Ttta phát triển ngân hàng số tại ngân hàng thương mại cổ phần sài gòn thương tín

MINISTRY OF EDUCATION AND TRAINING MINISTRY OF FINANCE ACADEMY OF FINANCE DEVELOPING DIGITAL BANKING AT SAIGON THUONG TIN COMMERCIAL JOINT STOCK BANK Major: Finance - Banking Code: 09.34.02.01 SUMMARY OF DOCTORAL THESIS Hanoi – 2023 The work was completed at Academy of Finance Opponent 1: ………………………………………… Opponent 2: ………………………………………… Opponent 3: ………………………………………… The thesis will be defended in front of the thesis marking Council at State level held at Academy of Finance, Hanoi At h , day month năm 2023 It is possible to learn about the thesis at National Library Library of Academy of Finance PREFACE Rationale Digitalization of the banking industry is a strong trend in the world Digital banking (DB) is a new and modern form of development, rooted in scientific and technical advances brought about by the 4th industrial revolution Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) is one of the pioneering banks in technology, starting to introduce online services to customers since 2005 However, there are still limitations of Sacombank in the process of developing digital banking services, such as limitations in technology innovation speed, poor customer experience on products and services, support… Sacombank has not yet made a clear difference in the process of competing digital banking services with other commercial banks… These limitations lead to the need for further research and improvement on the theory of DB development as well as building a modern comprehensive DB development strategy Therefore, the PhD student has chosen to carry out the research topic: "Developing digital banking at Saigon Thuong Tin Commercial Joint Stock Bank" to a thesis specialized in Finance - Banking Research purpose - Overall purpose: Researching theoretical issues related to digital banking and digital banking development at commercial banks - Specific purpose: Research the concept and connotation of digital banking and digital banking development at commercial banks, then, study the model to find empirical evidence on the influencing factors as well as the impact of these factors on the development of digital banking at commercial banks Research objective and scope of study Research objective The research object of the thesis is digital banking and digital banking development at commercial banks Scope of study - Space: Saigon Thuong Tin Commercial Joint Stock Bank Sacombank - Time: The thesis chooses the research period from 2017-2022, in which: Secondary data is collected from 2017 to 2021, primary data is collected in 2022 Proposed solutions to 2030 Research method 4.1 Methology The main and thorough research method used in the thesis is the dialectical and historical materialism of Marxism-Leninism Besides, the thesis also uses a combination of other research methods such as analytical method, synthesis method, comparative method 4.2 Data collection method The thesis uses two main data sources, primary data and secondary data The data source of the thesis will be collected from the following specific subjects: - Primary data: collected from Sacombank's survey on clients using DB of the bank - Secondary data: collected from Sacombank's audited financial statements, the system of guiding documents on internal regulations and DB development strategy from the bank's Digital Transformation Center New contribution of thesis 5.1 Theoretically Firstly, the content of "digital banking" has been clarified, the content of "digital banking development" has been definited, and at the same time, it has clarified the components that make up the DB as well as the stages of DB development Secondly, building a model to evaluate the factors affecting customer satisfaction with DB Third, synthesize several valuable experiences on DB development from the existing physical commercial banks 5.2 Practice Firstly, the thesis analyzes the current situation of DB development at Sacombank, points out the achievements and limitations in the process of building the bank's DB Second, the thesis provides primary data as practical evidence for identifying the main factors affecting the satisfaction of DB customers at Sacombank Based on the results of the quantitative model implementation, Sacombank can adjust the DB development strategy in line with the actual situation of the bank Third, the thesis proposes a comprehensive set of solutions, best suited to Sacombank's DB status in the research period in order to help the bank promote the development of digital business in the next period Layout of thesis Excluding Preface, Conclusion and Preferences and Appendix, the thesis consists of chapters as following: - Chapter 1: Theory of digital banking development in commercial bank - Chapter 2: The situation of digital banking development at Saigon Thuong Tin Commercial Joint Stock Bank - Chapter 3: Digital banking development solutions at Saigon Thuong Tin Commercial Joint Stock Bank CHAPTER THEORY OF DIGITAL BANKING DEVELOPMENT IN COMMERCIAL BANK 1.1 Overview of digital banking 1.1.1 Digital banking concept Through the research, the thesis states that “Digital banking is a banking model formed on the basis of digital technology, providing banking services with low cost, high efficiency and optimizing customer experience.” 