The pandemic has drastically changed the consumption behaviour of customers. That has been prompting banks to adapt. As digital transformation has become inevitable, banks have made greater efforts to put new technologies into practice in the digitalisation race.

Currently, Viet Nam is one of the leading nations in banking digital transformation, Le Anh Dung, deputy director of the Payment Department under the State Bank of Viet Nam, said during a webinar entitled 'Banking industry as a pioneer in digital transformation: for the public to participate and benefit'.

Among the country's remarkable achievements are the rate of technological adoption in banking operations which has increased by 40 per cent and mobile payments which have seen significant yearly growth of 90 per cent in volume and 150 per cent in value.

Digital and payment ecosystems have been established by integrating digital banking services with several other services in the economy. Many banking operations have been fully digitalised. In the first eight months of 2022, mobile payments experienced an increase of 107 per cent in volume and 92 per cent in value, respectively.

These impressive achievements were thanks to heavy investments pumped by banks into their technology systems. According to the Payment Department's statistics, the banking industry has invested up to VND15 trillion in automation with many new technologies adopted.

Many banks have long considered technology as one of the priority areas for their development strategies.

Tran Nhat Minh, Deputy CEO and Head of Banking Technology Division at VIB, said that the bank has chosen a pioneering digitisation strategy and focused its resources on technology development.

VIB has paid special attention to the My VIB app, data and artificial intelligence (AI), and new technologies such as cloud and open APIs. VIB is among the first few banks in Viet Nam to implement multi-cloud technology. Since 2020, VIB has successfully applied AI and big data to fully automate its credit card approval process. As a result, consumers may now register accounts and activate a credit card in just 30 minutes completely online.

Furthermore, the bank has applied AI to launch Viet Nam's first virtual financial advisor - Vie. It has also integrated AR into the My VIB 2.0 app, which enables users to virtualise various life aspects from daily activities to education and healthcare.

VIB's strategy of pioneering digitisation is regarded as the bank's advantage in making breakthroughs in service speed, innovation and continuously bringing the best digital banking experiences and personalised products to users.

Currently, 93 per cent of VIB customers conduct transactions via digital channels. Nearly 50 per cent of VIB's new cards are issued via digital channels without sellers and 10 per cent of calls to VIB are answered by Virtual AI Agent.

Up to 93 per cent of VIB customers conduct transactions via digital channels. — Photo courtesy of VIB

Many other banks also focus on similar technologies. Techcombank has launched iDO, a new digital platform for its branches, and PayLink, a payment hub system connecting interbank payment networks.

ACB has accelerated its investment in AI and is applying this technology to face recognition. Meanwhile, MB has successfully connected the MBBank digital banking app with the MB SmartBank system so that customers can synchronise transactions in a quick and convenient manner.

Vietnam Report's survey on the banking industry in 2021 and its outlook in 2022 outlined the increase in customer expectations and the competitive environment as two key factors driving banking digital transformation.

In addition, young clients (aged 24 to 44) have a high demand for experience and do not expect a single bank to provide all services to meet their needs. Instead, this age group expects a more integrated experience when combining multiple service providers. Innovation and convenience as well as digitisation of services are what these clients need, according to the survey.

“Consumer expectations are growing rapidly, and to maintain their competitive edge, banks need to build new business models that are able to respond to growing demand and evolving market conditions. They will need to be more agile, creative and accelerate the digital transformation process,” says Vietnam Report.

“Consumer expectations are growing rapidly. Thus, banks must create innovative business models that can respond to rising demand and evolving market conditions in order to maintain their competitive edge. They will need to be more agile and creative to accelerate their digital transformation process”, says the report.

According to the report, the cost-to-income ratio (CIR) of the majority of banks has dramatically declined in recent years thanks to the digitisation of operations. The pandemic has also significantly accelerated user engagement with internet banking services. That has ultimately reduced the bank's fixed costs. Up to 54 per cent of banks forecast that CIR in 2022 will improve compared to 2021. — VNS