THE DETERMINANTS IMPACT ON OPENING AND USING ATM ACCOUNT

Transcription

1 THESIS: THE DETERMINANTS IMPACT ON OPENING AND USING ATM ACCOUNT In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION by Ms: Le Thi Hong Ngan ID: MBA02018 Advisor: Dr. NGUYEN VAN PHUONG International University - Vietnam National University HCMC February, 2013 i

2 THE DETERMINANTS IMPACT ON OPENING AND USING ATM ACCOUNT In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION by Ms: Le Thi Hong Ngan ID: MBA02018 Advisor: NGUYEN VAN PHUONG International University - Vietnam National University HCMC February 2013 Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree. Approved: Advisor: Dr. NGUYEN VAN PHUONG Chairman Committee member Committee member Committee member ii Committee member

3 Acknowledge Firstly, I would like to express the special thanks to my supervisor of this thesis, Dr. Nguyen Van Phuong, the teacher in International University, Vietnam National University, Hochiminh City for the valuable guidance and advices given to me during last eight months. His enthusiastic instructions and precious reference materials help me to find out the solutions to complete the thesis. Secondly, I want to gratitude to the members of committee who gave me the helpful comments on my proposal as directions for me to finish my thesis. I also would like to thank other teachers of the School of Business of International University, Vietnam National University, Hochiminh City and my classmates who have provided me with useful knowledge and learning skills. The last thanks are specially given to my parents and my husband for their encouragement, sympathetic and great supports during a long way for successful completion of my thesis. iii

4 STATEMENT OF AUTHORSHIP I certify that this thesis entitled The determinants impact on opening and using ATM account is my own work. Except where reference is made in the text of the thesis, this thesis contain material published elsewhere or extracted in whole or in part from a thesis by which I have qualified for or been awarded another degree or diploma. No other person s work has been used without due acknowledgement in the main text of the thesis. This thesis has not been submitted for the award of any degree or diploma in any other tertiary institution. iv

5 Copyright Statement This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author s prior consent. Le Thi Hong Ngan/ MBA02018/ v

6 TABLES OF CONTENT CHAPTER ONE: INTRODUCTION 1.1 Present and history of ATM Background Research purpose Research questions Scope and limitation Implications... 5 CHAPTER TWO: LITERATURE REVIEW 2.1 The key factors to make customer open an ATM account The determinants impact on using ATM account Customer Satisfaction Service quality Customer trust Customer loyalty CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Research Model and Hypothesis The determinants impact on opening and using ATM account The determinants impact on customer loyalty Research process Qualitative Research Quatitative Research CHƯƠNG FOUR: DATA ANALYSIS 4.1 Respondents Characteristics vi

7 4.2 Descriptive Statistics Determinants impact on opening and using ATM account Determinants impact on customer loyalty in using ATM account Cronbach Alpha test Exploratory Factor Analysis (EFA) Determinants impact on opening and using ATM account These factors affect customer loyalty for the use of ATM card services Confirmatory Factor Analysis (CFA) Structural Equation Modeling - SEM Bootstrap CHAPTER FIVE: DISCUSSION AND CONCLUSION 5.1 Summary of results Discussions of results and implications Limitations Conclusion Reference Appendix vii

8 LIST OF FIGURE Figure 3.1 Proposed Research Model...15 Figure 3.2 Proposed Research Model...16 Figure 3.3 Research Process...17 Figure 4.1 Sex...21 Figure 4.2 Age...21 Figure 4.3 Income...22 Figure 4.4 Occupation...22 Figure 4.5 Determinants impact on opening ATM account...35 Figure 4.6 Determinants impact on customer loyalty in using ATM card...48 Figure 4.7 CFA of measurement model standardized...51 Figure 4.8 Structural Equation Modeling result after adjusting theoretical model (standardized)...54 LIST OF TABLE Table Respondents Characteristics...20 Table 4.2 Variables Descriptive Statistic...23 Table 4.3 Variables Descriptive Statistic...25 Table 4.4 Result of Cronbach Alpha test...29 Table 4.5 KMO and Bartlett's Test...31 Table 4.6 Total Variance Explained...32 Table 4.7 Rotated Component Matrix...33 viii

9 Table 4.8 KMO and Bartlett's Test of first EFA...37 Table 4.9 Total Variance Explained of first EFA...37 Table 4.10 Rotated Component Matrix of first EFA...38 Table 4.11 KMO and Bartlett's Test of second EFA...41 Table 4.12 Total Variance Explained of second EFA...41 Table 4.13 Rotated Component Matrix of second EFA...42 Table 4.14 KMO and Bartlett's Test of third EFA...43 Table 4.15 Total Variance Explained of third EFA...43 Table 4.16 Rotated Component Matrix of third EFA...44 Table 4.17 KMO and Bartlett's Test of Customer Loyalty Variable...49 Table 4.18 Total Variance Explained of Customer Loyalty Variable...49 Table 4.19 Component Matrix of Customer Loyalty Variable...50 Table 4.20 Standardized Regression Weights (Group number 1 Default model)...52 Table 4.21 Composite Reliability and Variance Extracted...53 Table 4.22 SEM Regression Weights for main parameters...56 Table 4.23 SEM Standardized Regression Weights for main parameters...56 Table 4.24 Goodness-of-fit measures...56 Table 4.25 Results estimated by Bootstrap...57 ix

