Tài liệu Improving the retail banking services in bank for investment and development of viet nam – thai ha branch

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- TRỊNH VIỆT HOÀ IMPROVING THE RETAIL BANKING SERVICES IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIET NAM – THAI HA BRANCH PHÁT TRIỂN DỊCH VỤ NGÂN HÀNG BÁN LẺ TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH THÁI HÀ LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH Hà Nội - 2017 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- TRỊNH VIỆT HOÀ IMPROVING THE RETAIL BANKING SERVICES IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIET NAM – THAI HA BRANCH PHÁT TRIỂN DỊCH VỤ NGÂN HÀNG BÁN LẺ TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH THÁI HÀ Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. NGUYỄN THỊ KIM OANH Hà Nội - 2017 DECLARATION ON HONOUR I confirm that I have written the present thesis independently and without making use of any sources or references other than those explicitly stated in th e bibliography. Passages extracted literally or as regards content from the sources and references listed in the bibliography are identified in the thesis as a citation or a paraphrase. This master thesis has not been previously published and has thus neither been made accessible to other interested parties nor submitted to another examination authority Date………………………….. Author Trinh Viet Hoa i ACKNOWLEDGMENT To finish the dissertation "Improving the retail banking services in Bank for Investment and Development of Vietnam - Thai Ha Branch ", I would like to thank all the teachers for teaching and helping. I studied in Viet Nam National University, Ha Noi School of Business and Management. I would like to express my sincere thanks to the dedicated help of instructor Dr. Nguyen Thi Kim Oanh, Board of Directors of Deposit Insurance Viet nam – Ha noi Branch. I would like to thank my friends, colleagues, relatives and family who have always been with me, encouraged and helped me during my study and research. Although we have tried our best to study the topic, due to limited time, knowledge and practical experience is still limited, so I can not avoid the lack of research, I hope to receive the comments of teachers, friends, colleagues to complete the thesis. I sincerely thank! ii TABLE OF CONTENT DECLARATION ON HONOUR ................................................................................i ACKNOWLEDGMENT ............................................................................................ ii OVERVIEW ..............................................................................................................ix TABLE OF CONTENT ............................................................................................ iii ABBREVIATIONS....................................................................................................vi LIST OF FIGURES.................................................................................................. vii LIST OF TABLES .................................................................................................. viii CHAPTER 1: INTRODUCTION TO THESIS ..........................................................1 1.1. The urgency of the thesis .................................................................................1 1.2 Purpose of thesis ...............................................................................................2 1.3 Subjects and scopes of study ............................................................................2 1.4 New contributions of the thesis .......................................................................3 1.5 Structure of the thesis .......................................................................................4 CHAPTER 2: BASIC ISSUES ON IMPROVING RETAIL BANKING SERVICES AT COMMERCIAL BANK .......................................................................................5 2.1 Literature review ...............................................................................................5 2.2 Retail banking activities of commercial banks .................................................7 2.2.1. The over view of Commercial Bank ........................................................7 2.2.2. The Concept of Retail Banking Services .................................................8 2.2.3. Characteristics of retail banking ...............................................................9 2.2.4 Retail banking products ...........................................................................11 2.3. Improve retail banking ...................................................................................16 2.3.1 Theory of improvement of retail banking ...............................................16 2.3.2 The role of retail banking service improvement .....................................17 2.3.3 Criteria for assessing retail banking improvement ..................................19 2.3.4 Factors affecting the improvement of retail banking ..............................23 iii 2.4 Experience in retail banking improvement in some banks around the world and experience in Vietnam ...................................................................................30 2.4.1 Experience improving retail banking in some banks around the world ..30 2.4.2 Lessons learned for Vietnamese commercial banks ................................32 Conclusion Chapter 2 ................................................................................................33 CHAPTER 3. RESEARCH METHODOLOGY AND IMPROVEMENT OF SURVEY INSTRUMENT ........................................................................................34 3.1 Research methodology....................................................................................34 3.1.1 Type of research and data analysis methodology ....................................34 3.1.2. Research data ..........................................................................................35 3.1.3. Sampling and data collection..................................................................36 3.1.4. Research models .....................................................................................37 3.2. Develop questionnaire ...................................................................................38 CHAPTER 4. SITUATION OF IMPROVING RETAIL BANKING SERVICE IN BIDV – THAI HA BRANCH ...................................................................................40 4.1. Overview of business activities of BIDV Thai Ha branch ...........................41 4.1.1. The process of formation and development ...........................................41 4.1.2. Organizational model .............................................................................41 4.1.3 Evaluating results of business activities of BIDV, Thai Ha branch ........42 4.2. The status of retail banking services of BIDV - Thai Ha Branch..................45 4.2.1 The status of retail banking services and retail banking services turnover at BIDV Thai Ha branch...................................................................................46 4.2.2 Current price / charge situation in capital mobilization, lending and retail services .............................................................................................................58 4.2.3. Current status of facilities and equipment for RETAIL BANKING activities ............................................................................................................59 4.2.4. Current status of human resources for RETAIL BANKING activities .60 4.2.5 The current state of information technology infrastructure for retail banking61 4.3 Achievements and limitations of retail banking service of BIDV – Thai Ha branch ....................................................................................................................63 iv 4.3.1 Achievements ..........................................................................................63 4.3.2 Limitations ...............................................................................................64 4.4. Reason ............................................................................................................66 4.4.1. Subjective reasons ..................................................................................66 4.4.2. Objective reasons....................................................................................69 Conclusion Chapter 4 ................................................................................................71 CHAPTER 5: SOLUTIONS TO IMPROVE RETAIL BANKING SERVICES IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM, THAI HA BRANCH ..................................................................................................................72 5.1 Trends in improving retail banking services in Vietnam ...............................72 5.2. Orientation of retail banking improvement at BIDV, Thai Ha branch to 2020 ....73 5.2.1. General direction ....................................................................................73 5.2.2. Orientation of improving retail banking .................................................74 5.3. Solutions to retail banking improvement at BIDV, Thai Ha Branch ............74 5.3.1. Solutions group on retail banking services packages .............................74 5.3.2 Group of personnel solutions...................................................................75 5.3.3 Technology Solutions Group ...................................................................76 5.3.4 Customer service solutions ......................................................................77 5.4. Requests .........................................................................................................78 5.4.1. Recommend to Vietnam Development Commercial Joint Stock Bank .78 5.4.2. Recommendations to the State Bank and other ministries .....................81 CONCLUSIONS .......................................................................................................83 BIBLIOGRAPHY .....................................................................................................84 APPENDIX ...............................................................................................................86 v ABBREVIATIONS BIDV Bank for Investment and Development of Vietnam - Thai Ha Branch CAR Capital Adequacy Ratio IT Information Technology IFRS International Financial Reporting Standards VAMC Vietnamese Asset Management Company VAS Vietnamese Accounting Standards WTO World Trade Organization vi LIST OF FIGURES Figure 3.1. The quantitative research process (Author, 2017) ..................................35 Figure 3.2. Research framework ...............................................................................37 Figure 4.1. Organization structure framework of BIDV – Thai Ha branch ..............42 Figure 4.2. Service package of BIDV Thai Ha .........................................................46 Figure 4.3. BIDV's capital mobilization situation, Thai Ha branch from 2015 to 2016 .....47 Figure 4.4. Situation of BIDV's term deposit