the seller of the service and the customer is the buyer of that travel service at the price offered by
12 the seller or agreed between the two parties, however For brokerage services, the securities company provides services with the role of connecting buyers and sellers together with the following characteristics:
The customer is the one who makes the buying and selling decision and the broker must follow that order exactly
The broker (can be a securities company) is the person who directly executes the purchase and sale orders at the request of the customer
Accounting for transactions must be done on accounts owned by the customer
Brokers are only allowed to collect service fees as agreed in the transaction entrustment contract.
Quality of stock brokerage activities
Zeithaml (1987) believe that service quality is the customer's assessment of the superiority and overall excellence of an entity It is a form of attitude and results from a comparison between what is expected and the perception of what is received
According to CEM PARTNER Blog Service quality is the ability of service providers to meet customer expectations and satisfy customer needs
Service quality is what customers feel when interacting with a business It is subjective, depending on customer evaluation and satisfaction level Each customer will have a different assessment of service quality At different times, with the same service, customers can also have different assessments of service quality Here, it means that the securities company meets the expectations of customers with professionalism, ethical conduct, operational efficiency, and client satisfaction
1.3.2 Indicators for evaluating the quality of brokerage activities
To comprehensively evaluate the quality of stock brokerage activities, it is necessary to use a system of indicators that includes the following aspects:
An increase in the number of customers and market share Market share is a common and important indicator to evaluate any business activity In today's economy, "customers are king" because it is customers who bring profits and success to businesses The securities sector is no exception The better a securities company operates, the more customers it attracts, and the securities company's products and services better meet customer needs In today's competitive conditions, securities companies are increasingly enhancing their position, creating a good image to expand market share Stock brokerage activities are only considered quality when the securities company has a diverse product and service portfolio and good service quality to attract more and more customers
Turnover from brokerage activities: is the total value of matching trading orders at a securities company If sales grow steadily over the years, it shows that the scale of brokerage activities is also increasing, leading to growing and expanding stock brokerage activities, contributing to improving the quality of stock brokerage However, it is also necessary to combine analysis of other indicators to ensure accurate decision making In addition, it is necessary to consider the proportion of revenue from stock brokerage in the total revenue of the securities company This indicator indicates the ability to generate profits and the position, position, and contribution of stock brokerage activities in a securities company
Cost indicators for brokerage activities: operating costs include all related costs that securities companies must pay to provide securities brokerage services to satisfy the wishes and needs of customers If operating costs are greater than the revenue brought in, the securities brokerage activities of the securities company will not achieve the desired efficiency
Profit from brokerage activities: this is an indicator that reflects the efficiency and profitability of stock brokerage services when comparing the difference between revenue and expenses let go
Profit from stock brokerage = Stock brokerage revenue - Stock brokerage costs
Collateral: includes cash balance, bank deposits and other assets in accordance with the requirements for securities transactions and payments to ensure safety for securities companies and not cause major losses to customers This indicator helps increase customer confidence, peace of mind and safety when trading at securities companies
Competitive brokerage fees: a reasonable and competitive stock brokerage transaction fee schedule compared to rival companies will be attractive, attracting more and more customers to the securities company, helping to increase revenue from the service stock brokerage service
It is shown in the professionalism of brokerage's products and services, the operating ability of the securities company, and the level of impact of brokerage's activities on other activities
Operational ability: The operational ability of brokerage activities shows which customers the securities company's brokerage activities can provide and satisfy, the size of customers, and the professionalism of brokerage staff gender, scale and space of the trading floor, technical facilities and software technology that the company is using
Professionalism of products and services: Securities companies provide comprehensive products: from providing research results, analysis to advice, to monitoring accounts and promptly giving recommendations necessary recommendations to clients (This is called a full service brokerage firm) Or the company mainly helps customers execute orders to buy and sell securities and collect a small commission that only reflects the cost of executing the transaction
The degree of impact of brokerage activities on other activities: when brokerage activities operate with good quality, it will lead to other activities such as
15 securities analysis, securities investment consulting, and depository activities
Stocks develop and vice versa Because those activities perform a number of operations to supplement brokerage activities, making the products of brokerage activities more complete.
