Factors affecting customer satisfaction when using digital banking in ho chi minh city

STATE BANK OF VIETNAM THE MINISTRY OF EDUCATION AND TRAINING BANKING UNIVERSITY OF HO CHI MINH CITY LAC HONG NHU FACTORS AFFECTING THE SATISFACTION OF CUSTOMERS WHEN USING DIGITAL BANKING IN HO CHI MINH CITY GRADUATE THESIS MAJOR: FINANCE – BANKING CODE: 7340201 HO CHI MINH CITY, 2021 STATE BANK OF VIETNAM THE MINISTRY OF EDUCATION AND TRAINING BANKING UNIVERSITY OF HO CHI MINH CITY LAC HONG NHU FACTORS AFFECTING THE SATISFACTION OF CUSTOMERS WHEN USING DIGITAL BANKING IN HO CHI MINH CITY GRADUATE THESIS MAJOR: FINANCE – BANKING CODE: 7340201 SUPERVISOR M.Sc VO THI NGOC HA HO CHI MINH CITY, 2021 i ABSTRACT The goal of this research is to use the modified SERVPERF model to assess customer satisfaction and the influence of these dimensions (interface, reliability, responsiveness, empathy, security, and price) on customer satisfaction in three digital banks in Ho Chi Minh City (Timo, Tnex, and Cake) Data is collected from 304 Timo, Tnex, and Cake consumers The SPSS 20 program statistically evaluated the sample data using exploratory factor analysis, factor analysis, descriptive statistics, correlation analysis, and regression to assess service quality perception and customer satisfaction The results show that customer satisfaction is influenced by six factors: interface, reliability, responsiveness, security, empathy, and price The reliability factor has a positive impact on customer satisfaction with a statistical significance of 90% while the remaining factors have a positive impact on customer satisfaction with a statistical significance of up to 95% The study's findings also revealed that there was no difference in satisfaction between genders but there is a difference in satisfaction with age group and occupations Finally, the paper provides management implications for digital banks to enhance their service quality, as well as points out some limitations of the research, and suggests future research directions ii DECLARATION I hereby declare that this is my own research under the supervision of MSc Vo Thi Ngoc Ha The truthful data, content, results, tables, and images used for commenting and analysis collected from various sources are cited and clearly stated in the references section In addition, comments, reviews as well as results of other authors will be fully cited The Author Lạc Hồng Như iii ACKNOWLEDGEMENTS I would like to express my sincere thanks to all the professors at Banking University of Ho Chi Minh City for their patience and dedication in teaching and imparting practical and useful knowledge to me over the past four years, especially MSc Vo Thi Ngoc Ha, who directly guided and helped me complete my graduation thesis Due to limited knowledge and practical experience, my research still has many shortcomings I am looking forward to receiving your advice and comments to improve this thesis Finally, I wish you all health and success in your career Best regards The Author Lạc Hồng Như iv ABBREVIATION LIST Abbreviation Description DB Digital Banking Fintech Financial technology SBV State bank of Vietnam VP Bank Vietnam Prosperity Joint Stock Commercial Bank MSB Vietnam Maritime Commercial Joint Stock Bank v LIST OF TABLE Table 2.1 The difference between Digital banking and e-banking .8 Table 3.1 Encrypt data for Interface component .29 Table 3.2 Encrypt data for Reliability component 30 Table 3.3 Encrypt data for Responsiveness component 30 Table 3.4 Encrypt data for Security component .31 Table 3.5 Encrypt data for Empathy component 31 Table 3.6 Encrypt data for Price component .32 Table 3.7 Encrypt data for Satisfaction component 