Digital banks attract significant numbers of customers
After only six months of launching MyVIB 2.0 digital banking application – which uses multi-cloud computing technology to process 60-70 per cent of the input data to help banks realise ideas, bring products and services to the market faster and respond sooner to customer requests, VIB has doubled the number of customers compared to the previous year and reach the target of 4 million customers nearly a year earlier than expected.
Not only VIB, the wave of “cloudisation” of digital banking applications to expand modes and storage capacity, and increase integrated processing and user data security capacity has been invested in and implemented by many commercial banks.
Currently, VietABank, PVcomBank, VietinBank, Techcombank, SeABank, ABBank and OCB have all integrated cloud computing technologies to launch new digital banking platforms serving the sales of retail products and services, attracting millions of users.
The business results by the end of 2022 of banks showed a sharp increase in the number of new customers attracted by banks thanks to their digital applications. For example, MB last year added 7 million customers in the wake of developing Biz MBBank and Charity app while Techcombank with E-Banking apps (using AWS cloud computing technology) attracted an additional 1.2 million users in 2022. ACB and TPBank also said they recorded an annual growth of 30 per cent in the number of customers using digital applications in the 2019-22 period.
Along with the increase in the number of customers, the investment in new technologies and digitalisation of business activities have helped many banks attain significant achievements. For VIB and ACB, the proportion of revenue from retail activities was around 90 per cent in 2022. Retail activities at other banks such as MB, Techcombank and Sacombank currently account for more than 50 per cent of their business portfolio.
Recent research by Gimigo Vietnam showed 2023 will continue to witness fierce competition between banks in developing retail digital banking applications to gain market share.
According to Gimigo, the group of large State-owned banks such as Vietcombank, BIDV, Agribank, VietinBank and MB was leading in the retail segment thanks to being trusted by users and having a widespread network by the end of 2022. However, the group of private banks such as Techcombank, Sacombank, ACB, VPBank and TPBank have significantly improved their awareness level and attracted a large number of users in recent months.
Gimigo’s survey in Ha Noi, HCM City and some other big cities showed the digital applications of Techcombank, ACB and Sacombank are currently competing strongly with large-sized State-owned banks. Other private banks such as TPBank and VPBank also have high net promoter scores (NPS). Thus, the group of banks has many opportunities to expand the customer base thanks to the existing group of loyal customers and the new customers.
According to experts, developing the networks of branches, transaction offices, POS and ATMs is no longer the banks’ top priority. Instead, they focus on digitisation of products and services. To maintain the number of customers, banks need to pay more attention to transaction costs, quality of products and services, staff attitude, customer service, and continuous improvement of online procedures.
Regarding the development trend of digital application generations this year, Gimigo said besides investment in cloud computing technologies and applying Artificial Intelligence (AI) and Machine Learning to develop applications to support retail sales of products and services, banks will tend to pour in an integrated open banking ecosystem.
Some banks, which have so far invested in purely digital banking models such as Cake, Timo, Tnex, Octo and Ubank, have attracted users. For example, VPBank’s Cake app currently has 1 million users.
Experts forecast banks will invest more in developing completely new digital banking brands in the near future. In which, micro products and services will be integrated into personal financial management tools to attract customers to use banks’ retail products and services.
Source: Việt Nam News
Vietnam among world’s earliest in banking digital transformation: forum
Speaking at the Financial Services – Retail Banking Forum in Ho Chi Minh City last week, Vu Viet Ngoan, former chairman of the National Financial Supervisory Commission, said the habit of using digital products had become more prevalent than ever in Vietnam.
More than 30% of the population uses banking apps, second globally only after China (41%), according to Ngoan.
Vietnam’s banking and financial sectors would continue to play a key role in establishing a “fully digitised, human-centred system”.
He also pointed out that the digital transformation in the country would be an important process of how banks and financial institutions analyse, interact and satisfy their customers.
The government has set a target of increasing financial inclusion to cover more than 80% of the adult population by 2025.
Phan Thanh Duc, dean of the management information system faculty at the State Bank of Vietnam’s (SBV) Banking Academy, said Vietnam had recorded a surge in digital payment everywhere from online marketplaces to small convenience stores and even vegetable and fruit vendors.
Le Duc Anh, director of the Ministry of Industry and Trade’s Centre for Information and Digital Technology, pointed out that technologies such as blockchain, AI, cloud computing, machine learning, and customer data collection, management and analysis were being adopted.
