The factors affecting customer satisfation in retail banking at vietnam maritime commercial joint stock bank

Cohort 2016 – 2018 MASTER THESIS “THE FACTORS AFFECTING CUSTOMER SATISFATION IN RETAIL BANKING AT VIETNAM MARITIME COMMERCIAL JOINT STOCK BANK” Advisor: PhD DAO TUNG Author: TRAN THI THAO Hanoi, 05/2018 ACKNOWLEDGEMENT With the approval of the International Faculty of the National University, the University of Nantes and my teacher, PhD DAO TUNG, I have chosen the subject of the research "THE FACTORS AFFECTING CUSTOMER SATISFATION IN RETAIL BANKING AT VIETNAM MARITIME COMMERCIAL JOINT STOCK BANK” To complete this thesis, I would like to express my deep gratitude to all the teachers were enthusiastic teaching and guidance during my study, research and training at the department I would like to deeply thank our teacher - PhD DAO TUNG who guided me access to research topics and find out the best solution for this study He has given us a very sincere affection, warmth, an attitude to work very carefully, exemplary I could not have imagined having a better mentor than her my graduation topic Although my work is very busy, I always try my best to complete the thesis However, the first time doing an academic research brings me from this challenge to another one So it is impossible to avoid all difficulties in doing the research So I would like to receive valuable feedback from the teachers and colleagues to my study in order to get my thesis completed Last but not least, I also would like to express my special thanks to my family for their support during my two years studying in this program as well as during the last highly intensive time for this thesis Sincerely thank with my best regards, Hanoi, May, 2018 Author: Tran Thi Thao – FBA8 TABLE OF CONTENTS ABBREVIATIONS LIST OF TABLES LIST OF CHARTS LIST OF DIAGRAMS ABSTRACT INTRODUCTION Rationale for theResearch Overview of research situation 10 Research Objectives 14 Research Subjects 14 Research Scopes 14 ResearchQuestions 14 Research Methods 15 Structure of the thesis 15 CHAPTER LITERATURE REVIEW 16 1.1 Banking services 16 1.1.1 The concept of banking services 16 1.1.2 Characteristics of banking services 17 1.1.3 Types of banking services 18 1.2 Quality of banking services 20 1.2.1 The concept of quality of banking services 20 1.2.2 Criteria for measuring the quality of banking services 22 1.3 Customer satisfaction 22 1.3.1 The concept of customer satisfaction 22 1.3.2 The relationship between quality of service and customer satisfaction 23 1.3.3 Factors that affect customer satisfaction 23 1.4 Models of measuring the quality of banking services 27 1.4.1 SERVQUAL Model 27 1.4.2 SERVPERF Model 28 1.4.3 BANKSERV Model 28 1.4.4 JOHNSTON Model 29 1.4.5 BSQ Model of Bahia and Nantel (2000) 31 1.4.6 Model of Sureshchander et al (2001) 31 1.4.7 SYSTRA - SQ Model of Aldlaigan and Buttle (2002) 32 1.4.8 CBSQ Model of Xin Guo et al (2008) 32 1.4.9 Model of Kumar et al (2009) 33 1.4.10 BANQUAL-R Model of Tsoukatos and Mastrojianni (2010) 33 CHAPTER THE STATUS OF THE QUANLITY OF BANKING SERVICES AT MARITIMEBANK 34 2.1 Overview of Vietnam Maritime Commercial Stock Bank 34 2.2 Quality assurance services at Maritimebank 35 2.2.1 Training programs, communication and evaluation, quality control services at Maritimebank 35 2.2.2 Current status of service quality at Maritimebank 37 CHAPTER MODEL, HYPOTHESIS AND METHODOLOGY 43 3.1 Research Model 43 3.2 Research process 44 3.3 Data sources 46 3.3.1 Secondary data 46 3.3.2 Primary data 46 3.4 Research Methods 46 3.4.1 Qualitative research methods 46 3.4.2 Quantitative research methods 48 CHAPTER RESEARCH RESULTS 54 4.1 Results of qualitative research 54 4.1.1 Results of expert interviews 54 4.1.2 Results of personal interviews 55 4.2 Results of quantitative research 55 4.2.1 Results of sample analysis 55 4.2.2 The results of the scale evaluation 57 4.2.3 Analysis results 61 CHAPTER CONCLUSIONS AND RECOMMENDATIONS 67 5.1 Conclusions 67 5.2 Recommendations 67 5.2.1 Enhancing the capacity of the bank staff 68 5.2.2 Ensuring the fee of service are reasonable 69 5.2.3 Ensuring credibility in the transaction 70 5.2.4 Invest in upgrading facilities, equipment, dresses for employees 70 5.3 Limitation