Bank card service quality at techcombank

Lunghwa Universityof Scienceand Technology Department of Business Administration Thesis for a Master’s Degree Bank card service quality at Techcombank Researcher: Nguyen Anh Tu Supervisor: Nguyen Van Dinh December 2018 Lunghwa University of Science and Technology Approval Certificate of Master's Degree Examination Board This is to certify that the Master’s Degree Examinations Board has approved the thesis Bank card service quality at Techcombankpublished by Mr.／Ms.Nguyen Anh Tu in the Master Program of Graduate School of Department of Business Administration Master’s Degree Examination Board Board Members： Dao Tung Tsan Chia chi Nguyen Thi Hong Hanh Advisors： Chair： Nguyen Van Dinh Tsan Chia chi Date： 2018 / 12 / 21 ABSTRACT Thesis Title：Bank card service quality at Techcombank Pages：91 University：Lunghwa University of Science and Technology Graduate School：Department of Business Administration Date：December, 2018 Degree：Master Researcher：Nguyen Anh Tu Advisor：Nguyen Van Dinh Keywords: Service Quality (SQ) The banking system in Vietnam faces many internal difficulties in the economy as well as the internal of each bank, the institution of the banking system is still many Inadequate reform requirements and integration roadmap are major challenges for Vietnamese commercial banks in the integration process Currently, Techcombank has had a particular position in Vietnamese banking system However, the banking model in Techcombank for banking cards operates inefficiently because ofmuchbaddebt and high lending interest rates, the disbursementprocessiscomplicated Due to the importance of improvingbank card service qualityandrealactivitiesof Techcombank, the topic:‘Bank card service quality at Techcombank’ is selected for the master thesis The objectives of the research are to: 1) Find and choose the suitable theory to make an intensive investigation of bank card service quality at Techcombank, 2)Investigate the current situation of bank card service quality at Techcombank to find achievements and shortcomings and 3) Suggest some solutions to improve bank card service quality at Techcombank.The thesis concentrates on bank card service quality and how to deal with the problems about bank card service quality at Techcombank.Places where the research was implemented in are Techcombank’s head office and transaction points in Hanoi (in Hoang Cau, Thai Ha, Nguyen Chi Thanh, Hoang Dieu, and Dien Bien Phu).Secondary data were collectedfrom 2015 until recent Primary data were conducted from June to July 2018 There are five hypotheses i mentioned in this thesis: H1: Reliability has a positive and significant impact on service quality, H2: Responsiveness has a positive and significant impact on service quality, H3: Assurance has a positive and significant impact on service quality, H4: Empathy has a positive and significant impact on service quality, and H5: Tangibles has a positive and significant impact on service quality The author used secondary data and primary data to implement the research Primary data were collected by in-depth interviews (with the head of card center of Techcombank and two customers who were using banking cards of Techcombank) and survey(200 customers who were using bank card service at Techcombank at the time of survey) The author used qualitative method to analyze secondary data collected For primary data, the author used quantitative method via some statistical techniques including: EFA, Cronbach’s Alpha, regression analysis and descriptive analysis by means and standard deviation The survey results show that Responsiveness has the strongest impact on bank card service quality at Techcombank, then Tangibles, Reliability, Assurance and Empathy respectively The bank has some achievements in providing bank card service to customers, such as procedures for bank card transactions are strictly followed by banking employees, the bank does well in information confidentiality and transparency for customer information and banking transactions, etc However, sometimes bank card services are not provided to customers as quickly as possible, errors in the bank card system also may cause delay in providing services to customers, sometimes banking officials at Techcombank not have very polite and professional working attitudes and behaviors, causing customers to have negative ideas about the bank’s working style, etc The author also gave out some solutions to improve bank card service quality at Techcombank