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ASSIGNMENTAPPLING BALANCED SCORECARD SYSTEM TO IMPROVE STRATEGY FORGLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE ANBalanced Scorecard System is a modern management approach based onobjective. Accordingly, the development orientation of the enterprise isexpressed by indicators and objectives which are organized in harmony andharmony based on important priorities of organizations and enterprises. Thissystem helps people to move towards the common goal as well as thesustainable development of the business and as the basis for the managementand evaluation system. Therefore, although quarterly annual businessperformance measures will still be used to provide a current performancereport, these financial metrics will need to be supplemented by factors thataffect longterm financial performance
ASSIGNMENT APPLING BALANCED SCORECARD SYSTEM TO IMPROVE STRATEGY FOR GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN Class: Auditing 56 Lecturer: Nguyen Thi Phuong Hoa Members of group: Ha Vu Ngoc Linh (33%) To Thi My Duyen (34%) Tran Ngoc Mai (33%) INTRODUCTION Balanced Scorecard System is a modern management approach based on objective Accordingly, the development orientation of the enterprise is expressed by indicators and objectives which are organized in harmony and harmony based on important priorities of organizations and enterprises This system helps people to move towards the common goal as well as the sustainable development of the business and as the basis for the management and evaluation system Therefore, although quarterly annual business performance measures will still be used to provide a current performance report, these financial metrics will need to be supplemented by factors that affect long-term financial performance These factors, particularly those of growth opportunities, require other measures beyond the existing financial measures In the age of globalization and the increasingly competitive business environment, choosing the strategy for survival and development of banks is a difficult issue The traditional measure used in the evaluation of the performance of banks, primarily the financial information in the past has become outdated and no longer relevant Global Petroleum Joint Stock Company Nghe An Branch is a young and to confirm the role and position of the Bank as well as strengthening and enhancing its position in the market It requires the bank to develop a good strategy, a plan for the deployment of science, and the development of an appropriate metrology system The Balanced Scorecard (BSC) is a very appropriate tool for the Bank in the current period It is a planning and performance measurement method that transforms the Bank's vision and strategy into concrete goals, measurable, and measurable targets BCS not only helps the Bank assess its financial performance by measuring its financial position but also evaluates its measurement based on the measurement of non-financial factors Based on the fact that we have chosen the topic "Apply balanced scorecard system to improve the strategy for Global Petroleum Commercial Joint Stock Bank in Nghe An” BCS will help the bank to complete the strategy to evaluate the results on four aspects: Financial Customer Internal business Innovation and learning APPLING BALANCED SCORECARD SYSTEM TO IMPROVE STRATEGY FOR GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN Chapter 1: Overview of GPBANK NGHE AN 1.1 General Introduction of Global Petroleum Commercial Joint Stock Bank - Nghe An Branch (GP Bank Nghe An) 1.1.1 Introduction to GP Bank Global Petroleum Commercial Joint Stock Bank, formerly known as Ninh Binh Rural Commercial Bank, was officially transformed from a rural bank to an urban bank on November 7, 2005 From a unit of less than 10 members in November 2005, GP Bank's business network has been expanded continuously with head office GP Bank has built a team of more than 1400 young staffs, trained professionally, working in the network of nearly 80 branches and transaction offices of GP Bank nationwide in provinces, cities such as: Ha Noi, Ho Chi Minh City, Ninh Binh, Hai Phong, Vung Tau and Da Nang Over time, GP Bank has affirmed the growth, gradually make a good impression on the financial market - currency of Vietnam In the coming time, GP Bank will continue to develop its network to provide high quality financial and banking services closer to customers 1.1.2 Introduction of Global Petroleum Commercial Joint Stock Bank Nghe An Branch Full name: Gobal Petroleum Commercial Joint Stock Bank - Nghe An Branch Address: Lot 4.5, Building CT 1A, Quang Trung street, Vinh, Nghe An province As a new branch was put into operation, GP Bank Nghe An Branch has been striving, step by step building and mature comprehensive in terms of capital mobilization, investment growth and credit quality, cash receipts, expansion of external economic relations and other activities 1.2 Products and services at GP Bank Nghe An 1.2.1 Raising capital - - - Exploiting and receiving deposits of other domestic and foreign organizations, individuals and credit institutions in the form of demand deposits, term deposits and other deposits in VND and foreign currencies Issuance of certificates of deposits, bonds, promissory notes and other valuable papers Borrowing capital from other financial and credit institutions operating in Vietnam and foreign credit institutions when permitted in writing by the General Director 1.2.2 Lending: To perform short-term, medium-term and long-term loans in Vietnam dong or foreign currencies for individuals and economic organizations of all sectors and all business sectors according to GP Bank's regulations 1.2.3 Foreign exchange trading: Capital mobilization and lending, purchase and sale foreign currency, international payments, guarantee, re-guarantee, discount, rediscount of documents and other foreign exchange services in accordance with the Government's foreign exchange control policy, State Bank of Vietnam and GP Bank 1.2.4 Providing payment and treasury services include: Providing payment instruments; Implement domestic payment services for customers; Implement cash collection and payment services for customers; Implement other