Customers need more understanding about financial services

Mobile banking applications have played an important role in financial inclusion journey thank to the development of digital transformation process among banks. (Photo courtesy of Mambu)

The need to increase awareness and understanding of customers' financial services is increasing globally, and Vietnam - an emerging economy, is no exception, according to a report.

The information was released from a study of 2,000 global consumers released on May 27 by Mambu, a banking and financial services platform.

According to the State Bank of Vietnam (SBV)’s statistics in 2020, 70 percent of adults in the country had a bank account, but nearly half of them lacked access to credit. According to Agribank, more than 70 percent of the population is concentrated in rural areas, but access to modern banking services in these areas is very limited.

On the other hand, in recent years, thanks to the development of digital technology and the digital transformation process among banks, mobile banking applications have played an important role in financial inclusion. Banks have been able to reach customers in places without a physical bank headquarters or branches.

Cashless transactions in Vietnam increased by 75.2 percent in the first nine months of 2020, compared to the same period the year before. Online shopping grew exponentially, ranking third in Southeast Asia in terms of visits to online shopping apps in the second quarter of 2020.

The Government's efforts to enhance financial services include aiming for 80 percent of adults to have a bank account by 2025 and piloting a mobile money programme for two years from 2021.

The above factors encourage people to learn and use financial services while promoting digital transformation among banks and credit institutions. Statistics from the SBV show that 94 percent of banks in Vietnam have gone digital or are planning to do so.

As well as banks, fintechs and telecoms firms are involved in digital banking in Vietnam. Instead of competing with each other, there’s increasing collaboration between technology companies and credit institutions.

New technology solutions are changing the financial service landscape in Vietnam, include new forms of online payment such as e-wallets, QR codes, digital banking products incorporating AI, data analytics and cloud computing.

Pham Quang Minh, General Manager of Mambu Vietnam said: “Technology solutions that leverage true software as services (SaaS), cloud-native and API-first platform allow banks to compose any desired product and service by assembling best-of-breed components and independently connecting them together. The 'composable banking' approach will help banks digitise quickly, flexibly, economically, provides a 'customer-centric' experience, and meet the constantly changing needs of customers in the 4.0 era."

On a global scale, the report revealed both banked and unbanked inpiduals feel underserved, with 56 percent of banked customers claiming there are other services they should be able to access.

“With more than 1.7 billion unbanked adults globally, the data that’s usually reported points us to emerging markets and geographical barriers to access; however, the gap in accessibility on a global level should not be ignored,” said Elliott Limb, Mambu’s Chief Customer Officer.

“Personalisation is going to be key for banks if they want to avoid being sidelined by new entrants that give more inclusivity and access. Banks need to be using the technology available to understand their consumers’ habits and in turn, anticipate their needs, with hyper-personalised recommendations and services”./.