improving customer service quality for individual customers at bank for investment and development of vietnam - western hanoi branch

NATIONAL ECONOMICS UNIVERSITY NEU BUSINESS SCHOOL -  - LE THI HAI NHU IMPROVING CUSTOMER SERVICE QUALITY FOR INDIVIDUAL CUSTOMERS AT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - WESTERN HANOI BRANCH MASTER OF BUSINESS ADMINISTRATION THESIS SUPERVISOR: DR NGUYEN TRUNG KIEN HANOI - 2013 2 ACKNOWLEDGEMENT During EMBA course, I have collected a lot of knowledge about business administration First of all, I would like to thank all professor lecturers whose experience helped me a lot in developing the thesis I also express my great gratitude to my supervisor, Dr Nguyen Trung Kien from National Economics University whose encouragement, guidance from the initial to the final level enabled me to develop an understanding of the subject Special thanks to my fellows of EMBA9A who always support me in many ways during my time of studying the course and doing this thesis I would like to thank my husband, whose love, patience and persistent encouragement to me have helped me to overcome difficulties in this study Last but not least, words to me to thank everybody who supported to the successful realization of thesis with valuable information, as well as expressing my apology that I could not mention personally one by one The thesis could not be done without all of those supports 3 TABLE OF CONTENTS 4 ABBREVIATION BIDV Bank for Investment and Development of Vietnam CRM Customer Relationship Management WTO World Trade Organization ATM Automated Teller Machine POS Point of Sale SMS Short Message Services EVN Vietnam Electricity 5 LIST OF FIGURES 6 LIST OF TABLES 7 LIST OF DIAGRAMS 8 EXECUTIVE SUMMARY Currently, up to the global trend, commercial banks in the country understand that developing retail banking services for individual customers has now been a new and stable trend of development in the difficult economic situation Aware of risks during the economic downturn, commercial banks in recent years redirected to promote business banking services to individual customers Individual customers have become one of the important factors determining the survival and development of banks In an environment full of fierce competition, maintaining good relations with old customers, retain loyal customers is not easy In this context, what are the most important in the absence of product differentiation, product quality, the price, the product supplying process? The first thing we should think of is the quality of banking services “How to make them choose us and trust us to introduce new customers” is a more difficult question for Bank for Investment and development of Vietnam – Western Hanoi branch One of the most realizable methods to help Western Hanoi branch is to improve the individual customer service quality In this economic background, BIDV Western Hanoi branch also has to face so many challenges to compete with the other banks with good customer service With the aim of this thesis of assessing the current individual customer service quality in BIDV Western Hanoi branch, the objectives of this research are formulated as follows: - Analysis of the current situation of customer service quality at BIDV - Western Hanoi branch: What are the strengths and weaknesses? Identify the causes to the weakness of individual customer service quality - at BIDV - Western Hanoi branch Propose solutions to improve the individual customer service quality at BIDV - Western Hanoi branch 9 This thesis has used secondary data gathered form BIDV headquarters, BIDV Western Hanoi branch as reports, banking magazines in internal system, internet websites, newspapers and primary data collected by depth interview with the head of customer transaction department who have experience and deal daily workload with individual customers; and surveys of 100 customers who have been using banking services at BIDV Western Hanoi branch According to above methodology, the research has analyzed dimensions of SERVQUAL model – the most common method for assessing and measuring service quality: Reliability; Assurance; Tangibles; Empathy and Responsiveness There are some shortcomings were given out: - Incompletely customer information Unqualified and shortage of the staff Unprofessional “soft” skill of the staff Unreasonable transaction procedure Poor customer management Error information technology Base on the above shortcomings on individual customer service quality of BIDV Western Hanoi branch, some recommendations have been mentioned to improve the individual customer service quality of the branch in the coming years: - Building customer information system - Improving the quality of staff at the branch - Improving communication skills of banking teller in direct contact with - customers One-door transaction procedure innovation at the branch Applying the model of customer relationship management CRM to - improve customer service quality Application of modern banking technology 10 10 INTRODUCTION Rationale In the context of difficulties in Vietnam's economy having significantly influenced on the survival and development of enterprises, many business bank loans falling into the risks of being difficult payment or bad debts for all commercial banks Therefore, individual customers become an extremely potential market segment However, the competition in this segment is not a small challenge for any bank to participate Increasing people's knowledge, the customers’ deeper understanding of banking products, the boom numbers of banks invisibly increase customer empowerment Customers have the right to review and choose the best products and service Why commercial banks are willing to invest in individual customer market segment? First, enterprises have faced so many difficulties in order to approach capital from banks due to their financial situation does not have the ability to create trust in banks Second, the individual customer markets are abundant especially during the economic downturn People are always in need of safe investment, they not want to participate in high profit sector investment but accompanied by the risk of bankruptcy If there is a good business strategy for this object, the bank will attract and catch a huge number of customers This could be considered as the biggest objective of each