Digital Technology Helps Banks Innovate Comprehensively

3:15:39 PM | 14/6/2019

Economies around the world are witnessing the rapid development of digital technology in general and the digitalization trend in the banking sector in particular - also known as digital banking.

As one of the largest commercial banks in Vietnam, Vietcombank has launched the digital technology trading space for the first time in Vietnam, investing in a new version of VCB-Mobile B@nking service with new features such as registering/canceling the authorization of VCB-Auto Debit, online deposit, transferring money to beneficiaries receiving cash at Vietcombank; deploying money transfer service integrated AI technology - VCBPAY.

All banks in Vietnam, whether domestic or international, are getting actively involved. Dozens of other domestic banks such as Sacombank, Techcombank, VPBank, VIB, OCB, NCB have all allowed registering online accounts. Each bank also launches more distinct services such as BIDV with SmartBanking, or TPBank with LiveBank, VPBank promoting digitalization from the inside out with the establishment of the Digital Lab.

Other products and services involve chip cards with high security technology in accordance with the current 4.0 trend.

The development of banking services on digital technology platform can help banks comprehensively innovate from the process of providing products and services, renewing the distribution channel systems, expanding product portfolio, increasing competitiveness, improving business efficiency and creating new growth motivation. That comprehensive innovation ultimately facilitates the provision of more and more utilities for customers in many aspects of life.

Digital banking is understood as a new business model, a new approach with new values. Accordingly, most banking transactions are done online via the Internet. Transactions via digital banking do not have to be processed at the bank branch and minimize the relevant paperwork. At the same time, customers can do digital banking anytime and anywhere. Digital bank development is one of the most prominent trends helping banks to develop sustainably in the context of industrial revolution 4.0 as well as creating the breakthrough development in providing products and services.

Digital technology is also an opportunity for countries to promote financial inclusion, aiming to provide appropriate and convenient financial services to all individuals and organizations, especially to low-income earners and vulnerable people to enhance access to finance, creating livelihood opportunities, circulating investment and savings flows in society, thereby promoting economic growth.

Digitalization helps the bank comprehensively innovate the process of providing products and services in an optimal, automated and transparent manner. At the same time, it helps the bank to innovate its distribution channel system, expand its product portfolio, and provide services to a wider range of customers at lower cost.

According to SBV, digital technology is gradually changing fundamentally the form of providing financial and banking services. In particular, industrial revolution 4.0 is forcing banks and financial service providers to apply more advanced technologies in providing innovative financial products and services such as artificial intelligence and big data, cloud computing and the deep involvement of technology companies in the financial sector (Fintech).

According to Ms. Nguyen Thuy Duong, Deputy General Director of Ernst & Young Vietnam, Vice Chair of Vietnam FinTech Club, the strong digital trend forced the banking and finance sector to get themselves updated and better meet the increasing needs of customers. The decision to stay loyal to a bank today is not only based on the core product or service of that bank, but also depends on the new experience, as well as the utilities that the technology applications of the bank offer. Also according to an analysis report on "Global banking industry prospects 2018" conducted by Ernst & Young, up to 85% of banks set the top digitized conversion target among 221 financial institutions in 29 markets surveyed. Most banks said that investing in technology including Data and Analytics, artificial intelligence and application programming interface (API) will help create a competitive advantage in establishing and expanding markets in the near future.

With constant efforts to innovate products and services, increase the digital banking experience for customers, banks in Vietnam are showing strong development of innovative and sustainable business models, bringing satisfaction to customers through digital experiences using data platform and technology.

Quynh Anh