Nowadays, the population of Viet Nam is more than 86 million people and their income is more and more increasing but the rate of inhabitants who use banking service is still very restricted, only 50%-60% of citizens have accounts in the bank. Moreover, the growth of average income per head and of forms of enterprises create the potential market for commercial banks, especially retail banking market. It is the tendency and indispensable demand of commercial banks today to enhance presence, increase market shares and diversify kinds of bank's service and contribute to raise the competition of banks. One more reason for promoting retail banking service in Viet Nam is the pressure of competition which is increasing faster and faster due to carrying out the route of loosening the rules to foreign financial institutions, as opening bank branches and points of transaction place, discharging about mobilizing deposits in Vietnam dong, the ability of widening banking serivces. It proves that retail banking market in Viet Nam is very attractive. If domestic banks don't have good direction and change to accommodate the new environment , the failure at home market is unavoidable.
Being one of four strongest banks having equity of the government, Vietinbank has advantage of occupying a large market share in Viet Nam. However, Vietinbank is facing the risk of decreasing the portion in a severely competitive perspective as today, it requires Vietinbank to have suitable strategy to catch up with this tendency. The dissertation focus on analysing difficulties, challenges of Vietnam joint stock commercial bank, Branch Vung Tau in deploying retail banking service, compare the growth and the density of each banking service piece with entire branch, with other foreign banks and entire Ho Chi minh City area. It is an imperative demand for commercial banks in Viet Nam. From then, the dissertation gives specific solutions for each retail banking service part to heighten competitive capacity and hold fast the strong point in business in present stage for domestic banks.
Literature Review
The term commercial bank is defined: "A financial institution authorized to receive both time (savings accounts, CDs) and demand (checking accounts) deposits, to make loans of various types, to engage in trust services, to issue letters of credit, to accept and pay drafts, to rent safety deposit boxes, and to engage in similar activities and ventures.". (Denise L.Evans, JD & O.William Evans, 2007). The commercial bank have direct transactions with enterprises, institutions, and individuals by mobilizing deposits such as checking account, savings account and use this deposit to lend, discount, and supply banking service for them.
Therefore, the role of commercial banks is said: " A commercial bank's objective is to make a profit by intermediating between depositors (savers) and borrowers (investors), and this requires management of their different liquidity, maturity, and risk preferences."(Professor Elliott Parker, 2005). Payment intermediary plays an important role in the society nowadays, create conditions for developing other banking services more easily.
The term financial banking service is defined differently in each country and there is no unite definition. It can be understood as: "Any good or service provided by a financial institution. Financial products include loans, mortgages, insurance policies, advice, derivatives, etc."(Ed Jonathan Law and John Smullen, 2008). Or "Bank financial products are capital investment and management plans designed and sold to some specific target customers after further analysis on the potential customer" (Mengchun Ding & Jing Xiao, 2010). In general, that is all monetary activities, credits, payments, foreign exchange…of the bank system supplying for the economy.
How is Financial banking service understood in retail banking system? Finance banking service contains banking products such as: deposit account, checking account, foreign exchange activities, lending… and retail banking defined "Mass -market banking in which the customers are private individuals and small business customers. It typically offers a wide range of such services as personal loans, mortgages, pensions, and insurance as well as providing current accounts and savings accounts. Cash cards and credit cards are also provided. In most nationwide banking systems, it is still the most profitable part of a bank's activities."(Ed Jonathan Law and John Smullen, 2008). In general, a retail bank is a bank which works with individuals and SMEs (small and medium enterprises).
One outstanding point of retail banking service is electronic banking service which plays an important role among banking products of each bank because with a large amount of individuals who require technology network to meet various their needs, to satisfy them.
Or according to economic specialist of Asian Technology Academy, retail banking service is the service which supplies banking products, services to each individual, small and medium enterprises through branch's network, customers can approach directly banking products and services through telecom electronic means and information technology.
Objectives of retail banking market is individuals, small and medium enterprises, despite no high value but it's the potential market for developing new products, increasing profit, diversify product category to reduce risk, if taking advantage of a large portion of customers in this market, banks can maximize their profit , improve competitive ability also contribute to development of the economy of the society.
