Tài liệu Improving the quality of card services at bank for investment and development of vietnam sogiaodich 1 branch

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- CAO LAN ANH IMPROVING THE QUALITY OF CARD SERVICES AT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM – SOGIAODICH 1 BRANCH NÂNG CAO CHẤT LƢỢNG DỊCH VỤ THẺ TẠI NH TMCP ĐẦU TƢ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH 1 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH Hà Nội - 2017 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- CAO LAN ANH IMPROVING THE QUALITY OF CARD SERVICES AT BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM – SOGIAODICH 1 BRANCH NÂNG CAO CHẤT LƢỢNG DỊCH VỤ THẺ TẠI NH TMCP ĐẦU TƢ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH 1 Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƢỜI HƢỚNG DẪN KHOA HỌC: TS. PHẠM THỊ THANH HÒA Hà Nội - 2017 LỜI CẢM ƠN Tôi xin bày tỏ lòng biết ơn sâu sắc đến các thầy cô giáo Khoa Quản trị và Kinh doanh, Trường Đ ại học Quốc Gia Hà Nội, đặc biệt là các thầy cô đ ã truyền đ ạt cho tôi nhiều kiến thức và đ ã tạo điều kiện giúp tôi thực hiện bản luận văn này. Tôi xin bày tỏ lòng biết ơn chân thành đến TS. Phạm Thị Thanh Hòa đã dành nhiều thời gian tâm huyết, tận tình hướng dẫn, chỉ bảo cho tôi trong suốt quá trình thực hiện đề tài. Tôi xin chân thành cảm ơn Ban lãnh đ ạo Ngân hàng Thương Mại Cổ Phần Đầu Tư và Phát Triển Việt Nam chi nhánh Sở Giao Dịch 1 và các anh chị em ở các phòng nghiệp vụ của chi nhánh và phòng giao dịch đã tạo điều kiện thuận lợi, giúp đỡ tôi trong việc thu thập số liệu và những thông tin cần thiết cho việc nghiên cứu luận văn này. Tôi xin chân thành cảm ơn gia đình, bạn bè và đồng nghiệp đã đ ộng viên khích lệ và giúp đỡ tôi trong quá trình học tập và nghiên cứu. ACKNOWLEDGEMENT I would like to express my deep gratitude to the teachers of the Hanoi school of Business and Management, Vietnam National University, especially the teachers who imparted to me a lot of knowledge and helped me. Carry out this essay. I would like to express sincere gratitude to TS. Pham Thi Thanh Hoa has spent a lot of time, dedicated guidance, only told me during the course of the topic. I would like to express my sincere thanks to the Board of Directors of Joint Stock Commercial Bank for Investment and Development of Vietnam – Sogiaodich 1 Branch and for the siblings in the professional sections of branches and transaction offices who created favorable conditions. Help me in collecting data and information needed for the study of this thesis. I sincerely thank family, friends and colleagues for encouraging and supporting me in the process of study and research. Hanoi, date 25 month 5 year 2017 Student CAO LAN ANH TABLE OF CONTENTS ABBREVIATION................................................................................................................. i LIST OF FIGURES.............................................................................................................ii LIST OF TABLES..............................................................................................................iii INTRODUCTION................................................................................................................1 CHAPTER 1: OVERVIEW OF CARD SERVICES AND QUALITY OF CARD SERVICES OF COMMERCIAL BANKS........................................................................5 1.1 Overview of card services at commercial banks.................................................... 5 1.1.1 Definition and characteristics of card services of commercial banks..............5 1.1.2 The role and benefits of card services of commercial banks............................6 1.1.3 Main activities of card services at commercial banks......................................7 1.2 Quality of card services at commercial banks......................................................10 1.2.1 Definition of card service quality................................................................... 10 1.2.2 The necessity of improving card operations of commercial banks.................10 1.2.3 Evaluation models of card service quality at commercial banks...................11 1.3. Experience in enhancing the quality of card services at some banks and lessons drawn for BIDV - Sogiaodich 1 Branch......................................................................16 1.3.1. Experience of foreign banks...........................................................................16 1.3.2 Experience of domestic commercial banks.....................................................18 1.3.3. Experience lessons drawn for BIDV – Sogiaodich 1 Branch........................19 CHAPTER 2: REALITY OF CARD SERVICE QUALITY AT BIDV –.................... 21 SOGIAODICH 1 BRANCH..............................................................................................21 2.1 Introduction of BIDV – Sogiaodich 1 Branch...................................................... 21 2.1.1 Foundation and development history..............................................................21 2.1.2 Operating model of BIDV – Sogiaodich 1 Branch......................................... 22 2.1.3 Business results...............................................................................................22 2.2 Reality of the card service quality at BIDV – Sogiaodich 1 Branch in recent years................................................................................................................................24 2.2.1 Results of card business..................................................................................24 2.2.2 Reality of card service quality at the branch in recent years......................... 