The impact of green banking initiatives on customer satisfaction in vietnam

Dissertation submitted in partial fulfillment of the Requirement for the MSc in Finance FINANCE DISSERTATION ON THE IMPACT OF GREEN BANKING INITIATIVES ON CUSTOMER SATISFACTION IN VIE

Dissertation submitted in partial fulfillment of the

Requirement for the MSc in Finance

FINANCE DISSERTATION ON

THE IMPACT OF GREEN BANKING INITIATIVES ON

CUSTOMER SATISFACTION IN VIETNAM

DINH THI MAI CHI

ID No: 22080913 Intake 6

Supervisor: Dr Roberto Ercole

September 2023

I am Dinh Thi Mai Chi, a master's student in UWE 6B, UWE 6 course I declare that my master's thesis "The Impact of Green Banking Initiatives on Customer Satisfaction" is a research work of

Table of Contents

ABTRACT: 4

I Introduction 5

II Theoretical overview 6

Green banking concept and its importance: 6

Customer satisfaction in the banking sector 10

Previous Studies on Green Banking and Customer Satisfaction 12

III Research Methodology 18

Research Design 18

Data and sample collection methods 18

Econometric Models for Customer Satisfaction: 22

IV Empirical findings and discussion 23

Descriptive statistics and tests 23

Hypothesis testing 28

Discussion of Findings 30

V Conclusion and Recommendation: 34

Reference 37 Appendix Error! Bookmark not defined

1 Introduction

According to Marc Lallanilla (2020), the green movement began in the 1800s with transcendentalism to honor the natural world devastated by the industrial revolution at that time Throughout history, environmental protection has always been of social concern and exists in many different forms Today, the green movement is spreading to major industries around the world With the concept of “green living”, industries are focusing on the goal of acting environmentally friendly, creating positive returns for the economy in achieving environmental sustainability as well as a sustainable economy Finance is a large sector in the economy, including many other small sectors, and banking is one of the sectors within finance In fact, traditional banking transaction methods require many steps and paperwork, which poses many environmental risks and opens up new demand for green banking initiatives Thanks to that, the idea of green banking has spread not only around the world but also in Vietnam

According to Julia T and Kassim S (2020), Green banking is an environmentally friendly source of finance That is, bank services on environmental welfare and promoting environmental friendliness are considered green banks Banks act as intermediaries in the economy because they influence the flow of money (Berger & Udell, 2001) With its extremely important role, each bank can contribute to creating a better global environment by taking "green" steps (Thombre, 2015) Besides, Lindgreen (2006) also mentioned that in a highly competitive globalized environment, building better relationships with customers is important for businesses Vietnam, like many other countries, is moving towards sustainable development and is interested in aspects of green banking initiatives There are quite a few essays published on this topic This research focuses mainly on the impact of green banking on customer satisfaction because the success of applying green banking initiatives to businesses in Vietnam is determined by many factor, one of which is the level

of its influence such as the level of customer satisfaction with that business The main objective of the study is to understand how different features of green banking initiatives impact regional customer satisfaction with the scope of application to all banks in Vietnam In this study, the above issue will be investigated based on the characteristics of green banking initiatives, including security and reliability features, ease of use features, and environmental and societal, value creation characteristics and their impact when applying green banking initiatives on customer satisfaction

in Vietnam In addition, several proposals will be made to develop this initiative in the future

2 Theoretical overview

2.1 Green banking concept and its importance:

After the 2008 global financial crisis, most countries around the world have re-evaluated their organization and operating models in their financial systems, including the banking system Since its inception, the concept of green banking has attracted many researchers around the world to learn and develop Green banking has emerged as an ideal model for future banking, a foundation for moving towards a green economy and sustainable development There are many definitions of green banking, but according to Julia & Kassim (2020), the definition given by the German Development Institute is considered a recognized definition—“Green finance includes financing (including preparation and capital costs) green investment, public policy and green financial system.” According to CGC(2012) (Green Capital Alliance) - a non-profit organization with a mission to prevent climate change in the United States, Green Banks are organizations based on the mission of using innovation finance to speed up the conversion process, to clean energy and fight climate change A bank is considered "green" when it meets both conditions: providing green services in the short term and having a long-term business strategy that meets environmental and social responsibility criteria Green banking initiatives have become extremely important in our lives The devastating effects of natural disasters, environmental disasters, and the recent sudden changes in temperature experienced by many people around the world have forced people to start thinking about global warming and its consequences The transition to clean energy and combating climate change will reduce pollution According to Ravi Meena (2013), Green Bank benefits include avoiding paperwork, creating awareness among business people about the environment, and making loans at relatively lower interest rates Previous studies have suggested that when banks apply green banking initiatives, there will be no paper or less paper required for office correspondence, audits, and reports Many NGOs and environmentalists are propagating environmental consciousness among the general public by arranging consumer awareness programs Besides, banks can also introduce green banking loans with financial incentives for environmentally friendly products and projects such as fuel-efficient vehicles, green building projects, home loans, and home furnishing to install clean energy systems (Ravi Meena, 2013)

