In Vietnam, the banking industry was proved to be eligible to thrive not only in the present time but also in the far future. It was apparent that Vietnam was one of the fastest-growing economies in the world. Gross Domestic Product (GDP) per capita increased from $1,160 in January 2009 to $2,587 in December 2018.
Notably, in 2017, approximately 69 percent of the population aged15 and above had never used banking services, according to the World Bank, 2018.
Vietnam’s banking industry had also recently encouraged. The proof was that14 out of 31 domestic banks were honored in the AB500 ranking the most efficient banks in AsiaPacific (due to Asian Banker voted in 2018).
Several banks had stood at the peak of profit and efficiency scale thanks to new steps in the last economic cycle. Many profitable banks in nine months of 2019 increased sharply compared to the same period the previous year. Eight out of 27 banks had profit before tax increased by over 50%. Thanks to the remarkable growth of the premises, the total profit before tax of 27 banks in nine months reached more than 85.665 trillion dong, over 26 percent higher than the same period. However, many banks still could not reach the necessary indicators. There were many reasons, such as lack of orientation, unclear development strategy, lack of uniformity in implementation, lack of some core competencies, inappropriate and outdated business models, lack of solidarity and low productivity, old-minded leadership denying changing, and so on.
That was why over the years, many banks had disappeared or merged. This change showed that the growth model and the old way of governance were no longer suitable for the current period. Maintaining its position over the time was not easy when the business situation of the banking sector changes rapidly. The pressure of competition was also increasing.
It was high time that banks deeply understood their internal strengths, comprehensively assess opportunities in Vietnam and international markets. Banks also needed to acknowledge and face the gap in the core factors, including organisational culture, the degree of solidarity between all members, the capacity and the readiness of all personnel to receive and drive the change of expectations, effectiveness in terms of business strategy, business model, organisational model and brand experience.
Once these core issues were handled radically, organisations would operate in an efficient and healthy environment. In such a situation, the above symptoms would gradually disappear. That was also a formula drawn from more than15 years of Consulus consulting experience in16 countries.
Therefore, considering the current opportunities and the beneficial trend of the economy, Vietnamese small and medium banks were facing a perfect opportunity, not only to survive but also to grow and develop and become the market leader.
The only formula to break through and become a leader was ‘Purpose + Solidarity = Innovation and Growth.’ That was reforming and comprehensively transforming the business model from providing traditional banking services to a lifestyle banking experience, i.e., towards providing personalised services, high reliability, originality and consistency throughout all channels and points of contact with customers to serve their daily activities.
Comprehensive reform and transformation required a high commitment of management, both in terms of time, resources. The fact was that many bank managers were keen to reform but not all banks could start right away. Instead of waiting, banks that could not reform comprehensively should consider immediately deploying a combination of three directions named HOD below, to turn market weaknesses into opportunities and contribute to preparation for the comprehensive reform.
(1) Humanise the banking experience: Building human relationships with people, not just bank accounts;
(2) Open culture: Create conversations, not monologues. Senior and middle-level staff members must learn how to encourage team dialogue whenever the opportunity arises;
(3) Put design thinking into sales management processes calling design thinking for sales processes: Sales results would be much more spectacular if the director of the department applied design thinking into the selling process. Besides, spend time in meetings to share customer insights, customer problems and focus on solutions to solve the issues and thereby create long-term relationships with customers, instead of just focusing on pushing sales of products and services.