bank on the market The competitiveness level in bank sector now is higher and higher Bank products cannot create competitive advantage, bank interest and service fee cannot always lower in order to attract customer Customers, especially individual customers are more and more fastidious In this economic background, BIDV Western Hanoi branch also has to face so many challenges to compete with the other banks with good customer service “How to make customers feel happy when 81 81 customer relations need to have highly specialized knowledge and be equipped with soft skills for their communication and sales Banking managers should convert the operation concept in currency trading into the operation in monetary and financial service supply to form behaviors and attitude of serving the customer positively - Continuously improve modern level of banking technology Technology level and human using that technology have played a decisive role in the quality of customer service Technology brings quick strides and high ability to meet customer expectations The customer’s trust and loyalty crucially depend on modern technology, as well as facilities and values added to the customer brought with the application of technology - Head office of bank, especially places of transaction need to be laid out in a beautiful, eye-catching, harmonious and apparent manner compared to other banks The head office needs to have a logo and declaration or slogan committing the quality of banking service supply Wearing uniform also makes the customer feel friendlier and assured when doing transactions with the bank - Regularly exchange information with the customer Exchanging information with the customer plays an important role in understanding and meeting the customer’s expectations Information exchange may be carried out in various forms, in a mutual parallel or integrated manner such as customer conferences; advertising programs, promotion of products or services; organization of surveys to find out the needs of customer, hotline establishment, etc Thereby, the bank conveys information related to its products and services to the customer, handles the requests of the customer and collects the customer’s feedbacks and claims related to operation aspects of the bank It is necessary for the bank to store information data related to the customer to conveniently serve exchange activities with the customer - Deal with the customer’s claims It is necessary to consider these claims as a signal so that the bank may continuously improve its quality of services The researches show that the customer often complains about some certain faults If the faults are detected, recognized, thereby promptly mending, the number of claims decreases and the customer’s satisfaction and trust is increasing Many banking 82 82 staffs, even managers feel worried, afraid or not like the customer complaining When receiving opinions of complaint, they can not determine the responsibility or are not willing to handle This is really a wrong view because in addition to having opportunities to mend and enhance the process of service supply, resolving the customer’s claims still brings the opportunities for the bank to retain the customer Moreover, the bank may also restrict the dissemination of information because the customer’s claims are not resolved by the bank; thereby they will tell other people their dissatisfaction - Build group of customers regular and loyal to the bank The loyalty of customers is demonstrated in long-term transaction relationship, the ability to increase size and diversity of transactions and the ability to disseminate other people to use the bank's services The loyalty of customers increases the bank’s profits through increasing sales, reducing costs of customer attraction, the customer’s sensitivity related to prices and costs of customer service because they are familiar with operation system of the bank To have group of loyal customers, first of all, the bank must build the customer’s trust towards the bank and quality assurance of services provided by the bank The second thing is the attitude of service, professional characteristics ability of bank staff’s response to the needs of customers It is not enough to assume that only price reduction and promotion may attract and retain customers This solution is only meaningful in the short term and draws the small number of existing customers without winning the loyalty of customers if these policies are not associated with the commitment of quality assurance in the customer service CONCLUSION Service now plays an important role in our daily life as well as Vietnamese economy Besides, bank and finance service could be considered as the spine of the economy of each country, the motivation of economy’s development and the link of 83 83 international trading Therefore, the knowledge of bank and finance is very necessary to the action of building and developing an organization In a highly competitive environment, customer service strategy is the key factor for the success of a bank and creates positive differences in comparison with the competitors After participating in WTO, there are many of foreign banks have established in Vietnam, the commercial banks in Vietnam also expand their own scale by founding branch over the country In addition, customers now are more and more fastidious These factors make the level of competitiveness in bank sector become higher and higher With strategy of improving individual customer service quality, BIDV Western Hanoi branch is able to turn difficulties into opportunities to develop and assert their position on the market The solutions of building customer’s information system, renewing the transaction procedure, training the staff and applying modern technology in the business operations help BIDV Western Hanoi branch have professional staffs and bring satisfaction to customers Base on the strategies mentioned above, BIDV Western Hanoi branch have to implement synchronously from the Board of Director to the staffs in order to serve customer better Author hope the assessments and solutions in this thesis will contribute for improving individual customer service quality in BIDV Western Hanoi branch Because of the limit of time, cost and ability, there are many mistakes in this thesis and need to be added in the next researches REFERENCES 