Almost every advancement forward in the banking industry today is technology-based. Most analyses of banking trends do focus on what technology will bring to the banking industry.
Most financial institutions in Vietnam understand the major trends that are impacting the banking industry as well as what needs to be done to respond to those trends. The challenge for legacy banking organizations is prioritizing and deploying resources in alignment with these realizations. The question is whether organizations are ready to embrace change, take risks and disrupt themselves?”
Nguyen Hung, CEO of TPBank talks to Vietnam Insider about the digital transformation progresses and impacts on business at TPBank.
Can you describe TPBank’s digital transformation in recent years? How did these changes help boost TPBank’s business performance in 2018 and 2019?
We expanded our network and quickly gained market share thanks to lower investment costs than traditional branches. LiveBank (our internet banking service) developed 50 times faster than a typical branch, and digital channels attract 100 times as many guests as a typical branch. We also attracted more young customers, who would be the dominant customer force in the near future, and managed to reduce costs. Digital channels cost a fraction of what a typical branch costs for transactions and operation.
We tightened our security by using multiple verification methods (including fingerprints, voice and facial recognition), reduced human errors with OCR technology, and implemented new mechanisms to identify and prevent fraud. Finally, we greatly enhanced customer experience with 24/7 digital access through LiveBank, vastly improved transaction speed with low transaction costs, and customized experience. Customers can also open a new card or a new account in less than 5 minutes with LiveBank and other digital channels.
Which technologies have TPBank invested in to develop its banking services?
TPBank always keeps a close eye on financial technology trends. We have an investment strategy that is both diversified and selective in order to build the most effective and impactful technological solutions for our bank. Some of our recent investments include:
- Artificial intelligence. We fitted our website and Facebook page with a Chatbot with the ability to answer basic questions regarding TPBank’s products and services. Since launch, Chatbot has reduced up to 30% of our Call Center’s workload, freeing up our consultants to address more complex requests from customers.
- Biometric identification. Aside from greater efficiency for customers, this technology has vastly reduced data input errors and transaction time, while improving customer experience and support system productivity.
- Blockchain. We have successfully experimented with using blockchain in interbank transactions within NAPAS, alongside two reputable commercial banks. TPBank is also working with SBI on applying blockchain to international transactions. With its flexible, transparent and decentralized nature, blockchain has the potential to greatly improve transaction networks and ensure instant transactions despite geographical distance.
How has TPBank’s business model and strategy changed to adapt to digitalization, as well as to take advantage of its benefits?
Digitalization comes not only from technological transformation, but from transformation of people and procedure as well. TPBank has made a lot of effort to recruit talent for key positions. For long-term employees, we have organized internal training schemes, as well as meetings with experts and old colleagues to facilitate a change in mindset and perspective. Regarding procedure, we founded the Digital Bank center and adapted our internal procedures to allow different departments to cooperate with ease and efficiency.
With regards to strategy, we are approaching customers not only offline through traditional channels but also through online activities, including social media and e-commerce. Thanks to harmonization between channels, customers now have more ways to explore our products at their convenience.
Bank-customer interaction is considered one of the largest challenges for banks in the digital age. What do you think about this assertion? What barriers, if any, has TPBank encountered with regards to digital banking?
Approaching customers through offline channels is familiar to both customers and banks. Approaching customers through online channels is less familiar and therefore more difficult. We have seen a lot of challenges from customer behavior and attitude. Customers remain quite nervous when it comes to digitalization, and they keep old habits that no longer fit new digital processes. To solve these challenges, banks will need to build customer-friendly digital products and familiarize customers with applying digital banking processes to everyday life.
What is TPBank’s plan to accelerate investment in banking digitalization in the coming years?
In the coming years, we will continue to focus on areas in which we have an advantage and attract prime customers. Investing selectively helps to reduce risk and raise productivity, building a sturdy foundation for digital banking. We also need to develop and upgrade our technology constantly to adapt to new trends, and continue to improve our business model regarding human resource, procedure and organization to optimize existing advantages. Alongside external technological and market factors, investing in internal resources contributes significantly to our digitalization journey.
With assistance by Duong Ngoc Dung