Factor Affecting Customers Satisfaction About Banking Services: Evidence from Agribank, Vietnam

  • NGUYEN, Dung Thi (Department of Economics and Finance, Bac Giang Agriculture and Forestry University) ;
  • NGUYEN, Ha Quang (Bac Giang Agriculture and Forestry University) ;
  • PHUNG, Hanh My Tran (Thai Nguyen University of Economics and Business Administration (TUEBA)) ;
  • THAN, Hoang Viet (Vietnam Bank for Agriculture and Rural Development)
  • Received : 2021.12.30
  • Accepted : 2022.06.15
  • Published : 2022.06.30


Today, customer satisfaction is the most important issue for Vietnamese banks. There are numerous factors that influence bank customers' satisfaction. The study investigates the factors that influence customer satisfaction with deposit services at the Vietnam Bank for Agriculture and Rural Development (Agribank) in Bac Giang province, Vietnam, and analyses the impact of each component. The authors used 5-point Likert scales to assess whether elements were related to the factors determining consumer satisfaction with Agribank's deposit service. To perform this study, exploratory factor analysis (EFA) and multiple regression were used to find factors determining customer satisfaction with Agribank services. Customers that use deposit services at Agribank in Bac Giang province, Vietnam, provided samples of 300 survey questionnaires for this study. SPSS software is used to examine the data. Customers' satisfaction with Agribank's deposit service is influenced by six factors, including reliability, responsiveness, service capabilities, empathy, tangible means, and service price, according to the study. This finding also offers some recommendations for improving service quality in local Vietnamese banks to gain a competitive advantage.


1. Introduction

Banking is no exception in Vietnam, where competition pervades all industries, and money plays a vital role in the development of banks. Deposits from socioeconomic organizations and residents typically contribute 70 percent to 80 percent of a bank’s entire capital.

Customers are the deciding factor in the existence and brand positioning of banks in such a fiercely competitive climate. Customers’ loyalty and interest will keep a bank afloat and growing. Banks’ most essential strategy is becoming a customer-oriented business strategy. Customers’ happiness is always an issue that domestic commercial banks aim to address on a regular and ongoing basis to be able to meet their demands as quickly as possible. Capital mobilization is a vital activity at the Bank, as it helps to maintain and improve the efficiency of company operations while also bringing profits to the bank.

As a result, banks must develop an efficient capital mobilization strategy to mobilize more idle money in society to maintain competitive advantages, strengthen the bank’s reputation in the market, and satisfy the needs of scale expansion at the same time. Savings deposits, in particular, play a crucial role because they are one of the most reliable sources of capital, particularly medium and long-term savings deposits. The savings deposit mobilization market, on the other hand, is always a market where domestic and international credit institutions compete fiercely.

The interest rate for deposits with a period of 12 months or more (as of February 2022) at Vietnam Bank for Agriculture and Rural Development (Agribank) in Bac Giang province is now 5.6 percent /year. When compared to the deposit interest rates of some Vietnamese commercial banks, Agribank’s deposit interest rate is comparable to joint-stock commercial banks with more than 50% state-owned capital, such as Vietcombank, BIDV, and Vietinbank.

When compared to the private banking group Techcombank, VPBank, and Seabank, however, Agribank’s deposit interest rate is not particularly competitive. Meanwhile, these banks are all present in Viet Yen District and compete directly with the Bank for Agriculture and Rural Development Viet Yen District Branch, Bac Giang – Tu Lan Transaction Office in deposit mobilization efforts. In addition to the interest rate, one of the elements that clients consider when choosing a bank to establish a savings account is how satisfied they are with the bank’s savings deposit service.

