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Challenges to Grow Customer Base in the Banking Sector in Time of Digital Transformation – Investigating Driving Factors

In: Proceedings of the 11th International Conference on Emerging Challenges: Smart Business and Digital Economy 2023 (ICECH 2023)

Author

Listed:
  • Nguyen P. Hung

    (Vietnam National University, Department of Economics and Management, International School)

  • Nguyen Thi Hong Thoa

    (GP Bank, Head of Risk Compliance and Management Department)

  • V.U. Duc Loi

    (Vietnam National University, Hanoi School of Business and Management)

Abstract

The objective of this thesis is to examine the factors that affect customers’ decisions in using banking services in the context of digital transformation in the Vietnamese economy. Customers are the main source of revenue for banks, understanding their perception and behavior when using e-banking in the current and changing economic environment is critical to determining the results of the bank’s deposit mobilization initiatives. This research collects survey data from VIP customers who deposit money at commercial banks in Hanoi. We found factors relating to Brand, Diversity of supplemental offers, Security and Privacy, Interest policy, Staff quality, and Technology capability play key roles in attracting and retaining customers. Research purpose The main objective of this study is to identify and analyse the factors that influence customers’ decisions in digital banking services. Research motivation Bank directors need to understand what factors make a customer choose one bank over another to develop appropriate policies to retain existing customers and attract new customers. Research design, approach, and method: We develop a framework based on dimensions of (i) Brand; (ii) Diversity of Supplemental offers, (iii) Security, Safety, Privacy, (iv) Staff quality, (v) Technology quality factors. A survey was implemented, and data was analyzed by EFA and regression model. Main findings: We found bank’s brand, supplemental internet-based product/services offers, interest policies, and technology capability of a bank play important roles in the decision making of customers. Practical/managerial implications: Understanding which factors influence and which factors have the most impact on bank customers’ decisions helps managers design appropriate policies and programs to retain traditional customers and develop new customers. This research is a necessary reference, providing insights for bank managers and policymakers to make informed decisions about their digital transformation strategies to improve the service quality of their internet banking service and thereby to satisfy their customers.

Suggested Citation

  • Nguyen P. Hung & Nguyen Thi Hong Thoa & V.U. Duc Loi, 2023. "Challenges to Grow Customer Base in the Banking Sector in Time of Digital Transformation – Investigating Driving Factors," Advances in Economics, Business and Management Research, in: Nguyen Danh Nguyen & Pham Thi Thanh Hong (ed.), Proceedings of the 11th International Conference on Emerging Challenges: Smart Business and Digital Economy 2023 (ICECH 2023), pages 253-263, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-348-1_21
    DOI: 10.2991/978-94-6463-348-1_21
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