A person uses a phone to access her online banking account. Mobile banking is an increasingly indispensable product for the banking sector. — VNS Photo Thai Ha

HA NOI (VNS) — Commercial banks are eyeing mobile banking as a potential way to harness growing demand for online transactions, industry experts say.

Despite accounting for only a small portion of total market transactions, mobile banking is fast becoming a must-have product offered by Vietnamese banks.

"Mobile banking has been and will be an indispensable product for the banking sector," said manager of Bac A Bank's Card and e-Banking department, Pham Dang Khoa.

Nguyen Chien Thang, manager of internet banking at Sai Gon - Ha Noi Bank (SHB), agreed that mobile banking would be favored by Vietnamese consumers.

A rapid increase in the number of mobile subscribers, cheap smartphones, improving network infrastructure and a young population were key factors driving the development of mobile banking, he said.

Strengths and weaknesses

Both representatives from Bac A Bank and SHB agreed that mobile banking had advantages over other products.

Sai Gon-Ha Noi Bank's Nguyen Chien Thang said modern technologies integrated into smartphones would allow customers to make transactions whenever and wherever they needed.

Banks needed to provide applications for customers and offer them technical support to improve the quality of mobile banking, he added.

Bac A Bank's Pham Dang Khoa believed young consumers would be the focus of banks given the ubiquitous use of smart technology.

However, the biggest challenge facing mobile banking was how to approach customers, according to both managers.

"The banks had to design the application in the simplest way and instruct their customers to set it up on their phones," said Thang.

Khoa added that the youth was not the ideal group for product segmentation since they were not the ones with highest demand for banking products.

Additional obstacles lied in maintenance and large investments needed to integrate current services with mobile banking, Khoa said.

Simplicity is key

However, the opportunities to deliver mobile banking to customers are increasing, according to Thang.

Around five years ago, modern technologies like smartphones, 3G connections or online payments were a rarity not trusted by customers.

Services requiring non-cash payments were even avoided by customers because of lack of confidence and credibility in online payment systems.

Thang said he believes the success of mobile banking could eclipse internet banking in the near future. However, the Government had a role to play in creating confidence by creating a transparent legal framework, he said.

The popularity of mobile banking among consumers would also lie in the designing simple online applications that were secure and customer-focused.

However, banks should be patient and listen to their customers to improve the creditability of their products, said Thang. — VNS