of reasearch 71 CONCLUSION 72 REFERENCES 73 APPENDIX 01 - CONTENTS OF EXPERT INTERVIEWS 76 APPENDIX 02 - CONTENTS OF IN-DEPTH INTERVIEWS 81 APPENDIX 03 - QUESTIONNAIRE FOR SURVEY 84 APPENDIX 04 - DATA RESULTS 88 ABBREVIATIONS ATS Access to Services CFA Confirmatory Factor Analysis COM Communication CRE Credibility EFA Exploratory Factor Analysis FSE Fee of the service SAT Customer satisfaction SEM Linear Structure Model STC Staff Conduct WTO World Trade Organization LIST OF TABLES Table 3.1 A summary of research hypotheses Table 3.2 Summary of encoded scales Table 4.1 Results of expert interviews Table 4.2 Statistics of demographic characteristics of the surveyed subjec Table 4.3 Results of the Exploratory Factor Analysis (EFA) Table 4.4 Summary of measurement results Table 4.5 Summary the average value of each scale Table 4.6 Pearson Correlation Table 4.7 Regression analysis Table 5.1 Summary the results of the research hypothesis testing LIST OF CHARTS Chart 2.1 Comparison of service quality between banks in 2017 Chart 2.2 Comparison of Brand image of Maritimebank in third quarter of 2016 and third quarter of 2017 Chart 2.3 Compare Maritimebank's favorite level of customer with other banks in 2017 Chart 2.4 Compare the Maritimebank Brand image rating to other banks in 2017 Chart 2.5 Score of service quality of Maritime Bank in 2016 - 2017 LIST OF DIAGRAMS Diagram 1.1 BANKSERV Model of Avkiran (1994) Diagram 3.1 Research Model of the Thesis Diagram 3.2 The research process of the Thesis ABSTRACT Customers Satisfaction have a big influence on a bank’s development In fact, there has been a lot of researches that indicated the variety of factors effect on Customers satisfaction So in this study, author just mention some factors based on research model bankserv from Avkiran, such as Staff conduct, Credibility, Communication, Access to services and some factors that can directly impact on customers satisfaction at Maritime Bank, that is Fee of service Research result indicate that all above factors influence on Customers Satisfaction, but Access to services have the most influence on individual customers satisfaction I hope research result will help Maritime Bank to improve service quality and individual Customers satisfaction Key words: Banking, Customer service, Service quality, Customer Sactisfaction, Performance measurement, Retail banking, Bankserv INTRODUCTION Rationale for theResearch Customers are the decisive factor in the success of any industry and Banking is no exception In the increasingly competitive environment, banking services not seem to be specialized, leading the market, the quality of service is the way to bring customers closer to the bank Vietnam's economy is developing strongly and actively integrating into the world economy The commercial banks system has also developed remarkably and along with the competition between banks, between banks and other financial institutions This competition requires banks to have appropriate business strategies and constantly expand and improve the quality of services Developing retail banking is the trend of commercial banks around the world Especially for a booming economy like Vietnam to survive and develop in a sustainable manner, Today's commercial banks are aiming at strengthening and developing their customers, especially individual, household, small and medium enterprises Retail banking is always considered as a core activity, from which the bank can expand its business activities Facing competition and international integration requirements, commercial banks need to develop and improve their competitiveness in terms of retail banking quality; This activity has become a core activity to meet the increasing demand of society For Vietnamese commercial banks, despite the perceived importance of service quality and most of commercial banks have applied many positive measures to implement this type of service and the first step is quite positive However, in general, the quality of services in most commercial banks in Vietnam, including Maritime Bank, has not met the expectations, many of these commercial banks are still largely formal, lacking in form, and not even rightly centered The issue now is to study the factors