Digital Banking Inevitable for Vietnamese Banks, Experts Say

Nhat Trung

10:53 14/06/2019

BizLIVE - In terms of legal procedures, compared to surrounding countries in the area, the Vietnamese legal framwork has high adaptability to changes in the market. 

Digital Banking Inevitable for Vietnamese Banks, Experts Say
Today, Bizlive held the talk named “Digital Banking and the Specific Ecosystem”. Economist Can Van Luc said that the definition digital banking is often misunderstood as digital activity in the traditional banking system. 
According to Luc, the understanding that digital banking is banks will digitalize all activities is correct but not sufficient. Luc pointed out that digital bank is the new business model, new approach with new values, not just digitalize what already exist.
The digital banking contents, in the opinion of Luc, are: The integrity of distribution channels, diversifying the channels so that consumers can get easy access to banking services. In which, all channels should have the connectivity so that to ensure the customers’ experience. 
The digital banking development must count on the three following factors: eco-system forming to serve customers; customer base development and customer-centered strategy. All those steps will help to bring new experiences to customers, change the interaction methodologies between customers and banks.
 VPBank Director of Digital Sales & Partners, Nguyen Chien Thang
VPBank Director of Digital Sales & Partners, Nguyen Chien Thang, stressed that digital banking is the inevitable development path for banks. In which, data value is the prerequisite for development.
In terms of challenges, Thang thought that the biggest challenge lies in customers’ trust and habits. Thang shared that during the first days of establishment, Thang set out the targets to break the old habits of customers, build trusts and in order to do that, there should be benefits brought to customers.
Second challenge, according to Thang, is to build the eco system and digital network. Customers want to use all basic digital services.
In terms of legal procedures, compared to surrounding countries in the area, the Vietnamese legal framwork has high adaptability to changes in the market. Technology in the banking sector is developing fast thus technology does not pose as a hinderance to digital banking development.
Digital Banking should be understood simply as bank digitalizes all banking activities and services. 
Thang mentioned three trends of development in the Vietnamese banking sector. The first trend is from the end of 1990s when the Government started to launch the two level banking model. When switching to the two level banking model, the commercial banks became more active. In 2002, VCB became the first to roll out ATM technology. VPBank had to learn the card connectivity technology. Some state owneed banks ran two separate systems. 
In 2005, thanks to funding from World Bank, core banking in Vietnam received 5 million for development. In 2006, VCB ran the marketing program for the new convenience in which customers can withdraw money anywhere in the country after they deposit. 
The second trend started from 2008. Several years ago, it took several days to transfer money interbanks but now it takes just a few seconds. The third trend is the booming of Internet banking. Mobile banking is the necessary foundation for digital banking.

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