Consumer finance firms urged to invest in technology
Consumer finance companies should invest more in technology to avoid lagging behind in the digital era as technology has dramatically changed consumer behavior, said experts at a seminar in HCMC.
At the seminar “Movements of financial services in the digital era,” held by the Saigon Times Group today, December 5, Pham Minh Tung, head of research at market research firm Nielsen Vietnam, said that consumer behavior has changed significantly due to the development of artificial intelligence, Internet of Things, robotics and 5G.
At present, consumers need convenience and personalization, and are no longer loyal to any brands, Tung noted.
He also referenced firms’ application of technology to meet consumer needs. Amazon Prime has used robots to deliver goods and applied an online-to-offline retail model, allowing online consumers to take delivery of goods at outlets that are located near them.
In addition, promotional programs have been sent to each consumer instead of being made public.
Tung forecast that 20% of orders will be proposed by stores instead of being made by consumers by 2020.
Financial services have also changed sharply, with the increasing popularity of cashless payments and cash back services.
Besides payment services, other financial services have been improved for the benefit of customers thanks to the application of technology.
For instance, consumer finance company FE Credit’s $NAP app has helped reduce the time needed to approve consumer loans to 15 minutes from four to five days. The loan approval process does not involve the participation of people.
Kalidas Ghose, vice chairman and CEO of FE Credit, said that the firm has prioritized digital transformation.
According to a study by Nielsen, conducted monthly in HCMC and Hanoi, some 25% of consumers aged from 18 to 25 have used financial services, and the rate will continue to rise in the coming years.
Despite the potential of the consumer finance market, enterprises must understand the needs of consumers, especially young ones, when launching services, according to Dang Thuy Ha, director of Client Leadership at Nielsen Vietnam.
One of the greatest headaches for businesses in the digital economy is how to gain consumer confidence, noted Nguyen Quoc Bao, dean of the finance department at the HCMC University of Economics, adding that consumers are more inclined to be loyal to no particular brand, as they can easily switch to other brands just because of more attractive promotional programs.
Nguyen Hoang Ly, chairman of technological solutions consultant and provider Fintek, said that fintech has brought opportunities to all enterprises, but their products and services must be competitive.
Local fintech firms will face increasing pressure as foreign rivals have entered and dominated the domestic market. Therefore, if Vietnamese companies are slow in applying technology, they may lag behind their foreign rivals.
In addition, they should consider fintech firms as long-term partners.
Another obstacle is local human resources’ lack of knowledge of either finance or technology.
Ghose of FE Credit said that digital transformation does not mean reducing the number of employees but improving labor productivity to stay competitive.