10 ABSTRACT Today, ATM (automated teller machine) card is just like a friend for everybody in Vietnam. This is one of the best services provided by the banking industry to every one having an account in a bank. There is a direct relationship between the service quality of ATM card and the level of customer satisfaction. Customer satisfaction and customer loyalty are very important in the present world. This study investigates significant dimensions of ATM service quality, customer satisfaction, customer trust and their effect on customer loyalty. To explain customer loyalty level, this study follows Lin and Wang (2005) model that customer loyalty should be measured along with the factors as service quality, customer satisfaction and customer trust. The questionnaire was used to collect the data from a convenience sample of 300 customers of banks in Ho Chi Minh city. SEM (structural equation modeling) results indicate that service quality, customer satisfaction and customer trust positively and significantly contributes toward customer loyalty. The thesis makes a significant contribution to the banking management because some empirical findings are available dealing with this aspect of ATM card service in the Vietnamese banking sector. Keywords: service quality, customer satisfaction, customer trust, customer loyalty. x

11 Chapter One INTRODUCTION This chapter will introduce the present and history of ATM, background, research purpose, research questions, scope and limitation and implications. 1.1 Present and history of ATM An automated teller machine or automatic teller machine (ATM) is a computerized telecommunications device that provides the clients of a financial institution with access to financial transaction in a public space without the need for a cashier, human clerk or bank teller. The ATM has a long and interesting history dated back to Although, several inventors in different countries simultaneously developed prototype of the machine; there were only few practical model were installed for example Bankograph in New York City in 1939 or Uppsala in Tokyo in Although these machines somewhat dispense with cash and do certain transactions, they were individual entity and had no connecting capabilities. They also incorporated very basic user identification system such as using paper checks marked with carbon-14 readable by machines. Until 1968, the first networked ATM was invented in Dallas, Texas U.SA by Donald Wetzel. Chemical Bank was the first bank commercialized ATM machine in its branch in New York City. The initial rollout was very slow due to extremely high cost of the machine, unproven reliability of the network, and customers perception. At the beginning of the ATM era, customers would not have full confident when machines handling their money. There were many concerns over machine failures, network outage or banks error which could results bad transactions. Also, customers did not accustom to interact with machines, so it created tremendous hesitation to accept new ATM machines. Since then, ATM has been used widely, and now, in The United States alone, there are 371,000 ATM machines. You can see an ATM machine almost everywhere 1

12 in the world. Even there are a few machines in the Arctic belt or in the McMurdo observatory Station in Antarctica. All modern ATM machines nowadays connect through sophisticated interbank network. The current system would allow customers do majority of task without the needs of human teller. From the machines, customers would be able to withdraw certain amount of money, make deposits and be credited immediately. Customers also can check balances from several accounts, transfer money or print mini statements. The ATM machines would enable customers to do transaction whenever they want, and also they help banks to reduce cost significantly. 1.2 Background Vietnam is a country of which the economy is growing rapidly. Although the banking system in Vietnam is still regarded as one of the youngest systems in the world, Vietnam has been considered a great potential market for finance and banking industry recently. Since Vietnam joined the WTO in 2007, the number of business invests in banking services have been developed rapidly, Banking services are also increasingly fierce than before. The more banks establish, the more choices people have. People only choose a bank which has good and comprehensive services. The more a bank has high quality products and services, the more customers choose the bank. Among the numerous of products and services that banks provide to customers, ATM card is an innovative service delivery mode that offers diversified financial services like cash withdrawal, funds transfer, cash deposits, payment of utility and credit card bills, cheque book requests, and other financial enquiries. According to the spread of ATM machines all over the world, ATM cards now are not strange to the majority of the Vietnamese people. Almost all the banks in 2