including reducing job stress and pressure for banking employees, reducing errors in the banking system, improving banking expertise and skills necessary for banking employees, effectively motivating banking employees, making more suitable job allocation, and paying attention to recruitment and selection works of the bank Due to limited time and knowledge, the author still cannot takes a deeper investigation of bank card service quality at Techcombank However, the disseration can be used as a reference and base for more intensive study on banking service quality in general and bank card service quality in particular in Vietnam commercial banks ii iii ACKNOWLEDGEMENT I am happy to have this thesis finally be completed I would like to express my sincere and heartfelt gratitude to my supervisors for their insightful guidance and patience, support and encouragement during the entire course of this study Working with them has been an enriching and holistic learning experience for me and I truly appreciate the time, energy and diligent efforts they have put in with me in developing this thesisand also their faith in my abilities I am also deeply appreciated to all of employees of Techcombank, who care and help me in every respect I am also indebted customers of Techcombank who created favourable condition for me to complete the survey Last but not least, I am grateful for my family and my close friends for their unconditional love and support through successes and failures in all my accomplishments ever Thank you! Author Nguyen Anh Tu iv TABLE OF CONTENTS ABSTRACT i ACKNOWLEDGEMENT iv TABLE OF CONTENTS v LIST OF TABLES vii LIST OF FIGURES viii INTRODUCTION 2.THEORETICAL BACKGROUND AND LITERATURE REVIEW 2.1 Theoretical background 2.1.1 Service 2.1.2 Service quality 2.2 Literature review 14 RESEARCH METHODOLOGY 17 3.1 Method of research 17 3.1.1 Research process 17 3.1.2 Data collection 17 3.1.3 Data analysis 19 3.2 Theoretical framework on analyzing service quality in banking sector 19 4.ANALYZING BANK CARD SERVICE QUALITY AT TECHCOMBANK 23 4.1 Overview of Techcombank 23 4.1.1 Establishment and development history 23 4.1.2 Organization structure 25 4.1.3 The Techcombank corporate culture 26 4.1.4 Techcombank key performance indicators 28 4.2 Bank card service in the world and in Vietnam 31 4.2.1 Bank card service in the world 31 4.2.2 Bank card service in Vietnam 33 4.3 Respondents’ profile 37 4.3.1 Respondents’ profile by age 37 4.3.2 Respondents’ profile by occupation 38 4.3.3 Respondents’ profile by using time 38 4.4 Data testing 40 v 4.4.1 Exploratory factor analysis 40 4.4.2 Reliability of measurement scales (Cronbach’s Alpha) 42 4.4.3 Correlation analysis 44 4.4.4 Results of regression analysis of influence of independent variables on service quality 46 4.5 Analyzing bank card service quality at Techcombank 51 4.5.1 Reliability 51 4.5.2 Responsiveness 52 4.5.3 Assurance 54 4.5.4 Empathy 55 4.5.5 Tangibles 57 4.5.6 Service quality 58 4.6 Summary of findings 60 4.6.1 Achievements 61 4.6.2 Shortcomings and causes 62 PROPOSED SOLUTIONS TO IMPROVE BANK CARD SERVICE QUALITY AT TECHCOMBANK 64 5.1 Techcombank’s objectives towards service quality 64 5.2 Proposed solutions to improve bank card service quality at Techcombank 65 5.2.1 Reducing job stress and pressure for banking employees 65 5.2.2 Reducing errors in the banking system 66 5.2.3 Improving banking expertise and skills necessary for banking employees 70 5.2.4 Effectively motivating banking employees 72 5.2.5 Making more suitable job allocation 73 5.2.6 Paying attention to recruitment and selection works of the bank 75 CONCLUSION 77 REFERENCES 78 APPENDIX A 80 APPENDIX B 81 APPENDIX C 84 vi LIST OF TABLES Table 2.1: Five components of service quality 13 Table 3.1: Dimensions and attributes to analyze bank card service quality at Techcombank 20 Table 4.1: Age structure 37 Table 4.2: Occupation structure 38 Table 4.3: Using time structure 39 Table 4.4: Average spending structure 39 Table 4.5: KMO and Bartlett's Test for independent variables 40 Table 4.6: Rotated Component Matrix for independent variables 41 Table 4.7: KMO and Bartlett's Test for dependent variable 42 Table 4.8: Cronbach’s alpha summary after EFA 43 Table 4.9: Reliability test of factor ‘Service Quality’ 44 Table 4.10: Pearson correlation coefficients 45 Table 4.11: Model summary 46 Table 4.12: ANOVA results 47 Table 4.13: Regression coefficient 47 Table 4.14: Summary of hypothesis testing result 49 Table 4.15: Assessment towards