The race for digital banking

With the launch of OCB OMNI, OCB has become the first integrated bank in Vietnam.

Sharing at the VIB Bank's General Meeting of Shareholders in 2018, Mr. Dang Khac Vy, Chairman of the Vietnam International Commercial Joint Stock Bank (VIB), said that among the 8 retail business objectives of VIB, digital banking is the first priority. This is not only a trend but also a platform to reduce costs for banks. Currently, VIB has got MyVIB, which is a very good app and highly rated by users. In addition, on the website, this bank is also building a transformation to serve all banking activities, becoming a large-scale operational channel in parallel with traditional banks.

In 2017, VIB bought Ho Chi Minh Branch of the Commonwealth Bank of Australia (CBA) to take over the process, technology, products, customers,... for their retail operation. In time, VIB will replicate the model of CBA to their other branches...

Mr. Nguyen Duc Vinh, VPBank's General Director, said that one of VPBank's investment focus is digital banking and the bank is planning to announce a new brand name of digital banking in the first half of 2018. Accordingly, this project has been invested by VPBank since 2017, and reached some positive results after the trial period. According to Mr. Vinh, so far VPBank has nearly 600,000 users of this service and the bank has mobilized over 10,000 billion VND through digital banking, accounting for 41% of the newly opened savings accounts. At the same time, more than 42,000 loan accounts have been made via digital banking; of which 30,000 transactions are made via credit card. As a result, VPBank's counter service has now dropped to 17-18%.

From 2016, LienVietPostBank also started to enter the digital banking business with “Vi Viet” (Vietnamese Wallet) product and has gained a lot of success. As of March, 2018, Vi Viet had more than 2 million users and more than 18,000 accepting points.

Mr. Nguyen Dinh Thang, the "father" of Vi Viet, became the new Chairman of the Board of LienVietPostBank for the term of 2018-2023 on March 28. Under Thang's leadership, digital banking will undoubtedly be the top priority at LienVietPostBank. Mr. Thang stated that with the investment of 100 billion VND, Vi Viet's application can provide three-quarters of the online functions that replace counter services, including payment facilities, savings deposits, mortgage loans with savings accounts. Regarding the fourth function - consulting services, personal finance management, mortgage loan origination, mortgage online, - LienVietPostBank is developing this function and will launch it in the coming time. LienVietPostBank expects that in the future, Vi Viet products will reach more than 3 million users, more than 30,000 accepting points and connect services with large trading and providing service partners...

In March, VietinBank also announced their cooperation agreement with a Fintech company, Opportunity Network, to provide digital customer service. This platform is especially useful for small and medium enterprises because the customer network of this segment is not diversified, and they have to spend a lot of money and human resources to find reputable partners. With the connection of enterprises on the digital platform, enterprises can look for diversified business opportunities such as expanding the market and promoting products. In addition, enterprises may seek strategic partners to call for capital participation, technology and human transformation, mergers – Acquisitions (M&A), joint venture cooperation, investment in improving machinery and equipment,… As a result, businesses have expanded their activities in new markets, increased cross-border trade cooperation, optimized the use of assets, capital mobilization, and domestic and foreign business development.

OCB has also launched the OCB OMNI application applying the Omni-Channel (integrated channel) platform for bank operations, marking the turning point of becoming the first integrated bank in Vietnam. On this basis, a series of superior products will be developed and introduced to the market from now to 2020 by OCB. Accordingly, during the launch OCB OMNI, OCB also announced the first products of the first phase, especially the different products and features such as financial management; payment basket; periodical, future payment; widget handbook; opening an online savings books...

Digitization in the banking industry is an indispensable trend for banks to survive and develop in the new era before the impact of the industrial revolution 4.0 and the growing number of customers using the products and services provided by Fintech. Under pressure of enhancing customer experience, growing revenue, and reducing cost, banks have been forced to step up their digital convergence investments and strengthen cooperation with Fintech to learn and buy the new financial technologies to improve their operational process.

Therefore, according to the forecast of the Research Department - LienVietPostBank (LPBResearch) bank, digital banking will be the next step of retail banks in Vietnam although most of them have no strategy development for digital banking so far. According to McKinsey, in the world, banks will have 3-5 years to develop their digital banking unless they want to be removed from the retail chain. Therefore, in 2018, LPBResearch forecasts that banks will take stronger steps in researching and using digital banking to bring customers new experiences and cut operating costs for themselves.