Factors affecting the quality of stock brokerage activities
*Subjective factors Subjective factors are factors that come from within the enterprise and are controlled and regulated by the enterprise's leadership, including
Prestige and scale of operations of the securities company: this is a factor that greatly affects the quality of brokerage services Company reputation is an intangible asset, a competitive factor between companies For a new investor, they almost always choose the most reputable, even leading, companies in the field or industry they plan to participate in to conduct stock trading transactions and be trusted advising on investment decisions, even though these securities companies sometimes have high fees, they are willing to pay in return for helping investors find maximum profits The size of a securities company is based on the size of its capital and its history and operating achievements For some securities companies, a long history of operations and large charter capital have created prestige and brand for the securities company
Facilities and technological level: as an intermediary to buy and sell securities for customers, facilities are extremely important in securities trading activities of securities companies Because the stock market is extremely sensitive to socio- economic fluctuations, if securities companies have facilities and modern information technology levels to collect, synthesize, analyze and process information for consulting and implementation Show the most accurate and fastest transactions for customers Currently at securities companies, the main facilities are network systems and information systems, trading floors, and online trading systems Especially today's online trading system is very necessary for customers because of its
16 convenience When customers do not have time to go to the exchange to trade, the online trading system is an effective support tool, helping customers invest quickly and promptly with high security
Internal control: high information security requirements at securities companies are a decisive factor for success in competition between rival securities companies Information security issues at securities companies are a decisive factor in the company's success in competition Good internal control and information security make customers feel safe and secure when transacting at securities companies Avoid cases of violating the law and leaking confidential information that will negatively affect the company's image This will make it difficult for customers to entrust their assets to such securities companies
Human resources: In the stock market, especially in stock brokerage services, the human factor occupies a quite important position, affecting the quality of securities companies in general and brokerage services securities in particular The success of brokers is also the success of securities companies Successful brokers will bring huge sums of money to the company To achieve efficiency and improve the quality of brokerage activities, today securities companies and brokers always have to compete to attract customers and provide services to potential customers To do that, brokers must constantly improve their knowledge to master and use basic to professional skills Therefore, if securities companies want to win in competition, they must constantly train their brokerage staff to become professional, skilled, and ethical brokers to promote their strength profession to win the trust of customers, thereby enhancing the company's reputation and contributing to increasing the efficiency of stock brokerage activities Nowadays, when the technical means to support customers are almost identical, the brokerage force is the core that brings success to securities companies
Customer care and development policy: is the policy that securities companies apply to express their marketing strategy: the ultimate goal is to provide services to
17 maximum satisfy the increasing needs and desires of customers , thereby achieving the set goals and maximizing the profits of the securities company
Marketing policy: to improve the quality of brokerage services, marketing policy is one of the factors that have a certain influence on the quality of brokerage services
*Objective factors Objective factors are factors outside the enterprise, originating from macro, market and management agencies such as
Economic growth and political stability: promoting stock market growth leads to a corresponding increase in brokerage activities
Legal environment: a complete and highly effective legal basis for investment, securities and the stock market is an important factor in monitoring brokerage activities and handling possible disputes in the field of brokerage activities that are directly related to the economic interests of each participating entity
Policy: policies to encourage and attract investment, tax incentives can create many advantages for the activities of entities participating in the stock market and vice versa
Development of the stock market: The stock market is the operating environment of securities companies The development of the stock market will promote the development of other activities and vice versa brokerage activities are also in that relationship
Securities Business Association: Is an organization that functions as a bridge between securities traders and state management agencies; is the common voice of securities traders with the investing public as well as state management agencies In addition, the association also has a role in providing comments for the issuance of policy mechanisms by state management agencies for securities trading companies Therefore, correct and reasonable opinions and operational policies of the association
18 will create favorable conditions for all activities of securities companies in general and brokerage activities in particular and vice versa
Competitiveness: Securities companies are forced to offer many separate services to attract customers to the company, in order to survive and develop amid fierce competition from rival securities companies This directly affects the quality of services, revenue, costs and profits of securities companies
Traditional culture: people's understanding and open mind about securities will help the stock market and brokerage activities become more favorable and develop On the contrary, shyness, passivity, poor qualifications, conservative culture, lack of marketability, and limited understanding will cause some difficulties for the development of the stock market and brokerage activities
Level of income and savings of the population: if the level of income and savings is high, it will be easier for investors with financial potential and the ability to actively participate in the stock market Thereby also contributing to the professional development of brokerage operations.