In particular, the banking industry is a growing industry in the world According to BCG(2021), in

2021, there are about 256 digital banks in the world, up 4 times compared to 2018 More and more banks applying green banking initiatives will help a lot not only for the environment but also for

the environment of itself Specifically, according to Ajaz and Aijaz (2022), the application of green banking initiatives will reduce operating costs due to less use of stationery, energy, and water; Increase employee productivity and efficiency through skilled and optimal use of technology, and reach customers faster when using technology in service According to Gary (2022), Green Bank encourages banks to invest in sustainable, low-carbon business practices that generate long-term returns and attract eco-conscious investors Jain and Jain (2023) discuss that another important aspect of green banking is the 'Green Taxonomy' which provides a category/dictionary to accurately define what can be termed as environmentally sustainable investments Green taxonomy enables companies and investors to make better and more informed choices However, the authors also emphasize that green banking is similar to a traditional bank because it examines all social, environmental, and ecological concerns with the goal of protecting and conserving, natural resources and the environment

As such, the main objective of this banking concept is to improve the conservation of the earth's environment, habitats, and resources Green banking is also an innovative and forward-thinking approach to achieving long-term sustainability It is important for banks to be proactive to increase the growth rate of the economy Due to the ever-changing environmental conditions, banks face stiff competition in the global market However, it should also be noted that failure to invest and reduce fossil energy can reduce capital flows into fossil fuel companies, eventually leading to the destruction of this industry, and affecting the world's economy

 World experience in green banking activities:

The overview of world research on successful green banking models is divided into two main groups: green banking models in developed countries and green banking models in developing countries

According to US EPA (2022), in the United States green banks can be managed by the following entities:

- Local or state agencies typically use legislative bodies and public or private funding to establish green banks, although a variety of funding sources and structures may be used

- Non-profit organizations can be established as green banks This process typically does away with the legal requirements and authorizations needed to establish a green bank as a government agency

Some examples of green banks in the United States are the Connecticut Green Bank, DC Green Bank, and Hawaii Green Infrastructure Authority In a study of the potential role of green banks in the state of California, Juhnke C., et al (2012) evaluated the potential impact of a Green Bank on energy efficiency and distributed systems, based on 6 criteria: number of additional projects funded; bank's cost efficiency; Additional benefits provided by the bank; the bank's management feasibility; ease of integration with existing government programs, and political feasibility Thereby, research has proven that Green Bank's presence has helped increase the flow of effective, competitive capital costs, thereby helping the state achieve its clean energy goals and helping alleviate many current problems causing trouble for this market

One of the examples worth learning about green banking initiatives is in India According to Dipika (2015), India is currently implementing more products and services of the Green Banking initiative such as:

- Green loan: means lending to a project or business that is considered environmentally sustainable

- Green mortgage: refers to a type of mortgage that offers you a money-saving discount or larger loan amount than normally allowed as a reward for improving energy efficiency or for purchasing a home that meets specific energy-saving standards

- Green credit cards: Whether in the form of eco-friendly rewards, using biodegradable credit card materials, or promoting paperless banking, credit cards are going green

- Green Savings Account: In the case of Green Savings Accounts, banks donate on the basis

of customers' savings The more they save, the more the environment benefits in the form

of contributions or donations made by the bank

- Mobile banking and online banking: These new-age forms of banking include less paperwork, less correspondence, and fewer trips to branch offices for banking customers, all with a positive impact on the environment

In his research, Ahuja (2015) also pointed out that India, there are many opportunities that it can exploit and aim for economic development Strict steps are needed if we really want to practice Green Banking But before that it is necessary to increase consumer awareness Green banking not only means using resources sustainably but also applying green lending principles The literature review undertaken shows that what is lacking in the context of Green Banking implementation is

the level of consumer awareness and education Therefore, appropriate training and education programs by banks for green initiatives will truly bring success to Green Banks

