Recent statistics show that up to 96% of banks in Vietnam have designed development strategies based on Industry 4.0 technologies, and 92% of the banks have developed web and mobile applications. Technology corporations have also collaborated with banks to create their own digital banking services, such as Grab, Shopee, Be and Cake, in addition to e-wallets such as MoMo and Moca.

Realizing the great potential of the Vietnamese digital payment market, the Forum on Digital Transformation in the Banking Industry - SMART BANKING 2022 was recently co-organized by the Central Economic Commission, the State Bank of Vietnam and the IEC Group in Hanoi. The event gathered more than 1,000 participants who are representatives of commercial banks, experts and policymakers.

At the forum, experts discussed the latest issues related to digital transformation in the banking industry and solutions to develop digital banking. They pointed out the common problems facing businesses in digital banking.

Recently, banking business is becoming wider and channels and products are becoming detailed. Many banks are trying to incorporate various digital technologies to adapt to this change and are working on digital transformation. However, in many cases, digital transformation has been done inefficiently and the effectiveness of digital transformation has been limited as the focus remains on tackling the simple issues in front of bank staff.

Mr. Takayuki Morino, ABeam's digital transformation expert and manager, said: "Digital transformation in Vietnam is developing extremely fast, leading to problems such as shortage of qualified human resources. Also, regulations on digitization are constantly changing, and sometimes not up to date to cater to the latest technology and services, leading to disorientation in e-banking development."

“To solve this situation, the concept of ‘regulatory sandbox’ will be effective and it has already started in some other countries,” he said. 

Many other participants at SMART BANKING 2022 were also expressing similar opinions as Mr.Morino.

Determination of appropriate investment targets and scope is another problem. Mr. Morino mentioned common mistakes while implementing digital transformation. 

“The banks usually have silo structure organization and digital transformation tends to be closed within each silo which restricts the effects of digital transformation. Also, bank staff are familiar with their own banking operations, and come up with digital transformation target business/operation without analyzing the holistic business/operation. This tends to end up in small digital transformation which only helps to improve simple and minor business operations,” he said.

There are many new technologies which sound catchy such as AI, Automation, Blockchain and Big Data Analysis which attract banks that are considering digital transformation strategy. However, there is a trap when they start thinking about digital transformation. If banks just decide to implement solutions without carefully analyzing issues in their current business deeply before implementation, the solution won’t be effective because it will only improve some superficial issues and might result in a waste of money.

ABeam will start digital transformation by analyzing the current (i.e. As-Is) business to understand businesses/operations of its client based on rich expertise and experience of financial projects, then consider which issue to prioritize and what digital transformation solution would be the best to remediate those issues. 

In addition, one of the unique features of ABeam is to accompany clients to realize the solution that ABeam proposed until it is realized. This is the embodiment of ABeam's company slogan "Real Partner”. 

Mr. Morino said: “Vietnamese customers are highly interested in new banking products and services because of their curiosity and do not hesitate to experiment. However, to maintain a long-term relationship with a group of loyal customers is extremely difficult. Although it looks new and attractive, if it’s not user friendly, is difficult to use, has poor security, has high transaction fees, customers will easily leave for other services.”

According to Mr. Morino, implementation of digital transformation solutions is not a goal of the journey. The real goal will be achieved only when the targeted effects are realized.

ABeam regularly holds meetings with senior members of neighboring countries’ offices to exchange comprehensive views of global changes, and trends in countries thereby putting businesses on the right track. 

It can be said that building a Digital Bank is a long and complicated project, but ABeam will work with clients to lay the first bricks to create a solid foundation and work together to make the right decisions, develop and grow to unleash the full potential of the client's business.

PV