As a result, in the current competitive environment, in addition to developing an acceptable and competitive interest rate framework, it is vital to investigate aspects affecting consumer happiness when utilizing products. Bank services, in general, and savings deposit products, in particular, are critical for financial institutions. Customers who are satisfied with the bank’s products and services will bring the bank a large number of new customers as well as increased earnings from banking products and services. Customer development and attraction are critical, but retaining them now and in the future is even more critical. In recent years, in Vietnam’s Bac Giang region, heated competition between domestic and foreign commercial banks has erupted.

As a result, it is critical to assess the quality of services offered to clients by domestic commercial banks in recent years, to contribute to improved service quality and, as a result, customer loyalty. The purpose of this study is to explain the background of customers’ satisfaction with deposit service over time. The findings of this study have practical relevance. Based on this purpose, the study outlines the current discussion on Agribank customer satisfaction with deposit service. It uses exploratory factor analysis and multiple regression analysis to investigate factors affecting customer satisfaction with deposit service.

2. Literature Review and Hypotheses

2.1. Customer Satisfaction

There have been numerous studies on consumer satisfaction. In general, this research shows that there is a small but positive effect on consumer satisfaction (Ariffin et al., 2022; Bui et al., 2020; Ha et al., 2020; Nguyen et al., 2021; Tran et al., 2020). In the Malaysian commercial banking business, Zahir et al. (2015) investigated the factors influencing customer satisfaction and image on customer loyalty. To examine the incidental interactions between exogenous and endogenous variables, the authors employed the Structural Equation Model (SEM). The model was created and then tested using data collected from 512 valid surveys using the Partial Least Square (PLS) approach. The findings reveal that in the Malaysian commercial banking market, service quality, customer satisfaction, and image all have a significant and positive impact on customer loyalty. Customers’ happiness is a key topic for both academics and bank marketers, as Ahmad and Kamal (2002) investigated the antecedents to and a consequence of customer satisfaction. The findings were based on a poll of 167 people who participated in the study, which looked into the impact of service quality factors and customer expertise on satisfaction. Customer satisfaction is related to both core and relational dimensions of service quality. According to research studies, expertise appears to be adversely related to satisfaction.

Customer satisfaction with banking services in Jimma, Ethiopia, was evaluated by Belay and Ebisa (2013). The authors employed descriptive statistics to assess primary data sources. The study’s findings revealed that several factors impede the smooth delivery of banking services; for example, network issue is a big stumbling block in check clearing operations; loan approval delays are a huge issue, and the benefits of electronic banking services are limited. Alhemoud (2010) examined the opinions of bank customers toward the retail banking sector in the Middle East, with a focus on Kuwait. The author used descriptive statistics methods and ANOVA test with 605 usable questionnaires that were randomly distributed to retail customers at various banks within the country.

Pham (2020) used the SERVQUAL model and exploratory factor analysis (EFA) to find influencing factors and examine the influence of each factor on customer satisfaction with domestic commercial bank service quality in Bien Hoa City. The samples consisted of 700 survey questionnaires gathered directly from clients in Bien Hoa City who used the services of domestic commercial banks. According to the findings, four aspects influence customer satisfaction: staff service attitude, reliability, tangibility, and employee competencies. Tran et al. (2020) studied the factors that influence the customers’ satisfaction of Vietnamese commercial banks in the context of COVID-19. The authors used a sample of 1, 639 customers’ satisfaction. The findings revealed that three factors influence CSD satisfaction: the Central Bank’s legal provisions (Legal), commercial banks’ policies and methods (Policy), and commercial banks’ products (Products) (Product). Nguyen (2020) investigated customer satisfaction with the Tra Vinh Province Branch of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV). A total of 183 bank customers participated in the survey. Using SPSS software, the authors conducted multiple regression analyses. Trust component, responsive component, assurance component, empathetic component, tangible media component, and competing component price are all factors that influence customer satisfaction.

Customers’ satisfaction with bank deposit services is critical for bank growth; however, international studies are often focused on other nations or areas. Also, the studies have not been conducted to check for precision and efficiency in Agribank in Bac Giang province, Vietnam. Based on this purpose, the study analyses Agribank in Bac Giang province, Vietnam, and investigates factors affecting customer satisfaction in the long term perspective.

