Digital banking boom in Vietnam during the coronavirus pandemic | Bank and finance

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Digital banking boom in Vietnam during the coronavirus pandemic

The convenience of e-banking has attracted customers and provided free service for customers. Digital products such as Quick Response Code (QR Code) payment, savings deposit, digital loans, and more recently Electronic Know Your Customer (eKYC) have been used by many people.

Recently, VPBank just launched VPBank NEO digital bank, which is a digital bank with no transaction desks. VPBank NEO digital bank allows customers to open accounts online on smartphones using eKYC technology. It takes less than five minutes for customers to create an account online via 2-step identity verification and face verification.

After opening an account, customers can immediately transfer money to other people’s accounts, receive money, buy and sell bonds, and pay bills free of charge. Additionally, customers can sign up to open a virtual credit card for online payment within 30 minutes to 2 hours.

Nam A Bank also launched a modern multi-device integrated Open Banking digital transaction space to help customers complete multi-channel transactions on a single app.

In addition, the bank also deployed VTM Onebank, a virtual bank branch, to improve the customer experience. VTM OneBank helps customers complete transactions including deposits, cash withdrawals, opening savings accounts and opening debit cards without having to visit direct transaction sites.

Electronic payment can reduce people’s exposure to germs, leading to the digital banking boom. A survey by Visa Company, a digital payment company, shows a 34% year-over-year increase in Vietnamese consumer payment transactions through Visa credit and debit cards in the first months of 2021. About 85% of consumers use e-commerce applications. on smartphones to buy goods and services at least once a week and 44% of shoppers have purchased products on social media since the pandemic spread.

Pham Tien Dung, director of the payments department of the State Bank of Vietnam (SBV), said that in the first months of 2021, payment-related activities in the economy still proceeded transparently despite the impact of the Covid-19 epidemic. In addition to the legal framework and policies relating to payment-related activities which continue to be improved for the application of new technologies, the free payment services offered by the State Bank and other credit institutions have responded to the demand. online payment request.

At the end of April 2021, online payments via Internet banking transactions increased by 65.9% in quantity and 31.2% in value; payment-compatible mobile phones jumped 86.3% in volume and 123.1% in value; QR code payment has jumped 95.7% in quantity and 181.5% in value over the same period in 2020.

In fact, to reduce reliance on credit income, many commercial banks have increased their income by minimizing costs, including the costs of raising capital.

One of the solutions to reduce the cost of raising the bank’s capital is to increase the deposit ratio payable on demand or current account savings account (CASA) because it has the lowest interest rate, generally ranging from 0.1% to 0.8% per year. The more money a bank receives, the lower the interest rate offered by the bank.

Techcombank said that in order to have a CASA rate of nearly 45%, the bank changed its traditional online transaction method.

State Bank of Vietnam Vice Governor Nguyen Kim Anh said that currently 95% of credit institutions have developed and implemented digital transformation strategies. In addition, most of the banks have applied new technical and technological solutions in their operations and services. Of 19 banking operations and services, nine have been fully digitized by some banks.

Many banks have also applied artificial intelligence technology and big data to assess customers for a disbursement decision to simplify procedures. According to the banking sector digital transformation plan to 2025 with a vision to 2030, approved by the State Bank of Vietnam in May 2021, at least 70% of banking transactions will enable customers to perform digital transactions .

By Nhung Nguyen – Translated by Anh Quan

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