Banks have to change to conform in the post-Covid-19 season

21-Oct-2020 Intellasia | Thoi bao Ngan hang | 6:02 AM Print This Post

An expert said that in a difficult situation when we were going slower than many countries in the region and around the world in the application of digital technology, changing the approach to customers, the Covid 19 epidemic could be considered as an unexpected ‘advantage’ brought to the process of changing many banks in Vietnam.

The era of digitalisation took the throne

It was a fact that the Covid-19 epidemic had made the behaviour of customers changing when trading on digital space become much more common. The fact that businesses and people these days applied digital technology more widely and widely was creating opportunities for the economy in general and the banking system, particularly in the application of new technology. This was the most significant thing that would change banking operations, creating conditions for banks to better carry out the 4th industrial revolution’s production and business activities.

At the policy dialogue session on promoting digital transformation in the banking sector within the framework of the 16th Asean Central Bank Governor’s Online Conference, the Chief Executive Officers of Asean banks all shared the same view that the Covid-19 pandemic was causing severe consequences for the regional economy. However, from an individual perspective, the pandemic’s difficulties became the driving force for digital transformation and technological innovation in the banking sector. The application of technology in the financial sector would be the leading solution to promote financial inclusion and reduce direct contact during a pandemic. According to research by RFi, after the Covid-19 epidemic, approximately 71 percent of consumers globally each week used digital banking channels, an increase of 3 percent compared to the same period last year, while the use of goods increased by 6 percent over the same period.

Typically, the concept of branches and transaction offices would also change. Branches, transaction offices would be like service lounges. According to experts, the design of transaction offices would also be innovated according to practical requirements when space for customers to experience themselves would the most, bank staff (if any) were only supportive.

Pham Tien Dung, director of the State Bank of Vietnam (SBV)’s Payment Department, shared that banks, when converting digital, would have to pay attention to two factors. The first thing was how to turn ordinary users into bank customers quickly. The second thing was the satisfaction with the products and services of banks.

Attracting more customers to banks was also the reason why it was necessary to develop an electronic identification method (eKYC) regulation, as it would facilitate customers to open an account in the fastest way.

Since July 2020, SBV had allowed about 10 commercial joint-stock banks to pilot eKYC applications in operation. Like Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), this bank allowed customers to open 100 percent online payment accounts to make instant transactions without waiting. The representative of VPBank said that since its implementation, there had been about 15,000 new registered accounts, equal to 50 percent of the estimate for the whole year 2020.

HCM City Development Joint Stock Commercial Bank (HDBank) had also applied eKYC since the beginning of August 2020. Customers would have an iMoney account on the HDBank application. After only two minutes of completing the steps, customers could immediately perform online transactions. Tien Phong Commercial Joint Stock Bank (TPBank) applied online calling technology, ensuring customer identity verification, checking and verifying relevant documents at the highest level, the most effective equivalent to meeting in person. Viet Capital Commercial Joint Stock Bank (Viet Capital Bank) used the Face Recognition AI platform Facematching, OCR optical character recognition. Or, through NCB iziMobile of National Citizen Commercial Joint Stock Bank (NCB), it only took two minutes to identify with the service of opening a payment account, based on modern technology. All of which had saved much time and costs for both the client and banking sides, and at the same time improve customer experience when using the bank’s products and services.

Promote cooperation

Talking to reporters, an expert said that in a difficult situation when we were going slower than many countries in the region and around the world in terms of digital technology application, changing approaches For customers, Covid-19 could be considered an extraordinary ‘advantage’ bringing to the process of changing the number of banks in Vietnam. Banks were believed to have a hard time in the Covid-19 pandemic, but the reality flashed back to show that digital technology was implemented much better than before, bringing significant benefits to the platform economy, this expert shared.

The market was also witnessing new players with technological strengths such as Fintech participating in the worldwide retail banking market, thus increasing competitive pressure. Admitting challenges to banks, but Dinh Trong Thinh, Finance Academy, said that there were no longer worries like before that banks would lose market share because this was an era of accelerating mutual cooperation. Obviously, Fintech companies worked with banks to benefit a lot from the bank’s rich customer file. The outbreak of Fintech had no conflict with the banking activities because banks were then aware of the problem, even trying to make Fintech become close partners, thereby reducing operating costs. Without cooperating with banks, Fintech could not grow up. Both sides realised the advantages when there was a handshake, so in the near future, Fintech-banking partners would surely bloom in the market, Thinh analysed.

Besides, in changing business to the current retail model of commercial banks, linking with major retail partners was one solution that many banks took advantage of to exploit the potential from existing customers of the two parties and diversify products and services. The linkage model between banks and retail units also changed Vietnamese people’s buying and consuming habits, primarily focusing on the office world, young customers, love transactions, and card payment. Instead of going directly to shopping at traditional markets and grocery stores, it had shifted to shopping in centers and large retail systems. The change in customer behaviour caused retailers to increase sales, and thus banks also increased payment transactions.

The opportunity that digital transformation brought to banks was huge, but it should also be noted that digital technology must accept additional costs and ensure specific conditions. Therefore, banks must make more efforts to access digital technology to meet the needs of the economy.


Category: Finance, Vietnam

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