2.2. Hypotheses

2.2.1. Reliability (STC)

When a company performs a service right for the first time, the reliability of service quality has a positive impact on customer satisfaction. This demonstrates that the company is constantly working to meet its commitments and pay attention to the outcomes (Parasuraman et al., 1994). The SERVQUAL service quality model includes reliability as the first dimension.

The degree to which clients can trust the organization’s promised services is referred to as reliability (Ennew & Waite 2013). Reliability is an organization’s ability to provide services independently and reliably; it is a criterion of service quality; it has a significant impact on customer satisfaction; it is the ability to rely on accuracy and commitment to perform the services required for the client, and it is the ability to deal with the client’s problems (Parasuraman et al., 1988; Ennew & Waite, 2013). It is very important to solve the problem, perform the requested services in the first place, or provide the service at the appropriate time.

Error-free recordkeeping, according to Parasuraman et al. (1988), is a model of service quality reliability and has a significant impact on customer satisfaction. The precision of order fulfillment, the maintenance of correct records and quotes, the accuracy of payments, and the commitment to services are the most essential elements for client retention in banking services (Lee & Moghavvemi, 2015). The current research also demonstrates that reliability has a positive link with customer satisfaction in the banking sector, according to Kant et al. (2017). On that basis, the research hypothesis is proposed:

H1: Reliability has a positive impact on customer satisfaction using savings products at Agribank – Tu Lan Transaction Office.

2.2.2. Responsiveness (SDU)

According to Parasuraman et al. (1985), customer satisfaction is affected by the staff’s readiness to deliver the required service without causing any inconvenience to the client, i.e., responsiveness to the customer and service quality. The willingness and ability of a company to assist consumers and deliver services swiftly and at the proper time are referred to as services. The term “responsiveness” refers to how a service business responds to customers through its employees. Client satisfaction and employee attention to customer concerns will improve as a result of personal attention. When this occurs, their level of contentment shifts dramatically. Customer happiness is directly tied to the banking industry’s responsiveness, according to Kant et al. (2017). Based on the foregoing analysis, it can be stated that the bank’s service quality will have a significant impact on customer satisfaction. In summary, the hypothesis is put forward as follows:

H2: Responsiveness has a positive impact on customer satisfaction using savings products at Agribank – Tu Lan Transaction Office.

2.2.3. Service Capabilities (NLTV)

According to Duong (2015), service capacity is a criterion for assessing a company’s ability to promptly and efficiently resolve customer problems and complaints. This criterion was also created to assess a company’s willingness to assist customers and meet their needs. While seen from the perspective of the client, service capacity refers to the bank’s reaction to the expectations of customers when using specific services, such as bank employees are ready to assist customers, banks provide services to consumers. Service is provided swiftly and efficiently, and the bank responds positively to customer requests. The bank strives to resolve customer concerns in the most efficient manner possible.

To and Vo (2020) discovered that there are 5 factors affecting the quality of banking service: Tangible means, Responsiveness, Service capacity, Credibility, Empathy. From there, the research hypothesis is proposed:

H3: Service capacity has a positive impact on customer satisfaction using savings products at Agribank – Tu Lan Transaction Office.

2.2.4. Empathy (SDC)

Understanding, concern, sharing, and caring for customers are all examples of empathy (Cronin & Taylor, 1992). According to Duong (2015), the human factor is a crucial component of success, and the more attention a bank pays to its customers, the higher the level of empathy: Customers’ needs are prioritized by bank employees. Customers do not have to wait in large lines to be served; the bank has easy transaction locations for customers, and bank staff treats customers with compassion at all times.

H4: Empathy has a positive impact on customer satisfaction using savings products at Agribank – Tu Lan Transaction Office.