payment services 1.2.5 Trading in other banking services: Include: collect and distribute cash; trading gold, silver, currency; automatic teller machine, card services; safe deposit, receiving reserve preservation; financial leasing agents, securities, insurance and other banking services are allowed by the State and GP Bank 1.3 Organizational structure and management apparatus ❖ Board of directors: The branch manager directs all activities of the board of directors, who performs his or her duties and powers in accordance with the law and the superior bank and is responsible for all business activities of the branch The deputy director is the consultant who assists the director in the process of managing and operating the business, to the extent authorized by the director - - - - - The deputy director shall have the right to act on behalf of the Director and shall be liable for such decisions ❖ Customer Relationship Department Including: credit, international payment, capital, currency trading Function: • Advise the branch leaders to develop quarterly and annual business plans and propose measures to comply • Direct implementation of business operations under the scope of work Mission: • Compile the business data of the entire branch, help branch leaders evaluate the results of implementation from time to time • Monitoring and balancing capital sources as well as the use of these sources (loans, mobilized capital, short-term and long-term capital ) It then advises the leader on promoting or restricting capital mobilization Performing loan and guarantee business, in collaboration with the provision to ensure good information work under the direction of the Board of Directors • To organize and administer the bank's assets and liabilities in money in order to ensure the effective and safe operation of its assets in accordance with law ❖ Credit Support Department Responsible for credit marketing, advising clients on credit products, services and listings on related issues Researching customer credit strategies, classifying customers and proposing preferential policies for each type of customer ❖ Administrative offices – organizations Function: • Advise the leaders to build human resources for the branch through the proposal, set criteria for recruiting cadres, train human resources for business activities, to set up the regimes of personnel management, property management, reward and discipline of officials and employees Mission: • Management of employee records, recommendations to leaders in mobilizing and supplementing labor for departments, coordinate with departments to monitor the situation, summarize periodical emulation ❖ Accounting Department: - Function: • To advise the branch leaders on the management of assets in accordance with the financial and property management regime of the State of Vietnam • To act as the branch clue in researching and exploiting modern technologies for business purposes, ensuring thrift and efficiency - Mission: • To organize the implementation of accounting timely, accurate, honest reflection objectively under accounting regulations to ensure the safety of assets to banks and customers, make quarterly, full and timely balance sheet reports • Performing domestic and international remittance, account receivable, loan, promissory note, bond • Providing trust services between branches and credit institutions, economic organizations under contracts in accordance with the regime and providing data for payment, inspection and audit work ❖ Internal Control Inspectorate - To control the entire operation of the bank, the director and the functional divisions to ensure the regulation of the State Bank of Vietnam and the statutory regulations of the State Chapter 2: Identification strategies and application Balanced Scorecard in strategic assessment of GP Bank 2.1 Mission, objective and vision, strategic GP Bank - Mission: GP Bank strives to become a leading financial institution in Vietnam with outstanding values of prestige and quality of products and services The bank is committed to providing products and services that are professional, optimized to enhance and connect the value of life to every customer - Objective: To build GP Bank into a typical retail bank in Vietnam, "Not the first, but the best" In its retail banking strategy, GP Bank will focus specifically on individual customers - Vision to 2017: GP Bank will reach a comprehensive development bank to promote advanced technology capacity, modern NH management, qualify for competition and development in the regional financial system and new international financial system: Affirming the ability to compete equally with commercial banks, foreign banks - Strategy: Safety - Sustainability – Effectiveness GP Bank is constantly improving its competitiveness in the new phase to become one of the leading commercial banks in Vietnam The Bank always maintain financial status at a high level of safety, optimizing the use of shareholder capital to ensure the interests of customers, banks and shareholders High growth is made by creating a difference on the basis of understanding customer needs and customer orientation A comprehensive, effective and professional risk management system are developed to ensure sustainable growth; strategically prepare human resources and train professional staff, building "GP Bank Culture" into a spiritual element that links the whole system 2.1.1 Strategic view of GP Bank Nghe An branch - As a branch of GP Bank, first of all, the bank's strategic objectives must be closely aligned with the strategic objectives of GP Bank However, each region will have different environmental, economic, cultural and social characteristics In order to achieve its objectives, branch banks will have their own strategies With a strategic view from the corporation "Commitment to Success", analysis of population characteristics in Nghe An Province, GP Bank branch in Nghe An continues to inherit this strategic view, to bring the greatest benefits to people here, while improving the profitability of enterprises - Based on the orientation of operation in the past few years, it is possible to highlight some key objectives of GP Bank in Nghe An province as follows: • Raising total capital • Efficient