Spreading digital transformation in the banking industry

16:48-17/08/2022

To carry out the tasks in the Banking Sector Digital Transformation Plan, the whole system has implemented many solutions that bring good results, creating spillover effects to many other industries.

The event "Digital Transformation in the Banking Sector” aimed to promote the implementation of the Digital Transformation Plan of the banking sector and technological applications, contributing to the implementation of the national digital transformation program, spreading the spirit of digital transformation, changing the perception of organizations and individuals inside and outside the banking industry about the role, meaning and benefits of digital transformation in the banking operations.

Efforts to keep the "flagship"

At the National Forum for Digital Transformation Development, Prime Minister Pham Minh Chinh emphasized that digital transformation is geared towards people and businesses; digital transformation is an inevitable trend, but people and businesses must be the center of this process, the goal and driving force of digital transformation. Digital transformation must be effective, products need to be differentiated, people and businesses should benefit from such process.

To implement uniformly and smoothly, the State Bank of Vietnam (SBV) has established a Steering Committee for the Digital Transformation of Banking Sector headed by the Governor of the SBV; approved the Banking Sector Digital Transformation Plan to 2025, with orientation to 2030 and the SBV's Digital Transformation Plan in 2022; promulgated the Operational Plan of the Banking Sector Digital Transformation Steering Committee in 2022; announced the annual "Digital Transformation Day" of the Industry and implemented the series of events "Digital Transformation of the Banking Industry"...

With the initiative and decisiveness in digital transformation, Prime Minister Pham Minh Chinh affirmed that the banking industry continues to uphold the pioneering flag in digital transformation, making efforts to exceed the progress of the digital transformation process. digital transformation of the banking industry, contributing to accelerating the country's digital transformation towards digital government, digital economy and digital society.

The Prime Minister assessed that the SBV leadership and the whole banking industry have been well aware of, strongly directed and implemented this policy in order to transform many state management activities and services into a digital environment, thereby achieving many encouraging results, offering many practical products and services to serve the people and businesses in a timely and effective manner, contributing greatly to the national digital transformation.

Apart from the positive results, the Prime Minister stated that the process of national digital transformation and the digital transformation of the banking sector still face many difficulties and challenges. The current mechanisms and policies still have multiple shortcomings and problems, especially in terms of e-identification and e-authentication; the information technology infrastructure, the connectivity with and the exploitability of the population, insurance, tax,… data are still restricted; the participation and coordination of the financial technology companies is still limited; high-tech crimes with increasingly sophisticated forms and frauds; the resources, especially highly qualified human resources for digital transformation, are still insufficient, including IT human resources.

As the unit directly implementing the digital transformation process, Do Viet Hung, a member of the Board of Directors of Vietcombank, said that digital transformation is the core of the development strategy in both short term and long term. Implementing the policy of the SBV, the bank has issued a Resolution in 2019 that sets out great long-term orientations. After the issuance of Decision No.810 of the SBV in May 2021, Vietcombank's Board of Directors issued a digital transformation action plan with 2 levels including digital transformation actions with 7 groups, 15 targets and a 304 specific actions, covering all pillars from data digitization, technology; establishment of Data and Analytics Center; recruiting personnel who are domestic and international experts capable of adapting to digital transformation...

Also one of the pioneer banks in digital transformation, a representative of Techcombank said that from 2016-2020 the bank has invested up to 300 million USD in information technology systems. In the next 5 years (2021-2025), the bank will continue to spend 500 million USD to vigorously deploy with the pillars of "digitization - data - talent". At the moment, 15% of the bank's human resources are in charge of technology and data-related jobs and will increase this ratio to 20-25% to realize future goals.

Key tasks for digital transformation in the banking sector

The Prime Minister requested the SBV and the entire banking industry to show strong determination, great efforts, drastic and more effective actions in digital transformation, specifically:

Firstly, the Prime Minister requested the banking industry to further develop their understanding of the practical needs of the people, businesses and credit institutions in order to review, issue, amend and improve the legal frameworks, facilitating the application of digital technologies to business operations, providing banking products and services to improve operational efficiency.

The SBV is required to continue to closely coordinate with the relevant Ministries and agencies to urgently finalize and submit to the Government a draft Decree on non-cash payment. In addition, the SBV also needs to develop, test and apply a new legal framework for financial technology development.

Secondly, the SBV needs to further promote the investment and develop the shared infrastructure of the banking industry, such as payment infrastructure and credit information infrastructure, in order to serve as the core and keep up with the development needs of the credit institutions and the payment intermediaries; promoting the connections and linkages between the banks/credit institutions with the other industries and sectors to bring about the comprehensive benefits to the people and businesses.

Thirdly, focusing on ensuring security and safety, including security and safety of the IT infrastructure systems, the confidentiality of customer information and personal data; the database, data information, standardized connections; strengthening the inspection and supervision; analyzing the data to ensure security and safety of the entire system, as well as to prevent hi-tech crimes and money laundering.

Fourthly, strengthening the communication about the benefits of digital transformation in the banking sector, helping the people and businesses understand its benefits and the efficiency. The Prime Minister assessed that the communication programs which have been implemented by the SBV are highly effective, especially the TV show "Smart money" on VTV, with a very attractive and informative format. The Prime Minister emphasized the need for more extensive communication and promotion of communication on the digital platforms.