2.2.5. Tangible Means (PTHH)

The existence of facilities, equipment, employees, and communication materials, as well as a clear indicator of the resources required to provide the customer with the service, are referred to as tangible means. Customer satisfaction is influenced by the presence of professional management and staff, as well as brochures and promotional materials (Parasuraman et al., 1985).

H5: Tangible means have a positive impact on customer satisfaction using savings products at Agribank – Tu Lan Transaction Office.

2.2.6. Service Price (GC)

Since customers are always aware of the cost/benefit trade-off, service excellence alone is not enough to establish customer loyalty (Lee & Cunningham, 1996). According to Zeithaml (1988), the higher the satisfaction with the perceived price and the overall transaction, the lower the perceived price level and the lower the sacrifice. From there, the research hypothesis is proposed:

H6: Service prices have a positive impact on customer satisfaction using savings products at Agribank – Tu Lan Transaction Office.

3. Research Methods

3.1. Samples

In this study, the exploratory factor analysis (EFA) was applied. As a rule of thumb, we need to have at least five times as many observations as the number of variables to be evaluated (Hair et al., 2014). Because there were 30 observations in this study, the number of samples should be 150. The authors sent 300 surveys directly to Agribank deposit customers.

3.2. The Scale

Likert scales allow you to choose from different responses to a single or a series of assertions/statements. Typically, there are five response categories ranging from 5 = strongly agree to 1 = strongly disagree, with 3 = neutral (Jamieson, 2004). The items in the survey have to be related to the elements affecting customer satisfaction with Agribank’s deposit service.

3.3. Research Model

The Principal Axis method of extraction and Varimax rotation was used to perform exploratory factor analysis (EFA). The validity of the factor analysis of the data set was tested using the Kaiser-Meyer-Olkin (KMO) measure of sample adequacy and Bartlett’s test of sphericity. Using a multiple regression model, factor scores were used as independent variables to estimate customer satisfaction with deposit service (SHL).

Because the multiple regression model is appropriate for analyzing factors affecting customer satisfaction with deposit service, the authors assume the following multiple regression function, which takes into account six factors:

SHL = β0+ β1 . STC + β2 . SDU + β3 . NLPV + β4 . SDC + β5 . PTHH + β6 . GC

4. Results and Discussion

4.1. Cronbach’s Alpha Coefficient

Cronbach’s Alpha reliability coefficient was used to assess the scale. There are a few things to keep in mind when it comes to Corrected item-total Correlation: it must be greater than 0.3. (Nunnally, 1978). Cronbach’s alpha coefficients for all variables are greater than 0.7, as indicated in Table 1. As a result, all of the factor scales are suitable for inclusion in the exploratory factor analysis (EFA).

Table 1: Cronbach’s Alpha Coefficient

4.2. Exploratory Factor Analysis

According to Table 2, Kaiser-Meyer-Olkin (KMO) indices of 0.819 indicate that the data is eligible for factor analysis (Hair et al., 2014). A statistically significant Bartlett’s test of sphericity, Sig. = 0.000 (sig. 0.05), shows that the variables are sufficiently correlated to proceed (Hair et al., 2014).

Table 2: KMO and Bartlett’s Test

All factor loading values are more than 0.5, and these observed variables only upload a single factor, indicating that the observed variables are significant in the factors. Convergence values and discriminating values are required by the scales. Table 3 illustrates the factors matrix. Six factors were derived from 27 observations factors related to independent variables.

Table 3: Rotated Component Matrixa for Independent Variables and Dependent Variable

4.3. Multiple Regression Analysis

The analysis was carried out using the Enter technique, in which the variables were selected at the same time using the criteria for picking variables with a significance of less than 0.05. Table 4 shows the findings of the regression analysis.

Table 4: Coefficientsa

aDependent Variable: SHL.

