Banks and the Digital Transformation Challenge

In the digital transformation race, Vietnam's banking industry is painting a vibrant picture of creativity and challenges. From impressive results, banks have not only enhanced their competitiveness but also contributed to building the digital economy. However, this journey still faces hurdles that need to be addressed to ensure that the digital transformation efforts yield results that align with the banks’ goals and better support the economy.

From Goals to Key Figures

Recently, the State Bank of Vietnam (SBV) has actively implemented its digital transformation plan for the banking sector, aiming for completion by 2025, with a vision for 2030, as approved by Governor Nguyễn Thị Hồng. The SBV consistently ranks highly among ministries and sectors in terms of fostering institutional frameworks for digital transformation. SBV leaders have instructed commercial banks to closely follow the directions of the Prime Minister, with a consistent focus on putting people and businesses at the center of the digital transformation strategy, and measuring success by the customer experience.

The SBV has emphasized that "Digital transformation is no longer an option; it is a matter of survival." In practice, more than 87% of adults now have payment accounts at banks, and many banks have processed over 95% of transactions via digital channels. The growth rate of mobile and QR code payments between 2017 and 2023 has averaged over 100% per year. Banking technology infrastructure is continually upgraded, with the interbank electronic payment system handling an average of 830 trillion VND (approximately 40 billion USD) per day, and the financial switching and clearing system processing 20-25 million transactions daily.

The benefits of digital transformation have helped commercial banks enhance their competitiveness by improving efficiency, reducing costs, and enhancing customer experience.

In an interview with the Government’s e-newspaper, Mr. Nguyễn Hưng, CEO of TPBank, shared that the bank has fully integrated cloud computing, big data, and artificial intelligence (AI) into its operations. One significant step is the use of a diverse cloud storage technology that modernizes data infrastructure, enhances performance across all transaction channels, and supports the development of machine learning models.

The adoption of the most advanced technologies has helped TPBank reduce the time for developing and operating new models by 40%. The bank is also developing and implementing eight data science and machine learning projects. Customer experience at TPBank has been greatly improved, thereby increasing customer retention. With support from advanced technologies, TPBank has built an advanced banking ecosystem of products and services, which enhances its competitiveness by offering better customer support, from meeting diverse needs to providing a wide range of services through digital channels.

Banks and the Challenge of Leveraging the Digital Flow

Despite positive results, the digital transformation process in the banking sector still faces challenges such as completing the legal framework, ensuring information security, and developing a high-quality workforce; investing in technology infrastructure, training human resources; and balancing innovation with risk management (cybersecurity, data protection).

Mr. Nguyễn Hưng, CEO of TPBank, shared that one of the biggest challenges is having infrastructure and technology solutions that are good enough to ensure a competitive advantage over other banks, fintech companies, or other online business platforms, where all competitors have a strong ability to meet customer demands.

Furthermore, the rapid change in customer preferences and habits presents a challenge for banks, as they must constantly explore, research, and innovate their products to meet the growing and varied needs of customers.

Lastly, maintaining and enhancing consistency and coherence in customer experience across all transaction channels is also a challenge for TPBank. The bank needs to ensure that customers always have a consistent and excellent experience, no matter which channel they use.

Accelerating Digital Transformation for Higher Efficiency

To boost the effectiveness of digital transformation in the future, Mr. Nguyễn Hưng, CEO of TPBank, emphasized that developing high-quality human resources and digital transformation resources has always been one of TPBank’s top priorities. Regarding plans to expand digital banking services in the future, TPBank is continuing to develop and upgrade its digital services. The bank has built a multi-channel digital ecosystem, connecting with over 100 partners inside and outside the financial sector. This enables TPBank to provide services and products that meet customer needs, from online payments and personal financial management to non-financial services like travel and insurance.

TPBank is also collaborating with fintech companies and tech startups to enhance customer experience and expand its influence. With this strategy, TPBank hopes to continue contributing positively to the development of the digital economy and provide fast and convenient transaction solutions for businesses and individuals.

The government leadership has identified the opportunities and challenges in the digital transformation of banks and has laid out key tasks and solutions moving forward, clearly emphasizing that banks should focus on serving people as the center, contributing to the larger goal of developing the country’s comprehensive digital economy.

Specifically, the government leader has instructed the banking sector to build a national customer database, linking it with the population data to promote digital transformation and the development of the digital economy. Cooperation with the Ministry of Public Security will help efficiently utilize the chip-embedded citizen identification information, VNeID, enhancing the safety and convenience of banking services. The banking sector needs to expand data interoperability with ministries and sectors, applying advanced technologies like AI and big data to develop modern services and protect customer data.

At the same time, the government is emphasizing the need to train and attract high-quality human resources and learn from international experience to meet the requirements of digital transformation. Additionally, the government has highlighted that ensuring cybersecurity and preventing high-tech crime is an urgent task. The banking sector needs to work closely with the Ministry of Public Security and regulatory authorities to control risks, monitor, and prevent financial crimes.

Notably, the government leadership has emphasized the role of public awareness campaigns to help people and businesses understand the benefits of digital transformation, thereby encouraging active participation in the digital financial ecosystem.