mobilization, Thai Ha branch from 2015 to 2016 ..............................................................................................................48 Figure 4.5. Credit structure .......................................................................................49 Figure 4.6. Implementation Status Of Retail Outstanding Loan over the times .......49 Figure 4.7. Outstanding loans of BIDV – Thai Ha Branch compared to the whole system ........................................................................................................................50 Figure 4.8. The structure of incomes from operations (not including business operation expenses) ...................................................................................................52 Figure 4.9. Income and expenditure structure of BIDV – Thai Ha Branch compared to BIDV system .........................................................................................................53 Figure 4.10. Foreign Exchange Profits of BIDV, Thai Ha Branch ...........................54 Figure 4.11. Price of BIDV- Thai Ha branch in comparison to other competitors...58 Figure 4.12. Status of facilities and equipment for retailing bank ............................60 Figure 4.13. Infrastructure of equipment supplying services ...................................61 vii LIST OF TABLES Table 4.1. Financial Report of BIDV - Thai Ha Branch ...........................................43 Table 4.2. Descriptive Statistics ................................................................................45 Table 4.3. Retail sales of BIDV Thai Ha increased over the years. .........................50 Table 4.4. Net income from card services, POS .......................................................54 Table 4.5. Some results on international credit card products ..................................56 Table 4.6. Result of BSMS service of BIDV Thai Ha branch ..................................57 Table 4.7. Results of BIDV's domestic payment service fee, Thai Ha branch from 2015 to 2016 ..............................................................................................................58 viii OVERVIEW Studying the challenges facing Vietnam's banking and finance industry, experts have concluded that one of the two challenges facing the banking industry is the fierce competition in service quality. In addition, in the development strategy of Vietnamese banks in the coming years, the diversification of products and services and the improvement of quality of products and services is a vital issue, in parallel with the provision of credit to the economy. The Bank will survive and develop sustainably. Vietnam Commercial Joint Stock Bank for Investment and Development (BIDV) is a commercial bank established in 1957 in the form of a state commercial bank, and since April 2016 BIDV officially became a joint stock commercial bank. The state holds 95% of the shares with a dense network and a large market. In fact, from its inception to 2000, BIDV has been mainly serving capital construction projects and projects in the economy, but from 2000-2016, BIDV entered the integration period, in parallel with the credit growth. BIDV has also actively shifted its customer structure to reduce the proportion of outstanding loans and develop credit service products. However, BIDV is too focused on developing credit and investment, while investment in modern banking products and services accounts for a modest share. BIDV, Thai Ha branch was established in May 2015 with the traditional activities of credit, capital mobilization and services. In the business strategy of the past 3 years, BIDV's goal is to become a leading bank providing banking products and services in Vietnam. and will constantly improve the quality of products, develop banking services. Based on the above reasons, the authors selected the topic: "Improving the Retail banking services in Bank for Investment and Development of Viet Nam - Thai Ha Branch" to increase income from banking services and enhancing competitiveness and reducing risks for Thai Ha Branch and contributing positively to the joint venture business as well as contributing to the state budget and creating jobs for local laborers. ix CHAPTER 1: INTRODUCTION TO THESIS 1.1. The urgency of the thesis Along with the socio-economic development, the activities of commercial banks are increasingly developed and reached certain achievements in many aspects such as technology modernization, supplying of new products and services, risk managements, customer-oriented restructuring... Accordingly, retail activities account for a large proportion in commercial banks and bring about many benefits. On the socio-economic perspective, retail activity contributes to improving people's living standards, reducing social costs, and improving civilization in payment. Considering the financial and management aspects of banks, retail operations reduce risks, creating stable sources of income for banks. This is a fast-growing trend of commercial banks in the world in recent years. In Vietnam, under the pressure of: competition from other credit and noncredit institutions, foreign banks, increasing in understanding and demand of the bank, and the development of information technological advances and retail activities of commercial banks in recent years have made remarkable progress; however, there are many shortcomings such as: lack of synchronism in the development of retail banking activities. Service products are traditional, poor in category, utility is not high. Service quality is low. The level of