Banking on digital

09 November 2021 - 09:31 AM Alternate Text

 

In an interview on Vietnam Economics Time, Mr. Le Xuan Dong, Managing Director and Head of Market Research and Consulting at FiinResearch shared several in-depth insights about digital transformation in banking sector.

According to recent statistics of State Bank of Vietnam (SBV), by the end of 2020, around 94% of Vietnamese local commercial banks have been implementing their own digital transformation programs and 40% of local banks have determined digital transformation as one of key initiatives in their next five-year strategic plans.

Digital transformation has been main backbones of most local banks’ long-term strategy to increase their target customer base, improve customer experience and optimize their end-to -end business operations. 

The impact of COVID-19 in terms of social distancing, business continuity is an important catalyst to accelerate the digital transformation journey in the banking sector in Vietnam.

The transformation process has significantly changed the banks’ leaders and top management’s mindset on digital banking strategy, digital business models and culture, product innovation, customer experience and acquisition etc.; support them to sharpen and maintain their competitive advantages in the long run.

The local banks have actively developed their own digital infrastructure and solutions, covering automation of their business operations, data collection and analytics, development of omnichannel distribution network, comprehensive applications etc.,

In addition, they have also established strong partnerships with various stakeholders (e.g fintech (e.g. providers of intermediate payment services (i.e e-wallets, payment gateways …)), telcos, retailers, e-commerce platforms etc.,) on digital basis to enlarge target customer base, cross sell of basic banking services and improve customer experience.

The active participation of some leading banks (e.g VCB, Techcombank, VP Bank, ACB, MBB etc.,) recently in the digital transformation has helped to improve their transaction banking platforms, maintaining strong low-cost CASA sources, healthy NIM as well as significant improvement in operational efficiency in term of cost to income ratio (CIR).

Read full article HERE.

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