13 Vietnam have launched ATM service, which also created a high competition among them. Customers become the important objects to test. However, there is a little study about the relationship among customer satisfaction, customer loyalty and customer trust. Almost banks are increasingly focusing their strategic effort on marketing and attracting new customers. The aim of this thesis is to investigate the factors that affect customers continued usage of ATM banking service and determinants impact on customer loyalty in using ATM card. 1.3 Research purpose The strong development of ATM card market has received considerable attention recently. It is an important part in the bank. Banking has traditionally operated in a relatively stable political environment for years. However, today the banking industry is facing a dramatically aggressive competition in a new dynamic environment. The most of state owned banks have been privatized and become the commercial banks, therefore banking services are much more competitive in bank market. Competition will undoubtedly continue to be a more significant factor. With the phenomenal increase in the country's population and the increased demand for banking services; service quality, customer satisfaction, customer trust and customer loyalty are going to be key differentiators for each bank's future success. Thus, this study may be very useful to banking manage and it may also help the ATM section of the bank to identify their positive and negative features and the recommendation of the customers. Banking managers can take actions on service to improve the quality. The purpose of study included in: Identify factors that impact on making the customer open the ATM account. Analyze the impact of service quality, customer satisfaction and customer trust on the loyalty of customers. 3

14 1.4 Research questions Factors that affect customers continued usage of ATM banking service. The customer retention is the most important factor in influencing the financial income of bank. The thesis helps us to answer five main questions: What are the key factors to make the customer open the ATM account? Why do the customers choose the ATM banking service for using regular? Does service quality influence the customer satisfaction in ATM service? Does customer satisfaction influence the customer loyalty in ATM service? Does customer trust influence the customer loyalty in ATM service? 1.5 Scope and limitation The study has some limitations. The study has used convenience sample and just focus all individual office employees and factory workers in Ho Chi Chi Minh City, a big industrial city in Vietnam. A mix of interviews and qualitative data gathering techniques could be used to make the results more comprehensive and generalization. Future research could focus on diversifying the sample across different ethnic groups, income, and education in many cities and provinces. 1.6 Implications The research finding and contributions have brought some implications to the banking management. The research findings provide some insight and feedback for the banking operator to get the new managerial strategic on how to increase customer. Banking managers need to know the key factors that impact on customers decision on opening new ATM cards and customer loyalty. 4

15 Chapter Two - LITERATURE REVIEW This chapter will present the key factors to make customer open an ATM account and the determinants impact on using ATM account The key factors to make customer open an ATM account Sharma (1993) examined the impact of firm characteristics, market structure and state regulations on the adoption of automated teller machines (ATMs). Sharma (1993) analyzed the effect of the explanatory variables to find key factors of the customer need. ATMs have been introduced by banks throughout many ways to make the customer understand and start to use all service though ATM account: 1) to attract new customers by offering and flexible and convenient service; 2) to envisage that these machines could perform many deposit, withdrawal and transfer operation at lower cost than human teller, and showed to the customer many benefit with opening ATM account; 3) to estimate the demand for service in a particular area before launching the new ATM services. 2.2 The determinants impact on using ATM account Customer Satisfaction The more satisfied customers are, the greater the number of ATM users is (Ranaweera and Prabhu, 2003). The customer satisfaction strategy is one of the core strength in many banks. Researchers show that the service quality has a direct link with the customer satisfaction and the number of customers (Parasuraman et al., 1988). Some studies have also identified customers dissatisfaction with ATM service quality dimensions. Large numbers of customers are resistant to this new mode of service delivery and prefer more personal services (Murdock and Franz, 1983). The researchers noted that customers do not like ATMs because of impersonality, vision problem, fear 5

16 of technology and reluctance to change and adopt new mode of delivery of service (Khan, 2010). The consumer satisfaction is explained by key purchase behaviors, such as complaining, word of mouth, customer retention, and product usage (Westbrook and Oliver, 1991). As Kim et al (2007) stated that customer satisfaction has a positive impact on customer loyalty. Vesel and Zabkar (2009) showed that customer satisfaction is one of the significant determinants of customer loyalty. Hallowell (1996) also supported that the customer satisfaction is associated with the customer loyalty. According to Lin and Wang (2006), customer satisfaction exhibited the strongest direct effect on customer loyalty, whereas perceived value exhibited a stronger total effect on customer loyalty than that of customer satisfaction. The results consistently supported other studies, in which both perceived value and satisfaction were significant predictors of customer loyalty. The findings also indicated that perceived value was partially mediated through satisfaction in influencing customer loyalty. Both reasoning and empirical research have provided evidence that the perceived value and satisfaction of customers tap into different dimensions Service quality Service quality is an important factor to attract ATM users. The ATM services have become extremely popular among customers as the convenient mode of transactions. The technological innovation has transformed the banking business. Banks are aggressively adopting this mode. The advantages of using ATM have given new impetus to dimensions of service quality and banks are offering new choices to customers. Moutinho (1992) established that ATM facility resulted in speed of transactions and saved time for customers. Furthermore, researchers also identified many different dimensions of ATM service quality. For instance, Lovelock (2000) 6