1.1.2 Digital banking features Firstly, DB is a bank built with the orientation of reaching customers more effectively through a digital platform Second, the DB opens up access to banking services that are not limited in time and space for customers Third, the DB offers customers the experience of using traditional banking services without direct contact Fourth, the DB will have a detailed understanding of the customer The core banking system will store a lot of specific, detailed and valuable information about the characteristics of customers Fifth, the DB has a board that considers banking digitization as its business culture, not merely a project 1.1.3 Elements of digital bank A DB will be structured from eight key elements, including: customer service, management principles, internal controls, technology, data, business innovation, analytics, and personnel 1.1.4 Digital banking services DB services can be divided into two groups: - Services within the bank: The ability to connect and integrate the bank's customer service channels; automate the processes of providing products, services, and operations; Big data analytics support business decision making - Services provided to customers: In addition to providing traditional products and services to customers on a digital basis, commercial banks develop innovative products and services to form a product ecosystem of customer service Basic services can be listed as: loans, mobile wallets, investments, electronic payments, online savings, electronic bill payments, digital currency storage, etc 1.2 Developing digital banking at commercial banks 1.2.1 Concept of digital banking development According to NCS, DB development can be understood as follows: “DB development is understood as expanding the scale of operations and improving the business efficiency of DB through the growth in the number of customers, business sales, and sales quality of services provided” 1.2.2 Contents of digital banking development at commercial banks 1.2.2.1 Developing information technology infrastructure systems for digital banking development To develop DB, the infrastructure of information technology (IT) must be strongly invested, methodical and modern An outdated, patchy technology platform will create a huge drag on the DB development process IT infrastructure needs to solve the two most important tasks of providing a stable foundation for DB operations and ensuring financial security and safety for customers and banks 1.2.2.2 Developing digital banking services at commercial banks, adding value to customers From a transactional perspective, the essence of a bank is a giant ledger that records the content (data) related to the transactions performed And the DBs will be the banks with the capacity to store value, transfer value and assess the risk of transactions DB-oriented banks, and that are the future of banking in the 21st century, will become the platforms that allow financial transactions to be carried out efficiently 1.2.2.3 Developing the DB ecosystem of commercial bank To develop DB, it is necessary to quickly attract a certain number of customers To this, the basic condition is to have an ecosystem in which the DB plays an integral role Three industries with a large number of customers, suitable for connecting to banking services, are ecommerce, telecommunications and financial technology 1.2.2.4 Developing digital banking marketing programs Although DB can be built in parallel with traditional commercial banks, however, to attract consumers to use its services, a separate marketing campaign is required Innovative and attractive marketing programs create an abundant and loyal customer base, which is the foundation for DB to stand firmly in the competitive financial technology market 1.2.3 Evaluation of digital banking development at commercial banks 1.2.3.1 Evaluating the development of digital banking at commercial banks through the contents of digital banking development After analyzing the contents of DB development at commercial banks, the researcher builds a framework to evaluate the development of digital banking at commercial banks according to the above mentioned contents, accordingly, the evaluation of DB development at commercial banks is considered through the following contents: - Information technology infrastructure system for digital banking development of commercial banks - Digital banking service of commercial banks - DB ecosystem of commercial banks - Digital banking marketing of commercial banks 1.2.3.2 Evaluating the development of digital banking at commercial banks through a number of criteria - Customer satisfaction: is an important measure in evaluating service quality in general as well as digital banking service quality in particular - Growth rate of DB service business: Developing DB at commercial banks must first meet the needs of using DB services of customers - Number of customers using DB services: A DB is considered to be developed, first of all to meet the needs of the customer objects - DB