capital allocation with low cost, ensuring practical benefits for businesses - • Managing risk effectively • Improved service quality: convenient, reliable, fast through effective processes, supported by talented staff • Harmonizing GP Bank's customer and employee benefits, GP Bank's culture building is: Honesty, Ethics, Creativity, Quality and Effectiveness 2.1.2 The strategic objective of GP Bank Nghe An branch Based on the general and specific objectives of GP Bank, GP Bank Nghe An has set its own objectives for its business from 2013 to 2016 As bank operations are special types of services, including various activities, operational strategies are not aggregated in terms of BSCs In order to complete the strategy for GP Bank Nghe An according to the BSC, the objectives were rebuilt based on the results of the strategy implementation and divided into four aspects as follows: ❖ Financial objectives Mobilized capital (VND bill): increased by 15% - 17% compared to the beginning of the year Outstanding loans: went up 11% - 12% over the beginning of the year Maximum capital utilization rate: 80% Ratio of medium, long term loans/total outstanding loans: Up to 40% Bad debt ratio: Less than 3% Issuance of ATM cards: 500 - 1,000 cards Non-credit revenue: rose to 20% over the previous year Profit: increased 16% compared to 2016 Raising employee incomes: a 15% increase over 2016 The proportion of short-term capital used for medium and long term loans is 30% ❖ Customers objectives Next year, the bank's goal is to improve customer satisfaction, especially in terms of creating close relationships with traditional customers Besides, continuously develop selective new potential customers, accounting for 25% of total customers, especially increasing the market share of small and medium enterprises, building a sustainable business strategy The target of the bank in the next year also develops stronger than the advertising programs of GP Bank such as: advertising in newspapers, television, participation in trade fairs, especially seminars and conferences This is a good opportunity for businesses to know the bank and also the opportunity for banks to better understand the needs of businesses, find good customers Banks should provide information, policies on interest rates, service charges apply to different types of customers, at the same time listen to their opinions and answer their questions As a result, the bank can take positive steps to overcome the shortcomings and provide more reasonable policies and services to better meet the needs of its customers ❖ Internal business objectives In order to accomplish customer objectives, the goal of the internal process is to improve the supply of products and services To ensure the criteria such as conditions and procedures for using the service simple, fast processing speed, safety, high accuracy, customer data is updated continuously This enables the bank to increase its added value, provide its products and services at the lowest cost, and enhance the bank's asset utilization In addition to consolidating and increasing value for traditional products, the bank's goal is to develop new products and services, increase service fees, especially products and services package This service is a one-stop solution, a combination of existing products to bring maximum convenience as well as minimize time and procedures for customers Product packaging is a new trend in service delivery Cross selling products are commonly used These two forms deal with market saturation trends and improve competitiveness for service products Thus, the value that package products bring is the convenience, simple procedures accompanied by incentives Consequently, customers have to make fewer transactions for a variety of needs, thus saving time, money and feeling the added value of the service The cost for a service pack is therefore lower than the total cost of each service combined and also facilitates the customer's access to and use The working environment for employees is also a very important factor for achieving the bank's goals Therefore, the creation of a good working environment, motivation and conditions for employees is also an important goal set by the bank In addition to its business activities, GP Bank of Nghe An targets to further develop and actively implement social charity programs such as: visiting families with Agent Orange victims, handing over charity houses and supporting families in difficult circumstances ❖ Innovation and learning objectives To achieve customer objectives and internal process goals, the bank viewed training and development as the primary principle of its existence The Bank's 2016 goal is to develop a strong workforce that develops knowledge and skills for employees to create a culture of continuous improvement and alignment on the basis of solid information technology It is the fact that the bank has continuously implemented training plans for its staff every year Assurance of the quality of human resources of banks with the criteria such as capacity, qualifications, ability to integrate, work efficiency and good moral qualities In fact, no matter how strict the legal regulations and business process, for the personal benefit of the bankers can still collusion, deliberately spleen the law, leading to unpredictable risks In fact, there have been many serious losses due to the moral hazard of bank officials Therefore, the bank's objectives need to constantly educate the ethics of the profession to every officer in each department and its branches and transaction offices In addition to training staff, the bank's objectives are to build a modern technology foundation that ensures the bank's internal management requirements In addition, the bank also satisfies the growing demand for business transactions, demand for risk management and liquidity, able to connect with other banks in the area and in the country The modern banking services are developed on the basis of ensuring risk prevention, confidentiality and safe operation 2.2 Appling BSC to evaluate strategy of GP Bank Nghe An 2.2.1 Identifying and determining weights for the KPIs The weight of the core measurement indicators KPIs are defined as follows: providing product or