THESIS
INTERNATIONAL BUSINESS MANAGEMENT

THESIS
"IMPROVING THE QUALITY OF RETAIL BANKING SERVICES IN
BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - HANOI
BRANCH SOUTH"


ACKNOWLEDMENT
First, I would like to say my sincere thank to our teachers in the Paris
Graduate School of Management who have equipped me with valuable knowledge
in the past.
I would like I would like to express my sincere thanks to the Doctor Nguyen
Thanh Hieu, who has enthusiastically instructed me to complete the thesis.
After all, I would like to send many thanks to my friends, my colleages and
my closed people who did not hesitate to spend time on support, give comments and
help me during my study time.
I want to express my sincere thanks to all of you

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DECLARATION
I declare that the Thesis for Master of Business Administration "Improving
the quality of retail banking services in Bank for Investment and Development
of Vietnam - Hanoi Branch South" has been conducted by myself, which is
reliable with clear information source written by the subjective view. I'm solely
responsible for the accuracy from the reference materials.

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1.2.6 The need to improve retail banking services quality...................................19
1.3 Experience of improving retail banking services quality of a number of
banks in the world and lessons for commercial banks in Vietnam..........................20

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1.3.1 Experience of improving retail banking services quality............................20
1.3.2 Lessons on improving retail banking service quality for commercial
banks in Vietnam.................................................................................................23
CHAPTER II: THE CURRENT SITUATION ON SERVICE QUALITY OF
RETAIL BANK AT BANK FOR INVESTMENT AND DEVELOPMENT OF
VIET NAM – HA NOI SOUTH BRANCH.............................................................25
2.1 About Bank for Investment and Development of Viêt Nam – Ha Noi South Branch
................................................................................................................................ 25
2.2 Results of business operations of Retail banking at Ha Noi South BIDV.........26
2.2.1 Capital mobilazation...................................................................................26
2.2.2 Credit..........................................................................................................28
2.2.3 Other services.............................................................................................30
2.2.4 Business results...........................................................................................31
2.3 Analyse, evaluate the actual situation of service quality of the retail banking
through business results of retail banking at the Bank for Investment and
Development of Vietnam - Hanoi South Branch.....................................................31
2.3.1 The quality of retail capital mobilization service........................................31
2.3.2 The quality of retail credit service..............................................................35
2.3.3 Quality of other service:.............................................................................38
2.3.3.1 Quality of card service:........................................................................38
2.3.3.2 Quality of payment service..................................................................42
2.3.3.3 The quality of electronic banking.........................................................44
2.4 The main factors affecting the quality of retail banking services at the Bank


INVESTMENT

AND

DEVELOPMENT OF VIETNAM –HA NOI SOUTH BRANCH.........................58
3.1 The development orientation of Bank for Investment and Development of
Vietnam - South Hanoi Branch in the near future....................................................58
3.1.1 The general development Orientation.........................................................58
3.1.2 The development of retail banking services................................................59
3.2 Several Solutions for Retail Banking Service Quality Improvement.................60
3.2.1 Improving the quality of infrastructure.......................................................60
3.2.2 Solutions to improve the quality of human resources.................................62
3.2.3 Solutions to improve the quality of organizational management of
services systems retail banking............................................................................64
3.2.4 Solutions of developing new retail services................................................69
3.2.5 Designing service quality standards............................................................70
3.3 Suggesting to the State Bank and Government Offices.....................................71
CONCLUSION.........................................................................................................73
REFERENCES.........................................................................................................74
APPENDIX ............................................................................................................... 76

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LIST OF TABLES AND FIGURES
TABLES
Table 2.1:
Table 2.2:
Table 2.3:

Number of ATM, POS of Ha noi south BIDV during 2007 – 2011 stage
................................................................................................................ 40
Comparison oF property between domestic debit cards among banks
................................................................................................................ 41
Number of payment transaction of individuals at Ha Noi south BIDV
................................................................................................................ 42
Money transfer sales of individuals at Ha noi south BIDV....................43
Average time to deal with payment transaction of individual at Ha
noi south BIDV......................................................................................44
Number of customers using modern services oF Ha Noi south BIDV
................................................................................................................ 45
Data encryption......................................................................................49
Classifying survey..................................................................................50
Result of descriptive survey analysis......................................................50
Result of testing Cronbach’alpha............................................................51
Summary of the coefficient on the conformity of model........................52
Result of linear regression analysis........................................................53

FIGURES
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Figure 1.1: Model of five service quality gap...........................................................13
Figure 1.2:

The theoretical study model..............................................................................16