China is the world's 2nd largest economy The rapid development of this economy has caused environmental pollution problems not only in China but also in countries where it invests As the major bank that dominates China's financial system, ICBC plays an important role in promoting the adoption of green banking practices across the country's entire banking sector According to ICBC (2022), ICBC has officially launched the green finance brand "ICBC Green Bank+" in recent days Based on the Bank's leading position in green finance scale, product lines, governance systems, data management, risk control, carbon reduction in operations, international cooperation, and innovation results, the brand actively advocates the concept of harmony, integration, and friendliness, providing professional, comprehensive and forward-looking financial support for green development and achieving the goal of greener contributions to the house is more beautiful

In the next step, ICBC will continue to serve the real economy and market participants, continuously improve the green financial service system in China, focus on building green financial service capacity, and achieve high-quality development in the green transition of economic and social development

Through research on the experience of developing green banks in the US and India, it can be seen that these countries have programs to build and develop green banks to have credit sources to effectively respond to the problem of environmental pollution

 Current status of applying green banking initiatives in Vietnam:

Sustainable development with green growth is becoming a common development trend of countries around the world because green growth can simultaneously solve problems between growth and the environment - society, ensuring growth economics with environmental and social protection According to information from the Ministry of Finance (2023), the policy of developing a green economy in Vietnam has been clearly expressed in Decision No 1393/QD-TTg dated September

25, 2012, approving the National Growth Strategy; Decision No 403/QD-TTg dated March 20,

2014, approving the National Action Plan on Green Growth for the period 2014 - 20202 clearly stated that green Banks will be an important resource to implement the green growth strategy until

2020 because the banking system can contribute to limiting environmental and social risks by not lending capital to projects that pollute or have negative impacts on the environment and people's lives In addition, the concept of green banking is still quite new to the banking system Many

banks have not yet implemented a system to assess the environmental risks of projects granted credit The fact that lending interest rates for businesses investing in green technology are not much preferential compared to conventional projects has reduced the motivation of businesses to invest

in green technology According to the State Bank of Vietnam Survey, 19/35 banks have developed environmental and social risk management strategies; 13/35 banks Integrate environmental and social risk management content in the green credit assessment process; 10/35 banks Build credit products and banking services for the green sector and pay attention to providing credit, mainly medium and long term with preferential interest rates for green projects

Although certain results have been achieved, the implementation of green banking at Vietnamese commercial banks still has many limitations Although a number of guiding documents have been issued, the regulations are still general and not clear or specific There are few banks implementing green banking activities and there are no banks oriented towards the green banking model The reason is that banks believe that they will lose a large amount of profit because credit appraisal will

be tightened when considering social and environmental factors Green banking products and services in Vietnam are not yet specific and have not been implemented regularly The products that have been deployed are only short-term programs to demonstrate the bank's social responsibility Green credit products in the world such as green home loans and green car loans have not yet appeared in Vietnam

2.2 Customer satisfaction in the banking sector

A customer is an individual or company that purchases a product or service from another party (Mohd Farid Shamsudin, Ishak, et al., 2019) and customer satisfaction indicates how good the experience of using the product is relative to buyers' value expectations (Razak & Shamsudin, 2019) Good customer service is one of the most influential factors in customer satisfaction (M Shamsudin et al., 2015; Mohd Farid Shamsudin, Esa, et al., 2019) According to Joel Vaslow(2018), with everyone offering mostly the same products and services and little competition

on price, the customer experience with their service is very important It gives this bank a competitive advantage over other banks Therefore, understanding what customers need and want

is one of the most important things for banks today As such, the importance of customer satisfaction cannot be underestimated It's the best way to ensure loyal customers who will eventually become brand ambassadors Every company should consider customer satisfaction as

an essential business factor and work to improve it Linked with previous studies, when talking

about the model to help measure service quality and customer satisfaction, the SERVQUAL model

is often used This model will help businesses find where their service delivery is lacking and where

it could be better through the use of a questionnaire with paired statements for each category to find out if the service is good or not According to Marta Szyndlar (2023), there is also a customer satisfaction survey on a 7-point scale that can help researchers get a clearer picture of how customers feel This scale will start with "Very dissatisfaction" and end with "Very satisfied" In addition, the theoretical model of the Customer Satisfaction Index (CSI) is also used to measure customer satisfaction The CSI model includes the following cause-and-effect variables:

