From Strategy to Sustainable Development Action: TPBank Reaps Many Successes

Integrating ESG criteria into every activity of the bank and leveraging technology as a key driver to promote sustainable values, TPBank's unique position as a 'Human-Centered Digital Bank' has been recognized and honored by many prestigious organizations both domestically and internationally for its pioneering role in green development and sustainable growth in Vietnam.

Sustainable Development as a Guiding Principle

Sustainable development is no longer just a slogan; it has become a guiding principle for the operation of the entire economy. The banking sector, which is considered the lifeblood of the economy, plays a crucial role as an important link, and even a leader, in the sustainable development of a country.

In this context, ESG (Environmental, Social, and Governance) has quickly become one of the most frequently mentioned keywords in the financial sector in recent years. Banks are increasingly aware that integrating ESG into their business activities not only ensures a prosperous future for the bank but also promotes environmental friendliness and strengthens social responsibility. Moreover, as the financial channel of the economy, they also hope to create positive impacts on the public and businesses — the bank’s customers."

According to statistics from the State Bank of Vietnam, currently 80-90% of banks are implementing some or all of the ESG principles in their operations. Nearly 50% of other banks have established risk management departments focused on environmental protection in lending activities. Some banks have also introduced a "Green Credit Framework" and "Sustainable Loan Framework" to create processes for using and managing loan funds for projects in green sectors and emission reduction. Many credit institutions have published separate reports on sustainable development. This information highlights the rapid shift in the sector’s mindset and actions in a short period, reflecting a serious commitment to ESG practices.

A prime example is TPBank, which, since its restructuring began in 2008, has focused on a sustainable development strategy and pioneered digital transformation to support and drive its successful journey towards becoming a modern, advanced bank for people.

Mr. Nguyễn Hưng, CEO of TPBank, stated: "Based on a deep understanding and a strategy that puts customers and human resources at the center of all activities, TPBank has creatively implemented digital solutions and products to continuously elevate the customer experience. With the belief that development always goes hand in hand with human progress, the comprehensive implementation of ESG, and the creation of a Green and Sustainable Future, have always been guiding principles on the 'Purple Bank's' journey of ambition and growth."

In TPBank's recently released sustainability report, the bank's leadership also affirmed: "Increasing values and fulfilling social responsibility, while being environmentally friendly, are always central to our sustainable development direction, ensuring fairness and responsibility in every strategy and operational plan of TPBank."

The Green of ESG Visible in Every Activity

On its journey toward sustainable development to create positive values for customers, communities, and itself, TPBank has chosen to embrace digital transformation early in the Vietnamese market. The early and rapid adoption of digitalization has not only led to remarkable business success but also made significant contributions to ESG, both in TPBank's internal operations and in the products and services offered to partners and customers.

For many years, over 90% of TPBank's operations have been conducted on digital platforms, and this figure has even approached 100%. This shift has helped the bank significantly reduce paperwork, save energy, and lower carbon emissions. TPBank reports that since 2022, digitizing transactions and customer records has allowed it to cut paper use by up to 90%, thereby reducing environmental emissions and conserving resources and energy. Additionally, by optimizing its IT systems, TPBank has reduced electricity consumption by 30%.

According to TPBank, its "Human-Centered Digital Bank" vision is about offering the market top-tier, high-tech products and services that serve people, contribute to societal development, minimize environmental impact, and promote sustainable growth.

In recent years, TPBank has been a pioneer of digital banking in Vietnam, introducing a range of technologies that have made a mark in the market. When people think of TPBank, they immediately recall it as the first bank to launch LiveBank, integrating the most advanced technologies to meet up to 90% of customers' financial service needs. Features like ChatPay, VoicePay, and PastetoPay on the TPBank app have also brought a fresh breeze, changing the way customers interact with the bank—making it more modern, efficient, and user-friendly. The bank has also continually improved biometric authentication technology and introduced the digital assistant eCM, allowing customers to conduct transactions without paperwork.

Ten years ago, customers were required to visit a branch during business hours to open an account, fill out paperwork, and wait to receive their card. But with the advent of LiveBank, customers can now open accounts online at smart transaction points available 24/7, without wasting a single sheet of paper. Following this, TPBank quickly adopted eKYC technology for online customer identification, allowing customers to open accounts entirely online through the TPBank app. While the reduction in paperwork for a single customer may not be significant, when applied to tens of millions of customers over the years, the impact becomes substantial.

Just by digitizing the account opening process, a significant amount of paperwork has been eliminated. When TPBank digitalizes nearly 100% of its operations, the scale of paper reduction is truly remarkable. According to statistics, TPBank saves 4,100 tons of paper each year through the digitalization of processes and transactions. LiveBank 24/7 meets 90% of customer transaction needs, but the operational costs and environmental impact are only one-tenth of those of a traditional branch or transaction office. Additionally, automated robots help accelerate loan approvals, saving time and, most importantly, minimizing the paperwork required for customers.