Study overview
As Vietnam's market economy increasingly develops, the stock market goes hand in hand with it Since then, more and more organizations have entered this field and operated in the field of stock brokerage, causing competition to become very high Therefore, there have been many previous studies on stock brokerage activities
Regarding foreign studies, Seung-Hyun Rhee, Nam Wook Cho (2008) with the topic "Increasing the efficiency of business processes using a theory of constraints" researched and improved the theory of constraints (TOC) - Theory of constraints to determine goals organization's goals, the factors that hinder the achievement of these goals and therefore improve by trying to minimize or eliminate the limiting factors The authors simulated the working process of a real bank and applied the proposed method for analysis From the results obtained, they demonstrated that the basic theory of constraints can improve the efficiency of
19 business process especially when the workload is large but resources are scarce Dr
K I AI-Sulaiti with the topic Attitudes of Qatari Investors in Selecting a brokerage Firm in Doha Securities Market” researched about factors that affect the behavior of Quatari when choosing securities company through some basic factors such as reliability factors, qualifications of brokers,… the research results showed that there are two factors that most determine the choice to use services at a certain securities company: "The product service factor that the securities company provides and the reliability factor” However, this topic will be difficult to apply widely since the author only research through nine securities companies and they all located in the Qatar
Regarding domestic studies Dr Tran Thi Thai Ha has carried out a ministerial- level research project titled "Some issues on the formation and development of the stock brokerage profession" This research has created a new foundation for the development of the stock market and especially the stock brokerage profession in the future In the article, the author raised a number of issues related to different types of brokerage Dr Tran Phuong Thao with the topic” brokerage activities Ho Chi Minh City Securities Corporation” conclude that first, Brokerage always plays a role as the main source of revenue in the operating structure of any securities company; Second, the brokers is also the people who will contact and work with investors the most, that is why, what is trained, practiced, and the professional style of a securities company will is expressed entirely through that the broker employee
As far as I can see, there has not been any research evaluating the factors that affect the quality of stock brokerage services, and if there is, it has not gone into much depth and has mostly only researched the factors that affect the quality of stock brokerage services about the business activities of securities companies, so I will research about that in this thesis
RESEARCH RESULTS
Overview of VPS Securities Joint Stock Company
Company name: VPS Securities JSC - Forerunner: Vietnam Prosperity Bank Securities Company (VPBS)
Transaction office: No 8 Pham Ngoc Thach, Dong Da, Hanoi
VPS had its charter capital increased from 3,500,000,000,000 VND to 5,700,057,000,000 VND according to Decision No 119/GPĐC-UBCK of the Chairman of the State Securities Commission
Website: https://www.vps.com.vn
On December 25, 2006, Vietnam Prosperity Joint Stock Commercial Bank Securities Joint Stock Company officially came into operation with an initial charter capital of 50 billion VND At this time, VPS is a wholly owned subsidiary of
Vietnam Prosperity Joint Stock Commercial Bank VPBank In 2015, from the limited liability company model, the company transformed into a joint stock company In October 2018, VPBS raised its charter capital to 3,500 billion VND, ranking in the group of three securities companies with the largest charter capital in the country On February 21, 2019, Vietnam Prosperity Bank Securities Company (VPBS) changed its name to “VPS Securities Joint Stock Company”
2.1.2.1 main business activities of VPS
VPS is a company that provides diverse products to customers, creating added value for businesses and investors Products include stock brokerage, financial services, investment banking services, financial consulting and analysis Below is a summary of information about each segment of VPS operations
Corporate financial consulting services: Corporate financial consulting services are VPS's outstanding strength VPS always strives to understand and meet customer needs, gradually becoming a trusted partner of many businesses Below are details of the main activities that bring revenue to the consulting sector:
Debt issuance consulting services: Debt issuance consulting services include two main areas: debt restructuring consulting services, including short-term and long- term secured loans; Consulting services for issuance of debt instruments including plain and secured bonds, domestic and foreign loans, certificates of deposit
Consulting services for issuing capital instruments: VPS provides services including consulting, listing, exchange transfer, capital structure finance; IPO initial public offering; issue shares to increase charter capital; Private placement for existing investors and strategic investors M&A consulting services: With a network of investors around the world and understanding of domestic companies, VPS has successfully consulted on many M&A deals worth up to 5.32 billion VND since 2019
2007 Notables include the divestment deal of Hoang Anh GiaLai Hydropower Joint Stock Company, Vietnam Steel Corporation and Vietnam Coal and Mineral Industry Group
