TPBank - From the leading digital banking leader to the green transformation

As a pioneer in the digital transformation revolution of the banking industry, Tien Phong Commercial Joint Stock Bank (TPBank, HOSE: TPB) is also a pioneer in applying technology to build a modern business model, helping to increase productivity as well as minimize negative impacts on the environment, thereby contributing to promoting the sustainable development of Vietnam's economy.

Playing the vital role of the economy as an important capital supply channel, the banking industry also plays an extremely important role in promoting sustainable economic development, through orienting capital sources for green projects, contributing to reducing emissions and protecting the environment. We had the opportunity to talk with Mr. Nguyen Hung - General Director of TPBank to better understand the Bank's green transformation story.

Promoting technology application to perfect the payment ecosystem and promote sustainable development

In addition to being a leader in digital transformation, where is TPBank's green transformation position, sir?

General Director Nguyen Hung: TPBank has pioneered and actively contributed to accelerating the realization of Vietnam's green growth strategy with preferential loan programs, creating conditions for customers to supplement capital for investment, business, and consumption purposes as well as complying with the State Bank's orientation in developing green credit, contributing to environmental protection.

Typically, in September 2023, the US Development Finance Corporation (DFC) under the US Government committed to providing a loan worth 100 million USD to TPBank with a term of 7 years. The credit will be directed by the Bank to individual customers, micro-enterprises, small and medium-sized enterprises in Vietnam, including low-income female customers and businesses owned and led by women in Vietnam.

Not only that, a series of special preferential credit packages with a limit of 2,000 billion VND, prioritizing green development enterprises, export enterprises, and women-owned enterprises from the WSMEs program (an additional 0.2% reduction compared to the preferential level) in coordination with the Asian Development Bank (ADB) are also being implemented synchronously across channels.

How does the bank perfect its payment ecosystem and promote sustainable development, sir?

TPBank continues to perfect its payment ecosystem, becoming one of the banks with the most comprehensive digital experience ecosystem by expanding its cross-border QR payment platform, enhancing its biometric authentication system at all customer touchpoints, joining new NFC payment platforms, and a series of technology-rich features.

TPBank collects thousands of data points from traditional structured and unstructured data sources. All data is meaningful when exploited sufficiently and analyzed correctly. Combining principle-based models and artificial intelligence (AI), TPBank has introduced a series of models that can detect betting and gambling transactions, detect abnormalities in customer transaction behavior, fraudulent card opening records, detect credit card transactions on payment acceptance machines, unusual foreign currency transfers, money laundering transactions, etc.

In April 2022, TPBank officially launched Bio Center - a centralized citizen data warehouse and biometric authentication system proactively researched and developed by TPBank. As a place to concentrate and provide information related to biometric data and population data, Bio Center becomes a foundational system, playing a key role in TPBank's digitalization process, especially in eKYC (customer identity verification).

TPBank also put autobot into operation to promptly handle when detecting warnings about unusual and suspicious transactions on the account.

For small shop owners, TPBank also pioneered the implementation of the SoftPOS contactless payment method, turning phones into card swipers through the TPBank SoftPOS application.

From mid-2023, customers using the application on the iOS operating system can easily and immediately add TPBank bank cards to Apple Pay, Google Wallet, or Samsung Wallet. Synchronizing the feature of opening TPBank virtual debit cards through the banking application or at LiveBank 24/7, TPBank has completed the 100% online experience circle, the only one on the market, helping customers from the time they register to open a card to being able to spend in just a few minutes.

TPBank also participated in the development of Open Banking right from the beginning, standing shoulder to shoulder with the leading banks in the world such as DBS, OCBC (Singapore), Citibank (USA)... By listening and understanding the needs of customers, TPBank has implemented Open Banking and OpenAPI solutions (Banking as a Service) since 2018-2019.

Could you tell us some of the results achieved when TPBank deployed these solutions?

Up to now, TPBank is one of the banks with the largest wallet connection service coverage rate in Vietnam with 12 e-wallets and accounting for more than 90% of e-wallet service users. Purple Bank owns the leading digital ecosystem for 3 consecutive years, according to Asian Banker.

With new technologies continuously launched, TPBank application always achieves a high rate of regular customers (increased 4-5 times in the past 5 years). Currently, 80% of TPBank's new customers open accounts via digital channels. 98% of TPBank's customer transactions are via digital channels.

TPBank has a higher goal: Expanding its customer base, thereby becoming an important factor contributing to the Government and State Bank's project that all Vietnamese people will be able to use banking services, of which 90% will use digital banking services. This will help customers save time, effort, travel costs/cash withdrawals... making customers' lives easier thanks to the support of digital banking.

Developing criteria for green credit

How many green projects has TPBank financed in the past and what are the areas that the Bank is prioritizing investment in? How does the Bank ensure that funded projects comply with sustainability standards?

TPBank has financed many green projects in areas such as renewable energy, water management and energy efficiency improvement projects, contributing to reducing greenhouse gas emissions. TPBank relies on many criteria to evaluate and classify the sustainability of projects in order to grant green credit.

First, for the criteria of meeting environmental standards, projects must comply with national and international laws on environmental protection and sustainable development. These are projects that have achieved environmental certifications such as ISO 14001, LEED (Leadership in Energy and Environmental Design); or similar international standards. Projects need to demonstrate the ability to reduce CO2 emissions and other greenhouse gases. Projects that do not harm natural resources and biodiversity, even contribute to their protection and restoration.