17 identified secure and convenient location, adequate number of ATM, user-friendly system, and functionality of ATM. Davies et al., (1996) examined the factors influence customers satisfaction about ATM service quality. These factors include using costs and efficient functioning of ATM. Joseph and Stone (2003) examined the United States customers perception of ATM quality and found that user-friendly, convenient locations, secure positions, and the numbers of ATM provided by the banks are essential dimensions of ATM service quality. In a case study of Botswana, Mobarek (2007) established speed of operation, and waiting time as the important predictors of ATM service quality. The better service quality is provided, the more attractive the ATM users want to open new accounts. In various studies the relationship between service quality and customer preference loyalty had been examined (Boulding et al, 1993; Cronin and Taylor, 1992). In their study Cronin and Taylor (1992) focused solely on repurchase intentions. Whereas Boulding et al. (1993) focused on the elements of repurchasing as well as the willingness to recommend. In the study by Cronin and Taylor (1992), service quality did not appear to have a significant positive effect on repurchase intentions (in contrast to the significant positive impact of satisfaction on repurchase intention), whereas Boulding et al. (1993) found positive relationships between service quality and repurchase intentions and willingness to recommend Customer trust Trust is a focal key in the development of the relationship between banks and customers. It is also acknowledged in marketing theory as the basic policy in developing and sustaining long-term relationships (Crosby et al., 1990), to build a mutually beneficial relationship with customers on the basis of mutual trust and to enhance 7

18 competitiveness (Barney and Hansen, 1994). Generally, trust is viewed as an essential element for successful relationships (Morgan and Hunt, 1994) Mayer et al. (1995) define trust as the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the customer, irrespective of the ability to monitor or control that other party. Service providers, in some cases, may not be able to retain their satisfied customers (Schneider and Bowen, 1999) because the customer satisfaction itself alone cannot ensure long term commitment of the customer with a specific service provider. Instead, the service providers should think other factors beyond customer satisfaction, such as customer trust, to retain their customers (Hart and Johnson, 1999). This argument is supported by Morgan and Hunt (1994). Morgan and Hunt (1994) assert that the target of the firms is to develop customer trust beyond customer satisfaction to retain their customers in a long term period. In other words, customer trust is likely to be a strong driver of keeping customer (Ranaweera and Prabhu, 2003). Morgan and Hunt (1994) have advocated that trust is fundamental in developing customer loyalty. The importance of trust in explaining loyalty is also supported by authors like Singh and Sirdeshmukh (2000) Customer loyalty Oliver (1999) defines brand loyalty as a deeply held commitment to re-buy or repatronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior. This emphasizes two different aspects of loyalty described in prior studies-behavioral and attitudinal. Chaudhuri and Holbrook (2001) suggested that behavioral, or purchase, loyalty consisted of repeated purchases of the brand, whereas attitudinal loyalty included a 8

19 degree of dispositional commitment, in terms of some unique value associated with the brand. Thus, customer loyalty here was considered bi-dimensional, including both attitudinal commitment and behavioral re-purchase intention. Srinivasan et al (2007) stated that these are two main categories of loyal customers. The first category is of loyal customers. Within the loyal category, there are satisfied and un-satisfied customers. The satisfaction is not an essential requirement for loyalty, so satisfied customers do not have to become loyalty, but there is a correlation between the satisfied customers and loyal customers. Sometimes unsatisfied customers are also loyal due to attachment and commitment with suppliers. This type of loyalty is sometimes called False Loyalty in whish unsatisfied customers remain loyal to their suppliers. The reason for this false loyalty is the factors due to which the customer feels hurdles and obstacles in his/her way, which stops him her from switching or choosing another supplier. These hurdles are called switching suppliers. Finally, Lin and Wang (2006) model and other studies in banking filed indicated relationship of service quality, customer satisfaction and customer trust to customer loyalty. The relationship between customer satisfaction and customer trust depends on the level of service quality (Lin and Wang, 2006). Therefore, this study follows Lin and Wang (2006) to test the effects of customer satisfaction, customer trust on customer loyalty in ATM services in Ho Chi Minh city. 9

20 Chapter Three RESEARCH METHODOLOGY Based on literature review are presented in the previous chapter, this chapter will continue to present the research process and research model. It focuses on research process with two methods of quantitative research and qualitative research and develops the measurement scale. 3.1 Research Model and Hypothesis The determinants impact on opening ATM account Western society is moving toward to the electronic money. As this phenomenal spread all over the world, every person is often required to have a ATM card from a particular bank. People attempt to search a particular bank for guidance and reassurance to open ATM account. Therefore, commercial banks would like to offer their customers for the best possible deal. Clients always make a comparison among banks to find a good deal. To do so, they have to combine many factors that enable them to make a final decision. In the initial step, this study is used face to face discussion method to identify factors impact on opening and using ATM card. We invited 20 respondents who have been using ATM card in Ho Chi Minh city. They are selected randomly. We indentified some factors impacting on opening ATM card as follow: Location: Proximity, nationwide spread, localized service. How many branches and ATMs does the bank have and is there one in your local area? All the major banks have a strong presence. Product type: Saving plus credit saving. Customers wonder if the bank offers a large variety of services that suits all of their requirement. How many options do they have for day-to-day accounts and savings accounts? There are some options 10