A wide range of standout digital products and services has been and continues to be developed by the bank, leveraging cutting-edge technologies such as AI, Big Data, and Machine Learning. These technologies are extensively applied across all core banking services, including payments, credit, and deposits. With a diverse ecosystem connected to many services, the bank provides seamless experiences and significant benefits to users in the digital space. Customers enjoy convenient, fast, and efficient experiences while minimizing time, paperwork, and the need for physical travel.

In the field of risk management, TPBank's mastery of advanced AI models and the establishment of its own biometric data warehouse enable the bank to detect risks early and respond effectively to increasingly sophisticated technology-driven fraud tactics in the market, reducing reliance on any external partners.

Ms. Phuong Anh (30 years old) shared: "People from my generation, born in the '90s, can probably feel the changes most clearly as the bank has digitized. In 2012, when I first opened a debit card, and again in 2015 when I opened my first credit card, I clearly remember having to prepare a stack of paperwork and waiting two weeks to receive my card. But now, I can open a TPBank card completely online, without having to visit the bank or use a single sheet of paper. I can even use a virtual card on the app for payments. Honestly, for the past 2-3 years, I've only been to the branch a few times, and the rest of my transactions are all done through the TPBank app."

The rapid expansion of TPBank's customer base is a strong testament to the appeal of its digital banking services. In 2023, TPBank reached a record number of over 3.5 million new customers, bringing its total customer base to more than 12 million.

In addition to its digital transformation, TPBank is also continuously promoting ESG through a variety of other initiatives. In terms of green credit product development, TPBank is one of the banks actively supporting projects in renewable energy, green agriculture, clean water management, and businesses led by women.

In 2017, TPBank was one of eight banks in the East Asia-Pacific region to receive an award from the International Finance Corporation (IFC) for its trade finance efforts supporting climate-smart adaptation projects. In 2019, TPBank signed a long-term green credit facility agreement worth USD 20 million over three years with the Global Climate Partnership Fund (GCPF).

In September 2023, the Development Finance Corporation (DFC) committed to providing TPBank with a loan worth USD 100 million for a seven-year term. This credit facility will be directed toward individual customers, microenterprises, and small- and medium-sized enterprises (SMEs) in Vietnam, with a focus on low-income female customers and businesses owned and led by women.

TPBank has also set aside a special credit package with a limit of VND 2,000 billion, prioritizing green businesses, export-oriented enterprises, and women-owned businesses through the WSMEs program.

As a key part of its sustainable development strategy, TPBank always adheres to the principles of doing business in compliance with Vietnamese laws, making positive contributions to the state budget, and increasing its responsibility to the community through charitable activities and support for vulnerable groups in society.

According to the list of the highest tax-paying private enterprises in 2024 (PRIVATE 100) recently published by CafeF, TPBank ranks in the Top 10 private banks and Top 15 private enterprises for the highest contributions to the state budget in 2023. Specifically, in 2023, the bank contributed VND 2,419 billion to the state budget (including taxes and fees).

In terms of risk management, TPBank has implemented the Basel III Capital Adequacy Project based on the Internal Ratings-Based (IRB) approach (FIRB & AIRB). The bank has also integrated and developed a method for incorporating ESG factors into its capital calculation under the IRB approach.

Human-Centered Digital Bank with Comprehensive ESG Practices

With strategic and comprehensive steps, TPBank has firmly established itself as a pioneer in digital transformation and sustainable development. TPBank's image as a "Human-Centered Digital Bank" is not only unique and prominent in Vietnam but is increasingly recognized in the region, having won numerous prestigious awards for digital transformation and ESG practices over the years.

Recently, during the Global Trade Partner Meeting in Barcelona in early May 2024, IFC honored TPBank with the "Best Trade Partner Bank - Gender Finance 2024" award for its outstanding contributions to gender-inclusive finance.

At the 2024 Sao Khuê Awards Ceremony, TPBank also excelled in three categories: Digital Banking, Innovation, and Digital Access Solutions, thanks to its continuous efforts to innovate and make meaningful contributions to the digital lives of millions of Vietnamese customers.

TPBank has stated that in the coming years, the bank plans to continue expanding its portfolio of green credit products, with increased investment in renewable energy projects and sustainable agricultural development. At the same time, TPBank will continue to enhance its ESG implementation capabilities according to international standards, ensuring that all of the bank's activities align with sustainable development principles.

Additionally, TPBank plans to strengthen its corporate social responsibility programs, focusing on improving the quality of life for the community and protecting the environment, further cementing its position as a modern, innovative bank committed to sustainable values.