Stock brokerage services: Stock brokerage activities include two segments: Individual customer brokerage and Institutional customer brokerage Each department has specific goals and action plans, but they all aim at the common goal of the whole block: Promoting increased brokerage market share To meet customers' transaction needs for convenience, speed, safety and security, VPS is equipped with
22 a stock trading solution system provided by Freewill By focusing on investing in modern technology systems, promoting the provision of online services and phone transactions for customers with many attractive incentives and dedicated advice, after
15 years of operation, dynamic VPS has the leading stock brokerage market share in the country
Business of financial services products: Financial services department provides products to support stock brokerage activities while independently developing its own customer base In addition to committing to always maintaining and providing the best quality traditional products, VPS sets the goal of becoming a pioneering company and always leading in introducing and developing diverse financial products to serve the needs of customers ever-increasing customer demand Financial services provided by VPS to investors include but are not limited to margin transactions, advances, and collateral management Stock investment and capital contribution: VPS's proprietary investment division includes a team of experienced personnel knowledgeable about the financial market, focusing on analyzing and making investments in listed stocks and bonds businesses and government bonds to provide a stable source of annual income Investment activities are carried out with the principle of prudent investment and only taking advantage of market opportunities when the ability to bring profits is clearly seen
2.1.2.2 Stock brokerage process at VPS
VPS Company's brokerage process is very simple, including 4 steps as follows
Step 1: Search for investors and open a trading account
Step 2: Record the customer's transaction request
Step 3: Match the transaction order
Step 4: Authenticate results, transfer payment and transfer securities ownership
According to the table above we can see, the majority of VPS's revenue comes from stock investment activities and from 2021, their stock brokerage activities have achieved certain success and become one of the main source of revenue for VPS
Table 2: Market share of VPS
Being one of the leading companies in implementing eKYC (online customer information authentication) is an important "key" to help VPS simplify account opening operations, making it easier for individual investors access to the market
Thanks to that, VPS welcomes a massive wave of F0 individual investors entering the market during the boom period of 2020-2022 As shown in the market share table above, VPS is also currently leading in stock brokerage.
Evaluate the quality of brokerage activities at VPS
From the theoretical basis of service quality and criteria for evaluating brokerage service quality, the author finds that factors affecting the quality of stock brokerage services at VPS Securities Joint Stock Company include:
2.2.1 VPS's reputation and scale of operations
With more than 15 years of operation in the market, VPS has become the choice of many customers, providing a series of convenient services such as financial services, capital arrangement, securities underwriting, and confirmation consulting business valuation, capital restructuring, business mergers and acquisitions,
As of June 30, 2019, VPS company owned charter capital of up to 3,500 billion VND, total assets reached 10,274 billion VND VPS is a reputable unit in the investment field Behind the company are the leading financial and banking institutions in the country VPS Company has more than 15 years of operation in the market and is supervised by leading agencies with high authority in managing and securities operating investment activities such as the Ministry of Finance and the State Securities Commission countries, stock exchanges,
VPS is also a reputable unit that has received many prestigious awards at domestic and abroad, contributing significantly to building and expanding the Vietnamese stock market, creating meaningful community values
Established in 2006, VPS Securities Joint Stock Company (VPS) - formerly Vietnam Prosperity Joint Stock Commercial Bank Securities Joint Stock Company, has become one of the largest securities companies in Vietnam with capital Charter capital reached 3,500 billion VND and total assets scale was 10,274 billion VND as of June 30, 2019 VPS provides diverse, high-quality products, creating added value for businesses and investors, including: stock brokerage, financial services, investment banking services, financial consulting and analysis As a financial intermediary organization, investment banking activities are the central focus of our development orientation Specifically, VPS performs financial services such as capital arrangement, securities underwriting, business mergers and acquisitions
(M&A), consulting on business valuation, capital restructuring, debt in each stage and period
With the goal of providing outstanding world-class financial products and services, VPS has gathered a team of domestic and foreign experts with rich experience in the financial market, along with equipping a comprehensive system The most modern information technology system The achieved results have helped VPS increasingly assert its position in the Vietnamese financial market, becoming one of the leading prestigious financial institutions in Vietnam and the region
This group of factors affects whether VPS can build a tangible environment to provide brokerage services or not?