The banking sector had invested over 15 trillion VND (639.22 million USD) in digital transformation as of the end of last year, according to a report by the SBV.
Digital payments have been growing at 40% for the last four years, one of the world’s fastest digital transformation rates.
According to the report, more than 95% of Vietnamese banks have a digital transformation strategy.
Around 90% of banking transactions are handled through digital channels with 74.6% of adults having a bank account.
As of March around 3.71 million mobile money (or mobile payment) accounts had been opened, over 70% in rural, remote and disadvantaged regions across the country.
Non-cash payments have also seen significant growth, with 82 credit institutions offering internet-based payment services and 51 offering mobile payment services as of the end of last year.
There are 48 licensed intermediary payment organisations.
Digital transformation has helped banks bring down the cost-to-income ratio to 30%, on par with regional and international standards.
But experts say the legal framework for digital financial services is inadequate.
It is vital to improve institutional frameworks and upgrading infrastructure, they say.
The lack of human resources with up-to-date skills is another major challenge to digital transformation, they warn.
Organised along with the forum was a fair introducing the advancements needed for the financial industry’s digital transformation.
The event was hosted by the Vietnam Association of Securities Business, the Vietnam Digital Communications Association, and the International Data Group.
Source: Nhân Dân
Vietnam’s first unicorn VNG reports VND1,500 bln after-tax loss in 2022
The fact that the unicorn recorded more expenditures connected to taxes, intangible fixed assets, and allowance for financial investment activities led to the greater loss after taxes that the company experienced.
VNG aimed for a revenue of VND 10,178 billion in 2022 and anticipated a loss of VND993 billion after accounting for taxes. Therefore, the management unit of Zalo has merely met about 77% of the revenue plan, and the loss after taxes surpasses the projections.
The company recorded a loss of more than VND90 billion after taxes for the first quarter of 2023, with a net loss of more than VND40 billion during the same time period. The increase in net revenue to 1,852 billion Vietnamese Dong was 11% more than the same time the previous year.
The majority of the reason for VNG’s loss in the first quarter of 2023 stems from the fact that the firm is still under pressure from huge operational expenditures. The selling expenses for the company totaled VND544 billion, and the administrative expenses totaled VND337 billion. On the other hand, as of the end of March 2023, the total amount of the company’s undistributed profit after taxes amounted to VND 5,052 billion.
VNZ shares have been subject to trading restrictions since May 25 on the Hanoi Stock Exchange. This is because the company was late in filing its audited financial accounts for 2022 by more than 45 days, which is in violation of the laws. The trading of shares will take place solely on Fridays.
With a price of VND 771,900 per share as of the market’s close on May 29, VNZ continues to be the most expensive stock on the stock exchange.
India car rental app Zoomcar leaves Vietnam after 1.5 years
For customers, the app stops service from May 24, and will serve any bookings dated before May 24. Zoomcar will fulfill its obligations of payments to car owners normally until June 30.
In Vietnam, Zoomcar initially operated in Ho Chi Minh City and had plans to expand to Hanoi and Danang in 2023, as part of its target to become the biggest car rental service in Vietnam, said Zoomcar Vietnam CEO Kiet Pham. Vietnam’s car rental market, with a compound annual growth rate (CAGR) of 14%, can reach $884 million in 2027, he added.
The business attributed the decision to the market dynamics and projected complicated developments.
The car rental market in Vietnam has recently witnessed many new players, leading to fierce competition.
In March, Pham Nhat Vuong, chairman of Vietnam’s largest private conglomerate Vingroup, set up a new company, named GSM (Green-Smart-Mobility) JSC, offering electric car and motorbike rental and taxi services. It is the first green and integrated transport service model deployed in the world to popularize an electrified mobility experience, according to the company.
In December 2021, MoMo, a top e-wallet app in Vietnam, launched its car rental service. The move was in cooperation with Mioto, a HCMC-based car rental business. MoMo said its service would deliver cars to users’ homes and is available across major cities and provinces of Vietnam.
Foreign businesses also participate in the market. In 2017, MP Executives and Enterprise Holdings Inc. formed a partnership to launch Enterprise Rent-A-Car in Asia Pacific, starting with Vietnam. Enterprise Rent-A-Car is among the largest transportation solutions providers in the U.S.
In 2019, U.S. car rental business Hertz returned to Vietnam with initial operation in HCMC, after first-time operation in 2012. The Vietnamese franchisee, named New City Rent A Car, aims to serve foreigners in Vietnam and businesses with long-term demand to hire cars for staff.
Source: The Investor
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