The president of Military Bank, Le Huu Duc, said the bank has decided to highlight digital banking as the focus of its development strategy. Commercial banks could become technology firms by cooperating with telcos, to create a new growth space.
To turn this into a reality, Military Bank has cooperated with technology firms such as IBM, Oracle, and Viettel to optimise the digital transformation solution.
The bank has put a digital loyalty point system into operation, which allows users to buy services and exchange points. It has also piloted robotic payments and applied digital signature and electronic authentication (eKYC) tools on an app platform.
The CEO of Military Bank, Luu Trung Thai, explained that the bank wants to become a leading digital firm in the next three years. It aims to obtain 10 million clients and double the revenue, 90% of which would be from digital transactions. The bank is undergoing a digital transformation by setting up a specific business unit – digital banking, which is under the direct management of the CEO.
According to a press release, the Minister of Information and Communications (MIC), Nguyen Manh Hung, suggested that Military Bank should become a digital technology firm and create service delivery platforms around customers. Implementing digital transformation means changing all the operations
Military Bank stated that one of the most difficult problems is the lack of human resources in data science. Hung said it is difficult to recruit workers because businesses are still following “traditional ways” of banking.
To find a new growth space, some banks are trying to push beyond banking services. According to the Military Bank, however, because of the limitations set by the policies, it has found it difficult to compete with fintech. Hung said digital transformation needs to be carried out in core banking services before moving beyond them.
Firstly, banks need to conduct digital transformation with their current services, and the people who benefit must be loyal clients instead of new clients. During the digital transformation process, some problems may arise because many things still have not been covered by the legal system.
To develop beyond-banking services, Military Bank needs to cooperate with other businesses, for instance, mobile money. Banks should consider mobile money as a tool that familiarises people with financial services, thus creating new clients.
Nguyen Huy Dung, the director of the Authority of Information Technology Application (AITA), said the new banking services do not start from an ATM or a branch, but services provided through smartphones.
At present, banks analyse clients’ history of transactions as information to decide whether to lend money. As for technology firms, they make decisions based on assessing the clients’ debt payment capability, which is the main difference in policy between fintech and traditional banks. The first thing banks should do is collect data and connect all departments and divisions on a single platform.