Determinants on customer satisfaction of domestic transfer services a case study of shinhan bank vietnam binh duong branch

TRUONG ĐẠI HỌC MỞ TP HCM HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL MBAVB4 NGUYEN THI THANH NHA DETERMINANTS ON CUSTOMER SATISFACTION OF DOMESTIC TRANSFER SERVICES: A CASE STUDY OF SHINHAN BANK VIETNAM - BINH DUONG BRANCH TRING 081 HOC NG TP.HCH THU VIEN MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART-TIME) Tutor’s Name: Dr NGUYEN MINH KIEU Ho Chi Minh City (2012) ABSTRACT The year 2012 is.an important year in the five-year plan of Vietnamese banking industry development from 2011 to 2015 of Vietnamese Government Major tasks are bank restructuring, corporate governance enhancement and_ service quality improvement According to specialists, services are strategic development of global corporations and banks which are in the race for better service quality and larger operations As a matter of fact, maintaining high service quality can make a profit, reduce costs and expand market share Conveniént and effective distribution systems and transaction processes, like clear-cut borrowing applications and quick processing, are a sign of good service, financial strength, broad networks and technological prowess Besides, service quality also depends on the environment and the surroundings, like the design and layout of customer service desks However, measuring the quality of a service can be a very difficult exercise Unlike product where there are specific specifications such as length, depth, width, weight, color etc a service can have numerous intangible or qualitative specifications In addition there is there expectation of the customer with regards the service, which can vary considerably based on a range of factors such as prior experience, personal needs and what other people may have told them The research is set to examine the applicability of alternative measures of service quality in the developing economy of Vietnam and assesses related issues in that context Based on data gathered from customers at Shinhan Bank Vietnam, overall results support a multidimensional construct of service quality and suggest that the SERVQUAL model cannot provides greater diagnostic information than the SERVPERF scale The five-factor conceptualization of SERVQUAL does not seem to be totally applicable, and no significant difference was found in the predictive ability of the two measures Further, although SERVQUAL and SERVPEREF have identical convergent validity, SERVPERF appears to have higher discriminant validity than SERVQUAL Keywords: Vietnam, domestic transfer services, customer satisfaction, determinants iv TABLE OF CONTENTS Fe be TUTOR’S COMMENT : iii ABSTRACT LIST OF TABLE LIST OF FIGURES CHAPTER I - INTRODUCTION 1,1 Background of banking system in Vietnam . - + scecvsvexerverrerrrvrrrrrre 1.2 Shinhan Bank Vietnam introduction 1.3, Rationale of the research 1.4 Problem statement and justification 1.5 Research objectives and research questionS .sssssessesesseeseeseeseeseeseeneseesternes 1.5.1 Research objectives 1.5.2, Research questions 1.6 Research methodology " 1.6.1 Type ofthe research -.cs-cvx test 2t T11111111711110111 11tr 1.6.2 Scope of the research 1.6.3 Data collection "" ."-.".© 17 Đ Structure ofthe research .- s-sôsssxseskerereterseerrerrrerrrrrrrrrrrrereer Ủ CHAPTER II - LITERATURE REVIEWS .2.1 Commercial bank and domestic fund transfer service 2.1.1 Commercial banks eccsessssessseessessneessecsnesssecsneesuresnessucssnecesueecsneeesneessnees 10 2.1.2 Domestic fund transfer services 2.2 Customer behavior 2.2.1 Cultural factors “ 2.2.2 SOCcial faCfOS ct n1 re 15 2.2.3 Personal facfors . -cccrccsrsrvrre ` 16 2.2.4 Psychological factors .essesssesssseesseesssecssesssesssesssesssecssesssseessseesseessseessneessnes 16 2.3 CusfOmer S€TVICG s Ăn ưưn 2.4 SERVPERF model to measure customer service quality 2.4.1 Perceived service quality 2.4.2 Five dimensions of service quaÏÏty . s-ss+xeretrrerkerrkerrketrieree 2.4.3 Corporate Image and Corporate culture 2.4.4 Customer satisfaction CHAPTER III - RESEARCH METHODOLOGY 3.1 Research model 3.2 Research Hypotheses 3.3 Data collection 3.3.1 Questionnaires co nh Hư 3.3.2 Measurement Scale 3.3.3 Data analysis 3.3.4 Cronbach’s alph 3.3.5 Limear regression .ccessesessessessesseesessessessnessesseesssssessecseeanecseesneeseesaneeseesees 34 CHAPTER IV —- DATA ANALYSIS AND FINDINGS 4.1, Assessment of sample characteristics 4.2 Descriptive statistics analysis “ 4.3 The reliability of the scale eccesceeeeeereerrererrrrrrrrrrrrrrrrre 28 4.4 Explanatory factor analysis 4.5 Testing hypotheses : 4.5.1 Testing hypothesis for SME respondenIs .- -cc+ccccccrvccrvrser 42 4.5.2 Testing hypothesis for Corporate responden(s - ::-cc:-cs+: 43 4.5.3 Testing hypothesis for total respondents CHAPTER V - CONCLUSIONS AND RECOMMENDATIONS bì ®90 91 5.1.1 Conclusion for Cronchbach’s alpha values 5.1.2 Conclusions for explanatory factor analysis 5.1.3 Conclusions for linear regression analysis vi 5.2 Ñecommendations ¿sec csesreererterrirrrrrerrrrrrrrrrrrresree SỔ 5.2.1 Improving interface of online domestic fund transfer 50 5.2.2 Taking the involvement of high management board in enhancing the domestic fund transfer product 5.3 Limitation of the study and future suggestion 52 REFERENCES " APPENDIX I: TABLE OF QUESTIONNAIRE _ APPENDIX 2: RELIABILITY ANALYSIS (SPSS V'VERSION 118) HH vii net 60 LIST OF TABLE Table 1: Simple financial flows in the economy -. .:-«cc«cccescccceeeevceee TỔ Table 2: Fund transfer between two accounts in the same bank — 13 Table 3: Fund transfer between two accounts in different banks Table 4: Factors to measure customer safisfaction - cccccccccceeceersee 2Ổ, Table 5: Customer satisfaction and the effect on customer loyaÌty 27 Table 6: XY graph to show where cústomer satisfaction needs to improve 28 + 5e+se‡eesxersersersrtreteerretrrrrrrrrrsrrrrrrrrrrces 20 Table 1: The research ImOdel Table 2: Summary of factors and cOdỉng -s-c+s+sc+eceesxereererrereerererierirrrre 30 Table 1: Descriptive statistics of sample +©5+©xcscssxeexeessexseereeeeee 27 Table 2: Cronchbach's alpha analysis -. . ‹ .