Banking technology needed in order to compete

HCM City (VNA) - Technology holds the key to banks’ development, especially with the country’s increasing global integration, a seminar heard in Ho Chi Minh City on May 17.

Nguyen Van Thay, IT head at the State Bank of Vietnam’s HCM City office, said there is intense competition among banks and the appearance of major foreign banks like Citi Bank, HSBC and ANZ with their prestige, experience and modern technology has forced local banks to improve.

Tran Thi Hong Hanh, general secretary of the Vietnam Banks Association, said the strong growth in technology had resulted in advanced tools that enable banks to develop new products and services, expand distribution, and improve their management and competitiveness.

Commercial banks and financial institutions have increasingly expanded into retail banking, with retail lending accounting for a large proportion of their revenues and profits, she said.

To sustain growth, lenders are looking for cutting-edge technologies to assist them in all aspects of lending, from loan history management and regulatory compliance to servicing and portfolio management, she said.

Thay said the use of technology would help banks process a large number of loan applications quickly, safely and efficiently.

The use of IT in the banking sector could also benefit customers by allowing them to transact business quickly and safety on the internet, he said.

Modern technologies help banks improve their competitiveness and smoothen administrative procedures, he said.

“E-banking is an inevitable development trend now and in the future in the banking sector,” he told the seminar organised by the Vietnam Banks Association, Fintek and Diasoft.

Mobile banking would be a strategic channel while internet banking would retain its important role, he added.

Tran Le Quan, representative of Fintek, a leading investment, consulting and technology transfer firm, said according to the SBV only 20 per cent of Vietnamese people have a bank account, meaning banks could expand their retail banking activities to increase loans and deposits.

In the past banks mainly focused on selling products they had, but now banking products and services are customer-oriented, meaning they sell products that customers need.

Technology has played an important role in this, he said, adding that technology also enables banks to offer a better customer experience, improve productivity and offer fast and paperless services.

An executive from Diasoft, a global provider of financial software solutions, introduced FLEXTERA, a financial solution for front-to-back automation of retail, corporate and universal banking, treasury and capital market operations, and insurance.-VNA