Topic: Managing customer service at Joint Stock Commercial

Bank for Investment and Development of Vietnam – Hanoi

Branch
1. Introduction
1.1. General information of Joint Stock Commercial Bank for Investment and Development
of Vietnam and Hanoi Branch
1.1.1. Joint Stock Commercial Bank for Investment and Development of Vietnam
The Joint Stock Commercial Bank for Investment and Development of Vietnam has
abbreviated name as BIDV. As the longest-established bank in Vietnam, as of 31 December
2018, BIDV had total assets of more than VND850 trillion (~USD38.6 billion), making it the
country’s largest commercial bank. Establishment date is 26 April 1957. The head office of the
bank is located at BIDV Tower, 35 Hang Voi Street, Hoan Kiem District, Hanoi. Its SWIFT
code is BIDVVNVX. The bank’s charter capital is VND 34,187,153,340,000. The address of
the bank is at BIDV Tower, 35 Hang Voi Street, Hoan Kiem District, Hanoi. The member in
charge of the BOD is Mr. Tran Anh Tuan. The Chief Executive Officer of the bank is Mr. Phan
Duc Tu. The bank’s business registration number is 0100150619. It is audited by Deloitte
Vietnam Company Limited. Its stock code is BID with par value of VND 10,000. Total number
of shares is 3,418,715,334.
1.1.2. Hanoi Branch
Established in March 1991 with the orientation of being a special unit of the system, Hanoi
Branch is responsible for allocating and lending investment preparation projects and central
economic capital construction investment projects. It is a direct unit serving large customers,
corporations, groups, enterprises, financial institutions by providing modern banking products
and services that have built prestige and enhanced the position of BIDV in general and the
branch in particular on the financial and monetary market. Over nearly 30 years of operation,
contributing to the strong development of BIDV, Hanoi Branch has tried its best to build and
establish a solid customer base and provide a full range of multi-service and modern banking
products and services. With special efforts in its business activities, Hanoi Branch has become
a strong brand, a reliable branch of groups, corporations, organizations and individuals.
1.2. Products and services provided by Hanoi Branch of Joint Stock Commercial Bank for
Investment and Development of Vietnam
The primary products and services that BIDV’s Hanoi Branch supplies and gives current
customers are payment deposit, savings deposits, loan products, card service, international
payment services, electronic banking services, and some other services.
1.3. Situation of business operation in Hanoi Branch of BIDV
In recent years, with business orientation and strategic vision of the leadership team and the
effort of all staff, Hanoi Branch of BIDV has achieved success in many areas. However, in
2018, the bank shows some decline in some main areas as compared to 2017’s. Business
performance in detail, on the mobilization of capital and credit activities of Hanoi Branch of
BIDV in 2018 are shown in the table below.
No. Indicators 2017 2018
I. Gross Revenue from interests 73,422 82,487
Gross Revenue form services operation 1,610 2,753
Gross Revenue from others 2,006 16,287
Total Revenues 77,038 101,527
II. Expenses for staff 7,712 7,908
Expenses for tax 233 268
Expenses for management activities 4,527 3,929
Other expenses for equipment 8,295 8,893
Expenses for deposit insurances of customers 6,000 6,300
Others
Total Operation Expenses 27,948 27,949
III. Profit before allowance & provision expenses 48,803 73,612
Allowance & provision expenses 6,140 194,271
IV. Profit before tax 42,663 (120,658)
(Source: Annual Report in 2018 of BIDV)
Among all branches of BIDV, Hanoi Branch is in the middle level. The business performance
of this branch in 2018 was not very good. This can be shown through profit before tax. In 2017,
the branch had profit before tax of 42,663 billion dongs. However, in 2018, this number was -
120,658 billion dongs. It means that the branch got loss rather than profit in last year due to
financial recession. Moreover, Hanoi Branch has high operating expenses due to the fact that
all offices of the branch are hired in crowed streets with high hiring costs. These hiring costs
are also considered as branding identity expenses.
1.4. Main characteristics of human resources, infrastructure, technology affecting customer
service quality at Hanoi Branch of BIDV
a. Human resource
According to the HRD’s data, in three recent years, the number of employees at Hanoi Branch
of BIDV have increased because there are big changes in technology, by expanding the network
of branch transaction system, and due to the rapid increase in the number of customer base.
The branch has attracted and recruited a team of highly qualified personnel from colleges and
universities accounted for over 75% of branch’s personnel, personnel structure of young
employees under 30 years old accounted for 69% of total personnel. The staff of the branch is
mostly young, enthusiastic, willing to learn on the job, however, they have less practical
experience and their professional qualifications is still immature. Last time, the branch model
for restructuring had many fluctuations through the departments, etc., which had direct
influence on care and customer service.
b. Facilities
BIDV’s Hanoi Branch head office located at the address of No. 4B Le Thanh Tong, Hanoi.