-«e-c-e-ese + đỮ Table 3: Component matrix after Varimax ro(atiOn Table 4: Linear regression for SME responden(s .- -. ‹ ecs+-cccsce-c .+ 42 . -5++cecxeeereres 43 Table Š: Linear regression for Corpora(€ CuSfOI€S .- - : ++c+>++cssxsrvrrsrvs 44 Table 6: Linear regression for total respondens Table 1: SMEs customer satisfaction diagram -. cec«-cccceceeeeeeerecc.v để Table 5.2: Corporate customer satisfaction diagram . : c+xcccvsxvsrververreex 49 Table 3: Overall customer satisfaction diagram viii LIST OF FIGURES Figure 1: Location of the CUStomers seessessssssssesestesseseesesseesessecsesnsssecseeseesesneeneess 35 Figure 2: Respondents! company types sessessscssesssseessssesseseeseesecsesseesesseesscanecneesvess 36 ix ABBREVIATION SHBVN-BD _ Shinhan Bank Viet Nam - Binh Duong Branch HCMC Ho Chi Minh City SBV The State Bank of Viet Nam SMEs Small and Mediu-sized enterprises SPSS Statistical Package for the Social Science SERVPERF Service Performance CHAPTER I - INTRODUCTION 1.1 Background of banking system in Vietnam - The Vietnam's population is now more than 86 million people, of which 60% people is less than 35 years old, with the average income per capita has reached US$ 1,374 in 2011 and this figure is expected to be US$1,500 in 2012 Vietnam’s income per capita is predicted at around 20,000 by 2050, according to Goldman Sachs at the latest report on BRICS (Brazil, Russia, India and China) economies Earlier, the Ministry of Planning and Investment (MPI) have targeted the average GDP per capita by 2015 will reach US$ 2,100, 1.7 times higher than in 2011 Vietnam has also moved from the list of poorest countries to the low and medium income countries Hence the demand of transaction and retail financial services will be developed rapidly Banks play a role of considerable economic significance as intermediaries in mobilizing public savings, channeling the flow of funds for productive purposes and speeding up the process of the economic growth of the country Overall banking system in Vietnam is considered as fairly mature in terms of supply chain and product range Until Jun 2011, in Vietnam there are stated-owned commercial banks, 37 joint stock commercial banks, five joint venture banks and five wholly foreign-owned banks According to the State Bank of Vietnam (SBV), in recent years, competitive pressure is increasing due to the implementation of the roadmap loosen regulation for financial institutions, especially the opening of new branches and transaction points, the lifted restriction on deposits in VND Therefore, the commercial banks in Vietnam have to seek other market segmentations that will feed their expected profits Therefore, the banks began to focus its attention and exploiting the retail banking market such as promoting the modernization of banking technologies, developing new types of service, social ATMs, Internet banking, online savings They all marked a new and active market in financial industry, giving customers more and more facilities in settlement It is confident to say the retail banking service will be growth up with higher speed in years to come Furthermore, recent report of Business Monitor International (BMI) on Vietnam commercial banking showed that the annual growth rate projections 2012 — 2016 will be 20% for total assets, 20% for client loans outstanding and 14% for client deposits amount 1.2 Shinhan Bank Vietnam introduction Shinhan Bank is one of the leading banks in Korea with more than 100 years of traditional prestige Having over 18 million customers in Korea, Shinhan Bank has long been renowned as the Korean bank with the highest level of customer satisfaction Shinhan Bank is always proud of its unique, industry-leading capability and high growth rate Shinhan Bank now aims at transforming itself into a World-class financial services provider with global competence in talent and infrastructure At the end of 2011, Shinhan Bank has more than 1000 inbound branches and branches and subsidiaries a global network of 58 in 14 countries including the U.S., the U.K., Japan, China, Germany, India, Hong Kong, Singapore and Vietnam and so on ” With clear vision, confidence in the state of the art credit and financial foundation, as well as high expectation in Vietnam potential market, Shinhan Bank was one of the pioneers to promote the formal diplomatic relations between Vietnam and Korea by establishing Representative Office in 1993 Two years later 1995, Shinhan Bank Hochiminh Branch was opened A big milestone was marked in December 2008 when Shinhan Vietnam Bank was licensed and became one of the first five 100% foreign owned banks in Vietnam Ì Shinhan.com.vn ... level of customer satisfaction Shinhan Bank is always proud of its unique, industry-leading capability and high growth rate Shinhan Bank now aims at transforming itself into a World-class financial... quality of this product Consequently, the problem of this research is to examine and_ investigate determinants on customer satisfaction of domestic transfer services at Shinhan Bank Vietnam — Binh. .. Ì Shinhan. com.vn On 28th of November , 2011 the Bank once again shows its commitment to Vietnam market by merging with ShinhanVina Bank, and officially changed its name to Shinhan- Bank Vietnam