Source: smartretail.vn

According to Ajaz and Aijaz (2022), the effectiveness of digital banking adoption will also affect customer behavior Specifically, customer satisfaction when using a bank is an effective comparison between the benefits that customers expect before using the bank and what they receive after using the bank (Phan & Nguyen, 2022) High levels of customer satisfaction ensure long-term customers and make the business stand out from the competition It also allows banks to avoid the dire consequences of bad customer experience: customer churn and negative word of mouth (Szyndlar, 2023)

There are many previous research papers on customer satisfaction in the banking industry around the world Understanding its importance, organizational researchers from all over the world continuously emphasize the importance of customer satisfaction, loyalty and retention Quyet, T.V., Vinh, N.Q and Chang, T (2015) used the SERQUAL model to examine and examine the issue of banking quality in Vietnam They argue that customers have difficulty understanding the complex nature of financial products and therefore tend to focus on brands, which are often built

on service quality After using models for research, they believe that to minimize the gap between banks and customers, banks need to improve the professional level of staff providing direct services

to customers These employees need to understand and firmly grasp the product and its uses to ensure consulting capacity and the ability to serve customers at an appropriate level Toor et al (2016) argue that the best-performing businesses always put consideration of customer needs and requirements first in order to survive and compete successfully in today's dynamic business environment Through collecting data from 120 customers who visited bank counters and had accounts at banks serving Pakistan, researchers demonstrated that customer satisfaction is positively correlated with customer loyalty and negatively correlated with customer switching intention Bellou and Andronikidis (2008) argue that the growing importance of customer satisfaction is undeniable However, banks are currently facing another major challenge of meeting the changing needs of customers In his research paper, the author concluded that the quality, employee engagement and human resource management policies used to emphasize the quality of internal services can improve the availability of services employees' willingness to serve customers and thereby improve the quality of services provided to external customers

These research articles all have an aspect that has not been mentioned: the relationship between customers - people who use businesses' services - and green banking initiatives The hypothesis is whether customers will be satisfied when the bank pays more attention to the environment and offers changed policies and services to develop this concept In other words, this research will not only clarify the aspects of green banking initiatives but also address whether the features of green banking can satisfy customers by using a measurement scale Likert 7 levels to evaluate customer satisfaction

2.3 Previous Studies on Green Banking and Customer Satisfaction

Interest in Green Bank has been growing since 2011 and reached maximum attention in 2015 (Sarma and Roy, 2020) Researchers in India are very interested in green banking as they

continuously release many research papers on this topic: Suresh and Bhavna (2015) claim that environmentalism has become a leading concern in the field of green banking banking career The authors also believe that the banking industry has always had an impact on economic growth and development Therefore, the banking industry plays an important role in promoting environmentally sustainable investment Through their research, Suresh and Bhavna (2015) pointed out the concept of green banking and identified steps to apply the Green Banking initiative

to life Customer perception is also mentioned as an important part Mozib Lalon (2015) in his research paper showed us the history of green banking initiatives and focused on the process of applying green banking policy, environmental issues, and internal operations Click and compare the green performance of banks with each other Although most aspects of green banking initiatives have been covered, these research papers are limited in scope to India and Bangladesh In their research paper, Sarma and Roy (2020) have identified 6 different aspects of green banking and as

a result, Green banking is still underexplored with only 178 articles claiming it They also said the keyword analysis identified three main concerns of Green Banking, Sustainable Development, and environmental research Thus, the application of green banking policy with customers has not had much association Herath et al (2019) argue that it is important for banks to understand the demand side of green initiatives because the ultimate success or failure of such investments is influenced

by users' perceived satisfaction The bottom line for them: is the customer The impact will be generated by customer satisfaction with the features of green banking initiatives, on overall customer satisfaction with green banking Through four types of characteristics related to green banking initiatives, the authors demonstrated their relationship with customer satisfaction when using services They also emphasized that a deep understanding of these relationships in the context

of customer satisfaction with green banking will clearly be important Banks will be able to understand customer satisfaction levels regarding various aspects of green initiatives Most importantly, they will be able to understand how much impact each category has on overall green customer satisfaction As a result, they can decide what actions need to be taken in relation to their green initiatives in order to improve customer satisfaction with green banking in general Solekah (2019) mentioned in her research that the industry has a high potential to become a model for other industries in applying the principles of Sustainable Development The scope of this author's research is that Islamic banks are banks with potential banking business models by implementing green banking, as well as the regulations of Bank Indonesia as a central bank The central government has introduced Green Bank as a concept to be implemented in its business practice