2.2.2.1 VPS's network and transaction offices
After more than 16 years of operation, VPS's system has been expanded with
01 headquarters in Hanoi, 03 branches in Ho Chi Minh city, Da Nang and Quang Ninh, 02 Transaction Offices under the Head Office and 01 Transaction Office under the branch at Ho Chi Minh city
VPS's electronic trading board is highly aesthetic, making it easy for customers to place orders and transact
2.2.2.3 Stock trading system via the internet
Providing optimal online trading solutions, allowing investors anywhere to monitor stock market information and trade in real time, VPS's online trading system provides outstanding features
Secure with PIN or Token
Convenient transactions on handheld devices (mobile phones, iPhone, iPad): VPS SmartOne: trading on computer (PC)
VPS SmartOneApp: transactions on mobile phones
VPS SmartPro: for professional investors, organizations, account groups with many outstanding functions
Providing a variety of outstanding functions and utilities:
Place orders during and outside trading hours
Portfolio management (statistics, expected profit/loss )
Flexible and fast online money transfer through the systems of VPBank and other banks VPS always provided customers with the best quality of service to make sure customer can make transaction as smooth as possible
Regarding the trading system, to keep up with the 4.0 technology trend, VPS has launched modern trading platforms with fast processing speed, stability and high reliability such as webtrade, trading applications via SmartOne, SmartPro phones Up to now, both SmartOne and SmartPro applications developed by VPS themselves have been highly appreciated by customers for their superiority and friendliness, fast transaction data processing speed, real time, and integration Combines all the features so investors can trade and make money requests on securities accounts In addition, SmartRobo software, a chat bot tool based on Skype and Facebook applications developed by VPS, is considered a pioneer in new trading support tools on the Vietnamese stock market today Placed in the context of the 4.0 industrial revolution, with the orientation of VPS becoming a leading financial technology company in Vietnam, Mr Nguyen Lam Dung expects that the law on securities and the stock market is being improved Considering amendments and supplements will
28 create the necessary legal framework to pave the way for the development of financial technology companies and new financial products, contributing to helping Vietnam's capital market catch up trend and narrow the development gap with markets in the region as well as in the world
2.2.3.1 VPS's commitment to providing securities brokerage services
VPS always prioritizes ensuring each customer transaction is quick, effective, and transparent We always focus on investing in the most modern transaction systems to provide customers with speed, accuracy, security in transaction activities and continuous monitoring to help improve the quality of our products The goal is to provide the best brokerage services to all customers in all financial market conditions
VPS has a long-term commitment and always carries out transactions with the highest service standards for customers.Our experienced stock trading team has been involved in the Vietnamese stock market since its early years, specializing in providing market updates throughout and after implementation executing the customer's trading order to ensure that the transaction is carried out successfully
VPS's trading team has a deep understanding of the market as well as grasping customers' goals, thereby providing thoughtful care and special treatment to customers We are committed to transparency and ensuring the fastest and most accurate execution of transactions for customers
2.2.3.2 Ensure security of both personal and transaction information
VPS uses security measures, consistent with applicable law, to protect personal information from unauthorized access or use However, the open nature of the global information system means that personal information can be spread beyond the control of the security measures used by VPS; and information can be accessed and used by people other than the intended recipient of the information
29 ã To protect against unauthorized access to personal information by third parties, all electronic personal information will be retained by VPS on a system protected by a secure network architecture containing firewalls and intrusion detection devices Servers that store personal information are "backed up" (recorded) on a regular basis, making every effort to avoid accidental deletion or destruction of personal information, and are stored in secure systems and appropriate response systems ã When a user contacts VPS to inquire about a website or service, VPS can confirm the user's identity on the phone before exchanging information The questions and answers that the user selects when logging into this website for the first time will be used for this identification process VPS always make sure that the customer is indentify before access their own account by biometrics
In fact, VPS always focuses on legal regulations and continuously issues documents to closely follow the regulations of the Ministry of Finance
Regarding the personnel structure related to the compliance department: VPS has long established and built a system of risk management, internal control, and internal audit, according to the provisions of Circular 210/2012/TT -BTC