service, the level of training for employees, etc., so the weight of these KPIs is KPIs such as favorite brands and perceptions, the market share of each client segment, the percentage of managers who are studying abroad, are KPIs that have a weak impact on strategic objectives so their weight is 2.3 Assessment of strategic objectives of GP Bank Nghe An 2.3.1 Financial perspective In 2016, in general, the financial criteria are well implemented by banks, such as 13% increase in profit, 14% increase in capital, of which short-term capital increased by 8% and long-term capital increased 6% Besides, outstanding loans also increased at a relatively safe rate compared to mobilized capital, specifically 10% higher than in 2013 Therefore, these targets are considered strong points of banks with% completed more than 80% However, the percentage of employees' incomes has not been increased, increasing by 7% against the target of 10% Although profits increase, but costs also increase, especially the costs associated with the creation of new products and services In addition, the non-credit revenue in 2016 increased quite low compared to the target, specifically 10% increase compared with the target of 18%, with a trend of a modern bank, the revenue beyond credit The ratio is quite low, profit is mainly based on credit, this is the target has not reached the requirements and will create many risks, should be rated as average 2.3.2 Customer perspective The bank's financial indicators for 2016 are quite good, especially the percentage of traditional customers still relate This index is 95% higher than the target of 100%, leading to a 96% completion, this is a strong point of Nghe An GP Bank The number of traditional customers is rated by the bank yearly, mainly for borrowers and deposits For loan transaction customers are assessed through criteria such as the number of years that customer used GP Bank’s service, the average loan balance, the payment of principal, interest and other related costs, financial resources of enterprises ; For loan transaction, customers are assessed through criteria such as the number of years that customer used GP Bank’s service, average deposit balance, term deposit In addition, the criteria such as the number of new customers increase, the percentage of satisfied customers, favorite brands and recognition, are quite well Specifically, the number of new customers increased by 7%, which is an increase of nearly 450 customers compared to the total number of customers in 2015, the number of customers is mainly individual customers Percentage of satisfied customers is 70% so the level of completion is 76% According to the Marketing Department's report, the bank's brand recognition and preference increased by 10% over 2015 This is the result of market research outside the bank 2.3.3 Internal process aspect Criteria for internal processes such as safety from new products, internal customer satisfaction, and the number of participating social programs are programs implemented by banks are good and strong points Specifically, the safety of new products is 96% of the total number of products and services provided by the bank, error rate is low, the lack of risk for the bank and the customer Internal customer satisfaction reached 96%, which is the result of an annual survey conducted by the marketing department for all employees in the bank The number of social activities participating in the program exceeds the target, which is the activity launched by banks throughout the system and implemented on a regular basis such as: gratitude, build charity houses, activities for the green environment of the city - Criteria such as the percentage of utilization capacity of the property, average time of supply of products and services, the percentage of winning or losing cases, performance of employees, also performed well by the bank and is pretty good Specifically, the asset utilization rate is 73% and nearly 5% higher than that of 2015 The duration of service provision is down 7% compared to 2015, this is the result of the combination of departments in providing products and services The percentage of win or loss lawsuit increased by 2%, which is usually related to the bank's operating margin, which is the main profit-making and risk-weighted segment in 2016 GP Bank has cases not successfully implemented due to negligence in the process of providing products and services to customers Employee productivity increased by 7%, which is measured by the time it takes to deliver products and services to customers, and the amount of work and customers that each employee has to take up compared to 2015 However, some banking criteria are not well implemented, such as market share of each customer segment, the percentage of errors occurring when providing products and services, cost of production for new products, these criteria are only medium and weak The market shares of each customer segment grew only 1%, 3% lower than in 2015 and only 50% of the target is up 2% The percentage of errors occurring when providing services is 1.5% less than in 2015 but still higher than the target of 5% reduction Similarly, production costs for new products fell 3% from 2015, but were lower than the target of 7%, which were directly related to research, development and deployment Piloting products and services, with this result, the bank's implementation is not really effective 2.3.4 The aspect of training and development The criteria related to training and development are very well done by GP Bank Nghe An, which is reflected in the comparison with 2015 and benchmarking with other banks Specific criteria such as the level of training for employees, the budget to develop skills for employees, the number of violations related to professional ethics, the number of computers upgraded modern the proportion of managers who go to study abroad, the percentage of managers who go to study in the country, are the criteria considered as strengths Developing professional skills and life skills for staff is one of the top targets, so the budget for this investment is paid by the bank Budget increased by 12% compared to 2015, this budget is regularly held by banks or invited lecturers from universities, and