Research results show that green banking products and green business image directly impact green customer satisfaction, but green banking products do not directly impact customer satisfaction In contrast, the image of a green business directly affects the loyalty of green customers Rai, Rekha,

et al (2019) argue that environmental protection has been considered one of the burning issues around the world today and it puts pressure on all industries, along with financial services, to adopt

a “green” initiative to provide environmentally friendly services The authors also point out that financial institutions and banks can take proactive steps including reducing the use of a lot of paper, and multi-branch banks can support local green initiatives method by introducing the concept of green banking The research results show that the concept of green banking has been accepted as one of the emerging issues in banking and financial institutions and the awareness of green banking practices among banking consumers in general is still low The main issues found are concerns about information security and time saving is considered the most immediate benefit of using green banking services However, this issue needs to be widely studied in the national context of Nepal According to Bhardwaj and Malhotra (2013), "Green Banking" is the effort of banks to make industries grow green and in the process restore the natural environment This concept will bring mutual benefits to banks, industries, and the economy as it will not only ensure the greening of industries but also facilitate improvement in the asset quality of banks in the future Fake Tcas also concluded that today, entrepreneurs are forced to engage in environmentally destructive behavior due to the discrepancy between personal rewards and the common goal of sustainable development

To survive and compete successfully, organizations need innovation-friendly business strategies, organizational structures, top management styles, middle management practices, and effective innovation management practices to achieve success in innovation and competition and aim at customer perception through services and products

According to Akomea-Frimpong et al (2021), with growing global concerns about environmental protection, climate change, and sustainable development, policymakers and researchers have recently focused on green finance The author's results show that green securities, green investments, climate finance, carbon finance, green insurance, green credit, and green infrastructure bonds are part of important green financial products The key determinants that the study shows are influencing banks' green finance policies including environmental and climate change policies, interest rates, religion, risk, social inclusion society, and social justice as well as banking regulations However, the author also recommends that in the future, researchers should focus on analyzing customer aspects and the impact on customer satisfaction to fill in the gaps in

the topic of green banking initiatives Ankita, Dhamija, and Diksha Sahni (2021) mentioned in their research paper that the concept of green banking is used by banks to promote environmentally friendly activities, including the use of all resources cautiously and responsibly It aims to use IT infrastructure efficiently and effectively to make banking processes smooth with minimal impact

on the surroundings and the environment Online transactions and mobile banking are part of green banking Nedumaran, M., and Baladevi (2020) opined that Banks are adopting different natural practices in their daily business operations because of natural concern for maintaining environmental balance The banking department therefore undertakes the urgent job of promoting business activities that can be sustained organically and are socially credible Banks may not only

be polluters but most of them have financial links with certain entities or ventures that are polluters

or could be future polluters The author also affirms that the greater customer awareness, the more banks must focus on investing and developing green projects to achieve sustainable value Ibe-Enwo et al (2019) again draw attention to the importance of loyalty for managers in the banking industry and the increasing customer calls for higher sustainability performance from banks The authors show a direct and significant influence of green banking activities on green image, bank trust, and bank loyalty Green image significantly affects bank trust and bank loyalty No significant relationship exists between bank trust and bank loyalty Green image mediates the relationship between green banking practices and bank loyalty, while banking trust does not mediate the relationship between green banking practices and bank loyalty row Besides, from an operational perspective, banks are encouraged to adopt efficient and environmentally friendly technologies for their operations, while mitigation requires banks to embark on campaigns to discourage activities that cause environmental degradation, such as waste and pollution, which can

be integrated into corporate social responsibility Prakash Raj and Pappu Rajan (2017) mentioned that the banking industry, although it does not play a direct role in environmental degradation, also indirectly contributes to environmental problems Banking operations are generally environmentally friendly and do not impact the environment through internal operations through pollution or disposal of hazardous waste Just introducing different Green Banking products is not enough to create a better environment Success lies in ensuring that those products are used appropriately To improve and enhance green banking activities, banks need to gain support from the Government, NGOs, business organizations, and consumers (Dhamija, A., & Sahni, D., 2021)