With positive beta coefficients, the standardized regression coefficients are all different from 0, and the Sig t-tests of the regression coefficients are all less than 0.05. Customer satisfaction is affected by all six independent variables, and no factors are removed from the model. The following is the regression result:

SHL = 0.193 STC + 0.313 SDU + 0.140 SDC + 0.170 NLPV + 0.311 PTHH + 0.140 GC

According to the results of multivariable regression analysis, customer satisfaction about deposit service at Agribank in Bac Giang province is influenced by 6 factors that positively affect customer satisfaction; in order of importance from high to low: Responsiveness, tangible methods, reliability, service capabilities, empathy, and service price.

The beta coefficient of Responsiveness (SDU) is 0.313. So, when Responsiveness increases (decreases) by 1 point, the level of customer satisfaction increases (decreases) by 0.313 points.

The coefficient of Tangible means (PTHH) is 0.311. When Tangibility increases (decreases) by 1 point, the level of customer satisfaction increases (decreases) by 0.311 points. The beta coefficient of Reliability (STC) is equal to 0.193. So, when the factor Reliability increases (decreases) by 1 point, the level of customer satisfaction increases (decreases) by 0.193 points.

The beta coefficient of Service capabilities (NLPV) is 0.170, indicating that there is no difference in the relationship between Service capabilities and customer satisfaction. So, when the factor Service capability increases (decreases) by 1 point, the level of customer satisfaction increases (decreases) by 0.170 points.

Empathy (SDC) and Service price (GC) both have a beta coefficient of 0.140. So, when Empathy (SDC) or Service price (GC) increases (decrease) by 1 point, the level of customer satisfaction increases (decreases) by 0.140 points.

* Assessment relevance of the model

The Variance Inflation Factor (VIF), which is measured as the inverse of the tolerance value, is used to measure multicollinearity (Hair et al., 2014). Values much lower than the suggested thresholds (VIF values of even 3 to 5) may result in interpretation or estimation problems. Table 4 shows that VIF values of 1.099 to 1.391 are less than 3, indicating that the regression model does not violate the multicollinearity phenomenon.

The coefficient R = 0.799 in Table 5 indicates that the variables in the model are highly correlated with each other. The R2 (R Square) value of the regression model’s findings is 0.638. This indicates that the independent variable accounts for 63.8% of the variation in the dependent variable.

Table 5: Model Summaryb

a Predictors: (Constant), GC, SDC, STC, NLPV, SDU, PTHH; b Dependent Variable: SHL.

The research uses the F test to further assess the model’s suitability (relevance of the overall linear regression model). This indicates if the dependent variable and the independent variable are linearly associated. If the value of Sig.0.05 is less than 0.05, the data set is appropriate for the multiple linear regression model. The value Sig. of the F test is 0.00 < 0.05, as shown in Table 6. This indicates that the model’s independent variables have a linear relationship with the dependent variable, that the linear regression model is appropriate for the data set, and that the variables match the acceptance requirements.

Table 6: ANOVA

5. Conclusion

The author’s study was conducted with the aim of determining the most important parameters influencing customer satisfaction with Agribank’s self-deposit payment service product in Bac Giang province, Vietnam. The measures for the variables were measured by the study of the theoretical underpinnings and relevant empirical investigations that have been carried out by researchers, research findings gained through group discussion techniques, and research results obtained through group discussion techniques. 300 survey samples were collected, and SPSS software was used to analyze them. Customers’ satisfaction with deposit service at Agribank in Bac Giang province is positively influenced by six factors: responsiveness, tangible means, reliability, service capabilities, empathy, and service price.

This research has added to the theory of the existence of factors that influence consumer satisfaction with bank deposit services in Vietnam. This finding also offers some recommendations for improving service quality in local Vietnamese banks to gain a competitive advantage. Although the study has shown that positive aspects have an impact on customer satisfaction with Agribank’s deposit service in Vietnam’s Bac Giang province. However, with only a few samples to analyze, the data separation for analysis will be limited.


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