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The pandemic has been prompting banks to adapt. As digital transformation has become inevitable, banks have stepped up their efforts to adopt more new technologies in the digitalisation race.
Speaking at the webinar Banking Industry as a Pioneer in Digital Transformation: for the Public to Participate and Benefit by the Government Portal, Le Anh Dung, deputy director of the Payment Department under the State Bank of Vietnam said that Vietnam is one of the leading nations in banking digital transformation.
The country has achieved some remarkable achievements in a short time. The rate of technological adoption in banking operations has increased by 40 per cent. Mobile payments post a strong year-on-year increase of 90 per cent in volume and 150 per cent in value.
Digital service and payment ecosystems have been established by integrating digital banking services with several other services in the economy. Many banking processes have been fully digitalised. In the first eight months of 2022, the volume and value of mobile payments surged by 107 per cent and 92 per cent, respectively.
To acquire these achievements, banks have made heavy investments in their technology systems. The banking industry has invested over $628 million in automation with many new technologies.
Many banks have long considered technology as a key focus area for their development strategies. Tran Nhat Minh, deputy CEO cum head of Banking Technology Services at VIB said that the bank has opted for a pioneering digitisation strategy and channelled its resources into technology development very early.
VIB pays special attention to its My VIB app, data and AI, and new technologies like cloud and open APIs. VIB is among the first few banks in Vietnam to implement multi-cloud technology. Since 2020, VIB has successfully applied AI and big data to fully automate its credit card approval process. As a result, consumers may now register accounts and instantly acquire a credit card in just 30 minutes, all online.
In addition, the bank has employed AI to introduce Vietnam's first virtual financial advisor named Vie. Most notably, VIB has integrated AR into the My VIB app, which allows customers to virtualise various life aspects from daily activities to education and healthcare.
Currently, 93 per cent of VIB customers conduct transactions via digital channels. Nearly 50 per cent of VIB's newly issued cards come via digital channels without sellers.
Many banks also focus on similar technologies. Techcombank has launched iDO, a new digital platform for its banking branches, and PayLink, a payment hub system connecting interbank payment networks. ACB has stepped up investment in AI and is applying this technology to face recognition. Meanwhile, MB has successfully connected the MBBank digital banking app with the MB SmartBank system so that customers can synchronise transactions in a quick and convenient manner.
According to Vietnam Report's survey on the banking industry in 2021 and its outlook in 2022, the increase in customer expectations and the competitive environment are two key factors driving banking digital transformation. In addition, young clients (aged 24 to 44) have a high demand for experience and do not expect a single bank to provide all services to meet their needs. Instead, this age group expects a more integrated experience when combining multiple service providers.
“Consumer expectations are rising quickly. Thus, banks must create innovative business models that can respond to rising demand and evolving market conditions in order to maintain their competitive edge. They will need to be more agile and creative to accelerate their digital transformation process”, says the report.
According to the analysis, the cost-to-income ratio of the majority of banks has dramatically declined in recent years as a result of the digitisation of operations. The pandemic has also significantly accelerated user engagement with internet banking services. In the end, this lowers the bank's fixed expenses.
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By Thuy Vinh