technology application in service development is limited. Distribution channels are not diversified and ineffective. Marketing sales are passive due to lack of full customers’ information system. There is no set of indicators to assess retail performance as well as effective risk management. The effectiveness of retail banking on the social and economic aspects is quite modest. Meanwhile, with the potential market of nearly 100 million people, foreign banks, non-banks, non-banks, and non-financial institutions are acting aggressively to gain market share in this field. The Bank for Investment and Development of Vietnam (BIDV) have the same vision. In recent years, in addition to providing traditional products to corporate clients, the Bank for Investment and Development 1 of Vietnam There are strong directions in the development path that retail banking products are considered as a long-term business strategy and conditions for sustainable development in their operations. However, the development of retail banking products at BIDV has not changed dramatically; the retail banking products and services have not yet reached the customers, and the retail market share is not high in business activities. Together with the trend of BIDV, Thai Ha branch - new branch in BIDV system, with the former branch of Mekong Delta Bank House (MHB Ha Tay) was merged into BIDV in May 2015 Government policy. Since its founding, Thai Ha has focused on retail development. However, new retail banking activities are still inadequate. Therefore, the improvement of synchronous and creative solutions to develop the retail banking products at the branch will contribute to fulfilling BIDV's goal. Based on the above reasons, with the desire to find out solutions in a consistent, effective and practical way to develop retail activities of BIDV - Thai Ha Branch, I chose the problem: Retail banking at the Bank for Investment and Development of Vietnam - Thai Ha Branch as the thesis topic. 1.2 Purpose of thesis Studying and researching the basic theoretical issues of development of retail banking activities of Vietnamese commercial banks. Reflects and assesses the development of retail banking activities of BIDV Thai Ha branch including analyzes the shortcomings, constraints and causes affecting the development of retail banking activities of the branch. Suggest some solutions to help BIDV Thai Ha branch in particular and commercial banks in general to promote banking services at BIDV Thai Ha branch to bring efficiency to the branch, reduce risks, contribute enhancing competitiveness and sustainable development. 1.3 Subjects and scopes of study Subjects of study: Improving retail banking activities of BIDV Thai Ha branch. 2 Research scope: - The improvement of retail banking services at BIDV Thai Ha branch in 2015, 2016; - Direction and solutions to improve services of BIDV Thai Ha branch to 2020. 1.4 New contributions of the thesis Theoretically, the thesis has made a systematic approach and explanation to further clarify the basics of retail banking activities of commercial banks with an independent role for sustainable development of banking activities and commercial banks retailing. In terms of practical research: Based on the analysis of BIDV's retail operation in Thai Ha in recent years, the thesis has identified certain achievements, shortcomings and constraints. In retail banking activities, this is the field of activity that foreign banks, non-NH financial institutions are particularly interested in exploiting in the US market. Therefore, in order to win the fierce competition, the general banks in Vietnam and BIDV Thai Ha branch in particular must inevitably focus on the development of retail banking activities. About practical application: The thesis analyzes and sums up BIDV's retail operations. Thai Ha branch has evaluated the successes, shortcomings, constraints and causes of impacts. Comments on the potential, trend of retail improvement of BIDV Thai Ha branch to offer solutions with high performance. Based on this fact, BIDV Thai Ha branch can be applied in practical activities as well as adding theoretical basis in research activities in the unit. During the study of this topic, the author has some advantages and difficulties encountered are: Advantages: The author is an experienced banker working for a long time in a large commercial bank and very enthusiastic about the development of banking operations. At the same time, the research unit is BIDV - Thai Ha Branch is the leading unit in implementing the strategy and the new banking products are in the period of strong transformation into retail banking. Thus, the author has a comprehensive understanding of the retail banking 's activities, as well as about bank's activities in general, from which there are close research and practical 3 difficulties and difficult to find. From there, there is a practical solution for BIDV Thai Ha Branch. Difficulty: In essence, the commercial operation of commercial banks has existed since the commercial banks started operation, however, due to history, the traditional activities of commercial banks in general and BIDV - Thai Ha branch is to provide banking products and services mainly to economic organizations with credit services account for a large proportion. Until recently, in line with the trend of the world, Vietnamese banks have been perfecting the organizational restructuring and development of moving towards moving towards retail customers. In addition, the data reported by banks that are still consolidated are still carried out according to the service segment and not really according to the beneficiaries, so collecting data reflects retail performance is quite difficult. The detailed and uniform reporting system on retail activities is incomplete and incomplete, so the exploitation of data and comparison is difficult. 