Banks expect to see drastic revenue increase in 2022

According to the Banking Industry Outlook report for the year 2022 released by SSI Research, service fees went up by 62% in the first half of 2021, then saw a slight decrease by 2% by the third quarter of 2021 due to the impact of COVID-19 in Vietnam. In the first nine months of 2021, the growth rate remained at 37% thanks to the operation of payment services and revenue from insurance cross-selling.

Banks have been trying to reach out to customers through digital channels after the State Bank of Vietnam approved the use of electronic identification, which became effective from March 5, 2021.

The number of digital customers accounted for approximately 40-90% of the total figure in 2021.

A notable example is MB Bank, having reached 4.5 million customers through the digital channel in the first 9 months of 2021. While other large banks fluctuated between 300,000 and 1.2 million customers. The number of online transactions also increased significantly over the same period.

SSI Research forecasts that in 2022, revenue from payment services will rise considerably along with international payments and trade finance, while the insurance cross-selling market continues to flourish. In 2021, MSB signed an exclusive contract with Prudential Insurance, while Sacombank renegotiated their exclusive contract with Daiichi Life Insurance.

Vietinbank is expected to fulfill their contract with Manulife Insurance by 2022, while Techcombank and VPBank continue to renegotiate with Manulife and AIA. HDBank and LienVietPostBank are looking forward to finalizing their new insurance cross-selling contract.

In general, banks have a lot of incentives to promote insurance cross-selling in order to achieve their targets or take advantage of sales revenue in negotiating prepaid fees. SSI Research estimated that insurance cross-selling commissions on total service revenue will increase in the upcoming year (from the current average of 15%).