21 as: small deposit to long term investment, loaning money for mortgage, business investment with a competitive package. Security: Big banks with long history always create trust with their clients. For example, ANZ is an established banking instituted with over 100 years of banking experience. With strong performances year in & year out, customers are looking to open an account, home mortgage, saving, bank card, investment, shares whatever product the bank has to offer, the strength and knowledge of ANZ instill security and trust that their investment is secure. Customer relations: General characteristics of a bank for instant nice, bright, friendly and efficient staffs with prompt service is very important. Interest rate: What interest rates do they have on their accounts: fixed deposit, loan / credit facility? What rates and fees does the bank charge? Are clients very concerned about those fees? What is the quality of other products and services clients might be interested in, like term deposits, personal loans, overdraft facilities, international money transfers, etc? Are clients happier with seven days trading hour s bank which is a benefit to customer which they cannot go during normal working day? Promotion: What promotion aspect clients can get from that bank compared to the others? For instant, a bank offer premium package to make special client. A platinum cardholder has no question about their credit rating. A bank with good quality and special service always offers have more probability to get more cardholders. Other factors include salary advance: If you're going to be living and working in Vietnam, you will require a bank account where your employer can deposit your salary and so that you can make e-money transfers, pay bills and rent, make 11

22 payments by card and withdraw cash - all without worrying about excessive e- banking fees. Another example is that the university you are attending is banking with this bank. Or you get introduction from friends with good rating and compliment. A bank with a strong marketing strategy to approach customers might attract more customers attention. It is more convenient to do business transactions, and to deposit on saving account. With the factors mentioned above, the sampling and questionnaires will be created for clarifying the determinants impact on opening and using ATM account. The above factors are reduced into two key factors as follows: the initial reasons impact on opening and using ATM account, the customers are anxious when they switch to the other bank s ATM. The initial Figure 3.1 Conceptual Model reason Open ATM account Customer Fear The determinants impact on customer loyalty To study customer satisfaction on ATM service quality, this study bases on theory and model of Wang and Shieh (2006) to analyze relationship between satisfaction and service quality. The first hypothesis is offered: H 1 : Service quality has a positive effect on customer satisfaction. 12

23 Following researches on positive effects of customer satisfaction on customer loyalty (Lin and Wang, 2006), the below hypothesis is proposed to examine the influence of customer satisfaction on customer loyalty: H 2 : Customer satisfaction has a positive effect on customer loyalty. Regarding the direct effect of customer trust on customer loyalty that if customers trust are high, it results in higher levels of loyalty (Lin and Wang, 2006), the following hypothesis is offered: H 3 : Customer trust has a positive effect on customer loyalty. Figure 3.2 Proposed Research Model Service quality H 1 Customer satisfaction H 2 Customer Trust H 3 Customer loyalty 3.2 Research process Figure 3-3 illustrates the process of questionnaire design and data analysis 13

24 Figure 3.3 Research process Research problem - Literature review. Establish the - Design model. scale. Pilot study for 40 customers who use ATM service regularly. Modify questionnaire. the In-depth interview for 15 customers. Complete questionnaire. the Survey 320 customers. The determinant impacts on customer loyalty using the ATM account. -Descriptive Statistics. -Cronbach s Alpha Test -Exploratory Factor component Analysis (EFA) -Confirmatory factor analysis (CFA) - Structural Equation Modeling (SEM) - Bootstrap Test. The determinant impact on opening ATM account -Descriptive Statistics -Cronbach s Alpha Test -Exploratory Factor Component Analysis (EFA) -Collect the data Analyze the data and report. The following step, we develop the questionnaire to determine the information which will be test hypotheses and solve research objectives. In a question, respondents were asked to indicate their level of satisfaction regarding various aspects of the ATM client on a five points Likert type scale (1 for Highly disagree to 5 for Highly Agree ). There are three parts in the design of the questionnaire: first part asked about 14

25 their private information, the second part detailed the question to collect the reasons why customers open the ATM account, the third part focuses on the measurement of service quality, customer satisfaction, customer trust and customer loyalty. 3.3 Qualitative Research Base on the theoretical, an outline of questionnaire was developed based on the findings of the in-depth interview. After qualitative research by interviewing 15 customers, the questionnaire was adjusted. This questionnaire used a five point Likert scale, test interview with 15 users regularly ATM cards to modify for suiting customer trend in Ho Chi Minh City, and then complete the official questionnaire. The result of qualitative presented in the next chapter. After testing survey, there are 38 observed variables: The determinants impact on opening ATM account: 10 variables. The determinants impact on customer loyalty when using ATM card: 28 variables. 3.4 Quantitative Research By convenience sample method, 320 questionnaires were delivered to respondents who are using the ATM service in Ho Chi Minh City. Then, 298 questionnaires are collected on the rate reach 93.13%. With the collected sample, 272 questionnaires were completed. Therefore, this study is based on the data of 272 completed questionnaires. With 272 questionnaires, the data will analyze as follows: The determinants impact on opening ATM account of customer: run the data by SPSS version 20 as descriptive statistics, Cronbach s Alpha test, Exploratory Factor component Analysis (EFA). The determinants impact on customer loyalty using the ATM account: run the data by SPSS version 20 and Amos: Cronbach s Alpha test, Exploratory Factor 15

