The trend towards retail banking will only get stronger in Vietnam asbanks realise the vast potential of the market, experts said at theASEAN Banker Forum held on November 19 in Ho Chi Minh City.
"The experience of the monetary crisis in 1998-99 and 2007-08 showedmistakes. Commercial banks had invested a great deal in sectors thateasily brought high profits such as real estate and security. Theyforgot retail, a potential, stable sector," Ha Huy Tuan, deputy chairmanof the National Financial Supervisory Commission, told the forum.
Bankers, financial experts and technology consultants attending theforum agreed that the fast pace of urbanisation, the country's risingpopulation and higher incomes, and an increasing number of small- andmedium-sized enterprises (SMEs) had pushed the development of retailbanking in the country.
During the one-day meeting,experts spoke about operational excellence and the need to differentiateand transform banking channels.
Tuan said theincrease in population and income had created "much potential; moreover,90 percent of companies in Vietnam are SMEs, a potential customer forthe market".
"That's why developing retail banking is becoming the key strategy of banks and financial institutions," he said.
Le Cong, CEO of the Military Bank, said that only 30 percent ofVietnamese residents had been approached by banking services, and theremaining 70 percent represented a huge market for retail services.
Nguyen Tu Anh, CEO of the Smartlink Card Joint Stock Company, saidthat retail banking had become more important in the Vietnamese bankingsector in the last three years.
"For big banks likeVietcombank and Vietinbank, capital mobilisation from the retail sectoraccounts for 50-55 percent. Meanwhile, the figure is more than 80percent at smaller banks," she said.
Anh said the number of cards and banking accounts had continued to surge.
"As of June, there were about 50 million banking cards and many otherpayment tools. The payment network has also developed with more than16,000 automated teller machines (ATMs). Many companies are acceptingonline payments. In addition, many other payment methods such as mobilebanking are being used," she said.
Despite thepotential, many participants said that competition was tough as thebanking sector was one of the first to open to foreign players. Theyestimated that to win the market, banks must be able to differentiatethemselves in services and products from their competitors.
The participants said that service payments and money transfers atbanks in Vietnam were too similar and as a result customers did notdistinguish between banks. They added that developing better managementskills and investing more in information technology were two othernecessary steps.
"Banks in Vietnam have to createdifferentiation and make big changes. They need to upgrade theirdistribution systems as well as services and products," said Tran ThiHong Hanh, secretary general of the Vietnam Banks Association.
The ASEAN Banker Forum was co-organised by the association andInternational Data Group (IDG). This was its third annual meeting.
Outstanding Banking prizes
Six banks in Vietnam on November 19 were awarded the VietnamOutstanding Banking Awards 2013 organised by IDG ASEAN and the VietnamBanks Association.
The award honoured those banksthat had achieved an outstanding performance and had contributed to thedevelopment of the banking and financial sector.
Thetitle outstanding retail bank was bagged by Techcombank; outstandinge-banking award, Vietinbank; outstanding security initiative bankingaward, HDBank; outstanding trading platform banking award, Vietinbank;outstanding branch of foreign bank ward, CitiBank; and Oceanbank andTienPhong Bank, outstanding innovative banking products and servicesaward.
The jury included representatives fromgovernment agencies, ministries, associations and experts in the fieldsof finance and banking technology.-VNA
"The experience of the monetary crisis in 1998-99 and 2007-08 showedmistakes. Commercial banks had invested a great deal in sectors thateasily brought high profits such as real estate and security. Theyforgot retail, a potential, stable sector," Ha Huy Tuan, deputy chairmanof the National Financial Supervisory Commission, told the forum.
Bankers, financial experts and technology consultants attending theforum agreed that the fast pace of urbanisation, the country's risingpopulation and higher incomes, and an increasing number of small- andmedium-sized enterprises (SMEs) had pushed the development of retailbanking in the country.
During the one-day meeting,experts spoke about operational excellence and the need to differentiateand transform banking channels.
Tuan said theincrease in population and income had created "much potential; moreover,90 percent of companies in Vietnam are SMEs, a potential customer forthe market".
"That's why developing retail banking is becoming the key strategy of banks and financial institutions," he said.
Le Cong, CEO of the Military Bank, said that only 30 percent ofVietnamese residents had been approached by banking services, and theremaining 70 percent represented a huge market for retail services.
Nguyen Tu Anh, CEO of the Smartlink Card Joint Stock Company, saidthat retail banking had become more important in the Vietnamese bankingsector in the last three years.
"For big banks likeVietcombank and Vietinbank, capital mobilisation from the retail sectoraccounts for 50-55 percent. Meanwhile, the figure is more than 80percent at smaller banks," she said.
Anh said the number of cards and banking accounts had continued to surge.
"As of June, there were about 50 million banking cards and many otherpayment tools. The payment network has also developed with more than16,000 automated teller machines (ATMs). Many companies are acceptingonline payments. In addition, many other payment methods such as mobilebanking are being used," she said.
Despite thepotential, many participants said that competition was tough as thebanking sector was one of the first to open to foreign players. Theyestimated that to win the market, banks must be able to differentiatethemselves in services and products from their competitors.
The participants said that service payments and money transfers atbanks in Vietnam were too similar and as a result customers did notdistinguish between banks. They added that developing better managementskills and investing more in information technology were two othernecessary steps.
"Banks in Vietnam have to createdifferentiation and make big changes. They need to upgrade theirdistribution systems as well as services and products," said Tran ThiHong Hanh, secretary general of the Vietnam Banks Association.
The ASEAN Banker Forum was co-organised by the association andInternational Data Group (IDG). This was its third annual meeting.
Outstanding Banking prizes
Six banks in Vietnam on November 19 were awarded the VietnamOutstanding Banking Awards 2013 organised by IDG ASEAN and the VietnamBanks Association.
The award honoured those banksthat had achieved an outstanding performance and had contributed to thedevelopment of the banking and financial sector.
Thetitle outstanding retail bank was bagged by Techcombank; outstandinge-banking award, Vietinbank; outstanding security initiative bankingaward, HDBank; outstanding trading platform banking award, Vietinbank;outstanding branch of foreign bank ward, CitiBank; and Oceanbank andTienPhong Bank, outstanding innovative banking products and servicesaward.
The jury included representatives fromgovernment agencies, ministries, associations and experts in the fieldsof finance and banking technology.-VNA