The role of retail banking service is shown to economy, to banks and to customers
To economy: retail banking service, raise the efficiency of government's management, reduce the cost of society and circulation in cash.
To banks: Diversify products, reduce risks, bring stable return in business for banks and improve the capacity of competition in the financial monetary market.
To customers: Supply various kinds of banking products, convenient and safe for customers.
Significance of the study
The dissertation is significant in assigning difficulties and challenges of domestic banks in deploying retail banking service, namely in Vietinbank Vung Tau which is facing to strong competition from foreign financial institutions.
At once, the study is very useful for Viet Nam banks to be aware of obstacles they meet in the process of developing retail banking service, from then propose solutions for Vietinbank Vung Tau to develop and compete in the financial market.
Research questions and objectives
Research questions
What are difficulties and challenges of Vietnam joint stock commercial bank Vietinbank Vung Tau) in deploying retail banking service?
How does Vietinbank Vung Tau do to promote retail banking service today?
The overall aim of this research is to analyse barriers of Vietinbank Vung Tau in developing retail banking service which is the imperative tendency of Vietnamese commercial banks. From that, the researcher puts forward feasible approaches to hold fast its position in the financial market.
To achieve this purpose, questionnaires with closed question and semi-structured questions to be used to survey customers' opinion about the quality of the products, services of Vietinbank Vung Tau, strong and weak point , existences of services and give solutions to develop financial banking services.
Research objectives
Identify the weakness of financial banking product and service, mainly focus on traditional product while e-banking service is still limited in Vietinbank Vung Tau
Clarify that Vietinbank Vung Tau's competition is not high, there is no complete link together between domestic banks in issuing cards and developing new product
Evaluate critically for building strategy of Vietinbank Vung tau to compete with other domestic banks also foreign banks
The first objective will be achieved through interview, face to face with prepared questions, survey of level of customer's satisfaction about the quality of product, document analysis using data extracted from books, magazines, private company…at once with the literature review to have better understanding of concepts of e-banking service to evaluate, compare Vietinbank Vung Tau's retail banking product with other bank's.
On the other hand, the second objective is gained through review of literature, mainly from magazines, websites to have critical assessment of alliance between banking systems.
Similarly, the last objective will be based on secondary sources such as: newspaper, magazine, websites, following the typical examples for the success of retail banking service as ACB bank, Sacombank, some foreign banks to learn experience also find most suitable solutions to compete with them.
Research methodology
Because the research focus on identifying obstacles of Vietinbank Vung Tau's retail banking service and propose solutions for Vietinbank Vung Tau, so it restricts the study to the description of methods used in data collection and analysis, comparative method about the growth of each financial kind of product with other bank's product so as to receive the last conclusion.
The researcher uses:
*The statistical method: collect and process the information through 2 sources:
+ Use internal data created by Vietinbank Vung Tau, head office of Vietinbank Vung Tau, using quantitative method to analyse, evaluate and compare volume also return between banks objectively based on empirical data.
+ Use external data from sources: newspapers, means of transport, commercial information, organizations, associations, annual report of state bank and some of commercial banks.
*The survey method: based on the basis of synthetizing data from 10 interviews, questionnaires with 30 closed and 12 semi-structured questions to investigate customer's opinions about the quality of banking service, interact with customers selected randomly to collect date to serve for the study, to withdraw the weakness and existence of banking services and propose suitable solutions.
1.5.0 Time scale
The researcher should divide the study into many phrase to ensure efficiency for the dissertation:
Stages
Study
Duration
1.
Background
2 weeks
2.
RQS, aim, objectives
4 weeks
3.
Literature review
6 weeks
4.
Research methodology
4 weeks
5.
Data collection
4 weeks
6.
Analyse data and presentation
4 weeks
7.
Research conclusion
2 weeks
1.6.0 Resources
The researcher will require the following instruments for serving the research project:
A laptop computer for doing the dissertation
A notebook to record important and necessary information
Writing material
Software program: Microsoft Office as excel, word…
Assistance from the leaders of Vietinbank to gain access to data
Finance for mobility of investigating opinions of customers.
And if possible, if the researcher has condition, SPSS software for analysing data will be used.