31 2.2.3 Reality of card service quality at BIDV – Sogiaodich 1 Branch.................... 36 2.3 Evaluation of the quality of card services at BIDV – Sogiaodich 1 Branch......50 2.3.1 Achievements .................................................................................................. 50 2.3.2 Limitations and causes....................................................................................51 CHAPTER 3: SOLUTIONS TO IMPROVE THE QUALITY OF CARD SERVICES AT BIDV – SOGIAODICH 1 BRANCH......................................................................... 54 3.1 Developing orientations of card operations at the bank......................................54 3.2 Solutions to improve the quality of card services at BIDV Bank – Sogiaodich 1 Branch............................................................................................................................ 55 3.2.1 Investing solutions to improve facilities and demand meeting ability............55 3.2.2 Solutions to improve service deployment outcome.........................................57 3.2.3 Solutions to complete the service providing process......................................59 3.2.4 Solutions to complete the management operation..........................................60 3.2.5 Solutions to strengthen the brand image of the branch.................................. 62 3.2.6 Solutions to enhance responsibility with society and community...................63 3.3 Reccomendations.....................................................................................................63 3.3.1 Reccomendations to the State Bank................................................................ 63 3.3.2 Recommendations to BIDV Head Office.........................................................64 3.4.3 Recommendations to the association of card issuing and payment banks.....66 CONCLUSIONS, LIMITATIONS, AND CONTRIBUTIONS OF THE STUDY......67 REFERENCES...................................................................................................................69 APPENDIX Abbreviation ACB ATM BIDV CVV EDC PIN POS i LIST OF FIGURES Figure 1.1: Research model of Parasuraman et al. (1988)...................................................11 Figure 1.2: Research model of Thai Van Vinh và Devinder Grewal (2007).......................12 Figure 1.3: Research model of Huynh Thuy Phuong (2010)...............................................13 Figure 1.4: Research model of Nguyen Thi Kieu Linh (2009)............................................14 Figure 1.5: Research model of Lê Thị Thu Hương (2014)..................................................15 Figure 1.6: Proposed research model...................................................................................16 ii LIST OF TABLES Table 2.1: Business results of the branch in the stage of 2013 -2015..................................22 Table 2.2: Results of card service business......................................................................... 24 Table 2.3: Number of ATM cards at the branch..................................................................26 Table 2.4: Revenue from card services................................................................................28 Table 2.5: Number of international payment cards at the branch........................................29 Table 2.6: Revenue from international payment card services............................................30 Table 2.7: Some training activities of card staff at the branch............................................ 32 Table 2.8: Some advetising and marketing activities for card products..............................33 Table 2.9: Distribution system and management technology of card service business.......34 Table 2.10: Common risks in card service business at the branch...................................... 35 Table 2.11 Results of the scale reliability testing................................................................ 37 Table 2.12 Results of independent factor analysis...............................................................39 Table 2.13 Rotated component matrix of independent variables........................................ 40 Table 2.14 Results of dependent factor analysis..................................................................41 Table 2.15 Rotated component matrix of dependent variables............................................42 Table 2.16 Multiple regression analysis.............................................................................. 42 Table 2.17 Regression coefficients......................................................................................43 Table 2.18 Evaluation of resources......................................................................................44 Table 2.19 Evaluation of outcome.......................................................................................45 Table 2.20 Evaluation of process.........................................................................................46 Table 2.21 Evaluation of management................................................................................ 