VN among world’s earliest in banking digital transformation: forum
VN among world’s earliest in banking digital transformation: forum
Vietnamese banks are among the earliest in the world to make the digital transformation, experts have said.
Speakers at the Financial Services – Retail Banking Forum last Friday. — Photo courtesy of the HCM City Press Centre |
Speaking at the Financial Services – Retail Banking Forum in HCM City last Friday, Vu Viet Ngoan, former chairman of the National Financial Supervisory Commission, said the habit of using digital products had become more prevalent than ever in Viet Nam.
More than 30 per cent of the population uses banking apps, second globally only after China (41 per cent), according to Ngoan.
Viet Nam’s banking and financial sectors would continue to play a key role in establishing a “fully digitised, human-centred system”.
He also pointed out that the digital transformation in the country would be an important process of how banks and financial institutions analyse, interact and satisfy their customers.
The government has set a target of increasing financial inclusion to cover more than 80 per cent of the adult population by 2025.
Phan Thanh Duc, dean of the management information system faculty at the State Bank of Viet Nam’s (SBV) Banking Academy, said Viet Nam had recorded a surge in digital payment everywhere from online marketplaces to small convenience stores and even vegetable and fruit vendors.
Le Duc Anh, director of the Ministry of Industry and Trade’s Centre for Information and Digital Technology, pointed out that technologies such as blockchain, AI, cloud computing, machine learning, and customer data collection, management and analysis were being adopted.
The banking sector had invested over VND15 trillion (US$639.22 million) in digital transformation as of the end of last year, according to a report by the SBV.
Digital payments have been growing at 40 per cent for the last four years, one of the world’s fastest digital transformation rates.
According to the report, more than 95 per cent of Vietnamese banks have a digital transformation strategy.
Around 90 per cent of banking transactions are handled through digital channels with 74.6 per cent of adults having a bank account.
As of March around 3.71 million mobile money (or mobile payment) accounts had been opened, over 70 per cent in rural, remote and disadvantaged regions across the country.
Non-cash payments have also seen significant growth, with 82 credit institutions offering internet-based payment services and 51 offering mobile payment services as of the end of last year.
There are 48 licensed intermediary payment organisations.
Digital transformation has helped banks bring down the cost-to-income ratio to 30 per cent, on par with regional and international standards.
Recommendations
But experts say the legal framework for digital financial services is inadequate.
It is vital to improve institutional frameworks and upgrading infrastructure, they say.
The lack of human resources with up-to-date skills is another major challenge to digital transformation, they warn.
Organised along with the forum was a fair introducing the advancements needed for the financial industry’s digital transformation.
The event was hosted by the Vietnam Association of Securities Business, the Vietnam Digital Communications Association, and the International Data Group.