Second, TPBank is interested in projects that bring high efficiency, minimize waste, use renewable energy; prioritize projects that apply and produce renewable energy such as solar power, wind power, biomass energy; use and manage water resources effectively, avoid waste and pollution of water sources.

Third is the criterion of positive impact on social factors. Projects need to provide job opportunities in green and sustainable industries or contribute to reducing gender inequality and supporting vulnerable groups in society to access financial opportunities (for example, women-owned enterprises - WSME); or projects that have positive impacts on the community, improving the quality of life and health of people.

Finally, the criterion is to ensure financial capacity and economic efficiency. Those green projects must be financially feasible, have a clear and transparent financial plan. Along with that, they must not only bring short-term economic benefits but also be sustainable and beneficial in the long term. These criteria help TPBank evaluate the sustainability of the project comprehensively, ensuring that the green credits granted will truly contribute to sustainable development and environmental protection.

What measures does TPBank take to minimize emissions in the Bank's internal operations as well as encourage innovative initiatives to optimize processes? Has the Bank published any sustainability reports to date?

In order to minimize emissions in the Bank's internal operations as well as encourage innovative initiatives to optimize processes, TPBank has actively implemented many activities.

In particular, TPBank deploys digital technology solutions to optimize workflows and minimize environmental impacts. Electronic banking applications and online services have helped the Bank reduce paper usage and save energy.

At the same time, to save energy and resources, the Bank also uses LED lighting systems, optimizes air conditioning systems and implements waste classification programs, etc.

In particular, TPBank builds a sustainable corporate culture by creating an environmentally friendly working environment and encouraging employees to participate in sustainable activities. Training programs on environmental protection and sustainable development are regularly organized to raise awareness and skills for staff.

To optimize sustainable development activities, TPBank has established a modern risk management system, ensuring compliance with legal regulations and international standards on environment and society. The Bank also integrates ESG factors (Environment - environment, Social - society, Governance - corporate governance) into the traditional risk management process.

This year, TPBank will publish a sustainability report.

Green banking on a comprehensive digital platform

Compared to banks of the same size today, what does TPBank do to create a competitive advantage to consolidate market share and increase the number of customers?

12 years ago, TPBank had a clear strategic path - taking technology as the first lever. TPBank boldly invested in its team, applying a series of new technologies to the transaction experience of customers and internally. All of TPBank's digital financial communication methods were exploited to the fullest. This was also the beginning of the Bank's continuous breakthrough in the number of customers.

TPBank has made its mark with a series of impressive products for both individual and corporate customers. LiveBank 24/7 has become a digital symbol of the banking industry with the integration of the most modern technologies, meeting 98% of customers' financial service needs.

TPBank App is a model of digital banking application with a series of impressive features such as ChatPay, VoicePay, Widget... or unique card product lines such as Flash 2in1 with 40 designs; digital products for corporate customers.

TPBank continues to perfect biometric authentication technology by launching the eCM digital assistant, helping customers to go to TPBank transaction points without paperwork.

What makes TPBank attractive also comes from its communication campaigns and creative approach to customers.

What do you think foreign partners appreciate about TPBank? What do leaders think the Bank needs to improve to improve its position not only domestically but also regionally and globally?

I think TPBank is always highly appreciated for its long-term vision and digital banking development strategy, especially its investment in the digital ecosystem. TPBank has shown significant progress in its digital journey by owning an ecosystem with a series of innovative products and comprehensive, customer-centric services, meeting needs based on customers' lifestyles and habits. TPBank is also one of the banks that has made a remarkable transformation when it was once the smallest unit in the system that "turned around" in the restructuring process, brilliantly rising to become a bank in the top 5 most valuable brands in Vietnam with an asset size of over 356,000 billion VND, the strongest and most sustainable financial foundation among domestic banks.

With the leading advantage in the digital transformation revolution, TPBank will continue to promote its inherent strengths and continue to build its human resources and technology infrastructure. The challenge of investment costs is not small. Therefore, once deployed, it is necessary to lead in technology. We are steadfast in our goals and continuously improve to find the most effective and optimal digitalization methods, bringing new experiences, enhancing the value of customers who accompany us.

A series of outstanding digital products and services have been and are being exploited by the bank based on leading technologies such as AI, Big Data, Machine Learning... are applied strongly and widely to all core banking services: payment, credit, deposit... With a diverse ecosystem, connecting with many services, the Bank brings seamless experiences and benefits to users in the digital space. The connection between TPBank's digital financial solutions and the comprehensive digital ecosystem in other areas of life will bring great experiences to customers in the digital society of the future.

In your opinion, what is the biggest challenge TPBank will face in 2024 and what is the Bank's action plan to overcome it?

TPBank enters 2024 with the mindset of seizing opportunities, leveling challenges, and conquering new heights. We understand that the market still has many difficult developments, TPBank will focus on managing the quality of its credit portfolio, monitoring bad debt collection to minimize loss risks; increasing cross-selling of products, increasing non-interest income; managing the balance sheet well, harmonizing short-term and long-term goals to ensure optimal profits.

The Bank continues to reduce interest rates, support customers, and continuously increase technology content to serve customers, for the goal of developing a green bank on a comprehensive digital platform.

Thank you!