Stepping up IT Application and Developing Modern Banking Services

At the conference, experts said that, in 2012, the banking industry revealed a plenty of weaknesses in risk management and bank governance, which are primary causes to the high bad debt ratio of the Vietnamese banking industry, standing at 8.82 percent on total outstanding loans (according to SBV data), among the highest in the region. Consequences of world crises are expected to bottom out in 2013 and start a period of economic recovery and strong growth. Solutions to bad debt, risk management and banking governance together with bank restructuring acceleration will continue to be challenges in 2013. Therefore, banks need to focus on upgrading technologies to meet future requirements.

 

Besides, modern banking services - despite being diversified - mainly concentrate in major provinces and cities where citizens are familiar with banking services and transact with big values while remain distant with people in the countryside and far-lying areas who do not have bank accounts. According to experts, this market segment is very potential but untapped by commercial banks.

 

Delivering the opening speech, SBV Governor Nguyen Van Binh said the banking system restructuring would make huge progress in 2013. The opportunities for the banking sector in 2013 are represented in the robust development of new technology trends like cloud computing, mobile computing, social networking, and big data. These technology trends provide opportunities for banks to improve banking administration and system management, and completely change the way banks interact and engage customers. Banks need to capture these strong-growing technology trends to build up governance capabilities and develop banking services in the future.

Cloud computing trend is leveraging performance, flexibility and expansibility of banking IT system while Big Data analysis (looking into customer database to understand more about the market and customers’ demand) will decide the success of product/service differentiation, attract attention of customers and enhance their satisfaction. In addition, mobile computing and social networking will enhance accessibility and interactivity, and generate high convenience for customers in using these banking and financial products and services. So, in 2013, banks will focus on building breakthrough strategies for new customer experiences.

 

Mr Le Thanh Tam, General Director of IDG ASEAN, said mobile banking will be overheating in Vietnam, especially when smartphones are being used more popularly. In the next five years, 98 percent of Vietnamese to people will use mobile banking and mobile payment. This will be a great opportunity for businesses to invest in this sector.

 

The regional sales manager of UXP Temenos said that the rapid development of distribution channels together with popular use of smart devices of customers is presenting both challenges and opportunities for financial institutions. Nowadays, customers need to use financial services anytime, anywhere and expect to experience best services on every channel. This is a great opportunity for financial institutions to attract new prospective customers and strengthen cohesion and satisfaction of existing customers. Financial institutions need to act right strategies to maintain competitive advantages in the context of unpredictable market changes.

Held in Hanoi together with the conference, Vietnam Banking 2013 Exhibition will showcase most advanced banking technological solutions for retail banking sector, such as core banking, cloud computing , virtualisation, big data, data analysis solution, smart business management solutions, application development, system integration, ERP, BPM, credit risk management, operational risk management, and modern banking service channels.

 

Science and technology play very crucial roles and have significant contributions to socio- economic development, including banking sector. The management regime for scientific and technological activities was stipulated in the Decision 277/QD-NHNN of the Governor of the State Bank dated February 16, 2012, which created the legal framework for scientific and technological activities and improve State management over these activities.

 

However, in recent years, scientific and technological application in the Vietnamese banking sector has revealed many shortcomings. The sector has not generated innovative and breakthrough products because it lacks scientific and technological development strategies, lacks mechanisms for mobilising internal and external resources, and lacks financial mechanisms.

 

In the coming time, core contents of banking science and technology development in the 2013-2015 period, with a vision to 2020 are: Renovating and improving banking scientific and technological management, stepping up scientific advancements for banking industry modernisation, developing research personnel and expanding international cooperation and integration.

 

The time of rigid core banking run on non-interactive technology is no longer available. Today, banks focus on short-term profitable service-oriented projects. Architectures base on individual components and flexible technologies to respond quickly to market demands and improve the quality of customer experiences.

 

To keep customers and compete with non-bank institutions, banks must be willing to change their business models, ensure services to be delivered in multi-channel platform, and focus on customer needs and facilitate customers to use services anytime anywhere. In this digital time, only companies with modern technological infrastructures are able to adapt to new business environments. The ability to quickly improve service quality and manufacturing processes to meet customer demands is necessary for any companies to maintain competitive advantages.

 

IT is becoming an important tool to run business and ensure safety and efficiency. Therefore, stepping up IT applications to banking operations is considered a vital element to any banks in the digital age. Furthermore, banking IT application helps develop other economic sectors such as e-commerce and online payment.

 

Currently, Vietnamese banks are faced with enormous challenges like less efficient operations, increasing costs, lower credit growth and bad debt risks. Upgrading core software, payment system and specialist business software is necessary but insufficient because these systems are data-driven systems. Therefore, in the coming time, to improve business administration capabilities and boost risk management to keep up with international trends, Vietnamese banks must make every effort to seek, select, apply and deploy suitable IT solutions.