Reliability factor 51 Table 4.16: Assessment towards Responsiveness factor 53 Table 4.17: Assessment towards Assurance factor 54 Table 4.18: Assessment towards Empathy factor 56 Table 4.19: Assessment towards Tangibles factor 57 Table 4.20: Service quality assessed by age groups 58 Table 4.21: Service quality assessed by occupation groups 59 Table 4.22: Service quality assessed by using time groups 59 Table 4.23: Service quality assessed by monthly average cost groups 60 Table 4.24: Summary of dimensions’ analysis 61 vii LIST OF FIGURES Figure 2.1: Model of Technical/Functional Quality Figure 2.2: Service Quality Model Figure 2.3: SERVPERF Model Figure 2.4: Antecedents and Mediator Model 10 Figure 2.5: Five-gap Model of Service Quality 11 Figure 3.1: Research process 17 Figure 3.2: SERVPERF model as theoretical framework 20 Figure 4.1: Organizational structure of Techcombank 25 Figure 4.2: Techcombank’s core values 26 Figure 4.3: Total assets 28 Figure 4.4: Credit growth 28 Figure 4.5: Profit before tax 29 Figure 4.6: Return on equity 29 Figure 4.7: Return on assets 30 Figure 4.8: Global payment card use 31 Figure 4.9: Methods of online shopping 34 viii CONCLUSION Along with the increasingly strong competition in the business environment, learning about banking service quality in general and bank card service quality in particular becomes more necessary and therefore all the more research help for the implementation of more effective marketing activities as well as complete development policies of Techcombank The thesis generalizes and systematizes theoretical framework related to service quality Specially, it mentioned current situation of bank card service quality at Techcombank at its transaction points in Hanoi The thesis used SPSS 20 software for its statistics, factor analysis, regression analysis, etc The author conducted a survey with 200 respondents who were customers using bank card service of Techcombank at that time Beside, the author also conducted in-depth interview with people who were the head of card center of Techcombank and two customers who were using banking cards of Techcombank From the survey, the author found out that Responsiveness has strongest affecting on bank card service quality at Techcombank The other factors affects weaker than as: Tangibles, Reliability, Assurance and Empathy respectively Due to limitations in time and expertise, there are still some errors in the thesis The author would like to be consulted by teachers and Techcombank managers to further improve thesis quality 77 REFERENCES English Abdul Haseeb Ahmad et al (2017), Exploring Service Quality, An Antecedent Of Customer Satisfaction And Loyalty In Retail Banking Sector Of Pakistan; The Moderating Role Of Gender, Azerbaijanian Journal of Economics and Social Studies, Volume 4, No 1, 2017 Adam Smith Economics/Revue (1991), Modern Economics, Canadian Canadienned`Economique 24(4):994 · November Journal 1991, of DOI: 10.2307/135704 Brogowicz, A.A., Delene, L.M and Lyth, D.M (1990), “A synthesized service quality model with managerial implications”, International Journal of Service Industry Management, Vol No 1, pp 27-46 Cronin, J.J and Taylor, S.A (1992), “Measuring service quality: a reexamination and extension”, Journal of Marketing, Vol 56, July, pp 55-68 Dabholkar, P.A., C.D Shepherd, and D.I Thorpe (2000), “A Comprehensive Framework for Service Quality: An Investigation of Critical Conceptual and Measurement Issues Through a Longitudinal Study,” Journal of Retailing, Vol 76, No 2: 139-173, 2000 Trends Dezan Shira & Associates (2017), Vietnam’s Payment Preferences: Four to Watch, http://www.vietnam-briefing.com/news/vietnams-payment- preferences-4-trends-watch.html/ accesed on July 21, 2018 Grönroos, C (1984) A service quality model and its marketing implications European Journal of Marketing, 18 (4): 36-44 Lehtinen, J.R and Lehtinen, U (1982), “Service quality: a study of quality dimensions”, unpublished Working Paper, Service Management Institute, Helsinki Leonnard (2017), The Performance Of SERVQUAL To Measure Service Quality In Private University, ERIES Journal Vol 11 No 10 Marx, K (1867) Capital: A Critique of Political Economy, Volume 1, London: Penguin, 1976 11 Mobin Ahmed (2017), Service Quality Measurement regarding Banking Sector, International Journal of Business and Social Science, Volume 8, Number 6, June 2017 12 Ovato (2016), Study Report on the Global Payment Cards Industry 78 13 Parasuraman, A., Zeithaml, V A and Berry, L L (1985) A conceptual