32 Table 3.8 Summary of correlation between factors and customer satisfaction 32 Table 4.1 Survey sample characteristics 45 Table 4.2 Descriptive Statistics 49 Table 4.3 Cronbach's Alpha test results for independent variables 50 Table 4.4 Cronbach's Alpha test results for dependent variable .50 Table 4.5 KMO and Bartlett's Test for independent variables 51 Table 4.6 Total Variance Explained for independent variables 52 Table 4.7 Rotated Component Matrix for independent variables 53 Table 4.8 KMO and Bartlett's Test for dependent variable 54 Table 4.9 Total Variance Explained for dependent variable 54 Table 4.10 Component Matrix for dependent variable .55 Table 4.11 Pearson Correlation Analysis 55 Table 4.12 Regression analysis 57 Table 4.13 ANOVA 57 Table 4.14 Coefficients .57 Table 4.15 Test of Homogeneity of Variances between Genders 59 Table 4.16 ANOVA test between Genders .59 Table 4.17 Test of Homogeneity of Variances between Age groups .60 Table 4.18 ANOVA test between Age groups 60 Table 4.19 Test of Homogeneity of Variances between Occupations 60 vi Table 4.20 ANOVA test between Occupations 61 vii LIST OF FIGURES Figure 2.1 Digital bank models 13 Figure 2.2 The SERVQUAL model 18 Figure 2.3 The GRONROOS model 21 Figure 3.1 Proposed research model 28 Figure 4.1 Level of research and implementation of digital transform strategies of commercial banks in Vietnam 42 Figure 4.2 Digital transformation model in Vietnam 43 viii TABLE OF CONTENTS ABSTRACT i DECLARATION ii ACKNOWLEDGEMENTS iii ABBREVIATION LIST iv LIST OF TABLE .v LIST OF FIGURES vii TABLE OF CONTENTS viii CHAPTER 1: INTRODUCTION .1 1.1 Reasons for choosing the topic 1.2 Research objectives 1.3 Research questions 1.4 Research subjects 1.5 Research methods .4 1.6 Contribution 1.7 Structure of research CHAPTER 2: THEORETICAL BASIS AND LITERATURE REVIEW 2.1 Overview of digital banking .7 2.1.1 Definition of digital banking 2.1.2 Benefits and limitations of digital banking 2.1.2.1 Benefits of digital banking 2.1.2.2 Limitations of Digital Banking .12 2.1.3 Forms of digital banking .12 viii APPENDIX APPENDIX 1: QUESTIONNAIRE Dear Mr/Ms, My name is Lac Hong Nhu, i am a student majoring in Banking and Finance at the Banking University of Ho Chi Minh city I am currently conducting a graduation thesis proposal on the topic: "Factors affecting the satisfaction of customers when using Digital Banking in HCMc" The purpose of this topic is to evaluate customer satisfaction through factors which are interface, reliability, responsiveness, security, empathy and price Digital bank here is understood as a bank established by parent bank (which is a traditional bank) and operates based on the license of the parent bank This subsidiary bank only operates on a digital platform with an end-to-end business model and operates independently and separately from the parent bank This research will study about typical digital banks in Vietnam, namely Timo, Tnex and Cake If you have never used these digital banks, please skip this survey and thank you very much for your willingness to take the survey We look forward to your support I hereby certify that all of your information is absolutely confidential and used only on this research topic Our deep appreciation to your valuable time and support Thank you very much GENERAL INFORMATION What is your gender?  Male  Female What is your age? ix  15-25  26-35  36-50  Above 50 What is your educational status?  Postgraduates  Graduates  College or Intermediate  High school and below What is your current employment status?  Worker  Civil servant  Self-business or Office worker  Pensioner  Student  Others Which income group you belong to?  