international arbitration center for training of employees, banks achieved the target with a 95% training rate, which is higher than other banks in the city, which also results in jobless moratoriums in 2016.In addition to the development of skills for staff, the development of skills for leaders is also emphasized, in particular% of managers who go to study in the country and abroad increase by 12% and 5% over 2015 In addition to developing skills for staff and management, IT systems are also paid attention, especially the number of computers upgraded is 75% The number GP Bank's current computer system is 100% modern, which is strength of GP Bank in terms of standardization with the system 2.3.5 Assessment of GP Bank Nghe An's strategy completion results The percentage of completion of GP Bank Nghe An's strategy is calculated by the following formula: (%TC+%KH+%HN+%DP) - The percentage Complete strategy = According to the results in the table above and the calculation formula we have the result of the completion percentage of the criteria are: The percentage of Financial Criteria: 74.4% The percentage of Customer Criteria is 79.5% The percentage of Internal business criteria is 68.8% The percentage of Innovation and learning criteria are 87.8% So GP Bank's strategy completion percentage is 77.6% With 77.6% of its performance, it reflects the true potential of the bank Financial Good (74,4%) Điểm (74,4%) Customer Good (79,5%) Good (77,6%) Internal business Good (68,8%) Innovation and learning Strong (87,8%) Figure 2.1 Results of implementing the strategy of GP Bank Nghe An As can be seen in Figure 2.1, the training and development aspects are wellobserved and 87.8% are paid special attention This has a huge impact on the customer and the result is 79.5% in this respect Although the aspect of training and development was well implemented by the bank, it did not impact positively on the internal aspect, although it was quite good with a performance ratio of 68.8 %, but this rate is quite low compared to the efforts of the training and development, and lower than the result of the customer But overall, these three aspects have impacted quite positively on the financial side, with 74.4% results This is a good result compared to other banks in Nghe An province Thanks to the application of the balanced scorecard system, GP Bank Nghe An managers can easily identify their existing strengths and weaknesses, as well as quickly identify the cause of the problem From there, managers can make the right decisions to improve and correct their weaknesses In addition, it also helps managers continue to develop their strengths, to improve their operational efficiency, as well as to improve their performance for the overall purpose of GP Bank Although the implementation of the strategy of GP Bank in general successes and accomplishments beyond the targets, but looking deeper we see there are several key issues that need to be addressed: • GP Bank is an average bank in the province that pursues a strategy focused on the business of small and medium enterprises, which means that the risk will be higher than other banks However, the bank does not yet have a tool for evaluating the effectiveness of specific strategies, but mainly for transaction offices, to focus on financial factors that are ignored Non-financial factors are important factors contributing to the future development of the bank • Marketing activities are passive, customers themselves are the main Some of the staff are still very busy, not enthusiastic about work, leading to stagnant work, reducing the number of customers • Analyzing and evaluating the market according to the structure of the sector and economic sectors in order to build the structure of credit investment is limited, affecting the credit investment for each sector, each economic sector and war long-term investment • Not actively in the examination and self-examination The investigation, detection and handling of cases of errors sometimes lack of persistence leading to the error situation is still recurring Over the recent law violations in some branches, showing that beside the selfcultivation of professional ethics of each staff should be more strengthened quality, seriousness In the control work to prevent the remote, prevent serious consequences arising • Credit services have not been closely linked with the expansion of new product services in the form of package A number of GP Bank projects have been completed and put into operation, but other commercial banks have been competing to provide products and services Chapter 3: Strengthen the strategy for GP Bank Nghe An based on Balanced Scorecard 3.1 Viewpoint to complete strategy under Balanced Scorecard for GP Bank Nghe An 3.1.1 Finishing strategy to connect the bank's strategy with the activities of staff The goal of the bank is to use the BSC to communicate its strategy to all levels of the organization This enables all staff at all levels of the organization to better understand the organization's strategy and objectives From there, they can know what to on their own so that they can achieve strategic efficiency as well as goals for the bank The Bank's strategic link to employee activities has increased over the four years shown in Table 3.1: Table 3.1: Percentage Goal of Strategic Linking to Employee Activity Year 2014 The connection 3% strategy 2015 8% 2016 15% 2017 30% 3.1.2 Perfecting the strategy to incorporate strategic objectives with resource allocation processes This is an important goal because it determines the success of the bank in executing the strategy Use the BSC to encourage bank managers to focus accurately on the proper distribution of resources based on the bank's strategic objectives It helps to concentrate on the strategic focus of the bank Based on this strategic objective, managers can assess the importance of each goal It can then give priority to allocating resources appropriately to ensure that the bank's strategic goals are met, avoiding waste in allocating resources in an unreasonable manner The goal of using the Balanced Scorecard system is to achieve high efficiency in the distribution of resources The target is shown in Table 3.2 Table 3.2: Percentage Target of