Located on the central street at the capital of Hanoi, adjacent to many schools, hospitals,
supermarkets, crowded residential areas of the capital, the facility is spacious, clean, eye-
catching at the area, Hanoi Branch of BIDV gradually dominates and takes confidence in the
population. The transaction offices of the branch have begun going into stable operation,
contributing significantly to capital mobilization and scattered lending, collection services for
the branch customers and helping facilitate the transaction.
c. Technology
Right from its inception, BIDV’s Hanoi Branch was implemented using support software
program known as BDS (Banking Delivery System) which has many outstanding applications.
BDS system can automate job scheduling, rapid recovery of customer requirements, which can
make up to 1,000 transactions/sec, manage up to 50 million customer accounts and support
transaction system of 24h/day. BDS system can meet the information processing requirements,
improving the quality of management with prerequisites for the application and expansion of
electronic banking services and other modern banking services.
Software of BDS (Banking Delivery System) is targeted towards banks to meet the rigorous
demands of the financial trading system especially in modern risk management of issues at the
macro level, control security in full, automatic and quick transaction processing, giving the
new product on the market as quickly as possible. It helps banks offer a complete, appropriate
service through multiple distribution channels (ATM networks, Mobile Banking, Internet
Banking, etc.) by expansion of banking activities and workload processing or large transactions
but not increasing the cost of resources and infrastructure in the corresponding basis. When
applying BDS, the bank may extend unlimited affiliates, help the board manage credit risk, risk
management, market, diversify its services, increase profits, compete with other banks. BDS is
a technology showing remarkable strength of banks.
1.5. Problem identification and causes
Customer services offered at BIDV are not well customized, not offered anywhere and at any
time. Working attitudes of banking staff are not good. Errors still happen occasionally.
Causes for those problems are ineffective management and policy issuance of BIDV.
2. Problem analysis
Many surveys were conducted with customers (both via email or hardcopy) often making
transactions at BIDV’s Hanoi Branch. The purpose of those surveys is to understand the
customer’s assessment of customer service quality of BIDV, thereby to enhance customer
service quality, maintaining old customers and attract potential customers.
The surveys revealed that there are many constraints related to customer services that need
serious improvement from the bank if it wants to maximize customer service, thus customer
loyalty and minimize customer complaints.
- Customer prints are not designed beautifully and scientifically.
- Customer services offered at BIDV are not well customized.
- Customer services are not offered anywhere and at any time.
- Customers cannot save time when using customer services at BIDV.
- There are still errors during customers’ customer transaction process.
- Customer service staffs and consultants do not answer customer questions satisfactorily and
are always welcoming, respectful to customers.
- Customer care staff does not serve justice to all customers.
- Customer care staff sometimes cannot handle billing records of customers quickly and
accurately.
- The bank does not express special concern and give thoughtful care to customers.
- Customer care staffs at BIDV in some cases do not give prompt services to customers
- Customer care staffs at BIDV frequently have to check again when answering customers’
questions. In any cases customer care staff at BIDV - Hanoi Branch is sure about their answers
to customer questions, and asked customers for time just to wait them to check with upper
level. In most of the cases, waiting did not matter but for ones who was hurry, wasting time on
just waiting and waiting made them feel very angry and pressed. They latterly tended to find
another bank at which customer care staff could immediately and accurately respond to their
commands.
- All customers do not know about the technology for customer services used at BIDV - Hanoi
Branch, because the bank does not mention it in any official document or leaflet. Therefore,
they cannot know whether it is the latest or not. Feeling the experience of enjoying the most
advanced technology helps to increase customer satisfaction with customer services at BIDV -
Hanoi Branch.
There area some reasons for those shortcomings:
- Some products at BIDV are designed based on subjective assessment of customer care staff
without proper understanding of their customers. Some products provided at the bank must be
in compliance with regulations of financial institutions and agencies, which cannot customized
by the bank. Therefore, in some cases needing flexibility, this causes many difficulties and
costs much time to deal with.
- Sometimes the bank could not provide its customer services at 8am in the morning because
some customer care staffs did not arrive.
- Sometimes customers must wait a very long time to be able to make customer transactions. It
may be because in peak hours the bank has too many customers and too much work to do. It
can be because management and job allocation at BIDV - Hanoi Branch is not good, causing
insufficient number of customer care staff to deal with transactions of customers.
- Sometimes customer care staff was too busy, may be in working or just in doing their personal
affairs, to answer all of their questions. Instead, they just gave very basic and sketchy
instructions, and gave customers some leaflets for them to self-understand. Such customers did
not feel very satisfied, and because their transactions were just small, they immediately came
to other banks and ignored BIDV for next times they wanted to make transactions related to
customers.
- BIDV in particular and other banks in general still gives much priority for customers with
large limit of customer. A customer coming to the bank to make a customer with limit of 500
million dongs will be received better care than one with 50 million dongs. It is the fact occurring
in all banks, and BIDV is not an exclusion.
