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 September 8, Vo Tan Long, deputy general director of PwC Vietnam stated that Vietnam – a country in the Asia Pacific region, 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 $300 billion in 2025, of which Vietnam is worth $52 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 per cent 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.
Tran Diem Chi, representative of Backbase in Vietnam highlighted that banks in Vietnam have been more proactive in catching up with customers' needs, paying more attention to competitors' activities and learning from success stories.
“Banks are moving towards a customer-centric 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 partnerships with fintech and data across several sectors,” she revealed.
Nguyen Thi Quynh Giao, deputy general director in charge of the Retail and Banking Division of BIDV 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.
As for Dinh Van Chien, deputy general director cum director of the Science and Technology Division of TPBank, in order to build a digital ecosystem, banks must build technology capacity and adopt new operating models with different processes for providing and deploying products than the traditional model.
Moreover, banks should cooperate and connect with technology companies which provide technology and capabilities that banks do not invest in and develop themselves.
Last but not least, connecting with different fintech companies and partners such as e-wallets and e-commerce platforms which have a large customer base, and customer data, will help banks better understand customers.