Effectiveness in Resource Distribution Year 2014 2015 2016 2017 Effectiveness 5% in resource allocation 12% 20% 37% 3.1.3 Perfecting the strategy to create a stronger change and more flexibility for the bank This is not only a target of the bank but also a requirement for the use of the BSC Firstly, in the integration and development of global economy, the change and flexibility of a bank is essential to success GP Bank Nghe An is a small bank in the banking sector in Nghe An, so the change of the bank will be more difficult than the larger banks Therefore, the use of BSC with the goal is to help banks escape the situation Secondly, BSC focuses on the bank's strategy implementation, which always requires change Therefore, GP Bank Nghe An needs to create change, continuous improvement and flexibility over time 3.2 Perfecting the strategy for GP Bank Nghe An 3.2.1 In terms of financial 3.2.1.1 Raising and balancing capital to meet customers' demand for loans The development of banking credit services is directly influenced by the ability to provide capital Banks with strong financial strength, good capital mobilization capacity, high capital sources and low mobilization interest rates will have access to many loan contracts Therefore, raising capital and balancing domestic and foreign currency is the first job a bank must perform to facilitate its business The bank's capital must be abundant and stable, so the bank can meet the demand of enterprises To this, the bank should implement the following measures: • Firstly, interest rate policy A flexible and reasonable interest rate policy will be a good condition for banks to raise capital Specifically, the interest rate must be consistent with the term of the mobilized fund and have the targeted objectives towards customers With customers using many products and services of banks, people who have prestige with banks and have long-term relationships with banks will enjoy preferential interest rates on deposits For example, customers have high deposit balance, the bank should have reasonable incentive policy on interest rates, service fees Banks should apply preferential rates and interest rates to export customers, who have a large source of foreign currency to sell to banks • Secondly, product and service policies Banks should increase the supply of credit services to customers, diversify products and services to meet the needs of customers Specifically, strengthening the trust, preservation and consulting services Banks need to diversify in term of mobilization, mobilization method At the same time, propaganda, advertising, consulting for customers to know and understand the benefits from these services In addition, banks need to implement customer care activities such as sending gifts, greeting cards for holidays, anniversary of the establishment of enterprises, birthdays of business managers, individual customers to increase understanding, friendly with customers • Thirdly, policy on information networks and people In order to develop the products and services, the bank needs to better organize the development of information networks and improve the quality of information Develop and improve the system of tools to support credit activities for customers through the website of the bank, with the purpose to transmit information, shorten the gap between banks and customers Along with the application of advanced modern banking technology, it is necessary to well the work of staffs, raise the qualifications of bank officials to avoid waste of investment capital, especially the applications of information technology In addition, banking is a complex business activity, involving the interests of customers belonging to different components of business conditions, financial capacity, business ethics, demand for the type of service Therefore, the bank needs to build a civilized and polite communication style among the contingent of officials: enthusiastic, attentive to customers while still abide by the professional procedures and regulations on information security of the bank 3.2.1.2 Improve loan conditions and administrative procedures Typically, a banking product is considered complete and of good quality if it satisfies the needs of the customer best When evaluating the completeness of a bank credit service, customers often rely on criteria such as simple or complex service conditions and procedures, fast or slow processing rates, safe, high or low accuracy, the attitude of service of bank staff like, interest costs, high or low service charges and customer benefits will be achieved For a bank, a complete credit service must be those that better meet your needs than your competitors Next is the benefit to the bank itself, which is reflected in the income from lending activities and bad debt ratio, overdue debt on total debt To achieve that the bank needs to address the following issues: • Firstly, making use of credit services is becoming easier, more convenient, more attractive and giving customers value by completing the business process, simple procedures and conditions for using the service Particular attention is paid to project appraisal in order to make the right decisions in selecting clients and investment projects In particular, banks must establish a multi-dimensional credit information system on a selective basis By collecting good information, accurate and timely manner not only help banks to assess correctly the capacity of the client, but also help to make credit decisions quickly Banks will not miss out on potential customers as well as not to lose business opportunities of our clients • Secondly, the bank constantly improves, adds and improves the rating system, rating customers to match the real situation of enterprises in all aspects such as collateral, accounting system To increase efficiency, reduce costs through automation as part of the decision-making process • Thirdly, the bank should consider and loosen the lending conditions, focusing mainly on the feasibility, effectiveness of the project and production plan For collateral assets, the valuation must be commensurate with the market value and reasonable to help customers can borrow the amount closest to their capital needs For customers who are considered