Technology helps reshape the future of banking: experts

April 05, 2023 - 15:33
In the near future, banks would apply new technology by using artificial intelligence (AI), machine learning, blockchain and big data.



Participants exchange views at a panel discussion during the two-day seminar in Hà Nội. — VNS Photo Việt Thắng

HÀ NỘI - Global finance has shifted from traditional centres in North America and Europe to Asia.

The move from west to east, according to Nguyễn Quốc Hùng, General Secretary of the Vietnam Banks Association (VNBA), will continue. 

Hùng was speaking at a seminar in Hà Nội, the World Financial Innovation Chain (WFIS), organised by TradePass of India with the support of VNBA.

Hùng said that the Việt Nam government has conducted a “National digital transformation programme to 2025, orientation to 2030” and the State Bank of Vietnam (SBV) also has issued a "Plan to implement a national strategy on developing a digital economy and digital society by 2025, with orientations to 2030.”

He believes this is an opportunity for banks to innovate their business models, and further promote the development of financial services, adapting to new circumstances with a view to providing customers with new products and diversified digital options.

Hùng said, a number of pioneering banks have now entered a new stage of digital creation. In the near future, banks would apply new technology by using artificial intelligence (AI), machine learning, blockchain and big data.

Việt Nam’s banking industry has gained positive results, he said, adding that in the first two months this year, non-cash payment transactions increased by 50.14 per cent and payment via internet banking rose by 90.21 per cent while mobile payment apps reached 60.29 per cent.

Banks work with Fintech companies

Hùng said that Việt Nam's fintech industry has made remarkable progress thanks to a strong application of digital protocols in the business and the Government’s determination to promote digital payments.

With an internet penetration rate of 73.2 percent and  91.3 million smartphone subscribers, Việt Nam is now more tech-savvy than ever, Hùng said, adding that these are the perfect ingredients for the growth of fintech, especially as Việt Nam now houses close to 200 fintech companies. 

According to the global Fintech Center Rankings 2021, Việt Nam's Fintech score ranked 70th in the world. In the Asia-Pacific region, HCM City and Hà Nội were ranked 28th and 33rd, respectively.

This year, Vietnamese start-up MoMo ranked 7th in the top 10 global financial platforms, alongside big names such as Alipay, GCash, M-Pesa, Apple Pay, and Paypal. 

Global Platforms Ranking 2023 evaluates the top 20 technology platforms in the world and ranks them based on six criteria: customers, service coverage and scope, usage and engagement, financial efficiency, ecosystem, strategy and leadership.

The mobile payment market in Việt Nam is expected to reach US$70.9 billion in 2025, an increase from $16 billion in 2016, according to research by Allied Market Research. The FinTech market in Việt Nam is expected to grow to $18 billion by 2024, according to analysts at financial holding Robocash Group.

These figures, according to Hùng, show that Việt Nam’s market had great potential for development and could become attractive to Fintech products.

Also speaking at the event, the deputy director of the Information Technology Department of SBV, Đoàn Thanh Hải, said the industry was developing rapidly and innovation was the key to maintaining this development, noting that cloud computing has helped changed the operations of banks. Cloud computing also enabled banks and other financial service providers to store and manage big data efficiently while improving flexibility and responsiveness to market changes.

Johnson Poh, chief data officer and group executive at VPBank Việt Nam, said the effective use of data would generate a competitive advantage. In the banking system, there were many data-driven operational processes and data could be the key to helping banks conduct strategic decisions.

Mukesh Pilania, head of Digital Banking, at Techcombank Vietnam, told the seminar that in the baking industry there was a need to use customer data in order to personalise products and services noting that using and making the most out of data were challenges facing banks.

“For Techcombank, we focus on classifying customers, connecting data, and analysing every client to closely understand their expectations for personalised experience,” he said.

Sharing the views, Nguyễn Trần Nam, Head of Digital, ACB Viet Nam (Asia Commercial Bank) emphasied three factors that banks needed to pay attention to meet the trend of personalising clients’ experience.

Nam said banks needed to know clients’ data well in order to optimally apply and analyse correctly. Secondly, banks should conduct unique and flexible factors for their banking products after analysing clients ‘data and apart from personalising clients’ products and services, banks had to personalise the interface of digital banking.

According to Nam, customer demand has risen to a new high and they really wanted to experience services designed specifically for them. Therefore, banks needed to offer flexible tools to quickly interact with clients. He concludes that time played an important role in the customers’ experience. VNS