E-banking, the latest trend in the Vietnamese banking system, has not completely been able to replace conventional banking customs although the majority of baby boomers (those born in 1945-1960) and generation X (1961-1980) show insignificant interest in modern banking services.

A member of the Board of Directors (BOD) at a Vietnam-based commercial financial institution (FI) asserted, “In recent times FIs in Vietnam have put a lot of effort into providing online banking solutions in order to appeal to millennials (those born in 1980-2000) and generation Z, (born after 2000).”

However, “A large number of existing clients of Vietnam-based FIs are middle-aged and senior citizens. Specifically, savings worth $2-3 million with terms of up to 36 months were mainly deposited by customers born in 1945-1970,” he added.

To strengthen their relationship with regular customers, especially senior customers, a remarkable number of FIs launched various loyalty programmes, such as retro music shows, saxophone concerts, and scenic tours especially created for VIP customers.

Besides, the implementation of digital banking in Vietnam has encountered plenty of barriers since the current legal framework does not accommodate the digitalisation of the banking system or incentive policies endorsing electronic banking services.

Dang Duc Huy, deputy director of Retail Banking at Sai Gon Commercial Bank (SCB), said “FIs in Vietnam should think twice before restructuring the conventional banking model since such moves would be cost-ineffective and are unlikely to generate an instant stream of income.”

To date, a fair number of FIs in Vietnam have introduced a variety of online banking services, such as the Digital Lab of Vietcombank, Live Bank of TPBank, and the MyVIB application of VIB, aiming to enhance customer experience via electronic transaction channels.

Exceptionally, VPBank promoted the distribution channel as a stand-alone digital-based branch, called Timo, whose products and services as well as sales policies are entirely independent of the parent bank.

VIR