Below million VND  From to 10 million VND  Above 10 to 18 million VND  Above 18 million VND How often you use Digital banking?  Less than once a week  From to times per week  From to times per week x  More than times per week What kind of digital banking you use? (*You can choose multiple answers)  Timo  Tnex  Cake From which source you know and use Digital banking?  Friends  Relatives  Social media  Others What area of Ho Chi Minh city you currently live in?  The Central Urban Area of Ho Chi Minh City includes 13 main districts: District 1, District 3, District 4, District 5, District 6, District 8, District 10, District 11, Phu Nhuan District, Binh Thanh District, Go Vap District, Tan Binh District, Tan Phu District  The urban area at the North of Ho Chi Minh city: Hoc Mon District, District 12, Cu Chi District  The urban area at the South of Ho Chi Minh City: District 7, Binh Chanh District, Nha Be District, Can Gio District  The urban area at the West of Ho Chi Minh City: Binh Chanh District, Binh Tan District  Thu Duc city THE IMPACT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN DIGITAL BANKING Please rate the score from to for the statements below and check (X) in the corresponding box xi In which, 1: Strongly disagree 2: Disagree 3: Neutral 4: Agree 5: Strongly agree Number Question On applications or websites of digital banks, you find the interface very attractive On the interface of the digital banking application, you can quickly access banking services Digital bank applications or websites have a sitemap display that makes it very easy for you to use On the application interface or website of the digital bank, you can search information about services quickly and easily On the digital bank's app or website, you can easily log in to your account Digital banking keep its promises to deliver a service for you at a specific time Digital banks always provide services to you without any errors Digital banking perform the service to you correctly from the first time you use it Digital banking always actively notices to customers when it have a change in the service information 10 You can make transactions 24/7 with digital banking 11 Digital banking give you prompt service xii 12 13 14 15 Digital banking solves your problems quickly and in a timely manner Digital banking can serve your needs as a traditional bank Digital banks always have a call center staff to support customers online You are not worried about the security of digital banking 16 You trust in the technology of digital banking 17 You trust that digital banking protect your privacy 18 You think it is safe to use digital banking services 19 20 21 22 23 24 25 When you have a question or complaint, digital banking always solves it satisfactorily You feel that digital banking has many good customer care policies Digital banking always cares and understands your needs about digital banking services Digital bank always has attractive and suitable promotions for you Digital banks have interest rates of services suitable to your financial ability You feel that the cost of using digital banking is reasonable You feel that choosing to use Digital banking is the right decision 26 You will continue to use Digital banking 27 You will introduce your friends to use Digital banking xiii What you think Digital Bank needs to add or improve to make you more satisfied when using the service? The end! Thank you for taking the time to help Wish you health and happiness! APPENDIX 2: DESCRIPTIVE STATISTICS Gender Frequency Valid Percent Valid Percent Cumulative Percent Male 110 36,2 36,2 36,2 Female 194 63,8 63,8 100,0 Total 304 100,0 100,0 Age Frequency Valid Percent Valid Percent Cumulative