Overall assessment on the VPS joint stock company’s service quality 33 1 Achievements
Compared to other securities companies in Vietnam, VPS is the leading securities company providing securities services A long journey with the determination of all employees, VPS has achieved many achievements in service quality such as:
VPS's transaction offices have spacious transaction space, modern machinery and equipment, and complete facilities
The staff's professional qualifications are high, skilled, and experienced in stock brokerage operations, quickly accessing new knowledge
The friendly and cheerful customer service attitude of the staff creates a good impression on customers
VPS staff's attire is neat and polite
VPS has built a customer care policy (giving gifts, sending birthday messages, ) on holidays and special occasions (birthdays, holidays, Tet, )
Promote the VPS brand through providing comments and writing articles for specialized newspapers and magazines and sending experts to participate in programs on VTV, YouTube and other social network channels
VPS has applied specialized brokerage activities to establish individual customer departments and organizational customer departments Promote business activities at transaction offices through directly assigning targets such as sales, shares, outstanding loans, new account books, to branches and transaction offices to promote operations business, be more proactive in the business of the units
VPS uses modern technology so all customer data is centrally managed, ensuring maximum security of VPS's data
VPS has 01 headquarters in Hanoi, 03 branches in Ho Chi Minh city, Da Nang and Quang Ninh, 02 Transaction Offices under the Head Office and 01 Transaction Office under the branch at Ho Chi Minh city Compared to competitors of this scale, VPS is still very small
The transaction room is not clean and spacious This affects customers' goodwill when coming to VPS
VPS uniforms are considered neat and polite, however, there are no sanctions to comply, so sometimes they do not create professionalism and impress customers VPS's preferential and promotional policies are not competitive compared to other securities companies VPS's stock brokerage transaction fees and term loan rates are not competitive compared to companies such as: MBS, SSI, vcsc, VNDS,
The effectiveness of brokerage activities has not been fully and properly evaluated, so the role of brokerage in securities activities (high profits, risk dispersion, ) has not yet been seen
The service attitude of the brokerage staff is friendly and cheerful, but the professionalism and uniformity are not high Marketing policy has not been properly developed, the VPS brand is still not widely known to customers
2.3.3 The cause of the limitations
Although VPS has given orientation for the development of stock brokerage, the specific plans and strategies have not been methodically planned and have not been grouped VPS need to take customers as the basis to design each product and service to satisfy customer needs
VPS staff training has not been properly focused, sales skills are limited and have not created uniformity throughout the system The sales staff do not clearly understand the regulations on VPS products, especially newly deployed products The main reason is that VPS's training process is not done well
The product list has improved but is not yet diverse and rich Other services such as providing unlisted OTC securities services do not have policies focusing on development
Although modern information technology systems have been applied, exploitation is still limited and resources have not been fully utilized, so the processing of transactions on the system is still slow
VPS's marketing strategy is not clear, the organization is not methodical and ineffective Choosing mass media for advertising is appropriate, but the frequency of appearance is low, leading to not leaving an impression on customers After completing a promotion or advertising program, there is no organization to evaluate or measure the effectiveness of the program VPS has not proactively researched to assess customers' needs and desires to propose highly effective marketing policies
Specific regulations in each product and service also affect the level of customer satisfaction In case the customer has not or does not satisfy the regulations in the product or service, VPS cannot meet the customer's needs (for example, the customer does not meet the regulations on margin securities, fees, loan interest rates) , )
SOLUTIONS TO IMPROVE THE QUALITY OF STOCK
Orientation to improve the quality of stock brokerage services at VPS
or measure the effectiveness of the program VPS has not proactively researched to assess customers' needs and desires to propose highly effective marketing policies
Specific regulations in each product and service also affect the level of customer satisfaction In case the customer has not or does not satisfy the regulations in the product or service, VPS cannot meet the customer's needs (for example, the customer does not meet the regulations on margin securities, fees, loan interest rates) , )
CHAPTER III: SOLUTIONS TO IMPROVE THE QUALITY OF STOCK BROKERAGE ACTIVITIES AT VPS SECURITIES JOINT STOCK
3.1 Orientation to improve the quality of stock brokerage services at VPS
Maintain a reasonable growth rate, balance capital resources - capital use, dominate the stock trading market share, maintain financial safety ratio to ensure VPS operations are effective and safe Gradually improve financial capacity and services towards efficiency, safety and sustainable development
