The trend towards non-cash payments and digitalization in retail banking and the maturation of FinTech (financial technology) companies in Vietnam present major opportunities as well as challenges for retail banks during the fourth industrial revolution (Industry 4.0), the Vietnam Retail Banking Forum 2017, co-organized by the Vietnam Banks Association and IDG ASEAN on December 6 in Hanoi, with the theme “The Future of Retail Banking and Payment in the Fourth Industrial Revolution,” heard.
Mr. Nguyen Toan Thang, Secretary General of the Vietnam Banks Association, told the forum that Vietnamese banks are now moving in line with new technology trends. “They are transitioning from traditional banking to digital banking, transforming their business model, enhancing the customer experience with new products and solutions for business, building modern digital infrastructure, managing data, and applying artificial intelligence,” he said. “Industry 4.0 will create more opportunities for Vietnamese banks to develop retail banking, enhancing the application of innovative business solutions and breakthrough technologies to meet the needs of customers, especially those sensitive to new technology.”
Mr. Ha Huy Tuan, Deputy Chairman of the National Financial Supervisory Commission (NFSC), told the forum he acknowledged that many successful models stemming from Industry 4.0, such as Uber, Grab, Traveloka, Alibaba, and Amazon, are posing challenges for banks in attracting customers and increasing sales. “Industry 4.0 is changing many fields, with new technology breakthroughs such as artificial intelligence, automation, the Internet of Things, and cloud computing,” he said.
According to the “Banking Services Report: Users’ Behavior and Trends in Vietnam”, based on a survey and conducted by IDG Vietnam in 2017, e-banking solutions are increasingly favored for their easy access and time-saving nature, with 81 per cent of respondents using e-banking solutions for transactions compared to 21 per cent in 2015.
Meanwhile, customer dissatisfaction with e-banking solutions in Vietnam has remained almost constant over the last two years (68 per cent in 2017 and 70 per cent in 2015), with major issues including high transaction costs, transaction errors, and poor customer services. FinTech solutions are also gaining in popularity in Vietnam for their convenience and advanced security solutions.
The report showed that Vietnam’s banking sector has great potential to welcome Industry 4.0 but also faces many challenges. “The biggest challenge is the change in business model and business culture, as well as investments in information technology and human resources and technological risks,” said Mr. Can Van Luc, Chief Economist at BIDV. “Each financial institution therefore needs to build its own new business strategy in the digital age, along with investment in human resources, information infrastructure, and security.”
The Vietnam Retail Banking Forum 2017 served as a venue for industry leaders and experts from banking and technology sectors to discuss development trends in retail banking during the fourth industrial revolution by showcasing the latest technology solutions.
The forum brought together more than 20 high-profile leaders and experts from Singapore, the UK, France, South Korea, China, India, and Vietnam, who delivered speeches.
Vietnam Economic Times