Vietnam has been going through an exciting time of change with higher risk management standards and best practices adopted by the banking sector.
In order to thrive in this digital age and with the adoption of Basel II, Vietnamese banks will need to assess their current data governance processes and adopt proper controls to raise their risk resilience, according to experts.
This is increasingly important as more regulations are being established around the world to manage the complexity of the banking sector and new banking activities, stated industry experts at a conference discussing the “Future of banking” held in March 6.
In Vietnam, banks are required to meet the requirements on capital adequacy ratio (CAR) following Basel II standards, scheduled for implementation on January 1, 2020, requiring significant improvements in the corporate governance of the banking system.
“Vietnam has been going through an exciting time of change with higher risk management standards and best practices adopted by the banking sector. The banks which are well-prepared with a proper implementation strategy will have more chance to succeed and gain benefits,” Dinh Hong HanhFinancial Services Consulting Partner of PwC Consulting Vietnam said.
Furthermore, while the technologies available in the market provide the opportunity for unprecedented innovation, not all of them are covered by existing regulations. Therefore, banks are advised to become more proactive in conversations with lawmakers, to develop a regulatory landscape that nurtures innovation and consumer trust.
“Despite the emergence of new competitors, we believe that the traditional bank still has a bright future if it acts now and makes appropriate changes to be future-ready. Staying the same is not an option. The banks that will succeed are those who can best employ digital and data technologies to elevate customer experience and improve regulatory compliance,” John Garvey, PwC’s Global Financial Service leader, added.
According to Garvey, the future of banking is about a highly-digitised customer experience and the expansion from traditional banking services to providing “lifestyle” services that cover customer needs across the whole of their lives.
Banks need to look at the lifestyle of each customer and understand what needs or ambitions they have, whether it is to buy a car, buy an apartment or start a family. Banks should be in a position to help the customer achieve those personal goals through the use of their services, such as savings, loans, life insurance or third-party products like health insurance,” Grant Dennis, general director of PwC Consulting Vietnam, elaborated.
Most importantly, banks should be able to envision the needs of the customer and offer respective services even before the customer knows or asks for them. This is possible through proactive data analytics-driven customer insights, enabled by smart technologies and very often by partnering with fintech companies or other solution providers, stated Dennis.