47 Table 2.22 Evaluation of image...........................................................................................48 Table 2.23 Evaluation of social responsibility.....................................................................49 Table 2.24 Evaluation of the quality of card services..........................................................50 iii INTRODUCTION 1. Rationale of the study Nowadays, the increasing development of science and technology contributes considerably to the improvement of people’s life quality. People are more and more accessible to safer and more sophisticated service products. Banking service products are one of the breakthroughs on the basis of modern science and technology. One of those service products is bank cards. Customers using cards can conveniently carry out many transactions such as payment, transfer, cash withdrawal, internet payment, etc. without having to go to the bank. As a result, card products are becoming friendlier, closer, and being widely accepted by consumers. As for the banks, card products also bring them a lot of intangible benefits such as raising the banks’ position, promoting their brand image, and attracting customers to the banks. These are also business activities bringing revenue to the banks. These are the annual fees that cardholders must pay under the card use contract; cash withdrawal fee (4% for issuing bank and at least 50,000 VND for one transaction); fees for payment transaction of goods and services by credit card at card accepting units (2.5% of the value of each transaction, commercial discount (for agent banks that help conduct payment transaction for issuing banks); some other fees such as credit card penalty fee, checking fee (fee that cardholders pay for their checking requirements), fee for card reissuance (due to theft or loss) and card exchange (as requested by cardholders), fee for posting stolen or lost cards to the list of forbidden circulation. With the advantages that card services bring, each bank has built its own strategies to dominate the market and develop its card service brand. The competition in developing card services of commercial banks nowadays has made customers’ demands more and more satisfied and made the card service market become more active than ever. Therefore, the improvement of card service quality is very important and necessary for commercial banks. In the past few years, BIDV – Sogiaodich 1 Branch has implemented a lot of measures to improve the quality of card services. However, the card services of BIDV still have several shortcomings. For example, many customers apply for a card issuance but do not get the cards, causing the cost wastage for the bank. The problem of overdue credit card debt is arising. Besides, the habit of using cash has existed in Vietnamese people’s minds for a long time. Therefore, the aim of Sogiaodich 1 Branch is to improve the quality of card services in order to expand the card product market and better control risks in card business. For this reason, the author selected the topic "Improving the quality of card 1 services at Bank for Investment and Development of Vietnam – Sogiaodich 1 Branch " as my MA thesis. 2. Overview of the study The quality of card services is one of the factors affecting card service business, which brings a lot of revenue to current commercial banks. Thus, there are lots of studies related to the operation as well as the quality of card services. Some related studies are presented as follows. Le Thi Thu Ha (2015) conducted a study on the management of card business at Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Hai Duong branch. The study focused on the contents related to card business management including management planning, implementation of management plans, and inspection and supervision of the management plan implementation. Moreover, the study also focused on clarifying risks in card business and causes of the risks in card business at Vietcombank – Hai Duong branch. Nevertheless, the study did not present the issues related to the quality of card services, which is a prerequisite for achieving the goal of expanding and developing card services in a potential market like Hai Duong. The study of Dinh Nguyen Hoai Phuong (2011) aimed at exploring the solutions for card service development at Asia Commercial Bank (ACB). The research focused on analyzing the reality of card service development and measuring the satisfaction of employees and customers on the card product development at Asia Commercial Bank. Despite the fact that the expansion and development of card services are always accompanied by potential risks, the author did not focus on presenting the risks of the bank in card business to have a right developing orientation and a risk forecasting ability. Therefore, the solutions that the author proposed were still general and quite unreasonable in the card business environment with a lot of potential risks. Bui Thi Thanh Huong (2013) carried out a study on card product development at Vietnam Bank for Agriculture and Rural Development (Agribank). In her study, the author concentrated on analyzing the reality of card service developing solutions that were applied by Agribank such as marketing solutions, technology solutions, affiliating solutions, card risk management solutions, human solutions, and cost solutions. However, the analysis of the solution groups was only based on the collection and analysis of secondary data from the card business of Agribank in the author’s point of view. The collection of customer opinions through surveys wasn’t conducted, which decreased the objectivity of the thesis. 