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BRANCH The following set of statements relate to your feeling about BIDV Western Hanoi branch For each statement, please show the extent to which you believe BIDV Western Hanoi branch has the feature described by the statement Once again, clicking means that you strongly agree that BIDV Western Hanoi branch has that feature, and clicking means that you strongly disagree You may click any 86 86 of the numbers in the middle that show how strong your feelings are There is no right or wrong answer ITEM Reliability Actively supporting for business activities of our company Always taking care of the interests of customers Complying with the committed time with customers Assurance I understand about BIDV and the products and services provided by BIDV Staffs have professional skills Staffs communicate in polite, friendly and enthusiastic manner Tangible BIDV has modern technology systems to serve customers Staffs have nice, polite form Customers can easily contact with the staffs Staffs accurately estimate the transaction time Understand- Jobs are handled correctly and quickly ing Consulting for business clients dedicatedly and thoughtfully Staffs are truthful and honest to customers Accessibility Professional services Always meeting customers’ requirements in a timely manner Providing customers useful information in time Short standby time for another transaction Simple and quick procedures SCORE 87 87 88 88 APPENDIX B THE OTHER ASSESSMENT OF CUSTOMERS ITEM Image of BIDV Western Hanoi branch I understand about BIDV and the products and services provided by BIDV BIDV is a bank having professional working style BIDV has actively supported for business activities of our company The image of BIDV is increasingly advanced BIDV has modern technology systems to serve customers The level of Cards satisfaction E - Banking of customers International payment about the Money transfer services Loan offered by Deposit BIDV Other products Provide timely useful information with customers Staff loyal and faithful with customers Careful and enthusiastic profession consultancy to customers Assessments Meet timely requirements of customers Pay attention to benefits of customer of staffs Professional service Process the jobs accurately and rapidly Communicate politely, friendly and enthusiastically Nice and polite appearance Strong profession Customer Staff estimating accurately transaction time serving time Quick implementing time for transaction SCORE 89 89 ITEM SCORE Simply and rapid procedure Customers easily contacting to staff Quick waiting time to transaction turn Implementing under time as committed to customers Assessment on facilities Interest rate Promotion Other Bank tariff assessments Processing time Associated utilities General assessment on service quality Assessment on ability to introduce products APPENDIX C SURVEY RESULTS Notes: N: Number of fully answer Mean: Average value %: Percentage of number of fully answer Assessment of the image of BIDV Western Hanoi branch ITEM N I clearly understand about BIDV and the products and Min Max Mean 100 2.7 100 3.09 100 3.51 The image of BIDV is increasingly advanced 100 3.42 BIDV has modern technology systems to serve customers 100 3.44 services provided by BIDV BIDV is a bank having professional working style BIDV has actively supported for business activities of myself The level of satisfaction of you about the services offered by BIDV ITEM N % Min Max Mean 90 90 Deposit Loan Money transfer International 86 34 78 86 34 78 2 4 3.10 3.03 3.32 payment E - Banking Cards Other products 22 79 70 17 22 79 70 17 2 2 4 4 3.73 3.41 3.76 3.06 Assessments on facilities of BIDV Western Hanoi branch N % 60 60 35 35 5 0 100 100 Tổngcộng Assessments on employees ITEM N Min Max Mean Strong profession 100 3.17 Nice and polite appearance 100 3.53 Communicate politely, friendly and enthusiastically 100 3.24 Process the jobs accurately and rapidly 100 3.23 Professional service 100 Pay attention to benefits of customer 100 2.93 Meet timely requirements of customers 100 2.93 consultancy to customers 100 3.41 Staff loyal and faithful with customers 100 3.47 Provide timely useful information with customers 100 3.04 Careful and enthusiastic profession 91 91 92 92 Assessments on serving time Mea ITEM N Min Max n Implementing under time as committed to customers 100 2.77 Quick waiting time to transaction turn 100 3.02 Customers easily contacting to staff 100 2.95 Simply and rapid procedure 100 3.33 Quick implementing time for transaction 100 Staff estimating accurately transaction time 100 3.01 93 93 APPENDIX D THE QUESTIONS FOR INTERVIEW GUIDE FOR IN-DEPTH INTERVIEW WITH THE HEAD OF CUSTOMER TRANSACTION DEPARTMENT Good morning, I am conducting the thesis with topic: “Improving the individual customer service quality at Bank for Investment and Development of Vietnam – Western Hanoi branch”; I appreciate it if you could spend some time for my interview The interview is conduct to get your opinion about current situation of Individual Customer service quality at our Western Hanoi branch, the limitations comparing to other banks and the solutions to overcome these difficulties Do you think our branch should pay more attention to the individual customer service? Why? How you evaluate the current quality of individual customer service in our branch? Is our service better or worse than other commercial banks? In your opinion, what is the biggest problem in our branch’s individual customer service policy? What should be the best solutions to overcome this problem? Do you think our branch should apply some program to evaluate more exactly the individual customer service quality? What are specific measures to accomplish the above task? ... quality at BIDV - Western Hanoi branch? - What are the weaknesses of individual customer service at BIDV - Western Hanoi branch? - What are the causes of these weaknesses? - How to improve individual. .. statement "Professional service" gets 13% of customers completely satisfied and 76% of customers satisfied with the service of the Bank However, 9% of respondents are dissatisfied and 2% of customers. .. individual customer service quality of the branch in the coming years: - Building customer information system - Improving the quality of staff at the branch - Improving communication skills of