Fifthly, paying more attention to training, improvement of the quality of human resources, especially IT human resources; strengthening the disciplines and ethics to bring into full play the capacity and the wisdom of all officers and employees in the banking industry in order to better serve the people and businesses.

Sixthly, promoting the international cooperation in digital transformation in order to develop and adopt new technologies into the banking operations, such as near-field communications (NFC), contactless payment technology, etc.

The Prime Minister believed that the SBV and the banking industry would further promote the achieved results, overcome all difficulties and challenges, maintain the pioneering flag in digital transformation, and make efforts to accelerate the digital transformation process in the banking industry, contributing to the enhancement of the national digital transformation towards a digital government, a digital economy and a digital society.

People are at the center of the banking digital transformation

Speaking at the event, SBV Governor Nguyen Thi Hong stated that in order to implement the directions and the assigned tasks in a transparent and consistent manner, the SBV had established a Steering Committee for Digital Transformation of the Banking Sector, which is chaired by the Governor herself, and the Committee’s members are Directors General of the SBV entities, Chairpersons/General Managers of several credit institutions and payment intermediaries.

On May 11, 2021, the SBV issued Decision No.810/QD-NHNN approving the Plan for Digital Transformation in the banking sector by 2025, vision to 2030. The issuance of Decision 810 can be considered as an important milestone, showing the proactiveness and creativity of the banking sector, following closely the guidelines and orientations of the Party and the Government, ensuring consistent wills and actions of the whole banking industry to create strong resonances to help the banking industry develop sustainably in the digital era, continuing to pioneer in the implementation of the National Digital Transformation Program, and actively contributing to the development of Vietnam's digital economy.

For the SBV, there are two significant annual events in May, namely the Anniversary of Vietnam Banking Sector (May 6) and Vietnam’s Science and Technology Day (May 18). Therefore, in order to mark the digital transformation activities of the banking industry, contributing to creating a positive widespread effect for the implementation of the national digital transformation program, May 11 has been selected to be the Digital Transformation Day of the Banking Sector.

Over the past time, closely following the guidelines and policies of the Party and the State, especially the directions of the Government and the Prime Minister, with the close coordination and support from the relevant Ministries and agencies, together with the proactiveness and the great efforts of the whole banking industry, with the spirit of taking the people as the center, the banking industry has achieved encouraging results in the digital transformation, especially in improving the institutional and legal frameworks, developing the technological infrastructure, promoting the banking services, ensuring the safety and security, and enhancing the communications.

Supporting industries and professions for digital transformation

In fact, the spirit of digital transformation of the banking industry has been spread to many organizations and individuals inside and outside the banking industry. For example, the process of digital transformation and promotion of non-cash payments of the banking industry is helping people and businesses to use more tax  and electronic treasury services, which promotes digital transformation in these two industries.

For the tax industry, Mr. Dang Ngoc Minh, Deputy Director of the General Department of Taxation shared that the unit has cooperated with 55 commercial banks and 63 tax departments to deploy electronic tax services including tax declaration, tax refund and e-invoicing programs

Tax authorities have developed and promulgated processes, signed regulations on coordination with units in the service, built a system, connected with commercial banks to develop tax payment services; implementing electronic registration fee declaration and payment services for cars and motorbikes; coordinate with banks and other units to connect and exchange information on financial obligations between tax authorities and land registries in 19 provinces…

Meanwhile, a representative of the State Treasury shared that the important goal of the State Treasury is towards a cashless treasury. The unit has cooperated with banks and developed payment infrastructure, so that more than 99% of the value of revenue and expenditure transactions are cashless, helping create favorable conditions for people and businesses. Thereby contributing to giving the State Treasury a new look, from the traditional to the electronic State Treasury.

Not only that, the process of bank digital transformation helps people increasingly trust in choosing non-cash payment methods, so that activities such as buying, selling orders, introducing goods, and delivering goods of businesses can be easily accessed. Commercial and service businesses are carried out more on digital platforms. This not only helps businesses save time and management costs, but also helps limit risks, easily manage cash flow and contribute to increasing sales.

However, to spread the spirit of digitization more, the banking industry needs a stronger digital transformation. An expert said that banks need to develop a recruitment strategy not only from the number of new recruits, but also in how to retain and develop their talents. Accordingly, the bank needs to increase the salary fund and welfare regime for employees who directly contribute to the digital transformation process, both encouraging the spirit of existing employees and attracting other digital transformation talents; increase investment in training activities for employees on cloud computing technology, artificial intelligence, etc.

Banks need to pay attention to customer experience in the digitalization process. Customers always tend to switch to another bank that provides consistency and smooth transactions across all digital products, said Nguyen Thi Thai Hung, Banking Academy.

Therefore, banks need to create and develop a unified, user-friendly product ecosystem, ensuring a smooth connection flow to bring interesting experiences to customers; building a team dedicated to customer experience in the digital space; building a business culture based on customer experience, customer-centric strategy; cooperate and integrate technology solutions with Fintech companies into banking services.

Communication Department