With digital banking, transaction costs decreased by 86 percent.
At the “Banking Digital Breakthrough” seminar held on May 16 in HCM City, Le Anh Dung, deputy director of the Payment Department (State Bank of VietnamSBV), said, the digital banking was one of the inevitable trends and had great potential for development in Vietnam.
According to Dung, the impact of technology revolution 4.0 has fundamentally changed the business and management model of banks towards streamlining, automatic and smart direction. At the same time, the strong application of 4.0 technology by banks, strengthening innovation, creativity and expansion of cooperation, as well as completely changing the distribution channel towards digitalisation, multi-channel uniformity (Omni-Chanel) requires re-design of customer-centric products and services.
The booming 4.0 technology revolution requires banking products and services to be improved, because this was the key for banks to improve market share and increase revenue.
Du Xuan Vu, director of Technology Division of Orient Joint Stock Commercial Bank (OCB), said that the technology war was a market share battle. If technology was not invested, it was difficult for banks to improve market share.
“OCB deployed a new technology platform because this was the best solution for the bank to gain market share. The value brought to OCB when investing in technology was cost saving. OCB saved 60 percent of operating costs thanks to its strong investment in technology to boost other activities, ” Vu said.
At Asia Joint Stock Commercial Bank (ACB), the technology platform is also a strategy developed by the bank by gradually transforming the core banking system, as well as putting into use many advanced information technology applications.
“To prepare for the strategy for the period 2020-2024, ACB invests about $30-35 million in the technology system every year. The first goal of this strategy is to improve job performance, namely help reduce human resources, reduce paperwork, procedures and improve service quality “, ACB leader said.
Similarly, at Saigon Joint Stock Commercial Bank (SCB), Vo Tan Hoang Van, general director of the Bank, shared with the strong investment in technology, SCB would have the best conditions to serve and meet the increasing demands of customers.
With MoMo, Pham Thanh Duc, general director of the Company, said that only five years ago, it was very difficult for a FinTech company to cooperate with banks, but recently it was much easier. Up to now, MoMo has cooperated with 20 domestic banks.
In response to the question of whether the Vietnamese FinTech market segmented, Duc said, if there was stratification, it would be fragmented, because in fact, only about five to six e-wallets actually developed. According to Duc, the field of electronic payment would be difficult to develop without a number of users, because to get one percent of revenue from electronic payment in total revenue, equivalent to an electronic wallet must have millions of people using, besides another important factor, was the priority of banks in promoting technology development.
“FinTech companies are the bank’s extended arms in developing cashless payments. However, in the draft Circular, amendments and supplements to Circular No. 39/2014/ TT-NHNN on intermediate payment which is being consulted, some terms are barriers, making it difficult for FinTechs, if the legal corridor does not support, not only FinTech, but the banks also face difficulties in implementing the cashless policycash of the government “, Duc points out.
On the side of the banks, Le Anh Dung said that this subject also faced many challenges when shifting digital banking such as lack of investment capital, lack of high quality labour force, network security risks arising from acts fraud, willingness to cooperate and compete with FinTech. The issues of concern in digital banking development include changing organisational and administrative models; customer-centred, product design, service, safety, security and human resources are invested and trained regularly.
“Once the technology spreads and the digital banking is heavily invested, it will lead to the development of a multitude of open, multi-dimensional, continuous and complex connections, leading to increased network security risks. Therefore, the financial market infrastructure, including the payment system, needs to be changed to adapt, and at the same time, the banking sector’s human resources must also change in the streamlining, professional and professional direction”, Dung stressed.
