In a day enjoying pho xao at a corner in Dong Da district, Hanoi, watching a lady cooking on the street who did not have a merchant bank account and other people interacting and eating her incredibly good food who were also unbanked, Bryan Carroll, CEO of TNEX, thought about the product that could help draw un- and underbanked people into the financial ecosystem.
“I asked myself why nobody else has done this? Why do we have 58 million people that are underbanked or unbanked? And the answer is that traditional banking cannot serve these segments because traditional banking is expensive.”
Then digital bank TNEX was officially launched in late 2020 by Vietnam Maritime Commercial Joint Stock Bank (MSB) as the first digital-only bank. It is addressing unmet customer lifestyle needs such as food, education, travel, entertainment, health, fashion, as well as messaging and chat.
An outstanding, innovative platform
Carroll noted that, “TNEX’s mission is to provide inclusive, secure, free, and innovative financial and lifestyle solutions for every individual and small- and micro-enterprise in both urban and rural areas across Vietnam.”
|Bryan Carroll, CEO of TNEX |
TNEX has outstanding competitive advantages in convenience and is 100 per cent free for users. TNEX has no branches and no transaction offices. Instead of wasting time travelling and queuing at traditional transaction offices, you can now open an account completely online through the TNEX smartphone application.
Customers can also perform banking transactions on the application such as transfer and receive money immediately after successful registration. TNEX digital bank guarantees five “free nos” for a lifetime: No transfer fees, no withdrawal fees, no annual fees, no account management fees, and no hidden costs.
TNEX serves every individual, allowing even low-incomers and the poor who cannot afford the minimum balance or transaction fees. TNEX is 97 per cent cheaper than traditional banks – and running on the Amazon Web Services (AWS) Cloud is one of the factors that enables this.
TNEX can also access markets in remote and mountainous areas such as Sapa in Lao Cai, where traditional banking cannot reach.
“We do not only cater for the affluent, we serve the everyday people, the 58 million people who have struggled to be included in the financial system and have had it with being unable to access payments or credit,” Carroll said.
Maybe even more importantly, TNEX creates an ecosystem of individual customers and merchants. It is believed by Carroll that traditional banking and how it is delivered is not what customers actually want. When asked if they want a bank account, merchants and micro-merchants often said no. However, when asked if they want to increase sales or reduce costs, they would immediately say yes.
“An ecosystem gives you everything you need to live, where a marketplace is, where you go buy stuff. In addition, TNEX enables social interactions, allowing merchants and customers to chat securely in real time between each other,” he elaborated.
TNEX is all about generating lifetime values for customers and a platform for customers and shop owners. Specifically, TNEX-Consumer is an application that brings customers a world filled with offers targeting their daily needs such as food or entertainment. Meanwhile, TNEX-Merchant allows shop owners and shops to post online offers, targeting the right group of customers.
At present, 85 per cent of the enterprises in Vietnam are micro merchants. They provide about 40 per cent of Vietnam’s GDP, and 50 per cent of the employment in the country.
“When we address our customers, we are trying to make banking almost invisible. We have spent 1,000s of hours with our customers and continue to look at their lives and needs,” Carroll said. “Leveraging AWS’s broad and deep portfolio of cloud services – including analytics and machine learning – we can identify every single thing our customer is doing right now, what they have done in the past, and then make the best offer.”
“For instance, if we know that you enjoy tra da (Vietnamese iced tea that’s about more than VND5,000 and could go with pho) in the morning, we will make sure to get you an offer or a promo for tra da. It’s about mirroring the richness of Vietnamese culture, how people live their lives, and making it more digitized,” he added.
The potential of digital banking in Vietnam is huge. A key segment for TNEX is Generation Z, the demographic cohort succeeding millennials. By 2025, Vietnam’s Generation Z of digital-first consumers with significant spending power is expected to comprise 25 per cent of the country’s work force.
Now, along all banks in Vietnam, MSB is embarking on a major transformation programme because it is “go digital or go home”.
“I think the future is huge for Vietnam and digital-only banking,” Carroll said. “If we look at the numbers, there are 148 million phone subscriptions in Vietnam, 69 per cent of which are smartphones. People live their lives on their phones, spending six hours and 40-odd minutes on digital media every day.”
“I think the State Bank of Vietnam’s legislation is really facilitating digital transformation in banking. I think the next logical step will be the creation of a digital banking license capability, which will allow zero touch digital-only banks that can do it cheap and fast to enter the market,” he noted.