Vietnam Has Great Potential for Retail Banking Development

 

Speaking at the forum, Ms Tran Thi Hong Hanh, Secretary General of VNBA, affirmed retail banking development is a general trend of the world and Vietnam is no exception. This is also an opportunity for banks to demonstrate their competencies and brands in both domestic and international markets.

 

Mr Le Thanh Tam, CEO of IDG, said, Vietnam's retail banking market has huge potential for development. In 2015, the banking sector has witnessed strong makeovers, featured with bank restructuring plus bank mergers and acquisitions (M&As), efforts of the State Bank of Vietnam (SBV) to reduce bad debt ratio, and its preparatory steps for unifying banking institutions with the Southeast Asian countries. These are three pillars that push up breakthrough changes of the banking sector in general and the retail banking sector - a segment that banks are heading for - in particular.

 

He evidenced that IDG conducts annual research and analysis on 21 categories of banking operations in Vietnam to make Vietnam Banking Report. In 2015, the strong growth of global electronic services and modern banking products/services (E-Banking, Mobile Banking) is expected to become the mainstream in the coming years. As of 2014, Vietnam had more than 30 banks engaged in this market, compared with 19 in 2012.

 

In addition, surveys on consumer behaviours towards retail banking showed a clear rising trend in the interest of customers in above banking products and services (rising from an insignificant percentage in 2013 to 12 percent of respondents in 2015).

 

Concurring with this viewpoint, Mr Huynh Song Hao, Retail Banking Director at Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), said that Vietnam has a population of over 92.5 million and about 69 percent of people at working age are young. Besides, rising income is a precondition for banks to deploy these retail banking products and services.

 

Before the sweeping development of global electronic services, information technology application is the key to success of retail banks.

 

Mr Tran Cong Quynh Lan, Deputy General Director of Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), said banks need huge investment for technology as, without it, they cannot create new products and lose competiveness. He noted that Vietinbank has invested very strongly in modern technology in the past three years and will complete all items to bring its technological system on par with rivals in the region in 2016.

 

Mr Andrew Cranshaw, Senior Principal Business Consultant at Genesys Telecommunications Laboratories Asia Pte Ltd, also confirmed that, with increasingly upgraded and improved technologies, retail banks are getting greater benefits from increasing experience for customers. In particular, the SMAC (social media, mobile, analytics and cloud technology) platform is being fully utilised to add surplus values for retail investors.

 

Remarking on how to improve the competitiveness of Vietnam banking system in the context of international integration, Dr Can Van Luc, senior advisor to the Board of Directors of BIDV, affirmed that Vietnam has been taking part in a number of free trade agreements, including the ASEAN Economic Community (AEC) scheduled for formation at the end of this year. Financial integration is slower than trade integration (because of its greater complexity and big differences). Therefore, commercial banks of Vietnam must to change, perfect themselves and improve service quality to keep up with the integration roadmap. And, the information technology application is the key to doing this.

 

Besides, according to experts, retail channels have always played an essential role in linking customers and meeting customer expectations with best experiences through interaction with customers. Banks should capture diverse needs of customers and customer segments to plan retail banking product/service development for target customers.