Digitalization and automation is a broad term that connotes the use of electronic means and ways to conduct banking. It encompasses products and services that customers can typically access without human intervention from the bank. From a user perspective, digitalization confers enormous benefits in the form of ease, speed and multiple means of access and a paradigm shift in engagement.
As digitalization is here to stay, banks cannot afford to remain stuck with old ways of doing business, and would be quickly overshadowed by competition unless they adopt digitalization in a big way.
In Vietnam, commercial banks are experimenting with digital in many areas but few banks have reached their full potential.
“At Orient Commercial Bank (OCB), digitalization and automation is part of our corporate DNA”, Mr. Sanjay Chakrabarty – Head of Retail Banking start off the interview with Vietnam Insider about digital journey.
Could you please share some facts and figures about the digital transformation process of OCB over recent years? How could these changes help improve your business performance last year?
OCB was one of the first banks in Vietnam to embark on the digital journey. We were very clear that our digital strategy had to be embedded in our core business, so we didn’t simply go around copying ideas from developed markets. We put in a lot of effort to understand where we could harmonize our digital strategy with our existing business model, which includes physical network. We worked with well-established consultants building our roadmap, and realized that it was so such more than just technology, it is also mindset and culture. Today I can say comfortably that digitalization and automation is part of our corporate DNA.
This process has changed the way we do business. 90% of all new customers we acquire now have at least one online transaction in the first 6 months. 45% of our credit cards are being sold exclusively through digital channels. We have unsecured pre-approved loans that are delivered and fulfilled through digital channels. We are now selling insurance as well as investments through our mobile app – OCB OMNI. This has resulted in significant enhancement of customer experience. Our frontend staff work seamlessly between digital touchpoints and physical ones.
What kind of technologies has OCB been investing in upgrading your banking system and services in recent years? How’s the progress of implementing digital core banking system to accommodate Internet banking payment services and digital payments at OCB at the moment?
The enhancement of technology is a continuous process. Today we have a frontend that cuts across mobile app (OCB OMNI), online banking and systems used by tellers. What that means is any customer can interface with us through any of the channels – physical or digital, and still have a consistent experience. At the backend we have a customer relationship management system (CRM) that gives us 360 degree view of the customer at all times. Our datahub ties in with the 360 degree customer view, allowing us to make trigger-based offers for various products on a real-time basis through mobile apps. We connect to our partners through APIs which then support frictionless payments through our bank. All these capabilities have required significant upgrade of systems, but more importantly they have called for a re-orientation of mindset among our employees who design products and customer experience.
For a customer to stay loyal to a bank, the bank must enable frictionless payment for most of their recurring needs. That’s why we have built direct payment network with phone companies and utility companies, hundreds of schools, key universities and hospitals. We have also connected with platforms that give us access to large merchant networks where we have set up our QR code based payment platform.
At OCB, we have also continued to enhance our credit card and debit card capabilities, which are the first means of cashless payment for many people. The internet economy of Vietnam is roughly 3% of GDP, one of the highest in this part of the world, and that has been made possible by banks such as ours which have relentlessly pursued digital payments.
How has OCB’s operational model and business strategies changed in order to adapt the digital transformation trend as well as to capture opportunities from the local banking sector?
For OCB, digital transformation is embedded in operational model and business strategy. For instance, we have been able to build ecosystems for most of our partners across SME and Retail Banking product lines. Our partners use our retail banking products to serve their employees and customers better. The interconnectivity of products and services across different financial needs is possible only because we can build and support it digitally. Now with open APIs we support real-time interactions with most of our partners. Digital transformation has allowed banks like ours to assemble a complete suite of products and services on one single platform that the customers can access seamlessly. This is important for customer loyalty. Banks that cannot build product compositions that remove the pain-points will lose their customers to fintechs, which are much better at addressing a narrow vertical in the financial value chain.
Interaction between banks and customers has now been considered among the most difficult challenges of digital banks in Vietnam. How do you think about this view? What barriers has OCB been facing in the process of digital banking application?
For digital banks, one particular challenge is establishing trust. At OCB, we were able to harmonize physical and digital touch points thanks to a clear understanding of the strengths that each channel brings. For example, digital platform is great for simple transactions such as payments and paying bills or even gathering information when deciding on investments or insurance plans. However, for value-added products and services, such as a mortgage loan, customers require face-to-face interactions.
Vietnam is still working on a regulatory framework that will set clear guidelines for e-KYC or electronic signatures. Once that happens, banks will be able to serve more customers online. This will drive financial inclusion in a country where the banked population is still quite small, at 30-35%.
What are your plans and strategies to accelerate technology investment for digitalization process at OCB in the coming time?
OCB is committed to Digitization and Digitalization. This is true not just for customer interface, but for every aspect of our business. We have partnered with various consultants and even Fintechs to accelerate the process. Our mobile application has been recognized as one of the best in the market. We have built products and services that specifically target digital platforms. We automated various process steps and reduced turnaround time for key services; as a result, our customer service has among the highest ratings from end-users. We have the loyalty of our partners, since we offer financial products to their employees and customers with least friction. We are seeing progress and value from different parts of the business coming through from digitization and digitalization.
We understand that this is an ongoing journey. We have a company culture where we seek speed and simplicity in everything we do. To this end, we embrace new technology, strive to automate as many manual processes as possible, use data to understand customers’ needs at all times, focus on presenting solutions, and empower customers to make their own choices.
This article was originally published on July 22, 2019. All content © 2019 by Vietnam Insider and may not be reproduced by any means without permission.