FINANCIAL INCLUSION, CORPORATE SOCIAL RESPONSIBILITY AND CUSTOMER LOYALTY IN THE BANKING SECTOR IN VIETNAM

• Published in: Journal of international studies (Kyiv) Vol. 13; no. 4; pp. 9 - 23
• Main Authors: Vo, Duc Hong, Van, Loan Thi-Hong, Dinh, Luong Thi-Huyen, Ho, Chi Minh
• Format: Journal Article
• Language: English
• Published: Centre of Sociological Research 2020; Fundacja Centrum Badań Socjologicznych; Centre of Sociological Research, Szczecin, Poland
• Subjects: Business Economy / Management; Business Ethics; corporate social responsibility; customer loyalty; financial inclusion; Financial Markets; structural equation modelling; Vietnam; financial inclusion; Vietnam; corporate social responsibility; structural equation modelling; customer loyalty
• ISSN: 2071-8330; 2306-3483
• DOI: 10.14254/2071-8330.2020/13-4/1

The banking sector in Vietnam is under enormous pressure today due to competition arising from the integration of Vietnamese economy into the world economy. Survival and success of this sector significantly depend on customer loyalty which has mostly been built on the recognition of banks' social responsibility and their provision of inclusive services, generally known as financial inclusion. The recognition of social responsibility from the banking sector and its strategy on financial inclusion has largely been ignored in current literature, in particular for Vietnam. This study has been conducted to examine the impact of corporate social responsibility (CSR), financial inclusion inter alia, on customer loyalty in the banking sector in Vietnam. The pyramid model is utilized in this paper, including various CSR factors/attributes such as philanthropic responsibility, ethical responsibility, legal responsibility, economic responsibility, customers-centric strategy and bank reputation. A sample of 368 responses to the well-defined questionnaires has been collected from the commercial banks in Vietnam in 2019. The structural equation modelling is utilized. The findings from this paper indicate that philanthropic responsibility of the banking sector has the most substantial impact on customer loyalty, followed by customer-centric strategy. Improving the aspects of CSR programs, in particular customer-centric strategy, will lead to improved extent of financial inclusion which currently attracts attention of Vietnamese government and practitioners. Doing so will improve the reputation of banks and enhance customer loyalty, thus preparing banks for competition in the near future.