that affect customer satisfaction on service quality, thereby clarifying the limitations and causes for practical action to improve the customer satisfaction As an officer of Maritimebank and directly operating in the field of service quality, with the enthusiasm to improve the quality of this activity to benefit both customers and Maritimebank, I chose the topic: “The factors affecting customer satisfaction in retaill banking at Vietnam Maritime Commercial Joint Stock Bank” as my Master's thesis on Finance, Banking and Insurance Overview of research situation So far, there have been many domestic and foreign studies on the quality of banking services, customer satisfaction on the quality of banking services and the factors that affect customer satisfaction on the quality of banking services Such as: Necmi Kemal Avkiran (2002) developed the BANKSERV banking service quality measurement model with 27 initial observations of six factors: Staff conduct, Credibility, Communication, Access to teller services, Responsiveness, Access management branch based on the SERVQUAL model by Parasuraman et al (1985) to measure the quality of retail banking services at Australian bank branches The results of data collection from 971 individual customers have been using the services at the bank branches, The analysis shows that four factors affect the quality of retail banking in Australia: (1) Staff conduct, (2) Credibility, (3) Communication, (4) Access to teller services Although research has identified four factors that affect the quality of banking services, Avkiran's research has not yet revealed the importance of each factor At the same time, the author's research shows that the BANKSERV model has not been expanded on the basis of segmentation of customers according to customer demand in combination with other Socio-Economic factors Kamilia Bahia and Jacques Nantel (2004) developed a service quality measurement model BSQ (Banking Service Quality) based on the combination of 10 service quality components of Parasuraman et al (1985) and the 7Ps Mixed Marketing methodology to measure the quality of service experience for different types of banking services in Canada By using the Exploratory Factor Analysis(EFA) through a database of 225 French-speaking individuals using different types of banking services in Canada, The results show that six factors affecting the quality of banking services in Canada include:(1) Effectiveness and assurance, (2) Accessibility, (3) Fee of service, (4) Tangibles, (5) Service portfolio, (6) Reliability All six factors of the BSQ model are more reliable than the SERVQUAL model However, as the BSQ model was developed to conduct a survey of French-speaking clients using Canadian banking services, it may not be suitable for customers who are using the other languages This is the limitation of the study Abdullah H Aldlaigan and Francis A Buttle (2007) developed the SYSTRA-SQ model based on the Nordic model of Gronroos (1982) to measure the quality of retail banking services in the UK Using the Exploratory Factor Analysis(EFA) and analysis of ANOVA variance by 10 ○ From 31 to 40 million VND ○ Over 41 million What services are you using below of Martimebank? ○ Deposit service ○ Credit service ○ Payment services in the country ○ International payment services ○ Electronic banking services ○ Foreign currency trading service ○ Other services How long have you been using Martimebank's services? ○ Less than year ○ From to years ○ More than years PART ASSESSMENT OF CUSTOMER SATISFACTION Would you please tell me your real feelings after using Martimebank's services according to the comments below (Please circle your choice on a scale of to 5) Very disagree Disagree No idea Agree Very agree Encode STC1 STC2 STC3 Scales Maritimebank's staffs are always available to help and support customers Maritimebank's staffs meet every need of customers quickly and in a timely manner Maritimebank's staffs always welcome customers when the transaction Select 5 STC4 Maritimebank's staffs show real interest to customers STC5 Maritimebank's staffs always polite attitude to customers 5 STC6 STC7 The costumes and appearance of Maritimebank's staffs are neat, polite and attractive Maritimebank's