In Vietnam, there are also many research articles on this topic Tran Thi Tanh Tu and Nguyen Thi Phuong Dung (2017) point out the definition of green banking, the current activities of green

banks, and the benefits of developing green banks in the Vietnamese market Proposals to effectively develop the concept of Green Bank in Vietnam are also given in this study Lessons learned include: raising awareness of green banking among bank leaders, encouraging businesses

to invest in green to create demand for green finance, and building a legal framework to encourage banks to provide green finance With the same research purpose, Tran Thi Thanh Tu & Tran Thi Hoang Yen (2015) gave an overview of the green banking initiative and listed the benefits of applying this initiative to the economy Vietnam's economy in general and the banking industry in particular The author agreed with the idea of accepting green banks as a model for future banks when balancing the benefits and costs between the economy and the environment of all stakeholders in banking activities In addition, bank leaders' awareness of green banking is also mentioned and the authors also encourage promoting the need for green finance The common point of the above studies is that Vietnam's recent efforts to promote green banking development have mainly focused on forming a legal framework for green banking development; encouraging green credit; Requiring banks to develop frameworks and standards, and implementing environmental and social risk management in performing lending operations; and some incentives for commercial banks and credit institutions performing banking greening operations Author Thi Hang (2022) believes that in Vietnam, sustainable economic development has become a long-term necessity However, sustainable development requires a balance between economic growth and environmental protection Therefore, Vietnam has chosen to develop a green economy, in which

"green banks" play an essential role Through research, the author analyzed the current situation and some challenges in promoting green banking development in Vietnam and proposed policy recommendations to promote green banking development in Vietnam during the next time Phuong (2020) believes that green goods encourage sustainable economic development and encourage environmentally friendly activities When researching the Vietnamese market, the author realized that the influence of macro factors on the level of green banking is the strongest, followed by the bank's financial capacity and the Government's support policies and green investment needs of business organizations In contrast, staff capacity and bank leaders' awareness of green banking do not significantly affect the level of green banking adoption in Vietnam However, the customer-related aspect has not been mentioned

Through the above research articles, this study has selected the features of green banks to analyze

a new aspect of this issue: How customer satisfaction with green banks has been affected through the following hypotheses

In the study, Shantha Herath (2022) found similar characteristics of green banking initiatives based

on the UTAUT model, which can be classified according to three characteristics: security and trust; Convenience and ease of use features and recommended features create value He also pointed out that each feature will have accompanying components to supplement and support those components Availability, transaction speed, user-friendliness, fees, and convenience were identified as some of the features that influence customer satisfaction with green banking initiatives Specifically, variables examining security and trust aspects including transparency, reliability, safety, and privacy represent customers' evaluation of online banking services Transaction speed, ease of use, and customer accessibility are considered different components according to convenience and ease of use Low transaction costs, additional services, and availability of the latest information are examined as components that vary according to the value proposition Shantha Herath(2022) found that customer satisfaction with the above variables greatly affects customers' overall satisfaction with e-banking In addition, the main goal of applying green banking policy is to increase awareness and social responsibility of the banking system for environmental protection, combating climate change, and promoting manufacturing industries, green consumption and services, clean energy, and renewable energy; actively contribute to promoting green growth and sustainable development Therefore, environmental and social concern features also need to be included for customers to evaluate

Therefore, this study pays attention to the Unified Theory of Acceptance and Use of Technology (UTAUT) model, as a basis in the process of deriving individual variables; the most essential characteristics of technology-based green banking initiatives, and the use of the above variables to generate hypotheses

The following hypotheses are made based on previously evaluated literature:

Hypothesis 1: H1: Customer evaluation of security and trust features has a positive impact on customer satisfaction with the initiative

Hypothesis 2: H2: Customer assessments of the ease of use of green banking initiatives have a positive impact on customer satisfaction with green banking initiatives

Hypothesis 3: H3: Customer assessments of environmental and social issues have a positive impact

on customer satisfaction with green banking initiatives

Hypothesis 4: H4: Customer rating with value-creating characteristics of green banking initiatives has a positive impact on customer satisfaction with green banking initiatives

The main objective of the study is to understand how different features of green banking initiatives

impact regional customer satisfaction in Vietnam

Accordingly, the specific goals are:

- Define and provide information about green banking initiatives and the theoretical basis of their characteristics

- Analyze the impact of customer satisfaction with green banking initiatives through green banking features