2 Hossain Shahriar (2008) conducted a study on customer satisfaction with credit cards at Prime Commercial Bank of Bangladesh. The purpose of the study was to have an overview of the users’ satisfaction with credit cards of Prime Commercial Bank in Bangladesh. To carry out the reaseach, the author conducted a survey measuring the influence of factors on customer satisfaction with credit cards of Prime Commercial Bank of Bangladesh. However, credit cards were just one type of bank cards. In Vietnam, credit cards are still quite new and not widely accepted by many customers. Other card products such as payment cards and domestic debit cards are still dominating in the card business of Vietnamese commercial banks nowadays. Therefore, the solutions proposed by the author were difficult to apply in the card business of commercial banks in Vietnam. The reseach of Han Kuo Tan (2009) explored different aspects of service quality and customer expectations from credit card issuers in Malaysia. The research showed that the card issuers wishing to improve their competitiveness in the market needed to offer multifunctional credit cards, contributing to enhancing customer satisfaction. The research proposed some recommendations for card issuers to improve the quality of their credit card services. However, the author failed to mention the risks in credit card business. It is a fact that if banks are only interested in developing their credit cards without paying attention to the risk control and management in the card business, serious losses which reduce the banks’ business operations can be caused. To sum up, there have been many studies related to the business operations as well as the quality of card services. However, there have been no studies dealing comprehensively with the quality of card services and the risks in card business in order to propose the solutions to improve the quality of card products at BIDV – Sogiaodich 1 Branch. Therefore, the research topic of the author is not duplicated with previous research topics. 3. Objectives of the study 3.1 Overall objective - Studying the quality of card services at BIDV – Sogiaodich 1 Branch in order to propose the solutions to improve the quality of card services at this bank. 3.2 Specific objectives - Building a theoretical basis on card services and quality of card services. Studying the development reality of card services and the quality of card services at BIDV – Sogiaodich 1 Branch, from which the author will assess the quality of card services at BIDV – Sogiaodich 1 Branch. 3 - Propose some solutions to improve the quality of card services at BIDV – Sogiaodich 1 Branch . 4. Subject of the study The study focuses on quality of card services at BIDV – Sogiaodich 1 Branch. 5. Scope of the study - In terms of space: The study was conducted in BIDV – Sogiaodich 1 Branch - In terms of time: + Secondary data: Secondary data were collected in the stage of 2013 – 2015 at BIDV – Sogiaodich 1 Branch. + Primary data: Primary data were collected from survey questionnaires to the customers from August to September, 2016. 6. Methodology In this thesis, the author combined comparative and synthetic analysis methods. + Comparative method was used to compare the changes of indicators reflecting the results of card business, the development of card products over the years (number of customers, number of cards, and costs in card business). + Synthetic analysis method was used to analyze the development reality of card products and the risks in card business (pointing out the causes of changes and explaining the reasons for changes in the development of card products, and the risks in card business). + Investigation Method: The author uses the survey method to assess the satisfaction of customers using the card products through questionnaires. Survey results were processed using SPSS software 7. Organization of the thesis This thesis was divided into three chapters: Chapter 1: Overview of card services and quality of card services at commercial banks. Chapter 2: Reality of card service quality at BIDV – Sogiaodich 1 Branch. Chapter 3: Solutions to improve card quality at BIDV – Sogiaodich 1 Branch. 4 CHAPTER 1: OVERVIEW OF CARD SERVICES AND QUALITY OF CARD SERVICES OF COMMERCIAL BANKS 1.1 Overview of card services at commercial banks 1.1.1 Definition and characteristics of card services of commercial banks * Definition A bank card is a payment tool issued by a card issuing bank to a customer to conduct payment for goods or services or withdraw cash within the scope of his or her deposit balance or allowed credit limit. Card services are used to perform services through automatic trading systems, also known as ATM service systems. In other words, a bank card is a means issued by a card issuer to carry out card transactions in accordance with the terms and conditions agreed by the parties (Governor of the State Bank of Vietnam, 2007). Bank card services are non-cash payment services originated from the method of purchase and sale of retail goods on credit and have developed associated with the application of information technology in the field of finance and banking (Mwatsika, 2014). * Characteristics of card services A card is a payment tool with different characteristics from other payment tools. Nowadays, when information technology develops at a high level, card payment service is a popular payment method replacing other traditional payment methods. This is because card services have a lot of outstanding features compared to other means of payment. - Flexibility: With a variety