transaction rate: In addition to the increase in the number of customers, the increase in the rate of transactions via digital channels is also an important indicator to evaluate the DB development level of a commercial bank 1.2.4 Factors affecting the development of digital banking 1.2.4.1 Subjective factors - Financial capacity of banks: To develop DB, banks need to have strong financial potential This factor plays a very important role in building and maintaining the DB service system on the basis of traditional commercial banks to improve the bank's competitiveness - Human resources of the Bank: People are an extremely important factor that plays a key role in the success and failure of banking operations, especially in providing services - Bank's technology base: Security has become a vital issue of the banking industry in the digital age Security is also the top concern of customers when deciding to choose a non-cash payment method - Channels to connect with customers: To meet the needs of customers, banks must modernize to have many channels to connect with customers 1.3.3 Lessons learned for Saigon Thuong Tin Joint Stock Commercial Bank Firstly, Establish a strategic vision and implementation plan according to the long-term roadmap in line with the bank's capacity and mission Second, Appreciate the executive leadership team and make this team the main driver for digital transformation Third, attach importance to economic benefits and rationally distribute between short-term and long-term benefit goals Fourth, Create a culture of continuous innovation Fifth, Continually foster knowledge and train staff and guide users Sixth, Developing the low-income customer segment is also a fairly new option for the DB CONCLUSION OF CHAPTER DB development is the basis to help commercial banks expand their market share, improve their reputation and promote the bank's image more widely The basic content of DB development focuses on (i) Establishing a modern information technology infrastructure system; (ii) Enhance the value of digital banking; (iii) Forming a DB ecosystem and (iv) Building an innovative marketing program In order to find an effective DB development direction, in chapter of the thesis, PhD candidate proposes a model to analyze the factors affecting customer satisfaction with DB services, with main factors including: tangibles , reliability, reassurance, empathy and responsiveness 11 CHAPTER THE SITUATION OF DEVELOPING DIGITAL BANKING AT SAI GON THUONG TIN JOINT STOCK COMMERCIAL BANK 2.1 Overview of Saigon Thuong Tin Commercial Joint Stock Bank 2.1.1 The history of formation and development of Saigon Thuong Tin Commercial Joint Stock Bank Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) was established on December 21, 1991, from the merger of Go Vap Economic Development Bank and credit cooperatives: Tan Binh Thanh Cong - Lu Gia Sacombank is one of the first joint stock commercial banks in Ho Chi Minh City Over the course of business operations, up to now, Sacombank has become one of the five largest banks in Vietnam in terms of total assets, charter capital and operating network 2.1.2 Business situation of Saigon Thuong Tin Commercial Joint Stock Bank For all banks in the Vietnamese banking system in general and Sacombank in particular, credit is an important activity and brings the main source of income for the bank, as well as a basis for banks to continue to continue to expand and develop other business operations such as capital mobilization, trade finance, foreign currency trading In the 5-year period from 2017 to 2021, Sacombank's total assets have changed significantly Specifically, total assets in 2017 of VND 364,016,293 million by 2021 have reached VND 515,900,025 million, equivalent to an increase of VND 151.883,732 million 2019 witnessed the largest growth with a growth of 11.75%, equivalent to VND 12 47,234,266 million In the next two years, Sacombank's total assets continued to grow relatively steadily with growth rates of 8.33% and 6.04%, respectively 2.2 Current status of digital banking development at Saigon Thuong Tin Commercial Joint Stock Bank 2.2.2 Digital banking management apparatus at Saigon Thuong Tin Commercial Joint Stock Bank In the period 2017 - 2021, DB at Sacombank is managed by the Digital Transformation Center under the management of the General Director Sacombank's DB system management apparatus in this period is still quite simple, streamlined and easy to change, adapting to the needs of customers and the bank's development tasks in the context of the increasingly digital economy extending 2.2.3 Current status of digital banking development at Saigon Thuong Tin Commercial Joint Stock Bank 2.2.3.1 Information technology infrastructure system for DB at Sacombank The foundation for building and developing DB at Sacombank is carried out based on three main platforms which are credit origination, approval and management system, customer relationship management toolkit and Sacombank Pay application integrating many financial solutions Credit origination, approval and management system: LOS - Loan Origination System - the system "Initiating, approving and managing credit