Change organizational structure and distribution channels to target customers
VPS needs to restructure its organizational and operational model Because VPS's upcoming orientation is to focus on developing the stock brokerage segment, it is necessary to adjust customer orientation, especially for individual customers, diversifying product offerings along with utilities for customers client
Focus on mobilizing capital from different sources to supplement margin lending capital according to a flexible, timely and effective mechanism according to the stock market situation to stabilize capital sources to ensure loans to avoid situations of "stuck and out of loan limit"
Operational growth: VPS operations need to ensure strong, stable and sustainable growth, which sets operational growth criteria for each branch and transaction office
Consolidate the executive management team and human resources from headquarters to branches/transaction offices
Personnel lacking a sense of responsibility and weak in management need to be strongly changed based on a transparent reward and punishment policy If they do well, they will receive worthy rewards, and continuously add new qualified and ethical personnel Virtue, capacity, and creative dynamism from internal and external sources create new vitality and resilience in VPS In addition, the duties and responsibilities of each level are clearly defined and accompanied by reasonable and competitive remuneration policies to not only encourage brokers and current management levels to improve productivity and work efficiency but also attract external human resources to VPS
Review, supplement and adjust legal regulations within the company
As a joint stock company, operating in the field of securities requires specific regulations In addition, previous practices need to be standardized into specific rules and regulations to create a legal framework for securities operations and
37 ensure compliance in the system, maintaining order Discipline in the management and operations of VPS
Internal audit needs to be increased and its role promoted
The legal framework is increasingly being completed, and internal control and auditing are regularly strengthened to minimize arising risks Strengthening and improving the quality of inspection and supervision, especially improving the quality of auditing and control operations, implementing remote supervision, and detecting risks for timely handling
With a relatively complete investment in the technology system, we continue to promote and exploit all the superior features of many new technologies applied in practice to meet the requirements of accuracy, efficiency, and speed in production management
With a history of nearly 20 years of operation and development, this is the pride and respect of VPS Promoting the VPS brand needs proper attention, needs to be conducted on many different media channels and done regularly and continuously so that customers can grasp information and recognize the company's brand, especially the unification of the brand identity system with many diverse and comprehensive forms from letterheads, workplaces to logos, signs, advertising,…
Solutions to improve the quality of stock brokerage services at VPS
To improve customer satisfaction when using brokerage services, VPS needs to increase service capacity and reliability and also need a number of other solutions to support the improvement of brokerage service quality
3.2.1 Solutions to improve customer trust
VPS needs to provide brokerage services as committed to introducing to customers, VPS ensures confidentiality of customers' personal information and
38 transaction information, VPS complies with the law, VPS's financial capacity is guaranteed , customer transactions are carried out quickly and accurately by VPS, transaction feedback is quick and accurate, trust in VPS's advice, trust in VPS's fees and interest rates
Try to continue to promote clearer processes on legal compliance, as well as maximize customer information security, and execute customer orders quickly and accurately Things that VPS has been appreciated by customers and appreciated over time
In addition, on issues of branding, financial capacity, and how to calculate VPS interest fees, some solutions will be proposed such as
Transparency in how interest rates are calculated on the website regarding margin interest rates and cash advance interest rates Currently, the fee section has details but the current interest rate is not yet available Be transparent and public on the website, specifically the content of VPS's subsidy and interest rates, update and widely notify customers of changes
The issue of raising VPS's brand awareness and especially the process of handling a brand crisis Especially in the securities industry, it often happens that you cannot place buy or sell orders during hot market times
VPS should have a clear process and notification when there is a brand crisis with brokerage staff on consistent communication to their customers, such as a brand crisis handbook that clearly stipulates the time and process process to deal with the brand and media crisis
Submit brand crisis handling scenarios to competent authorities for approval, including scenarios about litigation and transaction incidents
Periodically organize seminars on risks in brokerage activities and emphasize the importance of risk management as well as situations that may be encountered during work Emphasize the process of complying with the law, doing it right from
