Page 14 - Layout 1

COVER STORY

about access to source technology imple-
-
mented early on, along with a human
resources strategy creating the process and
experience.”
Co-developed by VietCapital Bank as a
digital bank, Timo does not have any trans-
action offices because everything is conducted
online 24/7. “The line between digital and
traditional banks will continue to be blurred
into the future,” Mr. Henry Nguyen, CEO
of Timo Digital Bank Vietnam, told VET.
“Over the next five to ten years, Timo will
be nourishing an ever-growing network of
partners in its digital ecosystem while using
customer data and insights from domestic
and foreign markets to improve its func-
tionality and user experience.”
Other large-scale banks are also focusing
on the digital transformation of traditional
business activities combined with creating PHOTOS: VIET TUAN
new products and service channels for
customers. For example, Techcombank
has focused on developing the customer
experience in online banking, and NamA
Bank has applied robotics technology in banks alike. The window for seizing oppor- Circular No. 16/2020/TT-NHNN allowing
trading. VCB Digibank from Vietcombank tunities will narrow quickly as consumers the opening of personal accounts using
was launched on the basis of merging give serious consideration to innovative eKYC (electronic Know-Your-Customer).
online transaction platforms, replacing its propositions from digital banks. The report On May 11, Decision No. 810/QD-
previous Internet Banking and Mobile revealed that the increase in active digital NHNN approving a plan for the digital
Banking services, and BIDV iBank allows bank users is arguably higher in Vietnam transformation of the banking sector by
businesses to manage cash flow effectively compared to Asia-Pacific emerging markets 2025 with orientations towards 2030 was
and easily manage revenue through an and some Asia-Pacific developed markets. promulgated by the SBV, with an ambitious
identity account system, and provides Between 2017 and 2021, 88 per cent of objective of gradually creating solid legal
direct connections with accounting / ERP consumers in regional emerging markets foundations for the development of digital
systems. The digital transformation process actively used digital banks, a 33 percentage bank models, setting out a roadmap and
of large banks is often associated with the point (ppt) increase. In Vietnam, the figure clearly stating nine implementation solu-
fundamental upgrade of information tech- rose 41 ppts in 2021 to 82 per cent. tions for such models. With this, the legal
nology infrastructure, especially core tech- Notably, consumers’ payment habits framework and policies in payment-related
nology (Core Banking). were changed substantially by the Covid- activities will continue to be improved for
According to a study by the State Bank 19 pandemic. “All behavior relating to con- the application of new technologies and
of Vietnam (SBV), some 94 per cent of sumption and daily life changed com- hopefully include a license for the regis-
banks have initially implemented or are pletely,” said Mr. Nguyen. “People are now tration of digital banks, leading to a boom
researching and building a digital trans- conducting more and more transactions. in the model in the near future.
formation strategy, of which 59 per cent Though they stayed at home, their shopping Nevertheless, the legal corridor for
have started implementation. Most Viet- needs never decreased.” Many stores sell digital banks is still not specific. The organ-
namese banks have introduced digital via social media and provide local delivery. ization and operation of banks are con-
banking at the transformation level in Transactions rise as a result, and people ducted following the provisions of the Law
terms of communications channels and also pay other bills online. “When people on Credit Institutions 2010, amended and
transformation processes to new data plat- could not have direct contact with others, supplemented in 2017, and guiding docu-
forms, which have been researched and digital banking models like Timo became ments. Meanwhile, e-transaction activities
implemented at a number of pioneer banks. an important element in helping them are carried out in accordance with the
process these transactions easily and provisions of the Law on E-Transactions
TAKING ON OBSTACLES quickly,” he noted. 2005 and guiding documents. These are
Vietnam is considered to possess poten- In order to develop digital banking, not in step with new technologies, which
tial, with opportunities on offer in digital the government and the SBV have issued may slow down development. “Traditional
banking development. The adoption of many legal documents to manage and pro- banks and banking services face ongoing
digital banking in Asia-Pacific emerging mote the development of non-cash payment challenges in complying with changing
markets, especially Vietnam, has caught services and initially set up the legal frame- regulations, risk management, capital
up with that in developed markets, accord- work for implementation. Examples include assurance, and the urgent need to upgrade
ing to a McKinsey report on the digital Decree No. 35/2007/ND-CP on electronic systems,” Mr. Nguyen said. “For digital
banking behavior of 20,000 urban banking transactions in banking activities, Decision banks, we must be mindful of all these
consumers across 15 Asia-Pacific markets, No. 35/2007/QD-NHNN on the principles issues but we must be focused on winning
including Vietnam. This change in behavior of risk management in e-banking activities, customer trust and service their most
has brought the financial services industry Decision No. 2545/QD-TTg approving a important needs.”
to a new level of maturity, opening up project on developing non-cash payments The cost of digitizing the entire opera-
new opportunities for banks and non- in Vietnam in the 2019-2020 period, and tions of a bank is huge, including invest-

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