to have growth potential but not have adequate collateral, they can create conditions for them to borrow without collateral in a safe and effective manner, or mortgaged from the assets formed by the loan or loan with a portion of the collateral • Fourthly, considering the improvement of traditional products in the direction of adding new features In essence, banks are increasing the value of their services and developing new products that are more relevant to their customers Instead of a service product that meets only one need, a service product can meet the needs of its customers Applying modern technology to provide products and services package for customers, both increase the convenience and reduce the cost per unit Improving loan conditions and administrative procedures will enable banks to reduce the time it takes to deliver products and services, thereby improving customer satisfaction and increasing the number of new customers 3.2.2 In terms of customers To arrange non-financial support staff for each client group Non-financial support activities include the provision of financial information, procedural guidance, the introduction of business opportunities, the introduction of investment partners and clients through various channels Especially through the website of the bank, the bank can support the typical customers to participate in training courses, participate in trade fairs and exhibitions thereby promoting the purchase and sale, technology transfer between customers, domestic and foreign enterprises The bank should regularly organize seminars, customer conferences for corporate clients and large individuals This is a good opportunity for customers to know the bank and also the opportunity for banks to better understand the needs of customers, find good customers The bank should provide information, policies on interest rates, service fees apply to each group of customers, and listen to their opinions and answers to their questions about credit activities As a result, the bank can take positive steps to overcome the shortcomings and provide more reasonable policies and services to better meet the needs of its customers 3.2.3 In terms of internal business The bank continues to closely follow the process of implementing business plans, agreed in the executive management and promote the strength of internal unity in the unit Organizing laborers to give comments on building business solutions and proposing emulation movements Regularly review the organization and operation of each department and encourage the promotion of contributions to further improve the work processes of each department Enhancing the speed of exchange between departments to respond quickly to customer requests Regularly check the attitudes of employees in the work process to colleagues and customers Actively deploy new products and services to increase revenue beyond credit, and engage customers with positive interest through effective marketing channels Carrying out accounting work, promptly and accurately payment, and follow the operating procedures to ensure the safety of the treasury 3.2.4 In terms of innovation and learning 3.2.4.1 Improve the capacity and performance of employees Business organizations and staff is the key to bank success, so bankers need to be knowledgeable about the law and the market, have in-depth knowledge of customers, work methods, good communication and customer service skills Employees need to know the market and advise customers to help customers choose the right service and bring efficiency to customers To this, the bank should implement the following solutions: • Firstly, it is necessary to continue to improve credit officers' skills, strengthen training and retraining so that credit officers have sufficient expertise as well as knowledge about market economy The bank regularly has different training forms with staff such as on-the-job training, sending to domestic and international organizations and inviting teachers for training on the subject In the immediate future, it is necessary to regularly coordinate with other commercial banks and government agencies in organizing seminars and training for professional staff in relation to customers such as: method of assessing collateral for bank loans, financial performance appraisal parameters, business results, information on prevention and risk warnings The bank should organize a good credit officer contest to encourage credit officers to learn from your banks and to keep up to date with new and useful information • Secondly, organizing the examination fairly, seriously, objectively select qualified people, dedicated to the profession, preferably experienced people The process of recruiting staff should not be rigid, but must be based on actual capacity to make arrangements for job placement as well as income adequately • Thirdly, educational cooperation programs with universities in the country, especially universities in the area or organizing internships are effective recruitment methods It not only can help banks recruit graduate students achieve honors, but also help save a lot of costs and promoting the image of their brand • Fourthly, the arrangement of using staff of credit officers must be in line with the position of each task and must be in line with the standard Clarify the legal responsibilities of each position to ensure that the rights attached to the responsibility • Fifthly, developing salary and incentive policies under the motive force to attract talented people, encourage cadres to love the job, devoted to the job This will improve productivity, labor quality and reduce grayscale competition in financial markets • Finally, it is important to build and link the relationship with business associations of the central, provincial, the credit guarantee funds for small and medium enterprises, the industrial and commercial departments of the city to capture the business activities and needs of businesses 3.2.4.2 Developing products and services package for customers The development of products and services will enable banks to increase revenue beyond credit, minimize the time and costs of developing new products and improve customer satisfaction, strengthen traditional customer loyalty