granting" is an advanced and modern management system applied to many customers number of banks in the world This is one of the 13 leading key projects of Sacombank, which has been implemented since January 2018 and applied in March 2019 2.2.3.2 Digital banking service at Sacombank The system of financial services being provided by Sacombank on the digital platform has been supplemented and upgraded to better serve consumers In other words, the value that the DB created by Sacombank has been upgraded over time DB Sacombank provides services towards two objects, which are individual customers and corporate customers To serve individual customers, Sacombank built Sacombank Pay application, which is convenient to install on smartphones For businesses, Sacombank builds an eBanking system (Internet banking, Mobile banking and Alert) 2.2.3.3 Digital banking ecosystem at Sacombank DB wants to develop sustainably, it is necessary to have a connection between the financial services that the bank provides and the transaction of goods and services in the market Currently, Sacombank's DB has connected with many leading networks of businesses, banks, insurance companies, securities companies in Vietnam: - Corporate customers (including financial technology companies - Fintech) - Insurance companies, securities - Banks - Open connection with non-banking institutions 2.2.3.4 Marketing ngân hàng số Sacombank 14 Creative marketing program (application of hybris marketing) is the core issue that helps promote DB development, create a bank's own brand, and consumers' habits of using DB services Sacombank runs advanced digital marketing programs (via email, web, mobile, advertising, social) and marketing campaigns on all channels: digital channels (email, push marketing, advertising, search) ) and traditional channels The bank collects behavioral data of potential customers in response to marketing information and uses that information to improve its campaigns 2.2.3.5 Sales of DB services of Sacombank From 2017 to 2021, Sacombank's digital business sales increased continuously, from VND 926,562 billion to VND 3,888,892 billion (equivalent to more than times) With convenient DB applications and innovative marketing programs, Sacombank has attracted more and more customers to switch from physical banking services to DB Especially, with the introduction of Sacombank Pay platform (which can be considered as the core of Sacombank DB system), the orientation of customers to switch to DB is even more promoted Since its inception at the end of 2018, Sacombank Pay's sales have grown continuously at a fairly high rate Revenue from Sacombank Pay in 2020 will increase more than 120 times in 2021; 2021 will increase 14.6 times in 2020 2.2.3.6 Number of people using the DB service The number of customers using Sacombank's DB services in the period 2017-2021 continuously increased Total number of people using DB services has increased from 1,054,685 people in 2017 to 5,470,834 people in 2021 The growth rate of DB Sacombank service users is 15 2018/2017: 33.93% respectively ; 2019/2018: 68.5%; 2020/2019: 56.55% and 2021/2020: 46.82% Notably, the number of accounts activated on Sacombank Pay platform (the main platform of DB Sacombank) has changed dramatically after only four years of launch In 2019, the number of accounts used on Sacombank Pay increased by 31.7 times compared to 2018 By 2020 and 2021, this number will continuously increase by times The expanded user scale represents Sacombank's outstanding DB development 2.2.3.7 Digital banking transaction rate Along with the increase in the number of customers participating in Sacombank's digital channel, the number of transactions on the digital platform has also made rapid progress in the period of 2019-2021 due to the impact of the Covid-19 pandemic The number of transactions via digital channels in 2021 has increased by 213% compared to 2019 If in 2017 Sacombank's digital transaction rate was only 23%, in 2019 this rate will be 39% By 2021, Sacombank's digital transaction rate has reached more than 70% 2.3 Research model results on factors affecting customer satisfaction with digital banking at Saigon Thuong Tin Commercial Joint Stock Bank 2.3.1 Survey sample PhD Candidate has conducted a survey by google form with customers who are using DB service of Sacombank The survey sample is 2670 people (satisfying the requirement for the minimum number of observers calculated in the method of information collection) 2.3.3 Research results 16 Table 2.1: Regression results Source: Research by PhD Candidate From the regression coefficients, two normalized and unnormalized regression equations are built in the following order: Y= 0,598X1 + 0,130X2 + 0,176X3 + 0,058X4 + ε Y = 1,137 + 0,452X1 + 0,131X2 + 0,214X3 + 0,162X4 + ε Regression results from the normalized regression equation show that there are factors affecting customer satisfaction with digital banks with decreasing levels in order as follows: X1 = Responsiveness X3 = Assurance X2 = Tangibility X4 = Empathy Thus, it can be seen that Responsiveness, Assurance and Tangibility are the factors that have the strongest impact on customer satisfaction with