Vietnam boosts digital banking development
Vietnam boosts digital banking development
Vietnamese banks are applying more advanced technologies in providing their financial products and services, such as internet of things (IoT), artificial intelligence (AI), machine learning, advanced analytics, distributed ledger technology (DLT), cloud computing, and application programming interface (API).
Digital banking development
Pham Xuan Hoe, former deputy director of the Banking Strategy Institute under the State Bank of Vietnam (SBV), said digital technologies are transforming the way banks provide finance-banking services for their customers. The emergence of fintech has also put banks under pressure to change their business models, Hoe added. According to an SBV survey, digitalization will help banks save 60-70 percent of operational costs and provide customers with better experience in dealing with banking services.
Vietcombank, a major state-run bank, launched its digital banking app VCB Digibank, while another state-owned bank, BIDV, initiated its own digital transformation campaign via BIDV iBank app. According to a survey, 93 percent of banks in Vietnam are investing in technology innovation. Digital banking will be the future of Vietnam’s banking system, so banks need a strategic, long-term and clear roadmap for digitalization. Banks with a strong digital ecosystem may have a major advantage against others.
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In recent times, many banks have designed applications with smart and user-friendly interface, implemented free programs for opening and maintaining cards, and opened accounts using the electronic Know Your Customers (eKYC) system, displaying their efforts and determination to promote digital banking development.
However, the rapid advancement of technologies in the banking sector should be accompanied with changes in current legislation, while banks should make greater efforts to meet customer needs.
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Restructuring, an urgent issue
Nguyen Thuy Duong, deputy director-general of Ernst & Young Vietnam, said 42 percent of Vietnamese banks are ready for the digital transformation process, while 28 percent have incorporated the digitalization strategy into their respective business.
Duong said most banks have not set a clear vision on digital banking and paid the right attention to the relationship between business and digitalization strategies. In addition, old-fashioned working methods are challenging digital systems.
Banking is an important component of the economy and in order to promote the digital economy, banks should find ways to educate consumers in digital literacy. The digitalization of the economy cannot happen without the digitalization of the banking sector.
Nguyen Toan Thang, secretary-general of the Vietnam Banks Association (VNBA), said the Covid-19 pandemic has brought about a change in banking habits, with online banking transactions increasing sharply, forcing the banking system to accelerate digitalization to survive and grow.
| According to a KPMG report, banking operations will see numerous changes in the next 10 years, with a customer-centric approach. |
