Improving Operational Efficiency, Competitive Advantages of Vietnamese Banks

“Innovation and transformation - Key factors for banks improving operational efficiency and competitive advantage in the new context of integration” is the theme of the Banking Vietnam Exhibition - Conference 2016 held on May 19. The event was co-hosted by the State Bank of Vietnam (SBV) and International Data Group (IDG).

Speaking at the conference, Deputy Minister of Information and Communications Nguyen Thanh Hung affirmed that extensive economic integration is expected to bring more opportunities for commodity development to the Vietnamese economy in general and to the banking industry in particular. However, this process is also coupled with rising pressures from mounting competition with foreign banks with strong financial strength and effective risk management capabilities.

 

He added, the more modern the information systems is, the higher risks and consequences of information insecurity are faced. Information insecurity in the banking sector tends to be occur more frequently, with the latest being cyber attacks to a Bangladeshi bank and a Vietnamese bank.

 

Agreed with this view, many attendants also said that IT risks are a huge potential risk of the banking system. Popular risks are cyber attacks and security leak attacks. Bad information security or operational errors and IT personnel challenges result in mistakes.

 

In reality, many banks in Vietnam do not have enough resources to build strong firewalls systems against hackers. While other countries invest billions of US dollars each year for new technologies, the Vietnamese banking sector spends a very modest amount for this.

 

Deputy Minister Hung recommended that, in addition to modern information infrastructure construction and application, the banking industry needs to pay attention to information security. To restrict information security risks, banks must opt for modern technologies immediately, identifying information technology risk control and management is vital to the banking system.

 

Mr Pham Xuan Hoe, Deputy Director of the Banking Strategy Institute, SBV, said, in a recent survey, 62 per cent of new-generation bank leaders in the world think that banks will impossibly exist without innovation now. Commercial banks need to create internet and mobile banking products and services for customers instead of mainly being used for marketing as now.

 

SBV Deputy Governor Nguyen Kim Anh noted that, to be active the integration process, domestic banks must quickly enhance their governance capacity and apply modern technology in order to provide various types of high-quality banking service quality like mobile banking and digital banking. For years, the banking sector has taken modern technological application and development as the key and decisive factor in institutional reform, capacity building and banking operation standardisation in accordance with international practices.

 

In Vietnam, banks are also working hard to modernise their distribution channels to bring more benefits to their customers. Typically, the VPBank launched online banking services where customers can use banking services on their mobile phones, called mobile banking. BIDV started studying sales services via social networks (Facebook). Or Bank Plus mobile banking service provided by Viettel helps people in remote areas transfer money to their children studying in cities a more simple way.

 

Economist Can Van Luc recommended that before the boom of technology, banks need to invest much in this area because it brings in very huge benefits.

 

Deputy Minister Hung also said that the Ministry of Information and Communications will always support and cooperate with Vietnam's banking sector to apply information technology and information security in order to improve efficiency and enhance competitiveness of this sector.

 

The conference was incorporated a banking technology exhibition with more than 30 booths showcasing innovative banking solutions provided by leading technology companies, covering banking infrastructure, data analysis, market risk, branch automation, transformation of core banking systems, security and privacy.