digital banking 2.4 Evaluation of digital banking development at Saigon Thuong Tin Joint Stock Commercial Bank 2.4.1 The achievements In the period 2017-2021, Sacombank has achieved some outstanding achievements as follows: 17 - Firstly, the interaction speed between Sacombank's digital banks and customers is quite fast - Second, the flexibility of products and services provided by Sacombank's digital bank is quite high - Third, Sacombank's digital banking marketing program has brought positive results - Fourth, the security of Sacombank digital bank is highly appreciated - Fifth, Sacombank has focused on building DB development strategy 2.4.2 Limitations Firstly, Sacombank's DB service applications are fragmented and difficult to manage Second, Sacombank's IT platform is not capable enough to develop DB Third, DB's products and services provided by Sacombank are not really comprehensive Fourth, Sacombank's DB Ecosystem has not been established commensurate with the bank's potential Fifth, the investment cost for DB marketing activities is still quite modest, not commensurate with the market potential 2.4.3 The cause of the limitations 2.4.3.1 Subjective reasons Firstly, because Sacombank's IT infrastructure system has been built over many years, with continuous innovation and improvement, many operations have the participation of different technologies in each period 18 Secondly, the software organization model in the form of Waterfall (Waterfall) has been developed since 1970 with many outstanding advantages Third, due to the digital capacity of Sacombank's human resources, it has not yet met the requirements for DB development and Sacombank's process of collecting analytical data for decision-making has not been completed Fourth, Sacombank's management direction is quite cautious Many service delivery processes are shaped by a rigid compliance mindset Fifth, the culture of digital transformation as well as the regulations in management and operation orientation of the bank is not really quick to catch up with the new trend of the market Sixth, the bank's digital transformation process has only been promoted by a digital transformation center with a small operating scale and modest staff 2.4.3.2 Objective reasons Firstly, Vietnam's national IT platform is still limited The technical infrastructure for a unified DB system on a common technical platform is still quite new for a developing country like Vietnam Second, the system of legal documents guiding DB's operations in Vietnam has not been developed comprehensively Third, the competition for DB service providers in the banking market in Vietnam is getting stronger and stronger CONCLUSION OF CHAPTER To analyze the current situation of Sacombank's DB development, NCS researched and understood the characteristics, development process and business results, legal basis for Sacombank's DB 19 development in the period 2017-2021 From there, the data related to Sacombank's DB development situation in the period 2017-2021 were calculated, synthesized and analyzed Survey results on factors affecting customer satisfaction with Sacombank's DB services show useful findings Accordingly, responsiveness, assurance, tangibles and empathy from the bank are factors that directly affect customer satisfaction with Sacombank's DB services CHAPTER SOLUTIONS FOR DEVELOPMENT OF DIGITAL BANKING AT SAI GON THUONG TIN JOINT STOCK COMMERCIAL BANK 3.2 Orientation and development goals of Saigon Thuong Tin Joint Stock Commercial Bank in the period of 2021 - 2025, towards 2030 3.2.1 Development orientation of digital banking at Saigon Thuong Tin Commercial Joint Stock Bank in the period of 2021 - 2025, towards 2030 Sacombank aims to develop into a modern, multi-functional DB leading in Vietnam To build a leading DB in the Vietnamese market, Sacombank orients its development based on eight core values, including: enhanced customer experience, responsiveness, value chain digitization, reliability and transparent, ecosystem ready, social media ready, solid technology platform and innovative digital culture 3.2.2 Digital banking development goals at Saigon Thuong Tin Commercial Joint Stock Bank in the period of 2021 - 2025, towards 2030 Sacombank's biggest goal is to reach the leading position in Vietnam's DB system in the near future, increase utility and customer experience, and realize the goal of financial inclusion and sustainable development 20 on the basis of sustainable development The department promotes the application of new and advanced technologies in operating management and providing products and services in the direction of process automation, optimizing business operations 3.3 Solutions to develop digital banking at Saigon Thuong Tin Commercial Joint Stock Bank 3.3.1 Setting up Ominchanel In order to solve the problem of DB services being set up on different, discrete and difficult to manage platforms, Sacombank needs to set up an omnichannel platform (Omichanel) for DB operations 3.3.2 Completing and upgrading the digital banking ecosystem To complete Sacombank's DB ecosystem both internally and externally, building the bank's digital platform is extremely important The platform