model of service quality and its implications for future research Journal of Marketing, 49 (4): 41-50 14 Parasuraman, A., Zeithaml, V.A and Berry, L.L (1988), "SERVQUAL: a multi-item scale for measuring consumer perceptions of the service quality", Journal of Retailing, Vol 64, No 1, pp 12-40 15 Rubogora Felix (2017), Service Quality and Customer Satisfaction in Selected Banks in Rwanda, Journal of Business & Financial Affairs, DOI: 10.4172/21670234.1000246 16 Svensson, G (2002), “A triadic network approach to service quality”, Journal of Services Marketing, Vol 16 No 2, pp 158-77 17 Techcombank (2015 – 2017), Annual Reports, Financial Statements, Meeting Minutes, etc Vietnamese Đinh Phi Hổ, Lê Ngọc Uyển, & Lê Thị Thanh Tùng (2008), Kinh tế phát triển: Lí thuyết thực tiễn, NXB Thống kê, TP.HCM Nguyễn Đình Thọ & Nguyễn Thị Mai Trang (2003), Đo lường chất lượng dịch vụ vui chơi giải trí ngồi trời TP.HCM, Đề tài nghiên cứu khoa học, mã số CS2003, Trường ĐH Kinh Tế TPHCM Nguyễn Đình Thọ & Nguyễn Thị Mai Trang (2007), Nghiên cứu khoa học Marketing-Ứng dụng mơ hình cấu trúc tuyến tính SEM,TPHCM: NXB Đại học quốc gia TP.HCM 79 APPENDIX A GUIDELINES FOR IN-DEPTH INTERVIEW QUESTIONS How you think about Techcombank bank card transaction procedures? How you think about the way Techcombank bank card services are provided to customers? How you think about working attitudes and behaviors of Techcombank officials? How you think about skills of Techcombank officials? How you think about knowledge of expertise of Techcombank officials? What about confidentiality and transparency related to Techcombank card service? What you think about Techcombank’s working area? How about working tools and equipment provided to support customers? How you think bout infrastructure on information technology supporting Techcombank operations? 10 In general, what you think about bank card services at Techcombank? 80 APPENDIX B QUESTIONAIRE FOR SURVEY First of all, I would like to thank you for your consideration to complete this questionaire Please fill out the following survey and skip any question if answering if makes you feel uncomfortable All your opinions assess service quality of bank card service quality at Techcombank The information provided through survey will help the author in contributing to Techcombank to improve bank card service quality in order to get higher level of customer satisfaction A Overall information Indicate your choice by marking the appropriate block with an (X) Please indicate your age < 25  36 – 45  26 – 35 > 45 Please indicate your occupation  Student  Manager  Others  Employee  Self-employed Please indicate your using time of bank card service at Techcombank < year  – years  – years > years How much you spend a month averagely on bank card service of Techcombank? < VND3m  VND3m – VND5m  VND5m – VND8m > VND8m B Surveying questions Please complete the question by an X to the statement that you feel correct with your satisfaction toward bank card service provided by Techcombank The level score from to is understood as followings: (1) strongly disagree, (2) disagree, (3) neutral, (4) agree, and (5) strongly agree 81 Code I Level Dimension RELIABILITY Techcombank bank card transaction procedures implemented as prescribed Techcombank bank card services are provided to you on a timely manner You feel secured and reliable when questioning and asking for information on bank card services at Techcombank Techcombank officials’ skills are professional and suitable II RESPONSIVENESS III are Techcombank officials are ready to deal with your problems related to bank card services Techcombank officials serve you quickly Techcombank officials give all instructions on bank card services in a consistent and clear manner Techcombank officials always talk to you to find the best ways dealing with your questions and complaints ASSURANCE Techcombank officials have good behavior and attitudes to represent the whole bank to serve you Your bank card information and status is kept confidential by Techcombank You can see transparency in any bank card transactions at Techcombank Techcombank guarantees that you will be served politely and professionally at any transaction office IV EMPATHY Techcombank officials always sympathize for your difficulties Techcombank officials give detailed explanations for your questions Techcombank officials are friendly and enthusiastic to you 82 Techcombank officials always listen to and give detailed and clear instructions V TANGIBLES Location and working space is convenient and suitable VI The working area is clean, cool with suitably arranged working tables Working tools and equipment are fully provided and modern The infrastructure on information technology supporting banking operations is well designed and supported SERVICE QUALITY You have good impression towards bank card services at Techcombank You will continue using bank card services at Techcombank in the next three years You will positively introduce friends and relatives to bank card services at Techcombank THANK YOU FOR YOUR COOPERATION! 