staffs are willing to apologize to customers 85 Encode Scales Select when making mistakes CRE1 CRE2 CRE3 COM1 COM2 COM3 COM4 COM5 ATS1 ATS2 Maritimebank's staffs always inform customers about all information that customers are interested in Maritimebank's staffs operate fast and accurate Customers feel secure when making transactions with Maritimebank Maritimebank's staffs help customers save the transaction costs with the Bank Maritimebank's staffs have in-depth knowledge of banking services Maritimebank's staffs offer useful advice to customers Maritimebank's staffs are ready to let customers know about the products and services of the bank Maritimebank's staffs let customers know when the service is done Maritimebank always has employees ready to serve customers anytime, anywhere 5 5 5 5 5 5 5 The number of branches and transaction offices of Maritimebank are many and are reasonably distributed, convenient for customers ATS3 The number of ATMs, POST of Maritimebank is much, convenient for customers when dealing FSE1 FSE2 FSE3 The transaction fee of services at Maritimebank is reasonable The annual fee of services at Maritimebank is reasonable The security fee for informations at Maritimebank is reasonable SAT1 Customers are satisfied with the services of Maritimebank SAT2 Customers are satisfied with the service staff of 86 Encode Scales Select Maritimebank SAT3 SAT4 Overall, the quality of Maritimebank's services is satisfactory Customers always think of the first Maritimebank when they need to use services related to finance and banking Thank you for your support! 87 APPENDIX 04 - DATA RESULTS Gender Frequency Valid Percent Valid Percent Cumulative Percent Male 103 43.3 43.3 43.3 Female 135 56.7 56.7 100.0 Total 238 100.0 100.0 Age Frequency Percent Valid Percent Cumulative Percent Under 30 years old 75 31.5 31.5 31.5 From 31 to 40 years old 59 24.8 24.8 56.3 From 41 to 50 years old 46 19.3 19.3 75.6 From 51 to 60 years old 46 19.3 19.3 95.0 Over 61 years old 12 5.0 5.0 100.0 238 100.0 100.0 Valid Total Income Frequency Percent Valid Percent Cumulative Percent Under million 41 17.2 17.2 17.2 Between and 10 million 60 25.2 25.2 42.4 Between 11 and 20 million 48 20.2 20.2 62.6 Valid Between 21 and 30 million 34 14.3 14.3 76.9 Between 31 and 40 million 34 14.3 14.3 91.2 Over 41 million 21 8.8 8.8 100.0 238 100.0 100.0 Total 88 Education Frequency Intermediate Percent Valid Percent Cumulative Percent 55 23.1 23.1 23.1 101 42.4 42.4 65.5 Master 31 13.0 13.0 78.6 Ph.D 10 4.2 4.2 82.8 Other 41 17.2 17.2 100.0 Total 238 100.0 100.0 College, University Valid Job Frequency Percent Valid Percent Cumulative Percent Managers 34 14.3 14.3 14.3 Officer 50 21.0 21.0 35.3 Housewife 24 10.1 10.1 45.4 Doctor 25 10.5 10.5 55.9 Worker 20 8.4 8.4 64.3 Engineer 21 8.8 8.8 73.1 Teacher 32 13.4 13.4 86.6 Student 20 8.4 8.4 95.0 Other Job 12 5.0 5.0 100.0 238 100.0 100.0 Valid Total 89 Reliability Statistics Cronbach's Alpha N of Items 875 Item-Total Statistics Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha if Item Deleted Item Deleted Total Correlation Item Deleted STC1 20.88 22.813 721 849 STC2 21.03 22.336 680 854 STC3 20.78 22.123 720 848 STC4 20.85 22.447 687 853 STC5 20.83 23.254 615 862 STC6 20.75 23.588 533 874 STC7 21.06 23.494 641 859 Reliability Statistics Cronbach's Alpha N of Items 712 Item-Total Statistics Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha Item Deleted Item Deleted Total Correlation if Item Deleted CRE1 7.23 3.012 505 654 CRE2 7.05 2.482 561 585 CRE3 7.00 2.764 531 621 90 Reliability Statistics Cronbach's Alpha N of Items 757 Item-Total Statistics Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha if Item Deleted Item Deleted Total Correlation Item Deleted COM1 14.04 9.492 517 717 COM2 14.05 9.601 511 719 COM3 13.80 10.210 476 731 COM4 13.84 9.384 560 701 COM5 13.81 9.352 557 702 Reliability Statistics Cronbach's Alpha N of Items 750 Item-Total Statistics Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha if Item Deleted Item Deleted Total Correlation Item Deleted ATS1 6.84 2.692 580 663 ATS2 6.82 2.711 557 689 ATS3 6.66 2.598 594 646 Reliability Statistics Cronbach's Alpha 755 N of Items 91 Item-Total Statistics Scale Mean if Scale Variance