A transaction at Vietcombank (Photo: VNA) Hanoi (VNA) – Many Vietnamese commercial banks have moved to develop retail banking services, seeing it as a strategy to reduce risks and optimise their business results, according to insiders.
Retail banking, also known as consumer banking, is the typical mass-market banking with services offered to individual customers, including savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit.
Actually, investing heavily in retail services has become an inevitable trend in Vietnam’s financial market as they are a key to make a sustained and stable profit for the banking sector. This type of service also helps disperse risks due to a large network of customers while contributing greatly to expanding market and improving competitive capacity for commercial banks.
“Retail banking is playing an increasing role in the development of the banking sector”, said Nguyen Quoc Hung, head of the State Bank of Vietnam (SBV)’s Department of Credit for Economic Sectors.
Statistics from the central bank showed that outstanding debt for small-and medium-sized enterprises accounted for 18.7 percent of the total outstanding debt, up 12.9 percent from the end of 2018, while that for households made up 45.4 percent, increasing 12.19 percent year on year, he said.
Meanwhile, VNDIDRECT Securities Corporation (VNDIRECT) believed that retail banking would continue to become a primary motive for commercial banks’ development.
“Attractive retail services and quality human resources are two main factors that help commercial banks gain competitive edge in the field. Ability to distribute products also decides the banks’ market share in this segment; therefore, any bank with strong customer database will gain better advantage”, VNDIRECT experts said.
Besides traditional services, commercial banks are making heavy investment to promote retail sales on digital platforms, which have brought about robust results in revenue growth rate, business results and service quality, among others.
General Secretary of the Vietnam Bank Association Nguyen Toan Thang said that digital transformation is important for commercial banks diversify their service profile, save time and cost for themselves and their customers.
Hung said that in a bid to endorse retail services of commercial banks, the SBV has carried out a wide range of measures to stabilise the macro-economy to curb inflation, support the market, and create conditions for enterprises and residents to get access to banking services and products.
Along with boosting non-cash payment via Internet Payment, Mobile Payment, QR Code, Tokenization, contactless payment, and mPOS, the SBV will study and complete legal framework to back retail banking services, as well as encourage the expansion of credit institutions to mountainous and remote areas, Hung added./.
VNA
