What are barriers in Vietnamese banks’ digital transformation?

17-Dec-2020 Intellasia | Dien dan Doanh nghiep | 6:02 AM Print This Post

December 15th is the second day of the Vietnam High Level ForumVietnam Digital Transformation DayDXDay Vietnam 2020. This is a forum hosted by VINASA, the Department of Information Technology (Ministry of Information and Communications) and the Promotion Centre. investment and trade Hanoi City tourism coordinated to organise with theme “Digital transformation: Renovating modes of operating the whole society”.

According to Nguyen Thuy Duong, Chair of EY Consulting Vietnam, by 2025 it is expected that about a third of traditional banking revenue will be managed by new business models, from digitisation and application of technology in banking services.

“Traditional banks have some advantages in digital transformation, such as the participation of fintechs, open platforms, investment funds, creating a wider playing field. To become open banking, banks need to optimise digitalisation, create a completely digital platform for users and service providers to communicate like the Grab model, and at the same time need technology support, “said Nguyen. Thuy Duong stressed.

In the world today, there are about 5 models of digital transformation in the banking sector. The first is the traditional bank digital transformation, this is the model that most Vietnamese banks are implementing. The second is NEO Bank digital bank, this is a type of bank with no branch, strong partnership, one point of contact, 24/7 support on the application, attractive price. Third, the establishment of Fintech to provide products for financial-banking services. Fourth, the Techfins include Google, Amazon, Facebook, Apple. Fifth is a combination of both traditional banking models and digital banking.

Nguyen Thuy Duong said that digitising the banking industry in Vietnam must come from how we will digitise individuals? “If any bank claims to be a digital bank, it is necessary to understand that digital banking is a very broad concept, not a destination but a long way, and on the way, it is always digital. personal to increase customer experience “, Duong emphasized.

According to Nguyen Thuy Duong, there are four major barriers that banks in Vietnam face when implementing digital transformation:

The first is the relationship with business strategy, most banks do not clearly define the vision of banking digitisation and the relationship with the business strategy of the banks.

The second is the legal framework, which currently does not have a legal framework with ideas about completely new digital products, leading to banks’ hesitation in launching new products. However, it is still necessary to appreciate the efforts of the State Bank of Vietnam when allowing the opening of personal payment accounts using electronic identification method (eKYC).

The third is the old way of working, this method has not had Agile working mindset.

Fourth is legacy systems, most banks have a challenge with existing systems and this problem needs to be addressed in the IT strategy.

“In the digital age, every organisation needs to think like a strategist, innovate like a startup, design like a tech corporation, size as a venture capitalist”Duong stressed.


Category: Finance, Vietnam

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