1.5 Structure of the thesis Thesis title: " Improving the Retail banking services in Bank for Investment and Development of Vietnam - Thai Ha Branch ". The composition of the thesis: In addition to the introduction and conclusion, the list of references, appendix, thesis consists of 5 chapters: Chapter 1: Introduction to thesis Chapter 2: Basic issues on improving retail banking service of commercial banks Chapter 3: Research methodology and development of survey instrument Chapter 4: Situation of improving retail banking service in BIDV – Thai Ha branch Chapter 5: Solutions for improving retail banking service at BIDV – Thai Ha branch 4 CHAPTER 2: BASIC ISSUES ON IMPROVING RETAIL BANKING SERVICES AT COMMERCIAL BANK 2.1 Literature review Regarding the issue of "Improving retail banking services at commercial bank", there are some authors who have access to different business areas and perspectives. Some typical researches related to retail banking operations in the recent years such as: Research in country Research on the development of credit operations of Vietnamese commercial banks has a doctoral dissertation by Nguyen Kim Anh (2004) - the thesis presents an overview of credit operations of Commercial banks, then propose some solutions to develop credit business for both corporate customers and individual customers in the market economy; MA Nguyen Trong Nghia (2015), Opportunities and Challenges for Vietnamese Credit Institutions in the course of International Economic Integration, Journal of Financial and Monetary Markets. This research showed that opportunities and challenges for Vietnamese commercial banks when Vietnam joins WTO, the application of modern technology, human resources and experience of modern commercial banks require Vietnamese commercial banks to improve the banking system is and should have a breakthrough in the implementation process. Study on card payment method from Nguyen Danh Luong (2003) - the thesis presented an overview of card and card payment forms, shortcomings of card payment form in Vietnam From there, the solutions and recommendations to develop card payment in Vietnam; Research on the mobilization and use of foreign currency by Nguyen Manh Tien (2002) - dissertation on deepening the mobilization and use of foreign currency in particular in AGRIBANK, analyzing situation of these activities; thus offers some solutions to complete. 5 The study by Do Huu Hai, Nham Phong Tuan and Pham Van Tuan (2015) showed the factors that helped to develop banking services in Hanoi, Vietnam. This study has shown the impact of four groups of factors affecting the improvement of retail banking in Vietnam: scale, price, intangibles, infrastructure Information technology - service channels. Specific scales are used to evaluate the diversity of retail banking, the level of information technology applications for retail banking, banking facilities, Transactional ... The authors point out that convenience, speed and quality of service of retail banking want to be developed banks should focus more on upgrading IT infrastructure. news and online trading system. In addition to upgrading equipment in the workplace, service and marketing. However, this study is only applicable to Vietnamese banks at present but not to specific banks. Research on retail banking service in Nguyen Thi Huong’s master dissertation explored deeply retail banking service of BIDV – So giao dich 1 branch. However, this research only focused on assessing the strengths and limitations of products, the general picture of development of retail banking has not been drawn up on the basis of the qualitative and quantitative indicators. While retail banking activities are activities that cover many segments of services that serve the same target group as the individual and the household, previous studies focused largely on each of the service segments such as capital mobilization, use of funds, card services, or marketing in general. From 2004 to now, there have been no overview studies on the retail operation of the commercial bank as well as BIDV. Research in abroad Korda and Boris Snoj (2010) studied the quality of retail banking services with customer satisfaction. This research has developed Gronroos' (1984) study to show that customer satisfaction in retail banking is only satisfactory in terms of technical quality (what customers receive from retail banking such as safety, etc.) and functional quality (how does retail banking work?). Research on retail banking has also attracted research into retail banking support tools; which mentions to the Internet and the mobiphone. Research by Pham 6 Long (2010) and research by Carlotta Mariotto and Marianne Verdier (2012) on competition in Internet Banking and Mobile Banking has emphasized that in order to satisfy the needs of customers, banks need paying special attention to the development of Internet banking and mobile banking. In this study, the authors also illustrat the role of Internet banking and mobile banking by comparing some banks in Denmark, Sweden and Finland. Therefore, it can be defined that, this research is independent study, and the research topic is not duplicated with the previous published works. In this thesis, the author has studied a general overview of retail services of commercial banks that is the history of development, concepts and characteristics, the role of retail activities, retail banking, distribution channels, common risks in retail services of commercial banks; viewpoints on the improvement of retail activity, criteria for assessing the development of retail activity, factors affecting retail services of commercial banks. At the same time, based on the analysis of BIDV's retail banking in Thai Ha branch over the past time as well as considering and inheriting the previous researches, the author has proposed a number of synchronous solutions. It is highly practical to develop retail banking - a strategic activity of BIDV Thai Ha branch in the future. 