83 APPENDIX C SURVEY RESULTS EFA analysis Independent variables KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test Sphericity Approx Chi-Square of df Sig .758 1312.257 190 000 Communalities Initial Extraction REL1 1.000 663 REL2 1.000 600 REL3 1.000 635 REL4 1.000 678 RES1 1.000 517 RES2 1.000 419 RES3 1.000 548 RES4 1.000 530 ASS1 1.000 524 ASS2 1.000 674 ASS3 1.000 686 ASS4 1.000 660 EMP1 1.000 641 EMP2 1.000 765 EMP3 1.000 585 EMP4 1.000 732 TAN1 1.000 572 84 TAN2 1.000 740 TAN3 1.000 714 TAN4 1.000 597 Extraction Method: Principal Component Analysis Total Variance Explained Component Initial Eigenvalues Total % of Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Cumulative % Total Variance % of Cumulative % Total Variance % of Cumulative % Variance 4.349 21.744 21.744 4.349 21.744 21.744 2.679 13.397 13.397 2.562 12.810 34.555 2.562 12.810 34.555 2.622 13.111 26.508 2.255 11.273 45.828 2.255 11.273 45.828 2.606 13.029 39.537 1.766 8.830 54.658 1.766 8.830 54.658 2.538 12.690 52.227 1.547 7.736 62.394 1.547 7.736 62.394 2.033 10.167 62.394 918 4.592 66.986 761 3.804 70.790 734 3.670 74.460 681 3.406 77.866 10 578 2.888 80.753 11 553 2.767 83.521 12 484 2.421 85.941 13 474 2.371 88.312 14 427 2.136 90.448 15 401 2.006 92.454 16 368 1.840 94.294 17 366 1.828 96.121 18 279 1.397 97.518 19 261 1.304 98.823 20 235 1.177 100.000 Extraction Method: Principal Component Analysis Rotated Component Matrixa Component TAN2 841 85 TAN3 838 TAN1 738 TAN4 702 EMP2 868 EMP4 843 EMP1 787 EMP3 645 ASS3 823 ASS2 814 ASS4 787 ASS1 714 REL4 807 REL3 787 REL1 763 REL2 714 RES3 717 RES1 701 RES4 689 RES2 621 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 86 Dependent variable KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Approx Chi-Square of df Test Sphericity 731 325.750 Sig .000 Communalities Initial Extraction SQ1 1.000 851 SQ2 1.000 835 SQ3 1.000 762 Extraction Method: Principal Component Analysis Total Variance Explained Component Initial Eigenvalues Total % of Extraction Sums of Squared Loadings Cumulative % Total Variance % of Cumulative % Variance 2.449 81.619 81.619 347 11.556 93.175 205 6.825 100.000 2.449 Extraction Method: Principal Component Analysis Component Matrixa Component SQ1 923 SQ2 914 SQ3 873 Extraction Method: Component Analysis 87 Principal 81.619 81.619 a components extracted 88 Regression analysis Model Summaryb Model R R Square 830a Adjusted R Std Error of Durbin- Square the Estimate Watson 680 2978 1.457 689 a Predictors: (Constant) TAN ASS EMP RES REL b Dependent Variable: SQ ANOVAa Model Sum of df Mean Square F Sig 80.933 000b Squares Regression 35.895 7.179 Residual 16.232 183 089 Total 52.127 188 a Dependent Variable: SQ b Predictors: (Constant) TAN ASS EMP RES REL Coefficientsa Model Unstandardized Standardized Coefficients Coefficients B Std Error -1.483 264 REL 292 044 RES 346 ASS (Constant) t Sig Collinearity Statistics Beta Tolerance VIF -5.614 000 294 6.572 000 849 1.178 042 366 8.290 000 874 1.144 250 045 234 5.577 000 965 1.036 EMP 184 047 171 3.925 000 901 1.110 TAN 329 046 326 7.205 000 832 1.202 a Dependent Variable: SQ Residuals Statisticsa Minimum Maximum 89 Mean SD N Predicted Value 2.153 4.487 3.492 4370 189 Residual -.9270 1.5831 0000 2938 189 -3.065 2.278 000 1.000 189 -3.112 5.315 000 987 189 Std Predicted Value Std Residual a Dependent Variable: SQ 90 91 ... of bank card service quality at Techcombank?  How about the current situation of bank card service quality at Techcombank?  What are solutions to improve bank card service quality at Techcombank? ... to improve bank card service quality at Techcombank. The thesis concentrates on bank card service quality and how to deal with the problems about bank card service quality at Techcombank. Places... IMPROVE BANK CARD SERVICE QUALITY AT TECHCOMBANK 64 5.1 Techcombank? ??s objectives towards service quality 64 5.2 Proposed solutions to improve bank card service quality at Techcombank