Percent 15-25 106 34,9 34,9 34,9 26-35 151 49,7 49,7 84,5 36-50 38 12,5 12,5 97,0 3,0 3,0 100,0 304 100,0 100,0 Above 50 Total Educational status Frequency postgraduates Valid Percent Cumulative Percent 25 8,2 8,2 8,2 145 47,7 47,7 55,9 College or Intermediate 79 26,0 26,0 81,9 Highschool and below 55 18,1 18,1 100,0 304 100,0 100,0 graduates Valid Percent Total Occupation Frequency Percent Valid Percent Cumulative Percent Worker 37 12,2 12,2 12,2 Civil servant or Officer 46 15,1 15,1 27,3 Valid xiv Self-business or Office worker 132 43,4 43,4 70,7 Pensioner 3,0 3,0 73,7 Students 80 26,3 26,3 100,0 304 100,0 100,0 Total Income Frequency Valid Percent Valid Percent Cumulative Percent Below million VND 73 24,0 24,0 24,0 From to 10 million VND 46 15,1 15,1 39,1 120 39,5 39,5 78,6 65 21,4 21,4 100,0 304 100,0 100,0 Above 10 to 18 million VND Above 18 million VND Total How often you use digital banking? Frequency Valid Percent Valid Percent Cumulative Percent Less than once a week 33 10,9 10,9 10,9 From to times per week 79 26,0 26,0 36,8 From to times per week 151 49,7 49,7 86,5 More than times per week 41 13,5 13,5 100,0 304 100,0 100,0 Total What kind of digital banking you use? (*You can choose multiple answers) Digital banking Frequency Timo 246 Tnex 57 Cake 67 How you know digital banking? Frequency Valid Percent Valid Percent Cumulative Percent Friends 145 47,7 47,7 47,7 family 46 15,1 15,1 62,8 social media 84 27,6 27,6 90,5 others 29 9,5 9,5 100,0 Total 304 100,0 100,0 xv What area of Ho Chi Minh city you currently live in? Frequency The Central Urban Area of Ho Chi Minh City The urban area at the North of Ho Chi Minh city The urban area at the South of Ho Valid Chi Minh City The urban area at the West of Ho Chi Minh City: Thu Duc city Total Percent Valid Percent Cumulative Percent 160 52,6 52,6 52,6 17 5,6 5,6 58,2 46 15,1 15,1 73,4 19 6,3 6,3 79,6 62 20,4 20,4 100,0 304 100,0 100,0 APPENDIX 3: TESTING THE RELIABILITY OF THE SCALE WITH CRONBACH ALPHA’S CONFIDENCE COEFFICIENT Interface Reliability Statistics Cronbach's Alpha N of Items ,788 Item-Total Statistics Scale Mean if Item Scale Variance if Item Corrected Item-Total Cronbach's Alpha if Deleted Deleted Correlation Item Deleted Int1 14,87 6,280 ,402 ,794 Int2 15,19 4,901 ,694 ,704 Int3 15,14 5,801 ,422 ,792 Int4 15,22 4,549 ,707 ,696 Int5 15,27 4,886 ,616 ,731 Reliability Reliability Statistics Cronbach's Alpha ,770 N of Items Item-Total Statistics xvi Scale Mean if Item Scale Variance if Item Corrected Item-Total Cronbach's Alpha if Deleted Deleted Correlation Item Deleted Rel1 10,77 2,429 ,632 ,684 Rel2 11,38 2,354 ,631 ,682 Rel3 10,73 2,528 ,588 ,707 Rel4 10,67 2,524 ,452 ,783 Responsiveness Reliability Statistics Cronbach's Alpha N of Items ,848 Item-Total Statistics Scale Mean if Item Scale Variance if Item Corrected Item-Total Cronbach's Alpha if Deleted Deleted Correlation Item Deleted Res1 14,81 5,548 ,748 ,799 Res2 15,26 4,774 ,775 ,782 Res3 15,34 5,381 ,688 ,809 Res4 15,00 6,003 ,584 ,836 Res5 15,81 4,914 ,572 ,854 Security Reliability Statistics Cronbach's Alpha N of Items ,865 Item-Total Statistics Scale Mean if Item Scale Variance if Item Corrected Item-Total Cronbach's Alpha if Deleted Deleted Correlation Item Deleted Sec1 9,31 3,851 ,818 ,781 Sec2 9,10 4,733 ,675 ,844 Sec3 9,69 4,175 ,675 ,846 Sec4 9,14 4,482 ,702 ,832 xvii Empathy Reliability Statistics Cronbach's Alpha N of Items ,684 Item-Total Statistics Scale Mean if Item Scale Variance if Item Corrected Item-Total Cronbach's Alpha if Deleted Deleted Correlation Item Deleted Emp1 7,06 1,125 ,546 ,527 Emp2 6,92 1,112 ,489 ,606 Emp3 7,04 1,289 ,464 ,634 Price Reliability Statistics Cronbach's Alpha N of