of cards suitable for all people from high-income customers (gold cards) to low-income customers (standard cards), cards can be used to withdraw cash or pay for goods and services, etc. A card is regarded as a modern, safe, and fast “electronic wallet” helping cardholders control their spending activities. - Convenience: A card is a means of non-cash payment bringing customers many benefits that no other means of payment can compare. Cardholders can use their card to pay for goods and services in anywhere at anytime without having to carry cash or travel checks. For credit cards, customers can also be provided with a credit limit by the bank. Customers can make advance payments and repay money later without interest within a period of time. In addition, cardholders also enjoy many preferential treatments from the bank such as free information on banking services, accounts, exchange rates, 24/24 services, etc. Cardholders can also get preferential discounts when making payment at card accepting units or enjoy competitive interests on the account balance. 5 - Security and rapidity: Cards are made based on very modern and sophisticated technology and are difficult to counterfeit, so the security of the card is very high. Especially when smart cards are launched to the market, their security is increased; therefore, they are widely used in the market. When cards are lost or PINs are revealed, cardholders can notify the bank to lock the card account in time to avoid the thieves' ability to withdraw the money. Cards are often small and light, so it is easier for cardholders to carry when they have to make a large amount of payment or moving far. When shopping for goods or services, customers only need to show their cards and sign payment slips to complete the payment. This means customers have saved the costs of transporting and counting. 1.1.2 The role and benefits of card services of commercial banks When the economy is developed, the improvement in people's living standards and incomes leads to the development of many types of services, in which financial services, especially card services, are increasingly developing. These services bring many benefits to customers who are using cards. The banking system links the activities in the economy through card services; therefore card services play a vital role in economic transactions. + For card users: Customers using cards are mainly individuals since these services are introduced to primarily serve individuals in the transaction process. As people's incomes are increasing, the transaction demands are also going up with the development trend. The storage of cash in transactions is very large, so the demands for transactions via card services are increasing to reduce the risks in cash transactions. Moreover, customers can access faster to their accounts, which are more convenient, secure, and efficient with better time management and less time of traveling. Along with that trend, banks are constantly improving the quality as well as mordernizing their services to serve customers better. + Card services help develop banking industry Nowadays, there are a lot of banks in the financial market. The evaluation of the bank reputation through the quality of card services is very important because customers are people who decide which banks they want to use based on the quality of their card services and the security that these services offer. Customers often perceive that if the service quality of a bank is the best, that bank is reliable. Thus, banks need to focus on improving the service quality including the quality of card services. Regarding enterprises outside the banking industry, the impact from the development of card services is very big. Apart from companies using ATM cards to pay salaries to their 6 staff, many other service enterprises such as commercial centers or mobile operators also have services associated with the development of card services. People using postal and telecommunications services can conveniently make their cost payment by card. In addition, people can also easily pay by card when they go shopping at supermarkets. + Card services contribute to the development of the economy Card services can not affect the entire economy. However, the quality improvement of these services will make the economy more civilized. - Reducing social costs: The use of card transactions helps reduce a big amount of cash in circulation, thereby reducing the costs of printing, issuing, transporting cash, destroying old money, as well as reducing counterfeit money. - Speeding up payment activities: Card services improve people’s belief in the operation of the banking system thanks to the security, high accuracy, and time saving. At the same time, the government can control the transactions of individuals, enterprises, and the whole economy as a basis for calculating the monetary supply as well as operating more effective monetary policies. The application of modern technology in card issuance and payment creates conditions for the national economy to integrate and gradually catch up with the world economy. - Minimizing some of the illegal economic activities, contributing to the management of personal incomes, income taxes, and enhancing the decisive role of the govenment in the economy. 