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service style “customers are God”, step by step increasing the reputation and brand
name of BIDV in general and BIDV-Southern Hanoi Branch in particular in the
financial market.
From the above fact, the quality re-evaluation of the retail banking service
quality of BIDV- Southern Hanoi Branch as well as supporting banks in building
solutions for enhancing the retail services during the incoming time in order to
increase the satisfaction of customer is very important, so I have considered and
selected the thesis subject “Improving the quality of retail banking services in
Bank for Investment and Development of Vietnam - Hanoi Branch South" The
subject is conducted for the above objectives and hopefully the author will receive
contribution ideas to complete the subject matter.
2. STUDY SUBJECTIVES:
- Evaluate the real situation of the retail banking service quality of BIDV- Southern
Hanoi Branch.
- Suggest some solutions for increasing the retail banking service quality of BIDVSouthern Hanoi Branch. The main objective focuses on the Credit and Capital
mobilization.
3. SUBJECT, METHOD AND RESEARCH SCOPE
- Research: The quality of retail banking services in BIDV- Southern Hanoi Branch.
- Research methodology: Analyze main factors affecting the quality of retail
banking services at BIDV- Southern Hanoi Branch, after that conducting the
analysis of the customer satisfaction through practical survey, then proposing the
solutions for increasing the retail banking service quality.
-Scope of study: The research data is to 31/12/2011 in BIDV- Southern Hanoi Branch.
4. THE PRACTICAL MEANING OF THE RESEARCH SUBJECT:
Based on evaluation of retail banking service system in BIDV- Southern
Hanoi Branch, analyzing the achievements and failures in the retail banking system
quality, then propose the solutions for increasing the retail banking service system

means that supplying services to the hand of end-users with quantity. It should be
understood that retailing is an activity of distribution, in which the researching,
promotion, study, experiment, discover and develop the modern distribution
channels- the outstanding feature is online business. The retailing includes three
main fields: market, distribution channels, services and service supply. Retailing is
more developed to be international.
According to economic experts in the Asian Institute of Technology-AIT,
retail banking service is to supply products, banking services to each individual,
small and medium enterprises through branches, customers who can approach
directly to products and banking services through telecommunication electronic
equipments and Information Technology.
According to the WTO, the retail banking is a typical service type of banks
where individual customers can make transactions in branches/ transaction offices
of banks to perform the services like: Deposit, account checking, mortgage, loan,
credit card service, debit card and related services.

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According to the BIDV, retail banking services are the supply of products
mainly for individual customers with services like saving deposit, card services,
money transfer for abroad study, remittance services, electronic banking services,
individual consumption loans , business, etc. In short, retail banking services can be
fully understood as "retail banking services banking are services provided to the
individual or individuals, small and medium-sized businesses through a network of
branches or customers can directly access to the banking services through electronic
media and telecommunication "
1.1.2 Characteristics of retail banking services
- The served customer objects are variable from individuals, households and
small and medium enterprises.

The retail banking services play an important role in diversifying the
products, extending the market, increasing the competition capacity, creating the
capital source for medium and long term for the banks to change the income
structure of banks, reducing the risks in banking business, at the same time
contributing to diversifying the banking activities, strengthening the national
finance.
1.1.3.3 For the customers
The retail banking services brings to the customers the conveniences, safety,
cost saving and effectiveness in the process of payment and income usage. In fact,
now the retail banking services have brought to banks a stable income with
decentralized risk, creating a steady base for the bank’s operation. Therefore,
commercial banks have initially considered the retail banking services as a core
activity for building, reinforce a stable customer network, then expand the business
to other sectors of the banks. Vietnam commercial banks have been developing,
increasing the retail banking services as a inevitable trend, consistent with the
common trend of banks in the region and in the world.
1.1.4 Retail banking services
1.1.4.1 Capital mobilization
One of important functions of Commercial banks is to mobilize capital for
giving loan and investment. Through methods and tools used, commercial banks
mobilizes capital from individual customers and small-medium sized enterprises

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under the main forms such as non-term deposits, term deposits, valuable papers
(bills, bank bonds, etc.) and other forms of deposit. Each individual customer or a
small and medium enterprise has idle capital which is not great but with a large
number of customers, an abundant and potential source of capital will be created for
commercial banks. Currently, in addition to traditional deposit products, the