Items ,731 Item-Total Statistics Scale Mean if Item Scale Variance if Item Corrected Item-Total Cronbach's Alpha if Deleted Deleted Correlation Item Deleted Pri1 8,04 ,959 ,586 ,606 Pri2 8,03 ,999 ,610 ,572 Pri3 7,80 1,285 ,479 ,728 Satisfaction Reliability Statistics Cronbach's Alpha N of Items ,801 Item-Total Statistics Scale Mean if Item Scale Variance if Item Corrected Item-Total Cronbach's Alpha if Deleted Deleted Correlation Item Deleted Sat1 7,00 1,667 ,683 ,690 Sat2 6,75 2,069 ,656 ,749 xviii Sat3 7,55 1,370 ,660 ,744 APPENDIX 4: ANALYSIS OF FACTORS DISCOVERING EFA Independent variables 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 8,266 34,442 34,442 8,266 34,442 34,442 3,527 14,694 14,694 2,136 8,901 43,343 2,136 8,901 43,343 3,223 13,429 28,123 1,794 7,473 50,816 1,794 7,473 50,816 2,448 10,201 38,325 1,333 5,553 56,369 1,333 5,553 56,369 2,400 10,002 48,326 1,186 4,942 61,311 1,186 4,942 61,311 2,143 8,931 57,257 1,016 4,232 65,543 1,016 4,232 65,543 1,989 8,285 65,543 ,872 3,635 69,178 ,732 3,050 72,228 ,659 2,744 74,972 10 ,616 2,566 77,539 11 ,599 2,495 80,034 12 ,571 2,378 82,412 13 ,543 2,261 84,673 14 ,496 2,068 86,741 15 ,447 1,862 88,604 16 ,433 1,804 90,408 17 ,392 1,634 92,042 18 ,359 1,495 93,537 19 ,335 1,395 94,932 20 ,305 1,270 96,202 21 ,254 1,057 97,259 22 ,240 1,000 98,259 23 ,226 ,941 99,200 24 ,192 ,800 100,000 xix Extraction Method: Principal Component Analysis Component Matrixa Component Res2 ,754 Int4 ,738 Int2 ,692 Int5 ,679 Sec4 ,666 Res3 ,664 Sec1 ,663 Res5 ,659 Res1 ,644 Rel2 ,643 Sec2 ,635 Res4 ,617 Rel1 ,611 Sec3 ,589 Rel3 ,586 Emp2 ,580 Emp1 ,563 -,526 -,503 Emp3 Int3 Pri3 ,537 Int1 Pri2 ,580 Pri1 ,569 Rel4 ,504 Extraction Method: Principal Component Analysis a components extracted Component Transformation Matrix Component ,519 ,505 ,386 ,397 ,219 ,347 -,674 ,182 ,366 ,043 ,606 -,097 ,246 -,541 -,347 ,125 ,674 ,238 -,069 -,387 ,209 ,798 -,201 -,354 ,148 -,510 ,739 -,371 -,074 ,170 ,435 ,097 ,083 -,224 ,291 -,812 xx Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Dependent variable Total Variance Explained Component Initial Eigenvalues Total % of Variance Extraction Sums of Squared Loadings Cumulative % 2,194 73,137 73,137 ,427 14,226 87,363 ,379 12,637 100,000 Total % of Variance 2,194 Cumulative % 73,137 73,137 Extraction Method: Principal Component Analysis APPENDIX 5: REGRESSION ANALYSIS Collinearity Diagnosticsa Model Dimension Eigenvalue Condition Index Variance Proportions (Constant) Int Rel Res Sec Emp Pri 6,920 1,000 ,00 ,00 ,00 ,00 ,00 ,00 ,00 ,030 15,246 ,04 ,00 ,00 ,00 ,67 ,00 ,07 ,015 21,819 ,03 ,25 ,01 ,19 ,19 ,02 ,20 ,011 24,544 ,01 ,00 ,28 ,02 ,04 ,71 ,03 ,009 27,353 ,00 ,24 ,63 ,00 ,09 ,18 ,19 ,008 29,289 ,01 ,51 ,03 ,77 ,00 ,07 ,01 ,007 31,531 ,91 ,00 ,05 ,01 ,01 ,01 ,50 a Dependent Variable: Sat Residuals Statisticsa Minimum Predicted Value Maximum Mean Std Deviation N 2,1041 4,9113 3,5493 ,45772 304 -1,53553 1,34719 ,00000 ,42130 304 Std Predicted Value -3,157 2,976 ,000 1,000 304 Std Residual -3,609 3,166 ,000 ,990 304 Residual a Dependent Variable: Sat xxi xxii ... VIETNAM THE MINISTRY OF EDUCATION AND TRAINING BANKING UNIVERSITY OF HO CHI MINH CITY LAC HONG NHU FACTORS AFFECTING THE SATISFACTION OF CUSTOMERS WHEN USING DIGITAL BANKING IN HO CHI MINH CITY GRADUATE... more customers, it is required to study the factors affecting digital banking development in Vietnam Therefore, the topic of factors affecting customer satisfaction when using DB in Ho Chi Minh city. .. become more developed Stemming from the above reasons, the topic "Factors affecting customer satisfaction when using digital banking in Ho Chi Minh City" had been chosen 3 1.2 Research objectives