and increase new customers Currently, the bank only offers some products to customers such as: lending, guarantee, discounting of documents, international payment and account services Meanwhile, one of the wishes of customers in general is to use the package products, multi-utility for their business operations are conducted efficiently, conveniently and quickly On the other hands, credit and services are two cohesive activities credit products, which are package services including credit and insurance services, foreign currency trading, international payment It will enable the full exploitation of potential cooperation with customers The bank can apply some package products such as: The product "package project financing" provides package services including guarantees, loans, international and domestic payment to corporate customers in the order of arising demand of customers when implementing business projects Customers are assured of project implementation on the basis that the bank is committed to providing guarantees, loans, international and domestic payment services for the whole process of project implementation after the customer wins the contract or sign the contract Customers are entitled to preferential rates of guarantee deposit, the maximum loan size due to using the package financing service "Export-Import Package" is a combination of three independent units: port service company, insurance company and bank about import and export services In each unit with its own professional advantages will work together to support customers when using this product The "Package Export and Import" service includes inter-bank payment services and related services such as procedures for delivery of goods from the port, storage of goods, customs declaration procedures related to the field of import and export of goods, support customers to buy insurance goods The professional operations are carried out by the bank such as the collection of import-export documents, procedures and methods of payment The remaining stages such as customs clearance, cargo delivery, loading and unloading, cargo clearance procedures and import insurance will be provided by port service company and insurance company The basic advantage of this solution is the reduction of the cost of the service by combining specific types of customers into one solution or service package The cost of a service pack is therefore lower than the total cost of each service combined and also facilitates access for customers 3.3 Improve risk management capacity Liberalization, economic globalization and internationalization of financial flows have fundamentally changed the banking system Businesses are becoming more sophisticated and competitive pressures between larger banks and with it, the level of risk is also increasing Therefore, the banking sector must have strong reforms to enhance risk management capacity in each service activity, especially in credit risk management In order to this, it is necessary to carry out the seven solutions as follows: • Firstly, the correct risk management policy must be developed and completed Implement a comprehensive reform of the factors affecting the risk management capacity, including planning and formulating strategies and policies for risk management, promoting the application of the measurement tool • Secondly, restructure the risk management organization towards the specialized management department, separate the risk management apparatus, proceed to the vertical risk management, reduce horizontal authorization levels • Thirdly, implement the process of all activities in the bank, implementing the principle of risk mitigation, such as principles of separation of functions, principles of compliance with limits at all stages in the bank Especially in credit risk management activities, banks need to perform well on such as: customer contact, credit analysis, credit assessment, risk assessment, loan decision, paperwork contract, quality review, loan review • Fourthly, raising the quality of risk measurement tools and continue to apply new risk measurement tools This leads to the early detection of risk signs, identifying the exact causes of risk to timely and effective solutions Measurement tools should be able to demonstrate the quality of financial analysis and the development of an early warning system for the underlying performance of a bank It includes analyzing financial statements and identifying sensitive "points"; develop an approach to assessing the quality of risk management within the bank; raising technical requirements in setting up risk provisions • Fifth: Implement transparency and disclosure of information This function is the basis, motivation to improve the quality of risk management Transparency and disclosure of information are not only does between the bank and the State Bank in the city, but also within the bank • Sixthly, ensure that the quality of banking human resources with criteria such as ability, level, ability to integrate, work efficiency and good moral qualities In fact, no matter how strict the legal regulations, business process but if the bankers for personal benefit, they can still collusion, deliberately spleen the law, resulting in the unpredictable risk In fact, there have been many serious losses due to the moral hazard of bank officials Therefore, it is necessary to regularly educate the ethical values of the profession to each bank official • Finally, to step by step build and position the brand of the bank, focus on developing new products and services, raising service charges, gradually reducing the revenue from traditional credit products ... GLOBAL PETROLEUM COMMERCIAL JOINT STOCK BANK IN NGHE AN Chapter 1: Overview of GPBANK NGHE AN 1.1 General Introduction of Global Petroleum Commercial Joint Stock Bank - Nghe An Branch (GP Bank Nghe. .. financial and banking services closer to customers 1.1.2 Introduction of Global Petroleum Commercial Joint Stock Bank Nghe An Branch Full name: Gobal Petroleum Commercial Joint Stock Bank - Nghe. .. Nghe An) 1.1.1 Introduction to GP Bank Global Petroleum Commercial Joint Stock Bank, formerly known as Ninh Binh Rural Commercial Bank, was officially transformed from a rural bank to an urban bank