Building a digital banking ecosystem: Private paths

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At the online seminar of banking leaders with the topic “Building a digital banking ecosystem: Strategic trends and initiatives” directed and sponsored by the Central Economic Commission and the Vietnam Banks Association. On the morning of September 8, experts and leaders of many banks gave their opinions on digital transformation, together with IEC Group and Backbase Group.

The push from the pandemic

Speaking at the Seminar, Mr. Nguyen Quoc Hung, General Secretary of the Vietnam Banks Association, said: Although the pandemic causes many difficulties, it is also a push for all industries to change their business thinking and use services and is a leap forward to apply technology to all activities of life, including banking.

Digital banking services have crept into every corner of life, combined with other industries to form a comprehensive and intelligent ecosystem, providing the best customer experience.

However, representatives of the Vietnam Banking Association also frankly acknowledged that the digital transformation process of banks in Vietnam is not overall, the investment in infrastructure is still only according to the existing technology platform, not meeting the speed of digital technology. The ecosystem has been established but still incomplete, the new digital transformation focuses on digitizing distribution channels, the rest of the activities such as lending are only semi-automatic.

According to Mr. Hung, in May, the Governor of the State Bank of Vietnam issued Decision No. 810/QD-NHNN, approving the “Plan for digital transformation of the banking sector up to 2025, with orientation to 2030”, this is an opportunity to banks accelerate the digital transformation process, build a comprehensive digital banking ecosystem, to meet the increasing requirements of users.

Speakers exchange at the Seminar

Recognizing the benefits of building a digital banking ecosystem from the pandemic, Mr. Tu Tien Phat, Deputy General Director in charge of business, Asia Commercial Joint Stock Bank (ACB) informed, when the Covid-19 epidemic occurred in Ho Chi Minh City – where the bank has 137 transaction offices, because of compliance with regulations on immediate spacing, the bank had to close 100 transaction offices. However, the questions asked how to serve the financial needs of people and businesses have been met through digital channels.

For example, the online account opening service using e-KYC has skyrocketed, when the expected number of only 3,000 new accounts per day has increased to 10,000 accounts. Repayment or lending is also maintained through online services. The bank’s sales and number of online transactions in the first eight months of 2021 doubled.

Or as at another bank, Mr. Luu Trung Thai, Vice Chairman of the Board of Directors cum General Director, Military Commercial Joint Stock Bank (MBBank) commented: Two years ago, most banks in the digital transformation strategy in Every 5 years, we think digital transformation is an investment in technology. After the arrival of COVID-19, it is clear that digitization is not only a matter of technology but a completely different business mindset.

In particular, the creation of a digital banking ecosystem will bring advantages to banks, help reach the number of customers quickly without having to invest in transaction offices, understand customers more quickly thereby increasing customer experience.

Separate paths in building ecosystems

Ms. Tran Diem Chi, Backbase Representative in Vietnam, said that in the process of cooperating with 150 banks globally, it can be seen that banks have paid more attention to customers, taking customers as the center instead of customers for the same product as before. Especially in the past 12 months, many banks have invested heavily in digital platforms not only for individual customers but also corporate customers, asset management block, as the foundation to create a digital banking system. powerful digital banking ecosystem.

In which, one of the four problems posed to banks is, how do banks make a difference from other banks. And is the process of building the ecosystem of a large bank with a small bank the same?

Building a comprehensive and diverse digital banking ecosystem is an urgent requirement to enhance customer experience.

In this regard, Ms. Nguyen Thi Quynh Giao, Deputy General Director in charge of Retail and Banking Division, Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) shared: BIDV is a big bank with a large customer community. In many different fields, digital transformation is extremely challenging, different from smaller banks and just starting to implement digitalization.

In the midst of the story of building the ecosystem itself and participating in the ecosystem of many parties, Ms. Giao said that choosing to participate in the common ecosystem with many partners is the inevitable choice to bring the best experience to customers. However, banks must simultaneously make a difference in that ecosystem.

For example, with BIDV, 3 main layers of the ecosystem are: Core service layer, owned and managed by the bank; the second layer is other services such as financial management, tax, which are added services, the bank still manages the core technology and cooperates with partners to create an ecosystem for this layer; The third layer is life services for customers such as train tickets, resorts, etc. will participate in the ecosystem of partners. Thereby creating a uniform experience for customers. Along with that, creating a separate ecosystem for homebuyers and home buyers.

At TPBank, Mr. Dinh Van Chien, Deputy General Director and Director of Individual Customer Division, Tien Phong Joint Stock Bank (TPBank) said: When building the digital banking ecosystem, the bank is concentrated in 3 main activities.

The first is from within the banks, building capacity to develop the digital banking ecosystem. Including technology capacity to create connections, data processing systems. Along with that is the capacity of the operating model, because the digital ecosystem requires a different way of deployment and operation, which cannot follow the traditional model.

Banks also partner with technology companies, integrating existing technology to support the development of more efficient, larger-scale banking services.

Finally, banks connect with Fintech, different partners such as e-wallets, e-commerce platforms. These are partners with a large number of customers, a channel that is close to reality. When shaking hands, cooperation will form a diverse ecosystem, better serve customers, with more economical costs.

Mr. Luu Trung Thai, Vice Chairman of the Board of Directors cum General Director of MB added, in the process of building the ecosystem, this bank has continuously improved, thanks to directly listening to customer feedback about the service. Besides, investment in people, security technology are questions raised.

According to MB’s General Director, if the bank wants to own its own ecosystem, it must directly develop services and technologies. This can be difficult and stressful, but if there is a problem, it will be handled faster and more efficiently.

Although each bank has its own path and different strategy when building a digital banking ecosystem, they all share the same opinion that it is necessary to quickly have a favorable legal framework and keep up with the development of digital banking trends, from which new banks can create an ecosystem with a comprehensive experience for customers.

Source: – Translated by