Banks urged to renovate
Banks urged to renovate
Finance markets will become more sophisticated and powerful in the near future, and this will pose a challenge if banks do not focus on renovating existing technology, financial experts warn.
Banks that invest in new technology would see benefits of between 15-17 per cent profit, Can Van Luc, a finance expert told participants at Banking Vietnam 2016 yesterday, co-held by the State Bank of Viet Nam and International Data Group (IDG).
In response to current challenges and competition, Banking Vietnam 2016 features the theme: Innovation and transformation– key factors for banks improving operational efficiency and competitive advantage in the new context of integration.
The conference covers key initiatives and innovative IT solutions through a schedule of discussions and presentations from leading national and regional banking experts, and world-leading technology providers.
At the conference, Luc also outlined factors that will affect banking performance between 2016 and 2020. Namely that the legal environment has seen a tightening of regulations that will raise costs and reduce profits for the banking sector.
In addition, changes in demographics, an aging population and rising incomes will all lead to increased demands on banks. Customers are becoming more knowledgeable and often use information technology to stay regularly informed about banking news, he said.
Luc said that competition among banks and banking systems is becoming fiercer. A series of non-banking institutes have been established to offer convenient and rapid services, however, they often lack the risk management expertise of established institutions. Therefore, commercial banks have an advantage in being able to promote the protection of customers. In addition, Viet Nam also needs to foster strong participate in the international market with the adoption of new international standards.
According to the Deputy Director of the Banking Strategy Institute Pham Xuan Hoe, one of the challenges for investment in science and technology in banking was that it required a lot of starting capital, however, revenue from banking services and banking products remains low after failing to recover their investment costs.
Hoe offered an example of when he was working for a commercial bank, and being asked why ATM users had to pay a fee. He explained that users should share the burden with commercial banks to help them reinvest in better technology.
Luc also noted that the potential for financial markets remained huge in Viet Nam. The of the country's financial market was still small while banking products and services remained modest and still, access to financial services remains limited for many people. The banking system remains thin and is unevenly allocated.
Banking Vietnam is known as the largest and most influential annual ICT banking conference and expo in Viet Nam. The past 13 years of ongoing success has earned Banking Vietnam the reputation as a required event for leading bankers, technology professionals, and financial experts.