if Corrected Item- Cronbach's Alpha if Item Deleted Item Deleted Total Correlation Item Deleted FSE1 7.11 2.528 626 623 FSE2 7.37 2.994 543 718 FSE3 7.09 2.877 588 669 Reliability Statistics Cronbach's Alpha N of Items 736 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Item Deleted if Item Deleted Total Correlation Cronbach's Alpha if Item Deleted SAT1 10.32 2.269 515 684 SAT2 10.45 2.223 504 691 SAT3 10.48 2.209 544 667 SAT4 10.22 2.250 550 665 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Approx Chi-Square Bartlett's Test of Sphericity 765 1661.070 df 210 Sig .000 92 Total Variance Explained Comp Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings % of % of Cumulativ Variance e% onent Total % of Variance Cumulative Total % Variance Cumulative Total % 4.206 20.028 20.028 4.206 20.028 20.028 4.069 19.378 19.378 2.715 12.928 32.956 2.715 12.928 32.956 2.568 12.229 31.607 2.079 9.900 42.856 2.079 9.900 42.856 2.066 9.839 41.446 1.922 9.153 52.008 1.922 9.153 52.008 2.037 9.699 51.145 1.786 8.503 60.511 1.786 8.503 60.511 1.967 9.367 60.511 857 4.079 64.590 828 3.945 68.535 739 3.521 72.057 683 3.252 75.308 10 640 3.050 78.358 11 592 2.820 81.178 12 554 2.636 83.814 13 515 2.452 86.266 14 457 2.175 88.441 15 440 2.096 90.537 16 424 2.020 92.557 17 409 1.946 94.502 18 379 1.803 96.305 19 283 1.348 97.654 20 265 1.262 98.916 21 228 1.084 100.000 Extraction Method: Principal Component Analysis 93 Component Matrixa Component STC1 803 STC3 794 STC4 777 STC2 770 STC7 744 STC5 701 STC6 627 COM4 728 COM5 684 COM1 668 COM2 642 COM3 614 FSE1 806 FSE3 774 FSE2 726 ATS1 649 ATS3 555 ATS2 544 CRE2 620 CRE3 589 CRE1 506 Extraction Method: Principal Component Analysis a components extracted 94 Rotated Component Matrixa Component STC1 814 STC3 807 STC4 779 STC2 768 STC7 742 STC5 732 STC6 638 COM5 747 COM4 741 COM1 700 COM2 695 COM3 664 FSE1 850 FSE3 814 FSE2 780 ATS3 826 ATS1 813 ATS2 791 CRE2 813 CRE3 777 CRE1 767 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations 95 Correlations STC Pearson Correlation STC Pearson Correlation -.007 112 032 497** 070 912 085 625 000 344 344 238 238 238 238 098 -.102 019 -.003 369** 118 775 968 000 344 344 238 238 238 238 -.007 -.102 110 000 378** Sig (2-tailed) 912 118 089 998 000 N 238 238 238 238 238 238 112 019 110 040 526** Sig (2-tailed) 085 775 089 537 000 N 238 238 238 238 238 238 032 -.003 000 040 394** Sig (2-tailed) 625 968 998 537 N 238 238 238 238 238 238 497** 369** 378** 526** 394** Sig (2-tailed) 000 000 000 000 000 N 238 238 238 238 238 Correlation Correlation Correlation Pearson Correlation SAT SAT N Pearson FSE FSE 070 Pearson ATS ATS Sig (2-tailed) Pearson COM COM 098 Sig (2-tailed) N CRE CRE 000 238 ** Correlation is significant at the 0.01 level (2-tailed) 96 Model Summaryb Model R R Adjusted Std Change Statistics Square R Square Error of R Square the F df1 Durbin- df2 Watson Sig F Change Change Change Estimate 909a 827 823 201 827 221.592 232 000 1.584 a Predictors: (Constant), FSE, COM, STC, ATS, CRE b Dependent Variable: SAT ANOVAa Model Sum of Squares Regression Mean Square 8.957 9.378 232 040 54.162 237 F 44.784 Residual Total df Sig 221.592 000b a Dependent Variable: SAT b Predictors: (Constant), FSE, COM, STC, ATS, CRE Coefficientsa Model Unstandardized Standardized Coefficients Coefficients B (Constant) Std Error -.620 125 STC 238 017 CRE 212 COM t Sig Collinearity Statistics Beta Tolerance VIF -4.941 000 393 14.137 000 967 1.034 017 344 12.396 000 970 1.031 235 018 369 13.361 000 977 1.024 ATS 261 017 420 15.184 000 974 1.027 FSE 221 017 366 13.365 000 998 1.002 a Dependent Variable: SAT 97 98 99 ... the factors affecting the satisfaction of individual customers on the quality of banking services at Maritimebank;  Examining the impact of factors affecting the satisfaction of individual customers... improve the quality of this activity to benefit both customers and Maritimebank, I chose the topic: ? ?The factors affecting customer satisfaction in retaill banking at Vietnam Maritime Commercial Joint. .. Confidence 33 CHAPTER THE STATUS OF THE QUANLITY OF BANKING SERVICES AT MARITIMEBANK 2.1 Overview of Vietnam Maritime Commercial Stock Bank Maritime Commercial Join Stock Bank (Maritimebank) was officially