26 component Analysis (EFA), Confirmatory factor analysis (CFA), Structural Equation Modeling (SEM) and Bootstrap Test. Cronbach Alpha is a measure of reliability to eliminate inappropriate variables, variables that have correlation coefficients greater than 0.6 of the new variables retained (Hoang and Chu, 2008). Method s EFA is used when KMO coefficient value of 0.5 or higher, the variable factor loading <0.5 will be rejected. The scale is acceptable when the total variance extracted of 50% or higher (Hoang and Chu, 2008). The scale meets the requirements will be further analyzed CFA, SEM and Bootstrap. 16

27 Chapter Four - DATA ANALYSIS The purpose of this chapter is to analyze data collected through the use of descriptive statistics, Cronbach s Alpha test, Exploratory Factor component Analysis (EFA), Confirmatory Factor Analysis (CFA), Structural Equation Modeling (SEM) and Bootstrap Test. 4.1 Respondents Characteristics Analyzed data based on data collecting from 272 valid samples. Results are explained in detail as below: Table 4.1 Respondents Characteristics Demographic Characteristics Frequency (n) Percentage (%) Gender % Male Female Age % Less than More than Income % Less than 4 million VND million VND - less than million VND 8 million VND - less than million VND 12 million VND less than million VND 20 million VND less than

28 million VND More than 30 million VND Occupation % Office employee Engineer Retired man Accountant Secretary Other Figure 4.1to figure 4.4 display respondents characteristics. Figure 4.1 Sex 53% 47% Male Female Figure 4.2 Age 10% 27% 9% 15% 39% Less than More than 40 18

29 Figure 4.3 Income 1.5% 0.7% Less than 4 millions VND 15% 6% 20% 4 millions VND - less than 8 millions VND 8 millions VND - less than 12 millions VND 12 millions VND less than 20 millions VND 57% 20 millions VND less than 30 millions VND More than 30 millions VND Figure 4.4 Occupation 28% 20% 12% 30% 9% Office employee Engineer Retired man Accountant Secretary Other 1% In the survey sample, over half of sample is female (52.9%). Almost of respondents are very young: 38.6% from 25 to 30 and 26.8% from 30 to 35 years old. The income from four to less than eight million VND accounts for the highest percentage of 57%. 19

30 The main income levels are divided into 4 groups: less than four million VND (19.9%); from 4 million VND to less than 8 million VND (57%), from 8 million VND to less than 12 million VND (14.7%), from 12 million VND to less than 20 million VND (6.3%), from 20 million VND to less than 30 million VND (1.5%) and above 30 million VND (0.7%). Finally, most of respondents are office employee (29.8%). 4.2 Descriptive Statistics The observed variables are measured by Liker Scale with five levels, as follow: 1- Strongly Disagree. 2- Disagree. 3- Neutral. 4- Agree. 5- Strongly Agree Determinants impact on opening and using ATM account Table 4.2 Variables Descriptive Statistic Observed Variable Symbol N Mean Std. Deviation Bank s opening card has many incentives and promotions. Customer service of ATM center is good. Company transfers salary by bank monthly. ATM card s word of mouth by friends, acquaintance is very good. Reason Reason Reason Reason

31 Advertisement through texting message by telephone or magazine. Ownership cost, using and maintaining new card is high. Wasting time to figure out services and transaction of new card. Reduction / loss of the preferential rights of using ATM cards. Reason Fear Fear Fear Not convenient in the new card transactions by the company is Fear currently paying the old card. This table displays mean values of variables. Means of variables measuring the initial reasons impact on opening and using ATM card have high difference (mean varies from 2.5 to 4.87). Specially, respondents do not agree that advertisement through texting message by telephone or magazine (mean = 2.5); bank s opening card has many incentives and promotions (mean = 2.66) and ATM card s word of mouth by friends, acquaintance is very good (mean = 2.76). Means of variables measuring the customers are anxious when they switch to the other bank s ATM. have high difference (mean varies from 2.65 to 3.40). Specially, respondents do not agree that reduction or loss of the preferential rights of using ATM cards (mean = 2.65) and ownership cost, using and maintaining a new card is high (mean = 2.76). 21

