Clients make transaction at a HSBC Vietnam transaction office in HCM City. (Photo courtersy of HSBC) UK banks may set up representative offices, branches, 100% foreign-owned banksand joint ventures with capital contributions not exceeding 50% in Vietnam.
Until 1 August 2025, UK financial institutions may solicitate the approval of Vietnam’scompetent authority (State Bank of Vietnam) to buy shares in one joint-stockcommercial bank of Vietnam, up to 49% of that enterprise’s chartered capital,except for four commercial banks of which the Government of Vietnam currentlyholds the majority of equity.
UK investors are also permitted to transfer cross-border financial informationand financial data processing. In addition, UK investors can providecross-border advisory, intermediation, and other auxiliary financial services(including credit reference and analysis, wealth management, acquisitions advice,and corporate strategy).
The UKVFTA was signed on December 29, 2020, and temporarily came into effect onDecember 31, 2020, before officially starting on May 1, 2022.
Digital transformation is an irreversible trend of businesses in the 4.0 era.Banking and finance is not an exception to that trend, according to bankingexperts.
According to the State Bank of Vietnam (SBV), at least 95 credit institutionshave developed plans for digital transformation.
In recent years, the use of banking transactions on digital channels is nolonger unknown to the majority of people.
According to experts, the bank's digital transformation journey consists ofthree steps. The first is digitisation - converting the traditional process toa digital one; the next is digital transformation - digitising each part ofbusiness, enhancing customer experience; the last is ultimately digitalreinvention - combining technology and digital platforms to generate revenueand results through innovative strategies, products and services.
Most banks are at the third step, so there are already many plans to go furtherin digital transformation. Therefore, many banks have moved to establish adigital banking ecosystem, from opening accounts to registering, issuing, andmanaging products. Services such as accounts, credit cards, loans can all bedone online.
The percentage of people accessing digital platforms is increasing as Vietnamhas a young population structure and a rapidly increasing smartphone usageratio.
According to Adsota's Vietnam digital advertising market report in July 2020, Vietnamhas 43.7 million people using smartphones, or 44.9% of the total population. Vietnamis among the 15 markets with the highest smartphone users globally.
UK-based HSBC opened a full-service branch in Ho Chi Minh City and has takenthe lead in implementing digital penetration and new technology solutions whichare key focus areas at the bank for both retail as well as corporate customers,according to an HSBC report.
Likewise, on the retail space, HSBC Vietnam has been the first bank in themarket to roll out an end-to-end digital journey for onboarding new customersand mobile banking.
HSBC Vietnam has introduced Omni Channel Collections Solution, a dynamicservice that supports businesses, especially those who wish to develope-Commerce, to provide multiple payment options on one single platform.
“We are very proud to be the first international bank and the fifth market inthe world for HSBC to launch this innovative solution in Vietnam. Thisambitious, holistic and digitalised solution has proved that banks and Fintechcompanies can flourish in partnership and will help boost digital payments asper the Government of Vietnam’s strategy to encourage cashless transactions,”said Hanh Nguyen, Country Head of Global Liquidity and Cash Management, HSBCVietnam.
According to Tim Evans, General Director of HSBC Vietnam, two important issuespost-Covid-19 to ensure that the financial sector maximises its potential aresustainable finance and digitalisation. The State Bank of Vietnam (SBV) hasrecently introduced initiatives to support green finance development anddigital transformation. It has set a target of 60% of banks having access togreen capital and lending to green projects by 2025.
Do Quang Vinh, Member of the Board of Directors, Deputy General Director andHead of Digital Banking Division of SHB, said that digital transformation isconsidered a long-term project, with items that are highly complex and requirecoordination between many units.
The bank has transformed customer management to offer a variety of financialsolutions as well as applying technology in operations, which help to save timeand personnel costs as well as increase productivity.
Nam A Bank said that in 2022 it will continue to focus on increasing investmentand applying technology, creating new steps in digital transformation, andcontinue to perfect the digital banking ecosystem: Robot OPBA, Open Banking andONEBANK, meeting the needs of transactions anytime, anywhere.
MSB has also cooperated with the world's leading consulting group, BostonConsulting Group (BCG), in implementing the Digital Factory project with aninvestment of approximately 2 trillion VND (83 million USD).
However, to solve the above problems, banks have to invest up to tens oftrillions of dong per year for digital transformation. Vinh said SHB hasinvested a lot of resources and budget to upgrade Core Banking (core bank),upgrade cards, deploy investment banking, loan origination solutions (LOS),deploy Omni Channel systems and related information technology systems andapply the most modern solutions.
According to Le Anh Dung, Deputy Director in charge of the Payment Departmentunder the SBV, said in the first six months of 2022, non-cash paymenttransactions increased by 77.2% in quantity and 29.8% in value compared to thesame period of last year.
Around 68% of Vietnamese adults have a bank account, and 5.5 million accountsand about 8.9 million bank cards now use the eKYC (electronic Know YourCustomer) process.
Speaking at a seminar on digital transformation a few months ago, Governor ofthe State Bank Nguyen Thi Hong said that the banking industry will strengthensecurity and safety in electronic payments, effectively implement importantpayment systems and operate payment intermediary service providers to ensureproper, smooth and safe operation.
She said many domestic banks have 90% of their transactions conducted ondigital platforms, surpassing the target of 70% set for 2025.
Half of banking services are expected to be digitalised and 70% of transactionswill be carried out online by 2025, she noted./.
VNA
