Banks move forward to digital transformation

truc anH

Banks are taking advantage of Vietnam's potential environment to conduct digital transformation to meet increasingly technology-driven consumer demands.

In a talk show about trends and strategic initiatives to build a digital banking ecosystem held on 8 September, experts said that Vietnam which has the fastest growing and most diverse form of digital banking today compared to markets such as the Americas and Europe – also has great potential to develop its digital banking system.

Vietnam is home to a growing middle class. According to a report on the digital economy in Southeast Asia in 2020 by Google, Temasek and Bain & Company, Southeast Asia's digital economy is expected to gain USD300 billion in 2025, of which Vietnam is worth USD52 billion.

In addition, Vietnam has a young population, which plays a major role in the financial service system and will boost the diversity of financial services in the near future. with a young population, Vietnam has the highest percentage of digital consumers in Southeast Asia, with 41 percent of customers across sectors.

Moreover, the increase of super apps has created a value-added chain of goods and services on a single platform and the government and management agencies are opening up and encouraging digital banking systems to develop. Banks are moving towards a customercentric rather than product-based approach, which is why they see an increase in partnerships in their ecosystem. In the past 12 months, more and more banks invest in digital platforms not only for retail customers but for small- and medium-sized enterprises, large enterprises, and wealth management services.

Vietnamese banks have invested a lot but focused on fragmented and discrete solutions. However, banks have also realised that to scale and to understand customers better, it is important to aggregate data not only from their key solutions but from the partnership with fintech and data across sectors.

Mrs. Nguyen Thi Quynh Giao, senior executive vice president in charge of BIDV’s Retail Banking Group said that banks have different digital transformation strategies. “Digital transformation is extremely challenging to large banks such as BIDV. Building a digital ecosystem is also a challenge. Banks are not only concerned about digital transformation, they also need to look at business conditions, market development, and customer needs. It is imperative to participate in the ecosystem of partners to get the best value for both the bank and the public.”

Experts suggest banks cooperate and connect with technology companies that provide technology and capabilities that banks do not invest in and develop themselves. Connecting with different fintech companies and partners such as e-wallets and e-commerce platforms that have a large customer base, and customer data, will help banks better understand customers.