32 4.2.2 Determinants impact on customer loyalty in using ATM account Table 4.3 Variables Descriptive Statistic Observed Variable Symbol N Mean Std. Deviation You are satisfied using ATM card of current bank. Using ATM card of current bank is fantastic service. I don t have any complaint of using ATM card of current bank. Sat Sat Sat I like current bank s brand name. Sat I think that I am right to choose ATM card of current bank I am satisfied with consultant at ATM center of current bank. Sat Sat ATM service is diversified. Quality Registered process for ATM card is simple and convenient for you. ATM machine is working stably, less trouble ATM is a full-featured, easy operation, easy to use interface. Quality Quality Quality Banks always has gifts of gratitude Quality

33 program customers using ATM cards. ATM system is modern, accurate, quick transaction. Quality ATM machine is located in many parts of the City's districts and Quality provinces in the country. The ATM machine system opens 24/24. Quality The installation of ATM location are convenient and near public Quality area. ATM Space is spacious, airconditioned, and clean. Quality First opening fee is low. Quality The fee of using, maintaining is low (annual cost). Ability to troubleshoot, solve customer complaints is very quick Quality Quality ATM card with internet services (E-banking) update all the latest Quality transaction information. Current bank's ATM card connected to many other banks. Quality

34 I believe that the current bank s ATM is the best. Trust The ATM system has high security and safety for the property of the Trust cardholder. I believe the brand name of current bank s ATM Do you want to use the current bank continuously next year? Trust Loy While other banks have more promotions, but you continued to use the services of the current bank Loy ATM card I will introduce ATM services at the current bank for friends and Loy relatives I will not switch to using ATMs of other banks which have even Loy introduced friends. This table displays mean values of variables. Means of variables measuring customer satisfaction have high difference (mean varies from 3.10 to 3.36). Especially, the satisfaction level of six variables strikes average value. Satisfaction level of using ATM card of current bank is fantastic service is the lowest value (3.10) among six variables of satisfaction, which offers bank managers to focus on and make 24

35 improvements for this element. However, customers are satisfied using ATM card of current bank (mean = 3.36). The results provide evidence that banks have not yet taken good care to ATM users and service quality is not good enough to satisfy customers (mean = ). Mean value of trust is higher than average, i.e showing positive sign of customer trust about that the ATM system has high security and safety for the property of cardholder. Moreover, the mean value of loyalty is higher than the customer trust which initially indicates correlation between two factors. 4.3 Cronbach Alpha test Cronbach Alpha is a measure of reliability to eliminate inappropriate variables. The observed variables are retained if they have two conditions. First condition is the Cronbach alpha with scale higher or equal to 0.6. Second, the corrected item-total correlation is higher or equal to 0.3. (Hoang and Chu, 2008) Table 4.4 Result of Cronbach Alpha test Variables Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted Reason Cronbach s Alpha: Reason Reason Reason Reason

36 Reason Fear Cronbach s Alpha: Fear Fear Fear Fear Customer Satisfaction Cronbach s Alpha: SAT SAT SAT SAT SAT SAT Service Quality Cronbach s Alpha: QUALITY QUALITY QUALITY QUALITY QUALITY QUALITY QUALITY

37 QUALITY QUALITY QUALITY QUALITY QUALITY QUALITY QUALITY QUALITY Customer Loyalty Cronbach s Alpha: LOY LOY LOY LOY From Table 4.4 shows that all scales have alpha coefficients greater than 0.6. So keep all variables are satisfactory at this time. The final result of Cronbach s Alpha was presented on Table 4.4 with all the corrected item-total correlation higher than 0.3 and the Cronbach s Alpha if item deleted lower than the Cronbach s Alpha. Follow the above result, all variables would be used for Exploratory Factor Analysis. 4.4 Exploratory Factor Analysis (EFA) Determinants impact on opening ATM account When exploratory factor analysis, this study used principal components analysis with varimax method and stops when the extracted factors Eigenvalue greater than 1. Research models have three independent variables with observations of ten variables. 27

38 EFA is often used to identify aspects or independent factors that have relationship with each other (Hoang and Chu, 2008). In this case, the study use factors that affect to open ATM card in order to measure consumer behavior. Therefore, this study does not analyze regression. After analyzing the results as follows: Table 4.5 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy..729 Bartlett's Test of Sphericity Approx. Chi-Square Df 45 Sig..000 KMO coefficient is a criterion used to consider the appropriateness of factor analysis, 0.5 <KMO <1, then factor analysis is appropriate. As a result of KMO = 0.729, so the factor analysis is entirely appropriate. According to Hoang and Chu (2008) the number of factors determine has two common ways: Identification based on the intention of the researcher and the results of previous studies. Identification based on Eigenvalue (Determination based on eigenvalue), only the larger one that is retained in a new analysis model. This study is based (Eigenvalue) eigenvalues greater than 1 to determine the number of factors, this method gave three factors. These three factors accounted for % of the total explained variation. The first factor is that the eigenvalues and % explained variance of the data, the second factor with eigenvalues and explained that , third factor has eigenvalues and explained