is a plug-and-play business model that allows multiple participants (producers and consumers) to connect, interact, and create value 3.3.3 Digitizing business using digital technology To complete the DB ecosystem from within, Sacombank needs to automate business processes (Business Process Automation) 3.3.4 Improving the quality of human resources for digital banking development To develop DB, Sacombank started by improving the quality of human resources, building the bank's vision and culture in line with digital transformation, business structure, and rearrangement of departments and offices in a reasonable way to facilitate the research, application and deployment of new products and services 21 3.3.5 Enhance data collection and analysis to support decision making Sacombank has a large amount of customer data accumulated over many years, managed on many different software programs/applications The data is often heterogeneous because the programs are not linked or standardized but are collected separately The information acquired is simple because most of the data is imported from the Branch 3.3.6 Investing in modern information technology infrastructure for digital banking development To ensure the sound and stable operation of the IT infrastructure for DB Sacombank, the bank will need to strategically focus on the following areas: Cloud application, Flexible and continuous software delivery, Implementation security in digital business, Risk management in digital business 3.3.7 Establishment of Digital Banking Division Sacombank's DB can only develop comprehensively when the bank establishes a separate Management Division for this field The current digital transformation center with a streamlined operating system, only suitable for the early stage of market exploration, not suitable for creating breakthroughs, helps Sacombank's DB operate strongly and effectively with existing physical banks 3.4 Recommendations to develop digital banking in Vietnam and Saigon Thuong Tin Commercial Joint Stock Bank 3.4.1 Recommendations to the Government It is necessary to issue regulations on electronic identification soon; interoperability and synchronization of personal databases such as 22 national population data, citizen identification database, tax, insurance, information transparency makes assessment, customer management, money laundering and corruption prevention easy and timely Create favorable conditions for banks to connect payment easily and conveniently with public administrative service units, meeting all budget payment needs of people and businesses 3.4.2 Recommendations to the State Bank Research and improve the legal practice of payment card operations with the promulgation of standards for contactless payment (contactless), Promulate instructions for lending on the digital platform through the bank's application, as well as through the third-party application that the bank cooperates with Adjust, amend and supplement current regulations that are not suitable for digital transactions such as transaction limits; credit; allows transaction authentication using chip citizenship application to be more convenient, fast and simple CONCLUSION OF CHAPTER Chapter offers a number of solutions to help Sacombank build a more comprehensive, sustainable and superior DB These solutions are proposed on the basis of theoretical framework, actual data as well as references to documents of major commercial banks in the world and DB research documents of the world The solutions presented are to provide a scientific and practical basis for Sacombank to research and consider in accordance with DB's development orientation and business strategy in the coming time 23 CONCLUSION Development of DBs at commercial banks is still a new issue in Vietnam The thesis contributes to a systematic view of DB development in existing commercial banks Within the scope and subject of research, the thesis has achieved the following achievements: Firstly, the thesis has synthesized and systematized the theories about digital banking and the content of digital banking development, as well as the criteria for evaluating the development of DB, giving a model to evaluate the factors affect customer satisfaction when using DB services Secondly, on the basis of theory, the thesis has focused on analyzing, evaluating and clarifying the current situation of DB development at Sacombank Third, based on the theoretical basis and the actual situation of DB development at Sacombank, the thesis proposes solutions for the bank and recommendations to the National Assembly, the Government and the State Bank of Vietnam to contribute to creating a business environment best for DB development at Sacombank in particular and Vietnam in general 24 LIST OF PUBLISHED WORKS RELATED TO THE TOPIC Nguyen Duc Thach Diem (2021), Developing vietnam’s digital banking transformation, SEDBM-4, pages 956-962 Nguyen Duc Thach Diem (2022), Banking digitalization: international experiences and lessons learned for vietnamese commercial banks, SEDBM-5, pages 1180-1187 Nguyen Duc Thach Diem (2022), Development of digital bank at sai gon thuong tin commercial bank, FASPS-4, pages 481-486