capital mobilization, service charging and image PR. The card services go with the
technology application and the in interconnection among commercial banks for
market exploitation and IT infrastructure usage.
1.1.4.4 Payment services
The payment services are considered to be a profession component with high
profit rate but has not been paid proper attention. Payment means include cheque,
payment order, commercial bills, payment orders . Banks on behalf of customers
make payments for goods and services through the clearing, m online payment
transfer through the banking system within the banking system or other, transfer
within the country border or to the foreign countries.
Salary payment to the personal account, payment for electrical bills, water
bill, telephone bill and so on through the card services is developing and creating
substantial receiving source for commercial banks.
Money transfer services, money remittances are increasingly expanding and
developing. Many commercial banks have cooperated and been agents for money
transfer and remittance for a number of international financial institutions such as
Western Union, Money Gram ...
1.1.4.5 Electronic banking services
In the situation of integrated financial- banking market, Vietnam has
gradually opened door for foreign banks, services of domestic banks should be
distinctive in forms and contents. In which, the outstanding feature is the modern
banking services.
Currently, SMS Banking, eBanking, Mobile Banking and so on are services
selected by many customers. With this service, customers do not have to go banks
or spend much time on performing necessary transactions like account transfer,
account checking, payment, deposit and loan and so on. It is really an utility,
bringing customers to approach closely to the modern life. The application of
electronic banking services in business of current commercial banks is a
competitive advantage and it is one of important factors deciding the success in the


intangibility, heterogeneity, inseparability and can not be stored. Therefore, so far
there is no complete definition for service. According to VA Zeithaml and MJ Bitner

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(2000), "Service is behaviors, process and method to do a certain work in order to
create value for customers to satisfy their needs and expectations"
Services play an increasingly important role in the national economy. Service
quality is one of the determining factors for the efficiency of services and creation
of value to contribute to the national economy.
Service quality is evaluated in connection with culture, job sector and field.
Therefore there are many different definitions for it. Depending on the object and
environment of research that understanding of service quality can serve as the basis
for implementing measures to improve it.
In development history, many service providers have found their differences from
rivals and keep customers through the implementation of excellent quality service.
Service quality has become a major marketing tool to differentiate competitors and
boost customer loyalty. Customers can only assess the quality after having
purchased and used a service. Therefore, the definition of service quality is often
subjective, largely based on the attitude, feeling and knowledge of service users.
After referring to materials, there is some concept of service quality that is used by
many writers.
Service quality is a measure of to what level a service has satisfied a
customer’s expectation. A quality service is one that meet the expectations of
customers in a consistent manner (Luu Van Nghiem, 2008, page 163) Gronroos
(1984) saw service quality in two aspects, one is technical quality (what is served)
and functional quality (how it is served). In the 1998 study, he described perceived
service quality is the difference between expectations and the service received.
Parasurman, Zeithaml and Berry (1985.1988) (cited from Nguyen Dinh Tho and


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Gap 1: Appear when there is a difference between customer expectations of
the service and the bank awareness of these expectations. Gap 1 usually occurs
because the bank does not understand all the characteristics that make up the quality
of their service and do not see customers' needs.
Gap 2: This gap occurs during the implementation of service quality
objectives. The bank has difficulty in changing their perception of customer
expectations for the characteristics of their service. The second gap depends mainly
on the products design capacity of the bank.
Gap 3: Appears when the bank staff does not provide services to customers
according to the specified criteria. This depends on the quality of staff directly
providing products and services. Even when the product is designed well, fulfilling
customer demand, if the provision, attitudes and professionals of the staff are not
good, causing bad impression for customers, the bank's efforts in understanding
market demand, designing products, ... is no longer worthy.
Gap 4: This is the gap between the actual service quality and the customer's
expectations under the influence of external information dissemination and
communication such as advertising, marketing, etc. They are exaggerations that
exceed ability of the service provider. It is very easy to lose customer’s trust if the
service provider advertises far beyong the truth.
Gap 5: After using the service, customer will compare the service quality
they receive and what they have expected initially. The key is to ensure that the
quality customer receive must meet or exceeds what they expect. Thus, high or low
quality depends on customer’s perception of the service in the context of what he
expects from a bank. Parasuraman & ctg (1985) suggested that service quality is a
function of the fifth gap. This gap depends on the distance before it. Therefore, to
shorten the 5 gap and increase service quality, service managers must attempt to

decoration, stationary and equipment.
- Provide customer tangible items such transaction slip, forms, manuals,
business cards, invoices, documents...
(4) Assurance: Professionalism, courtesy and safety that the bank provides
customers.
- Create trust through the knowledge and skills of service personnel.

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- Create professionalism, specialization service of the staff.
- Create widespread image, reflecting the bank's value.
- Building a strong brand.
(5) Empathy: The availability of services providing to individuals.
- Make the customer feel important by responding to their needs and
understand their concerns.
- Develop long-term relationships with customers.
- Training staff to recognize customers’ need.
The research model
Banking service quality according to SERVQUAL model consists of five
components: reliability, responsiveness, tangibles, assurance and empathy. In
addition, according to analysis of the relationship between service quality and
customer satisfaction this paper use the theoretical model of quality banking
services and customer satisfaction as follows:
Figure 1.2: The theoretical study model
Trust

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