1.1.3 Main activities of card services at commercial banks * Issuing activities: The issuing activities of banks include the management and implementation of the entire card issuing process, card use, and debt collection. These three processes are all important and should not be disregarded. Each process is closely related to the customer service and the risk management for the bank. Financial institutions and banks issuing cards must develop regulations on the use of cards and debt collection: minimum payment amount, statement date, due date, fees and interests, maximum and minimum credit limits, preferential policies, and so on. Basically, card issuing activities are carried out as follows: - Conducting marketing activities to bring products into the market - Verifying card applicants - Offering credit limits, especially for credit cards - Designing and buying white cards 7 - Embossing and encoding - Providing personal identification numbers (PINs) to cardholders - Managing customer information - Managing customers’ card use - Managing debt collection from customers - Providing customer service - Clearing payments with international card organizations. When carrying out issuing activities, apart from getting card issuance fees from cardholders, banks also get the exchange fees that card payment banks collected from card payment through international card organizations. This is the basic profit of financial institutions and banks issuing cards. On the basis of this source of revenue, financial institutions and banks issuing cards will offer customers other benefits and preferential treatments to increase the mumber of card users and increase card use revenue. * Payment activities: The implementation of card payment activities of a bank is not only getting profits from the discount fees calculated on the value of payment transactions by card from card accepting units but also the desire to provide customers a complete service and a convenient basis for card use. For international card organizations and their members, it is very important to encourage card payment activities through expanding the network of card acceptors. First, the payment activity of a certain type of card is expanded in a market meaning that cardholders can use their cards more easily and conveniently. As people’s demands for tourism and entertainment are increasing, the development of card payment market abroad becomes more urgent. Card issuers and issuing banks pay maximum attention to how cardholders make use of this non-cash payment method. The large number of card acceptors available throughout potential markets and business lines means that bank cards are more widely accepted and bring benefits to cardholders, card accpetors, and issuing banks. Second, not just stopping at expanding the payment market by signing contracts with new card acceptors, a card payment bank is particularly interested in maintaining relationships with current card acceptors. This is reflected in the customer service of the payment banks. Without proper policies and good support services enabling card card acceptors to accept the customer's cards easily and being credited by the bank after subtracting discount fee rates, other banks will take advantage of this situation to offer more perfect services to these card acceptors. As a result, customers in payment activities will decrease and the profit targets of the banks will deeply be affected. 8 In general, card payment activities are not just limited to the crediting to the card acceptors under commitment. Instead, since the profits from card payment activities are not small compared to the average business profits, the severe competition makes payment banks always have appropriate marketing strategies and customer services. At the same time, they have to provide card acceptors (who accept their customers’ cards) with free services to enhance their competitiveness. Card payment activities of banks are mainly conducted as follows: - Building and managing the information system of customers and card acceptors * - Managing the operation of card acceptor network - Conducting payment for card transactions to card acceptors - Providing customer services - Offering training on card payment methods to staff of card acceptors - Supplying equipment and facilities for card payment Risk management activities: The issuance and payment of bank cards face different types of risks such as illegal use of cards by organizations or individuals, card acceptors not complying with instructed procedures, counterfeit transactions, information being revealed to the third party, or card acceptors not announcing business termination while still owing money to the bank. All these behaviors cause risks and financial losses to the banks. Therefore, one of the key areas of bank card business is the risk management. The risk management department at issuing banks is considered the backbone of card activities, which has the functions of: - - Preventing and investigating the use of counterfeit cards. - Managing the list of accounts related to lost cards. Making plans to keep track of the security of card workpieces, printed cards, damaged ards, and withdrawn cards. - Updating information on the list of stolen or lost cards. Cooperating with relevant authorities in investigating and dealing with contract breaches or counterfeit card use. Tracking and managing the operations of card center including operations of the staff. Organizing training sessions for card acceptors’ staff and cardholders on counterfeit preventive measures. The more the bank card business grows, the more the risk management sector is invested. Experts in this field should be really knowledgeable about cards and modern 9