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COVER STORY

cent of Vietnamese bank customers are
open to purchasing banking products and
services through digital channels, only 23
per cent actually do so. “This can be
addressed through five digital onboarding
pillars: digital education campaigns, aware-
ness raising of the value proposition of
digital, incentives such as discounts or fee
waivers for using digital channels, phasing
out of legacy channels over time, and
having in place secure but easy-to-use
security measures,” Mr. Delteil said.
There are also challenges to be faced
by Vietnamese banks during their digital
transformation journey, such as cyber secu-
rity, difficulties in accessing and exploiting
a national citizen database when imple-
menting eKYC (electronic know your cus-
PHOTOS: VIET TUAN and an incomplete legal framework in
tomer) solutions for account openings,
some areas, which may delay banks’ digital
transformation and partnership expansions,
according to Mr. Dong.
Based on customer needs and trends,
Insufficient help and support from staff Covid-19 by rethinking and accelerating there are several areas in need of addressing
-
at branches are cited by 40-50 per cent of their vision for digital transformation in for innovation in Vietnam’s banking system
Vietnamese consumers surveyed as one several areas. Lockdowns have shown that to take hold, including bridging the gap
of the top reasons for switching banks in the pandemic can create significant idle between customer appetite and actual pur-
the past 12 months. Half of respondents capacity at bank branches and networks, chasing behavior. To close this gap, Mr.
cite poor digital functionality as another agent networks, and ATMs, etc. Banks had Delteil recommended that banks be pre-
reason. Where gaps exist, banks need to to reconsider what portion of that physical pared to introduce innovative features and
enhance training in digital products and capacity can be reallocated to adjust cost compelling value propositions to engage
standardize service quality among their bases, free up productivity gains, and customers more deeply. They will also
employees, as well as bring in digital teams capture more value from digital offerings. need to leverage data streaming and
that are able to design products and plat- At the same time, more “digital onboard- advanced analytical capabilities to anticipate
forms with impressive and differentiated ing” of customers is needed. While 71 per customer needs in near real time and
functionalities. deliver highly personalized messages and
offers to each customer at scale, at the
BRIDGING THE GAPS right time, and via the preferred channel.
This year, MBBank aims to again be in Since digital offerings will be more rapid
the top 5 commercial banks in terms of than traditional banking, banks’ operating
operational quality and efficiency, leading models and talent capabilities need to be
in digital transformation with five key developed to match this new speed.
principles: foundation consolidation, digital Brand positioning is another important
transformation, comprehensive growth, factor. Each bank must be clear about
efficiency, and sustainability. Digital trans- its position in Vietnam’s increasingly
formation is among the three most impor- competitive market for financial services.
tant development strategies of the bank Throughout Asia-Pacific emerging mar-
over the next five years. kets, the penetration of fintech tools and
To achieve that end, Mr. Trung said e-wallets increased from 38 to 54 per
the bank has made elaborate preparations cent between 2017 and 2021. Fintech
in terms of technological infrastructure as offerings have grown much faster over
well as human resources, focusing on Banks have opportunities the same period, increasing market pen-
upgrading the customer experience. It is to partner or acquire etration by 40 percentage points, from
worth noting that investment in technology 16 to 56 per cent. Given the recent strong
infrastructure is not merely about tech- fintech / e-wallet solutions to showing of fintech innovators like MoMo,
nology but also about creating new product gain market share as well as to Shopee, and Grab, banks should note
development processes, new business mod- rethink their online and offline that, in Vietnam, approximately 60 per
els, and new ways of serving customers. cent of customers are open to switching
“Over the past three years, MBBank has customer journeys to provide to a digital-only bank. “This sentiment
invested around $50 million each year in integrated and multiple may be encouraging to full-service digital
technology, and this investment strategy touchpoints for consumers.” banking platforms, but it should also
will continue for at least the next five challenge incumbents to double down
years,” he told VET. on customer engagement through digital
Like other banks in the region, Viet- MR. BRUCE DELTEIL, channels and rethink branches as a profit
namese banks have had to respond to Managing Partner, McKinsey & Co. Vietnam center,” he believes. %

10 | VIETNAM ECONOMIC TIMES | NOVEMBER 2021 www.en.vneconomy.vn