- Weak abilities of customer care staff at BIDV - Hanoi Branch, for example, they often make
errors when handling billing records for customers.
- The bank is usually in its peak hours with too many customers to deal with and too much
work to do. Guards are outside to keep customers’ motorbikes and cars, so they cannot come
in to welcome customers.
3. Recommendations
3.1. Recommendations for Hanoi Branch in particular
a. Reducing errors in customers’ customer transaction process
The bank can invest in infrastructure and people to help keep the chances of a major slip-up to
a minimum. It can also invest in smart technologies and analytical tools that cross-check
payment against instructions and other data. Mistakes in customer services will be made, but
sensible investment in technology can help reduce their impact.
b. Perfecting the time for offering customer services
Sometimes the bank could not provide its customer services at 8am in the morning because
some staffs did not arrive. In general, maybe those staffs are stuck in traffic rush, or some
unexpected reasons keep them from going to work on time. To deal with unfortunate and under-
estimated cases, there are two reasonable ways. The first way is to announce publicly that the
bank starts working at 8.30am, instead of 8.00am, but still require staff to go to work at roughly
8.00am. The second way is to remain working time as previously known, but require staff to
go to work at roughly 7.30am. 30 minutes before the official working time will help staff to
prepare for all necessary things to start a busy working day, in terms of document, customs,
etc. Employees who are late without prior permission will be punished (VND100,000/time for
example).
Moreover, those customers wanted to make transactions on Saturday afternoons because at that
time they finished all the works of a week. However, customer care staff also needs to relax
after a working week under much pressure with financial data. Therefore, the most suitable
way in this situation is that the bank should work until 3pm in Saturday afternoons, and the
period from 1pm to 3pm in Saturday afternoons is regarded a shift, customer care staffs will
alternatively work in this shift. During that shift, the bank just deals with special banking
operations, which will be proposed and posted at its regulations publicly.
c. Saving time for customers when using customer services
To deal with the overcrowding at BIDV - Hanoi Branch in peak hours, the most important thing
is that the bank should popularize the importance and effectiveness of Internet Banking, the
service which customers can use to make almost all of banking transactions at a very cheap
fee. Some customers make very easy and simple transactions at the bank, for example
depositing money, or transferring money, which can be done easily through the service of
Internet Banking. For customers who often have to make transactions, customer care staffs
should advise them to use Internet Banking. It will help reduce the number of customers going
to the bank causing overcrowding at peak hours, and help the bank have more time to improve
its care to other customers including customer using customer services. This method is very
important for customers with time of using less than 1 year, because they are new customers
and still can be attracted easily by other competitors.
In terms of ineffective management and job allocation at BIDV - Hanoi Branch, the bank
should have some ways to improve it. Every day another employee moves into a management
position, perhaps without realizing that his or her life has just changed dramatically. While it’s
often assumed that good managers are born rather than made, that’s not actually the case.
Management skills can be learned. If a manager has recently moved into a management
position, or he simply wants to improve his management skills, take heart.
d. Taking efforts to treating customers equally
Customers sometimes are not treated equally as compared to those making transaction at a
large volume. Their expectation to be treated equally is right, however, all customers are not
created equal. Within a given customer base, there are segments that need, want and expect
very different things. This can be anything from contract terms to features to service levels.
Customers with complex needs, and customers with simple needs. Likewise, there are customer
groups that mean more to the bank’s success than others. Therefore, the key to success is to
identify and understand the difference between the customer segments - collect customer
feedback and analyze results accordingly. This is extremely important, because customer care
staff tends to give priority for customers with more simple banking operations.
3.2. Recommendations for BIDV in general
The results of production and business in the period of 2020 – 2025 show that this is a difficult
and potentially developing period of BIDV. The steady increase in business profit shows that
BIDV has gradually stabilized and recovered, regaining trust and prestige of BIDV brand,
through the process of conducting research and analysis. Here are some recommendations:
- Strengthen the role of internal control checks with the branches as well as at the head office
of the bank. This activity should be carried out more frequently, comprehensively and
accurately to detect, timely handle the risks, consolidate, build and advertise prestige bank
brand, gain trust in customers.
- Promptly and specifically guide the implementation of the State Bank’s documents,
regulations and directives on banking activities in general and capital mobilization activities in
particular, facilitate the bank to always operate within the legal framework and ensure high
quality.
- Stick to the orientation and objectives of socio-economic development of the Communist
Party and the State so that there are plans, targets and strategies in accordance with BIDV.
- Expanding the propaganda and promotion of BIDV’s image by sponsoring provincial
programs, socio-cultural programs, sports and charity programs, etc. for the brand and products
of the bank are widely promoted at home and abroad.
- Sending many qualified young people to study abroad, especially the country has advanced
technology such as Japan, USA, Switzerland, etc. Improve management and professional
expertise from which to draw experience and apply to the reality of Vietnam. Implement
centralized interest rate management at head office and branches to perform flexibly within the
specified time.