39 the beginning to minimize the risk of disputes between customers and the VPS company as well as such as brokerage staff and legal risks to each employee in VPS, especially the individual customer brokerage department
Strengthen periodic internal inspection of system operation processes, as well as customer information security Specifically, review security loopholes, delegate authority to specific employees and managers, compare them with job descriptions and promptly fix them to avoid disclosing customer information
Ensuring security while taking advantage of information technology staff's free time when the project ends
Minimize the frequency of transaction incidents, constantly improve information technology and anticipate incidents to have quick transaction recovery plans
3.2.2 Solutions to improve VPS's service capacity
3.2.2.1 Solutions to improve the quality of human resources
Improve recruitment and selection processes
Currently, VPS has not yet built complete and professional online policies and procedures Recruitment lacks a system of test questions to effectively evaluate candidates' abilities Candidates will take multiple-choice tests (English, specialized knowledge, IQ) and interviews The interviewing of candidates is not done by the interview board but only by the human resources department and the manager of the department where the candidate applies, so it is not objective Therefore, VPS needs to research and build a professional recruitment process, through designing a system of entrance exam questions appropriate to the professional qualifications of each position and at the same time designing detailed tables Job description, specific job standards of each position in the company, ensuring the selection of correct, sufficient and talented employees and attracting good and suitable personnel to the
Develop a reasonable employee remuneration policy
VPS needs to develop reasonable policies, salaries, bonuses, and incentives This policy needs to be researched and updated with market fluctuations, ensuring to stimulate the passionate and creative working spirit of each employee Salary policies are built appropriately through close association with inflation factors and the complexity of each position
Currently, the average salary of stock brokers at VPS is also very high in the market, so it is necessary to maintain this salary to attract talent
3.2.2.2 Solutions for investment in technology development
Securities companies in Vietnam as well as VPS have shown interest in investing in the development and application of IT in their operations
Technological advantages have helped Securities Company have an outstanding advantage in providing diverse services, quality and utility of products Applying new technology will increase initial costs, but considering the long-term benefits, when successfully applying modern advanced technology, it will help securities companies improve quality, diversify and develop Modern and advanced product services increase convenience for customers and increase competitiveness in today's integrated environment
VPS needs to ensure a smooth trading system with no signal errors A typical example is the case of VN Direct when they had a hacker invading their system, causing the system to stall and customers unable to access to transact That leads to the loss of a large number of customers
3.2.3 Solutions to improve the quality of stock brokerage service system management organizations
Regularly have promotions (gifts, lucky draws, ) There are separate preferential policies for each type of customer such as loyal customers and VIP customers
Develop quality criteria that clearly stipulate the processing time frame for specific products to increase VPS professionalism and customer satisfaction
Receive customer complaints about products and services and quickly respond to customers, monitoring the frequency of service complaints VPS usually reach out back to customer via text message or email to ask for service rating to make sure the customer is sastified or can report if has any problems with the service
3.2.3.2 On communication and marketing activities of stock brokerage services
VPS needs to promote marketing to develop its image and promote the VPS brand to many customers nationwide Marketing frequency needs to be regular and widespread to the majority of the population Marketing forms need to be diverse and rich in form, design, content and clear, easy-to-understand images to attract customers' attention to VPS’s services It is necessary to determine the target customers, which market segments to target, which distribution channels to use and which marketing methods are appropriate In addition, VPS needs to coordinate closely with the business development department to promptly deploy promotion programs and introduce new products to customers In particular, it is necessary to promote the promotion of the company's products on holidays, New Year's Eve, anniversary of establishment, major holidays, etc Printing leaflets and handbooks to introduce product features products and services in a concise, easy-to-understand manner to help customers understand the products and services that VPS has At the
42 same time, diversify forms of customer outreach: direct meetings, sending open letters/leaflets to each customer, through radio/television or through seminars and customer conferences