2.2 Retail banking activities of commercial banks 2.2.1. The over view of Commercial Bank In the world, now, there are different points of view about commercial bank, such as: According to Banking association of US (2016), commercial banks are defined as business firms specializing in providing financial services and operating in the financial services industry. According to French Trade Department (2015), commercial banks are the foundations where the regular occupations receive the public's money in the form of deposits or in other forms, and use that resource for themselves in the operations of discount, credit and finance. According to report of India banking association, commercial banks are banks that receive deposits for loans or grants and investments 7 In Turkey, commercial banks are understood as a type of limited liability company established for the purpose of receiving deposits and performing foreign exchange operations, bills of exchange, discounts and other Forms of borrowing or credit. In Vietnam commercial banks are the type of banks that can carry out all banking activities and other business activities in accordance with the Law No. 47/2010 / QH12 on Credit Institutions by the National Assembly On June 17, 2010, aiming to profit. Thus, it can be said that commercial banks are a special business dealing in currency with regular activities of capital mobilization, lending, discounting, guaranteeing, providing financial services and other related activities. 2.2.2. The Concept of Retail Banking Services The retail market is a completely new view of financial markets. There are now many ways to understand retail banking - "retail banking" in a variety of approaches. Literally in the supply of normal goods and services, retail is sold directly to the end consumer. It is the opposite of wholesale that is sold to intermediaries, to the supplier of the goods. However, due to the peculiarities of the banking industry, the term retail can be understood slightly differently. Currently, there are two different perspectives on retail customers. According to the World Trade Organization, "retail banking is a typical service of a bank, where individual customers can trade at branches of a bank. To make transactions such as savings deposit, checking account, mortgage loan, credit card service, debit card and some other services. Thus, in this view, retail customer consists only of individuals and households. In addition, there is also the view that retail customer is not just individuals and households but also small and medium enterprises. In his modern Banking career, David Cox said: "retail banking is a major banking service providing banking products directly to businesses, households and individuals and small credits. " According to experts from the Asian Institute of Technology, "retail banking is the bank that provides products and services to individuals, small and 8 medium enterprises through the branch network, or customers can directly access the banking products through information and communication electronics. " Thus, we can understand retail banking in a more common ways retail banking is a service covering all aspects of commercial banks such as credit, deposit, card services... Servers are individual customers, households, small and medium enterprises, through the branch network or the media, telecommunication electronics... The subjects of retail customer within the scope of the thesis include, among others, individual consumers, households and small and medium enterprises. Obviously, it can be seen that retail banking is completely different from wholesale banking, which provides services to corporations, large corporations and financial institutions. The size of a retail banking service transaction is also much smaller than the whole sale banking. 2.2.3. Characteristics of retail banking 2.2.3.1 Target customers According to banking association of US (2015), the subjects of retail banking services are individuals and households. This group of clients has a large number of members in society, middle income, diversified in terms of qualifications, business fields, industries and short-term capital requirements. In addition, this is also a group of customers very sensitive to changes in prices, distribution methods and policies of the banks; the object of the bank's least loyal. Of the individual clients surveyed by The Economist, 70% of clients left the bank due to product dissatisfaction and quality of service, 13% were due to inconvenience in trade, and 17% are other reasons (Eliot et.al, 1996; Reeves and Bednar, 1996). 2.2.3.2. Scope and number of transactions The needs of each customer in the retail market are usually small, with a very small value per transaction compared to the whole sale banking services. However, this is a potential market segment for banks because of the large number of customers. Especially, small and medium enterprises often occupy high 9