39 There is a standard for variance extracted (Hoang and Chu, 2008) requires that the variance extracted must reach 50% or more. Result of 03 factors above is % explained variance of the data, so it could be representing for 10 establishments of the initial data. Table 4.6 Total Variance Explained Extraction Sums of Squared Rotation Sums of Squared Initial Eigenvalues Loadings Loadings % of Cumulative % of Cumulative % of Cumulative Component Total Variance % Total Variance % Total Variance % Table 4.7 Rotated Component Matrix Component ATM card s word of mouth by friends, acquaintance is very.810 good. (Reason4) Advertisement through texting message by telephone or.762 magazine. (Reason5) Bank s opening card has many incentives and promotions..649 (Reason1) 29

40 Customer service of ATM center is good. (Reason2).545 Wasting time to figure out services and transaction of new card..798 (Fear2) Ownership cost, using and maintaining new card is high. (Fear1).674 Reduction / loss of the preferential rights of using ATM cards..635 (Fear3) Not convenient in the new card transactions by the company is.622 currently paying the old card. (Fear4) The time of using ATM card. (Time).767 Company transfers salary by bank monthly. (Reason3).727 Need of customers opening card are grouped into three main components are presented in the table above. In this table, only groups with a coefficient factor loading greater than 0.5. According to Hoang and Chu (2008), factor loading coefficients greater than 0.5 is considered meaningful sample. Three factors affect the customer's ATM card open is named as follows: The first factor: depend on bank s marketing policy. The second factor: depend on customer s personal benefit in choosing ATM service. The third factor: Factors affecting the maintenance of customer ATM card. 30

41 Figure 4.5 Determinants impact on opening ATM account. Determinant 1: Marketing Policy s Bank - Bank s opening card has many incentives and promotions. Factor loading = Customer service of ATM center is good. Factor loading = ATM card s word of mouth by friends, acquaintance is very good. Factor loading = Advertisement through texting message by telephone or magazine. Factor loading = Mean = 0.69 Determinant 2: Personal Benefit of Customer in choosing ATM service - Ownership cost, using and maintaining new card is high. Factor loading = Wasting time to figure out services and transaction of new card. Factor loading = Reduction / loss of the preferential rights of using ATM cards. Factor loading = Not convenient in the new card transactions by the company is currently paying the old card. Factor loading = Mean = 0.68 Determinant 3: Factors effect on maintaining ATM Card of Customer - Company transfers monthly salary by bank. Factor loading = Time of owning ATM card. Factor loading = Mean =

42 The first determinant: Marketing policy of bank. This factor includes four variables that affect on opening the customer's ATM card "card opening policy of the bank has many incentives, promotions," "Customer service is very good ", "the friends and acquaintances to introduce ATM services of very good banks", "Advertising via mobile messages, magazine.". This factor accounted for % of the analyzed variables. This is actually reasonable, if a bank has a good marketing policy, the Bank that will attract customers to participate in opening ATM card. The second determinant: Personal benefit of customer in choosing the ATM service. This factor includes four variables: "Worried about the cost of ownership, use and maintain new high card", "Cost / take the time to understand the services and transaction of the new card.", "Reduction / loss of the preferential rights of using ATM cards.", "not convenient in the new card transactions by the company is currently paying the old card.". This factor accounted for % of the variables analyzed. The variables in this factor related to the change of service the bank's ATM card present to use the services of another bank ATM card. The third determinant: Factor effect on maintaining ATM card of customer. This factor consists of two variables: "The company paid salary through banks", Time his / her owns ATM card". This factor accounted for % of the variables analyzed. These variables affect the maintenance of customer card. When a customer has used the longer time and the companies that pay salary through bank, the customers will continue to use ATM services at that bank. 32

43 4.4.2 These factors affect customer loyalty for the ATM user Factor analysis to explore customer satisfaction when using ATM services. Exploratory Factor Analysis (EFA) is a statistical method used to reduce or group a set of variables to underlying factor (Hoang and Chu, 2008). When EFA factor analysis, this study used the method to extract the main components (Principal components analysis) with varimax rotation, and stops when the factors extracted eigenvalues greater than 1. Research models give three independent variables measure the results of work with a total of twenty four observations. After factor analysis the following results: Table 4.8 KMO and Bartlett's Test of first EFA Kaiser-Meyer-Olkin Measure of Sampling Adequacy..881 Bartlett's Test of Sphericity Approx. Chi-Square Df 276 Sig Table 4.9 Total Variance Explained of first EFA Extraction Sums of Squared Rotation Sums of Squared Initial Eigenvalues Loadings Loadings % of Cumulative % of Cumulative % of Cumulati Component Total Variance % Total Variance % Total Variance ve %