3.2 Data and sample collection methods

For the purposes and hypotheses stated above, this research will conclude based on model analysis through Eview and Excel software In particular, the "customer" element is said to be individuals who have been using the bank's services with a frequency of at least 1-3 times/month,

at most daily, and use one of the following services: green banking services in Vietnam Therefore,

243 response samples from individual customers were collected, using a non-probability sampling method to select samples according to the overall characteristics and investigation needs, namely selecting individuals who have been and are using through services of the green banking initiative

in Vietnam An online questionnaire has been conducted to collect data from customers The study

gathered answers through a 2-part questionnaire Part one is questions related to the respondent's background including Name, age, occupation, monthly income, and frequency of using banking services Part two will include questions related to customers' evaluation of the services of the green banking initiative that banks in Vietnam have applied The dependent variables (Customer satisfaction) and the independent variables (green bank features: The feature of security and reliability; The feature of ease use; The feature of environmental and social concerns; and The feature of creating value) were collected based on the questions in part two A 10-point scale and

a 7-pointLikert scale are used to evaluate the dependent and independent variables Data screening was also performed before running using Eview software The mean scale is used to calculate the values of 4 independent variables based on the components To analyze customer satisfaction based

on evaluations of green banking features, multiple regression analysis was used According to multivariate regression analysis, correlations between each variable and collinearity statistics (Tolerance & VIF) were evaluated The regression model was developed and the hypothesis was tested at the significance level of 0.05

Green banking is an extremely broad concept, covering many aspects To realize the impact of green banking initiatives on customer satisfaction, this study applies the features of green banking

to evaluate According to the research (Agarwal, Rastogi, and Mehrotra, 2009), the features of banking are evaluated by analyzing the impact of customer satisfaction with the features of e-banking and comparing it with the unified theory of technology acceptance and use (UTAUT) After analyzing the model, they conclude and reduce those characteristics into characteristics:

e-security and trust; The convenient and easy-to-use features, as well as the suggested features, create value that affects customer satisfaction (Agarwal, Rastogi and Mehrotra, 2009) According

to information from the Ministry of Finance of Vietnam (2023), the actions of green banks include:

- Deploy electronic and automation services

- Prioritize lending or investing in projects related to the environment;

- Pay attention to social goals, sustainable development goals and green development

Among them, the implementation of electronic services and automation (e-banking) in the actions

of green banking initiatives has a direct impact on most strata and number of customers On the other hand, when relating the research of Shantha Herath (2022) with the proofs in the research of

Agarwal, Rastogi, and Mehrotra (2009), Shantha Herath (2022) has proven that these features can

be used as features of the green banking initiative are driven by technology

Sharma, Sharika, and Gopal, (2015) found that data security and privacy (including the elements

of Security, Transparency, Privacy, and Safety) are one of the concerns of customers when using green bank services Shep Hyken (2023) identified that speed and responsiveness affect customer loyalty Mary (2015) concluded that significant attention should be paid to the security features of e-banking Dey et al (2019) show that information processing speed has an indirect effect on perceived value, thereby affecting customer satisfaction According to Moorthy and Pradeepa (2014), ease of use, user-friendliness, fees, and convenience are identified as some of the features that influence customer satisfaction when they use green banking services Therefore, this study used the small variables listed above to collect customer feedback

Facing many natural disasters today, people are increasingly concerned about social and environmental issues According to Adam Butler (2018), customers are becoming more informed and more aware of the environmental impact of consumer products So they are asking industries

to improve the environmental performance of their products A clear direct contribution of banking and finance to emissions is the physical distribution of cash and coins throughout the economy which increases carbon emissions into the environment (Mullan, Cheetham-West and Braithwaite, 2021) Banks can protect the environment by avoiding paperwork, saving energy, and being eco-friendly (Singh and Singh, 2012) This study focuses not only on the characteristics of green initiatives from the technological perspective but also on the aspect of environmental and social

green-related characteristics Therefore, the feature of environmental and social concerns will

be included to analyze the impact on customer satisfaction

Table 1 shows the variables selected because of previous studies These variable components are all collected through the questions in part 2 of questionnaire

CSGB1 Customer satisfaction on green Banking Customer satisfaction on green Banking

EOU1 Speed

The feature of ease to use

EOU2 Accessibility

EOU3 Personalization

EOU4 Convenience for users

environmental and social

concerns

EASC2 Environmental protection

EASC3 Energy saving

value CV2 Update information

Table 01: Variables & Respective Variable Constituents

Table 02 below presents the data screening of demographic profile: