Rationale of the research
In recent years, Vietnamese commercial banks have undergone significant transformations, with banking services and products evolving steadily The introduction of digital banking has not only allowed these banks to adapt to modern demands but also to diversify their offerings, enhancing their competitive edge and creating new opportunities This advancement marks a notable achievement for commercial banks in Vietnam, as digital banking continues to dismantle traditional barriers in the industry.
Digital banking has emerged as a transformative trend, enhancing the accessibility of banking services for customers while addressing their needs for convenience However, traditional consumption habits hinder widespread adoption, leaving many individuals without access to digital banking Despite significant advancements in digital payment infrastructure, challenges remain, including a lack of synchronization across systems The majority of ATM and POS services are concentrated in major cities like Hanoi and Ho Chi Minh City, with limited availability in smaller towns and rural areas While digital payment options for utilities and personal finance exist, their reach does not align with market potential Additionally, the interconnectivity between different banking card systems is inadequate, and security issues, such as data breaches and fraudulent activities, pose significant risks to users of digital banking services.
The digital banking sector of commercial banks is currently witnessing significant growth and intense competition To capitalize on this opportunity, banks must swiftly expand their customer base by enhancing service utilities like mobile banking, Internet banking, CDM, and ATM/POS systems As customers engage more with these services, their usage of various financial and banking offerings is likely to increase Consequently, digital banking is becoming increasingly vital to the overall net profit structure of banks' products and services.
Vietnam's payment services have seen significant development and diversification, particularly with the rise of mobile payment solutions experiencing robust growth As consumer behavior increasingly shifts towards online transactions, banks and financial intermediaries must adapt accordingly This necessitates an upgrade to a "Digital Bank" system to meet evolving customer needs and enhance service delivery.
Digital banking presents significant opportunities and challenges for the Vietnamese banking system, necessitating a departure from traditional banking models in areas such as legal frameworks, implementation methods, and customer service This study aims to define the concept of "Digital Bank" while exploring the implications for commercial banks, particularly ACB It highlights the need for banks to adapt by learning from experiences and developing strategic responses, ultimately offering solutions and recommendations for successful integration into the digital landscape.
Literature review
International reviews
Recent research on digital banking has surged both domestically and internationally, aiming to enhance the banking system to meet current demands and prepare for future developments This article highlights various studies, articles, and news pieces that contribute to the evolving landscape of digital banking.
Tunde Olanrewaju's 2014 research, "The Rise of the Digital Bank," highlights the slow progress of digital banking in Europe, revealing that only 20 to 40 percent of retail banking processes are digitized and that 90 percent of European banks allocate less than 0.5 percent of their total investment to digital initiatives Olanrewaju emphasizes the importance of digital banking and encourages European banks to adopt a more serious approach towards it He argues that digitalization can be cost-effective if managed wisely and asserts that embracing technology is essential for the banking industry To thrive, banks must leverage existing technologies, invest in innovative digital solutions, retire outdated platforms, and fundamentally transform their operational processes.
Gaurav Sharma (2017) explores the concept of "Digital Banking," emphasizing its advantages for both the banking industry and customers His analysis draws on previous research to enhance our understanding of digital banking and its specific implications for achieving various objectives.
Digital banking offers significant advantages for both customers and financial institutions, as highlighted by the author's research It helps reduce operational costs and risks for banks while enhancing profitability through a competitive edge and increased efficiency in risk management For customers, digital banking improves the overall banking experience, lowers travel expenses, and minimizes fixed costs like money transfer fees The author emphasizes that we are in a digital era for banking, urging institutions to embrace these changes fully.
"tech-demonstrations" and genuinely embrace everything that technology has to offer."
It is now even more clear that digital banking was and continues to be one of the major turning points in the banking industry.
Domestic reviews
Digital banking has been extensively studied in Vietnam, with various documents, research, reviews, and articles contributing to the understanding of this topic The upcoming articles will provide a more detailed examination of digitalization in the banking sector.
In his 2021 article titled "Opportunities and Challenges in the Development of Digital Banking in Vietnam," published in the Financial Journal on June 1, Nguyen Le Hung from the Joint Stock Commercial Bank for Industry and Trade of Vietnam, Thang Long Branch, explores the evolving landscape of digital banking in Vietnam, highlighting both the potential growth opportunities and the significant challenges faced by the sector.
In 2021, the author discusses the nascent stage of digital banking development in Vietnam, emphasizing the potential for growth among banks like VPbank, Techcombank, and Tpbank The article highlights the significant opportunities and challenges within the digital banking sector, underscoring the importance of digital transformation in the current landscape Vietnam's young, tech-savvy population, characterized by high smartphone usage, plays a crucial role in this evolution Additionally, supportive legislation promoting non-cash payments and the overarching trend of "digitalization" are pivotal to the country's development trajectory.
Le Hung highlighted the challenges faced by Vietnamese banks, including the significant costs associated with digital transformation, limitations in human resources, and the evolving concerns regarding consumer behavior.
Ph.D Phan Thi Hoang Yen and Nguyen Thuy Hang (2021) emphasize the inevitability of digital transformation in banks, highlighting the crucial role of digital banking in their development They, along with Nguyen Le Hung, acknowledge the significant opportunities presented by the growth of digital banking in Vietnam, while also recognizing the challenges that remain Their research suggests that banks must collaborate with Fintech companies and integrate into the digital ecosystems of various industries to enhance customer experience and foster closer relationships with clients Despite the rapid growth of digital services, many banks have been hesitant to invest in essential infrastructure like data warehouses and centralized digital systems This investment is critical, as it not only reduces costs for banks but also streamlines transactions for customers, leading to a notable increase in the volume and value of online banking transactions.
In her 2022 article published in the Journal of Industry and Trade, MS Dang Thi Hong Nhung highlighted the significant growth of digital banking in Vietnam, accurately predicting its trajectory The study revealed that 77 percent of Vietnamese consumers are enthusiastic about digital banks, with 31 percent actively utilizing these services The convenience of digital banking allows consumers to conduct transactions anytime, eliminating the need for physical bank visits Notably, bill payment emerged as the most popular service among users, reflecting the increasing reliance on digital financial solutions in Vietnam.
A recent survey reveals that 72 percent of customers prioritize digital banking services, with 67 percent specifically utilizing money transfers to relatives and friends This highlights Asia's potential as a thriving market for digital banking, especially in the wake of the Covid-19 pandemic.
The COVID-19 pandemic, despite its severe impact on the global economy, including Vietnam, has acted as a catalyst for digital transformation within the banking sector, accelerating the shift from offline to online transactions In response, many commercial banks are investing in the development of digital banking services to align with this trend, recognizing the significant potential among younger consumers Notably, Gen Z is leading the charge in social commerce, with 85% of surveyed individuals familiar with social networks and 68% actively using them.
Despite ongoing challenges in the development of digital banking, the benefits and opportunities it presents for both the banking system and customers are significant Vietnamese banks must capitalize on these opportunities to enhance the overall banking framework and specifically improve their digital banking services Furthermore, once the current obstacles are identified, banks should implement targeted strategies and policies to effectively address and overcome them.
Scope and Objective of the research
The study's focus is on how Vietnamese commercial banks are expanding digital banking, as well as the opportunities and challenges that these banks face
This research evaluates the opportunities and challenges faced by Asia Commercial Banks in advancing their digital banking capabilities, taking into account their strengths and weaknesses and the overall landscape of commercial banks.
Research methodology
The research employs a blend of quantitative and qualitative methods, utilizing statistical analysis, systematization, and both deductive and inductive reasoning Additionally, it incorporates survey methods to gather opinions, leading to the following conclusions.
Data collection and processing involve gathering information from various bank departments' official documents, which are presented in tables, charts, and diagrams Additionally, accessible statistics are synthesized to showcase business results on commercial banks' official information pages To enhance the data collection process, newspapers, economic journals, theses, scientific research, relevant books, and credible websites are utilized Consequently, the data is statistically and selectively represented for analysis through tables, diagrams, and charts.
Data analysis and comparison methods involve processing operating results, business environment data, and aggregated indicators through statistical techniques, systematization, analysis, and synthesis The comparative process focuses on contrasting discrepancies between trends and requirements A synthesis of information from various commercial banks indicates that Asia Commercial Joint Stock Bank (ACB) encounters both opportunities and challenges in its digital banking development journey.
The research employs a survey method that combines personal experiences and prior professional survey data to gather insights on digital banking from customers of Asia Commercial Joint Stock Bank (ACB) Customers are engaged through evaluation questionnaires and interviews at select ACB branches, facilitating a qualitative analysis of their feedback The questionnaire is specifically designed to address aspects of digital banking and is distributed to customers who have utilized ACB's digital services, alongside direct interviews conducted at the branches.
DEVELOPMENT OF DIGITAL BANKING IN VIETNAMESE
OVERVIEW OF DIGITAL BANKING
Digital banking, as defined by Gaurav Sarma (2017), refers to the transformation of traditional banking processes and services into a fully digital format This means that customers can perform all the functions typically available at a physical bank branch through a single digital banking application, eliminating the need for in-person visits Additionally, all banking operations, including risk management, capital handling, product development, marketing, and sales management, are also digitized, allowing for seamless transactions across various distribution channels.
Digital banking and E-banking: Comparison
Table Error! No text of specified style in document.-1: Comparison between Digital banking and E-banking
Digital banking E-banking Definition A form of banking that digitizes all traditional banking activities and services
An online banking service, the electronic banking of banks
Means of operation Live banking, Website, mobile devices
Applications on mobile phones, laptops/PC, with network connection
Main activities - Withdraw money, transfer money
- Manage checking accounts and savings accounts
- Transfer money inside and outside the system
E-Banking refers to electronic banking services like Internet Banking, SMS Banking, and Mobile Banking, designed to enhance traditional banking In contrast, Digital Banking transforms a bank's entire structure, affecting everything from organizational processes to product offerings and legal frameworks While E-Banking focuses on essential functions such as money transfers, payments, and account balance inquiries conducted online, Digital Banking encompasses all traditional banking operations, allowing customers to submit requests and queries solely through mobile devices.
Digital banking relies on advanced technologies such as artificial intelligence, big data, and blockchain to innovate financial services This transformation enables banks to reduce costs, enhance competitiveness, and improve compliance and transparency For customers, digital banking offers easier and more secure access to banking services, leading to lower expenses, increased financial efficiency, and the promotion of online business growth.
Digital banking allows customers to perform various secure transactions through a single online platform, promoting a paperless and cashless approach that aligns with modern societal goals It includes a variety of services such as POS, ATMs, cards, internet banking, mobile banking, SMS banking, and phone banking, while also establishing a framework of rights, obligations, and associated costs.
- ATM – POS: In terms of what is the most familiar to both traditional and new systems of banking, ATM and POS are both common and initial service,
Modern ATMs have evolved beyond simple cash withdrawal and transfer functions, now offering enhanced features such as QR code integration, allowing customers to access their funds without needing an ATM card.
Phone Banking, also known as 24/7 Banking, enables customers to manage their bank accounts conveniently through a simple phone call to the bank's hotline This service connects users directly with the Customer Service Department, allowing them to inquire about account details, conduct transactions, and receive various consulting services at any time.
Mobile Banking and Internet Banking offer customers a convenient way to manage their finances, fulfilling nearly all banking needs With the availability of mobile applications, users can perform transactions easily from anywhere in the world, provided they have a smartphone, internet access, and a mobile banking service enabled on their account Both banking methods allow consumers to engage in various monetary and non-monetary activities through the bank's website or app Ultimately, Internet Banking delivers a similar experience to Mobile Banking, making these services highly accessible and widely used.
Digital banking represents a significant transformation in the financial system, offering numerous advantages over traditional banking services It enhances the banking experience for both financial institutions and their customers, making transactions more efficient and accessible.
1.1.3.1 Digital banking to commercial banks
Digital banking significantly lowers costs for commercial banks by enhancing operational efficiency By minimizing direct consumer interactions, reducing travel expenses, and streamlining transaction processes, banks can effectively cut down on operational expenditures.
Digital banking can significantly enhance competitiveness by streamlining administrative and operational processes Customers frequently face frustration due to lengthy procedures, but the adoption of digital banking solutions can alleviate these issues, effectively minimizing administrative delays and improving overall efficiency.
Enhancing capital efficiency is a key focus for the bank, which offers a range of digital banking services and products designed to facilitate faster and more convenient payment and collection processes for customers This streamlined approach accelerates cash flow circulation, ultimately leading to improved efficiency in the bank's capital utilization.
Digital banking enhances customer engagement and retention by providing convenient services that attract a growing audience As more individuals explore digital banking options, banks can leverage these advantages to offer tailored products and services, increasing the likelihood of customer adoption and loyalty.
Commercial banks are increasingly forming partnerships with securities firms, financial institutions, and insurance companies to offer a comprehensive range of products and services Through digital banking, these banks can efficiently launch new offerings and promotions, ensuring customers receive all essential information about their banking options.
- Furthermore, digital banking also helps commercial banks to implement globalization strategies without opening branches abroad
Digital banking offers significant advantages by saving both time and money for customers With the convenience of 24/7 access, users can conduct transactions and manage their finances anytime and anywhere, making banking more efficient and accessible.
Accessing banking services seven days a week and from any location is particularly beneficial for busy customers who have limited time to visit banks This convenience is especially valuable for SMEs and individuals with smaller transaction volumes Additionally, it enables customers to access and confirm transactions with complete accuracy at their convenience.
19 cost for online transactions usually will not take much compared to the cost of making it at the counter
DIGITAL BANKING DEVELOPMENT IN VIETNAMESE COMMERCIAL
1.2.1 The current situation of digital banking development in the world
Digital banking, initially pioneered in developed countries with advanced technology and high living standards, is increasingly gaining traction worldwide As mobile applications become more popular among users, the technological edge that once belonged solely to developed nations is now a global phenomenon This shift has facilitated the rapid spread of digital banking in developing countries, fostering the growth of a digital transformation ecosystem within the banking sector.
Digital banking has gained significant traction across various sectors worldwide, with notable examples including Barclays, Nutmeg, and Atom in the UK, as well as DSB Bank and UOB in Singapore Additionally, major global players such as JP Morgan Chase in Japan, Siam Bank, and Krung Thai Bank in Thailand, along with institutions like Scotiabank, CitiBank, Standard Chartered Bank, Wells Fargo, and OCBC, highlight the growing influence of digital banks in the financial landscape.
In recent years, major banks worldwide have successfully transitioned into digital banks, with a notable rise in Fintech companies emerging alongside traditional banking institutions The growing symbiosis between Fintech firms and established banks has reshaped the banking landscape, leading to significant changes in business models, customer support, management operations, and product development strategies However, not all banks have thrived in this digital transformation; some, like Hello Bank of BNP Paribas and UBS, struggle to attract users due to limited innovative features and high service fees.
Today, startups and established corporations alike identify as Fintech projects, focusing on the continuous enhancement of financial services This includes online payment systems, cryptocurrency exchanges, and platforms enabling users to open accounts and transfer funds digitally Traditional banks are also evolving by integrating modern technologies and cryptocurrencies, with digital banking progressively replacing conventional products The current banking infrastructure leverages social networks, messaging services, and customer support channels, ensuring secure and reliable payment systems Many of these systems incorporate advanced security measures, such as fingerprint and retina scanning.
2018 by Boston Consulting Group, by 2023, about 30% of the global banking system's revenue will only come from digital channels
IBM's report, "Building a Sustainable Digital Bank," outlines the essence of digital banking, highlighting that all banking products and services are delivered in digital formats This approach allows customers easy access to information, greatly simplifying their lives in an increasingly electronic world The model is designed for real-time interaction, with the concept of "digitization" facilitating rapid advancements in digital technology.
The success of bank digitization largely hinges on effective scalability Fintech startups face significant challenges in gaining customer trust and attracting users, primarily due to the absence of backing from a well-known brand.
Neobanks, which operate exclusively online without physical branches, represent a promising evolution in the banking sector, emphasizing lower fees and enhanced customer service through technology platforms These banks facilitate transactions via websites and mobile applications, catering to a tech-savvy clientele Traditional banks often invest in or acquire existing fintech startups to enhance their digital offerings, exemplified by BBVA's $117 million acquisition of the American startup Simple to target young Americans and expand its reach to Hispanic customers, and Otkritie Bank's purchase of Rocketbank for approximately 300 million rubles to leverage a growing mobile user base.
1.2.2 The current situation of digital banking development in Vietnam
In the era of global economic integration, the establishment of digital banking is essential Despite the long-standing advocacy for digital payments, their growth has stagnated since the COVID-19 pandemic Since 2006, the State Bank of Vietnam has sought approval from the Prime Minister for a non-cash payment initiative, which has evolved to align with economic growth and advancements in cashless payment technology Consequently, non-cash payment operations in Vietnam have expanded in both scale and quality, introducing a range of modern and convenient payment solutions powered by information technology.
In recent years, Vietnam has significantly enhanced its technological infrastructure for non-cash payments, particularly digital payments, focusing on quality and efficiency Banks are utilizing advanced payment technologies, which facilitate the development of innovative non-cash payment services The infrastructure for card payments has improved, with widespread availability of ATMs and POS machines in various sectors, including retail, hospitality, and gradually expanding to healthcare and education, achieving an annual growth rate of 17-18% Additionally, commercial banks have broadened their payment options to include bank cards, mobile wallets, and applications.
Vietnamese banks are increasingly adopting digital banking services as the country embarks on its digital transformation journey Most banks have established digitalization strategies, recognizing the importance of digital banking development Notably, 96 percent of banks have created development strategies centered around 4.0 technologies, while 92 percent have launched internet and mobile applications to enhance their services.
Vietnamese banks are increasingly adopting digital transformation strategies by creating dedicated digital banking divisions aimed at researching and implementing innovative solutions The introduction of the OPBA Robot marks a significant step forward in this digital evolution, enhancing the efficiency and effectiveness of banking services.
Nam A Joint Stock Commercial Bank (Nam A Bank) has launched a digital transaction platform called ONEBANK, which integrates a modern device ecosystem and artificial intelligence Similarly, Orient Joint Stock Commercial Bank (OCB) has introduced the OCB OMNI channel These innovations ensure that clients enjoy a seamless and cohesive experience across digital transaction channels, enabling them to access a wide range of products and services without the need to visit a physical transaction office.
Many banks are increasingly adopting digital banking processes and communication channels, yet only a select few are advancing towards digitalization of their data platforms Additionally, banks are forming partnerships with technology firms in the financial sector and major tech companies This collaboration enhances customer experiences and provides access to a wider range of services with reduced transaction efforts.
In Vietnam, leading banks have advanced beyond digitization and are now undergoing digital transformation, focusing on process automation and the integration of multiple communication channels This shift aims to enhance customer experiences through personalization Meanwhile, other banks are still in the initial stages of their transformation journey.
Digitalization in the banking sector is gaining momentum, with many small commercial banks like OCB and TPBank investing significantly in digital technology OCB's OMNI platform exemplifies this trend by integrating all banking services into a single digital interface, allowing customers to access services without visiting a physical branch Additionally, some banks are establishing pure digital banking models, such as VPBank's Cake and TPBank's LiveBank, which operate 24/7 and enable customers to conduct nearly all transactions online without direct interaction with bank staff Meanwhile, larger banks like Vietcombank, VietinBank, BIDV, ACB, and MB are focusing on transforming traditional operations through digitalization while also developing innovative products and services.
EXISTENCE
Although many Vietnamese commercial banks have implemented digital banking, the outcomes are still restricted, and the level is still basic, focusing solely
Frequency in using digital banking per week
Once a week From 01 - 03 timesFrom 03 - 07 times More than 07 times
Vietnamese commercial banks face several key obstacles in fully implementing digital banking, particularly in delivering essential services like personal unsecured loan products, which remain in the digitization process and have yet to reach customers.
- Firstly, about high-quality human resources
To successfully implement digital banking plans, Vietnamese commercial banks must invest in IT and develop skilled human resources adept at operating and enhancing digital services on new technology platforms Currently, the IT workforce in these banks falls short in both quantity and quality, hindering the advancement of digital banking systems Additionally, a lack of awareness among some employees restricts their ability to effectively market services and advise consumers The transition to digitization requires a continuous evolution of operational methods, demanding that staff remain open and prepared for changes within a digital landscape.
Digital banking necessitates that clients possess specific knowledge and skills for effective usage However, many commercial bank customers may lack the necessary IT proficiency to navigate the digital services offered.
- Secondly, in terms of technology
Many commercial banks rely on traditional core banking systems characterized by inflexible structures and monolithic operations, making system changes complex and costly in terms of both time and money This rigidity presents a significant obstacle to transforming the operational processes of these banks.
- Thirdly, the budget for the development of digital services
Digitizing a bank's operations entails significant costs, encompassing investments in IT projects, training for new management models, technology support, and staff education Implementing digital banking also requires substantial investment in AI research and development to ensure successful integration and innovation.
The high capital requirements pose challenges for small-scale banks, limiting the research and application of AI primarily to major banks and financial institutions globally The transition to a new core banking system involves significant costs and extended payback periods, as illustrated by Australia's CBA Bank, which has estimated substantial expenses for replacing its core IT infrastructure.
Australia's NAB has modernized its banking infrastructure by investing 450 million USD over four years, with plans to double its capital to 1 billion USD within five years This move replaces the outdated Core Banking system, which took up to 15 years to implement and exceeded initial cost estimates significantly.
Many commercial banks struggle to achieve full digitization due to challenges in user authentication and customer identification The traditional transaction office model faces difficulties in verifying individuals and their documents, such as ID cards and signatures Transitioning to a digital model that relies on machine-based recognition systems exacerbates these challenges, making verification even more complex.
User authentication in digital banking involves both technological and legal challenges, ensuring that banks have a clear basis for resolving disputes Currently, methods such as electronic signatures, digital signatures, and biometrics for customer identification have inherent limitations, exposing banks to potential risks.
Currently, the legal framework for digital banking is limited, with only a few key documents such as the 2015 Law on Electronic Transactions, the 2017 Law on Information Technology, and the Law on Information Security Existing decrees primarily address online transactions through Mobile Banking and Internet Banking platforms However, digital banking encompasses a broader range of services, including account opening, deposits, withdrawals, and loans, all of which require comprehensive digitization This incomplete legal framework presents significant challenges for the effective implementation of digital banking solutions.
Customer habits significantly impact the implementation of digital banking in Vietnam, as many individuals continue to prefer traditional transaction services offered at bank branches and transaction points This reliance on conventional methods poses a challenge for the adoption of digital banking solutions.
In today's digital banking landscape, it's crucial to adopt new awareness and consumption habits, particularly regarding information security Recent incidents of account losses and hacking of financial institutions have heightened customer concerns about the safety and reliability of online transactions Prioritizing secure practices is essential for fostering trust in digital banking services.
Chapter 1 offers a comprehensive overview of digital banking, covering its definitions, functions, classifications, and significance within the financial system and for clients It explores the global landscape of digital banking, with a specific focus on Vietnam, to understand the limitations, opportunities, and challenges faced by Vietnamese banks Additionally, the chapter examines the real-world scenario of Asia Commercial Joint Stock Bank (ACB) in the context of digital banking development, highlighting the opportunities and obstacles ACB encounters in its growth within this sector.
DIGITAL BANKING IN ASIA COMMERCIAL JOINT STOCK
OVERVIEW ABOUT ACB
- Full name: Asia Commercial Joint Stock Bank
- Type of business: Joint stock Company
- Address: 442 Nguyen Thi Minh Khai, Ward 05, District 3, City Ho Chi Minh
- Website: www.acb.com.vn
Asia Commercial Joint Stock Bank (ACB) was established on April 24, 1993, under license 0032/NH-GP from the State Bank of Vietnam and license 533/GP-UB from the People's Department of Ho Chi Minh City Officially operational since June 4, 1993, ACB has developed a robust banking network with over 369 branches and transaction offices, more than 11,000 ATMs, and 850 Western Union agents nationwide Operating in 47 provinces and cities, ACB offers a wide range of financial and banking services, including capital mobilization, investment management, lending, asset discounting, domestic and international payment services, and insurance, all in compliance with State Bank regulations.
In 2021, the State Bank approved an increase of VND 5,400 billion in ACB's charter capital, raising it to VND 21,616 billion ACB aims to expand its charter capital to over VND 34,000 billion by 2022, contingent on further approval from the State Bank The bank is committed to competing effectively in the banking sector, striving for leadership in customer service, financial performance, and capital efficiency With a workforce of over 10,000 employees, all holding university degrees or higher, ACB boasts a leadership team characterized by strategic vision and extensive experience.
The operational and management structure of ACB comprises the General Meeting of Shareholders, the Board of Directors, the Supervisory Board, and the General Director, in accordance with the regulations established by the Law on Credit Institutions 2010 and its amendments in 2017.
Figure Error! No text of specified style in document.-3: Organizational structure of
Asia Commercial Joint Stock Bank
(Source: Bank ACB Annual Report)
The General Meeting of Shareholders, the bank's most authoritative body, holds the power to elect and dismiss members of both the Board of Directors and the Supervisory Board This includes oversight of key committees such as the Risk Management Committee, Human Resource Committee, Investment Management Committee, and Strategy Management Committee.
Facility Management Division I.T Division H.R Division Finance Division
Board of Management Office Supervisory
Asia Commercial Joint Stock Bank (ACB) and its subsidiaries form the ACB Group, which operates through a centralized head office and various distribution channels The General Director oversees the management and supervision of 10 divisions along with 16 departments, centers, and offices located at the head office.
Table Error! No text of specified style in document.-2: ACB's business performance in 2019-2021
Value Value Value Value Deviant
Net fee and commission income
(Source: ACB’s consolidate financial statement from 2019 - 2021)
According to the annual report and consolidated financial statements of ACB from 2019 to 2021, the company has demonstrated a clear upward trend in all key indicators, reflecting impressive business performance during this period ACB consistently strives for excellence across all sectors.
35 to be better year by year, and once they achieve their goals, they make it to other goals
In fact, without the “explosion” of ACB's "Digital banking - ACB ONE", the business performance of ACB is still very good.
Figure Error! No text of specified style in document.-4: Increase in total asset from
(Source: ACB’s consolidate financial statement from 2019 - 2021)
As can be seen from the chart, the total asset of ACB during the period of 2019-
In 2021, ACB experienced significant growth, with total assets increasing by VND 83,239,840 million, or 18.7%, compared to a 15.9% rise of VND 61,015,665 million in 2020 This growth in total assets, as detailed in ACB's consolidated financial statements, was primarily driven by increases in cash on hand, gold and gemstones, deposits at the State Bank, and derivatives, despite a slight decline in fixed assets such as investment securities and real estate Notably, ACB demonstrated resilience in navigating the challenges posed by the COVID-19 pandemic, effectively managing operations and adapting business strategies to mitigate the impact of the crisis.
2.1.3.2 Increase in Deposits from customers
Figure Error! No text of specified style in document.-5: Increase in Deposits from customers (2019-2021)
(Source: ACB’s consolidate financial statement from 2019 - 2021)
In 2019, customer deposits significantly boosted the bank's capital mobilization, reaching VND 308,129,391 million, marking a notable achievement for a joint stock commercial bank Additionally, there was an upward trend in bank securities issuance, while other elements such as debts to the government and State Bank, as well as issuing derivative instruments, saw a decline Loans and deposits from credit institutions and trust loans also decreased this year This success can be attributed to the State Bank of Vietnam's interest rate strategy and the implementation of online deposit technologies and high-interest services, which enhanced the bank's capital mobilization efforts.
In 2020, capital mobilized from client deposits increased by 14.63%, rising from VND 308,129 billion in 2019 to VND 353,195 billion Although the issuance of various types of valuable papers continued to grow, the pace was slower compared to 2019 The outbreak of the COVID-19 pandemic significantly impacted the global economy, prompting ACB to implement policies and adjustments in interest rates and deposits to adapt to the changing financial landscape.
37 market, and made efforts to enhance deposit growth to respond to the current scenario of the entire economy, as one of the industries affected by the epidemic
In 2021, the COVID-19 pandemic led to extensive social isolation, with many individuals confined to their homes and business activities nearly halted During this period, depositing money in banks emerged as the safest financial option, resulting in a significant increase in CASA accounts To encourage deposit mobilization amidst the crisis, ACB raised online deposit interest rates Consequently, the total value of deposits reached VND 26,724,831 million in 2021, reflecting a 7.57 percent increase compared to the previous year.
2.1.3.3 Increase in Loans to customers
Figure Error! No text of specified style in document.-6: Increase in Loans to customers (2019-2021)
(Source: ACB’s consolidate financial statement from 2019 - 2021)
Between 2019 and 2021, ACB experienced a consistent annual increase in loans to customers, growing from VND 266,164 billion in 2019 to VND 308,528 billion in 2020, which reflects a notable 15.92 percent growth.
Between 2016 and 2020, the bank experienced a remarkable growth rate due to effective operational policies aimed at increasing customer loan growth In 2021, client loans reached VND 356,051 billion, reflecting a 15.4% increase compared to 2020 Given the economic conditions in Vietnam and the challenges posed by the COVID-19 pandemic, ACB's business performance was notably impressive.
2.1.3.4 Increase in General business performance
Figure Error! No text of specified style in document.-7: Increase in General business performance
(Source: ACB’s consolidate financial statement from 2019 - 2021)
ACB demonstrated strong business performance from 2019 to 2021, with a notable increase in net profit after taxes In 2020, ACB's net profit reached approximately VND 7,682 billion, reflecting a 27.83% increase from the previous year By 2021, this figure was estimated to exceed VND 9,603 billion, marking a 24.98% growth from 2020 These results indicate ACB's impressive progress in company development during this period.
Net fee and commission income
39 industries affected by COVID-19 business found the proper direction and strategy, resulting in business growth stability
Between 2019 and 2021, ACB's net interest income consistently increased, becoming a significant portion of the bank's overall revenue In 2020, the net interest income reached VND 14,582 billion, marking a 20.39% rise compared to the previous year and an increase of approximately VND 2,470 billion from 2019 This upward trend continued in 2021, with net interest income soaring to around VND 18,945 billion, reflecting a substantial 29.92% growth and an increase of nearly VND 4,363 billion year-on-year.
2020 All of the following growth data demonstrate that ACB has made significant and unexpected progress
2.1.4 Achievement of ACB in developing digital banking
ACB is recognized as a leading bank in the industry, renowned for its high-quality products and services With a commitment to progress and customer feedback, ACB aims to become "everyone's bank." In recent years, the banking sector has undergone significant transformations, with many banks rebranding and introducing innovative products and services that resonate with customers ACB stands out as a modern and progressive bank that embraces these changes.
STRENGTH AND WEAKNESS OF ACB IN DEVELOPING DIGITAL
2.2.1 Strength of ACB’s digital banking
The ACB ONE application features a youthful and eye-catching interface that has captivated both loyal ACB customers and frequent digital banking users Its innovative design marks a significant upgrade from the previous ACB Online version, emphasizing the slogan "Only you." This approach reinforces ACB's commitment to customer-centric service, highlighting the bank's dedication to meeting the needs of its users.
ACB ONE digital bank offers a comprehensive suite of banking products and services, allowing customers to easily manage their financial needs With features such as money transfers, insurance purchases, exchange rate monitoring, bill payments, and savings deposits, ACB ONE ensures a convenient and proactive banking experience.
ACB offers a unique double security feature through its ACB ONE and ACB Safekey applications, enhancing online transaction safety for customers By integrating OTP codes directly into the banking app, users must enter the code received from ACB Safekey to complete transactions, setting ACB apart in the banking industry The ACB Basic Safekey provides a randomly generated authentication code, functioning similarly to an OTP Token, with transaction limits ranging from 500 million VND to 3 billion VND per transaction and up to 20 billion VND daily for organizations This innovative approach ensures high security and peace of mind for customers during online banking activities.
+ ACB Advanced Safekey: With this safekey, the authentication code is generated in real time, attached to the information of each transaction, in order to be easily
46 tracked The trading limit of this advanced safekey is not limited Customers can register transaction limits according to actual needs
- Improvement: ACB ONE Digital Bank with outstanding features compared to the old version ACB Online, from payment speed within seconds
- Personalization: Easily personalize with a wide selection of personalized customer avatars
- Biometric factors: Note when logging in/confirming transactions by fingerprint/face ID:
+ Always control the number of fingerprints installed on the device, only 01 fingerprint should be maintained at all times
+ Absolutely do not let others install additional, or change fingerprints on their devices
+ Regularly check the list of fingerprints installed on the device
2.2.2 Weakness of ACB’s digital banking
ACB ONE, the inaugural digital banking platform of ACB, is still evolving and has not yet achieved the goal of complete digital banking While digital banks in Vietnam are at various stages of development, ACB ONE faces limitations, particularly regarding high-value transactions For individual customers, transactions exceeding VND 1.5 billion require access to the ACB ONE website, with a maximum transaction limit of VND 999,999,999,999 Corporate customers are restricted to transactions of VND 1 billion each, with a daily cap of 20 transactions; any amount exceeding this must also be processed through the ACB ONE web version.
The ACB ONE money transfer system frequently experiences tracing errors during transactions When a customer initiates a money transfer through the ACB ONE app and enters the OTP code, the process may fail at the final step due to this error Importantly, when a tracing error occurs, the funds are not deducted from the customer's account, indicating that the transaction remains incomplete.
47 transaction This can put customers at a huge disadvantage if they are in need of an instant money transfer
The concept of a "double-edged sword" highlights the inconvenience some customers experience when using two separate applications for money transfers, especially when compared to other banks that have streamlined the process by integrating smart OTP features into a single app.
DISCUSSION ABOUT OPPORTUNITIES AND CHALLENGES IN DIGITAL
2.3.1.1 Huge opportunities for ACB in developing digital banking
Digital transformation in the banking sector has significantly enhanced efficiency by reducing both time and costs associated with delivering services and products The impact of the COVID-19 pandemic has underscored the urgent need for banks to digitize their operations swiftly This transition not only optimizes costs but also prepares financial institutions to operate remotely, ensuring business continuity Moreover, it facilitates easier access for customers to a broader range of financial services and products, ultimately providing them with tailored financial solutions and improved experiences.
The rapid advancement of technology presents a significant opportunity for various industries, including banking, to enhance their operations through digital transformation This shift enables efficient data mining and information collection, paving the way for smart systems and software to replace manual tasks Moreover, these innovations can automate complex processes and support outsourcing trends, while also allowing for the internal reuse of services As a result, the development of a globally connected system will provide not only ACB but all Vietnamese commercial banks with convenient access to affordable software solutions.
By leveraging advanced technology, ACB is able to create highly efficient banking models that facilitate rapid expansion of its network and customer database This digital banking approach particularly targets young customers, who represent a significant growth opportunity for the bank.
In the near future, banks are expected to transform into high-end service providers by leveraging AI technology to enhance productivity and manage costs effectively The integration of AI-driven voice recognition software and Fintech innovations will not only expand their customer base but also redefine their brand identity in the industry, ultimately delivering human-like service experiences to customers.
- Diversification in products and services: Launching digital banking has helped
ACB is set to introduce innovative and groundbreaking products aimed at developing more suitable business models for the technological age The increasing adoption of these new banking products and services by customers highlights their utility and demonstrates that customer satisfaction is closely linked to the quality of offerings from banks.
Digital transformation presents a significant opportunity for banks to enhance competition and attract technology solution providers By facilitating transactions through e-wallets and bank cards, banks can meet the growing demands of customers, ultimately maximizing profits ACB has successfully partnered with leading e-wallets like MoMo and Shopeepay, creating a mutually beneficial relationship that boosts transaction volumes and expands its customer base This collaboration not only increases ACB's clientele but also reinforces its reputation for safety and security in digital banking Despite concerns over e-wallets and potential losses, ACB remains committed to providing secure and convenient services, allowing customers to link their accounts with confidence.
2.3.1.2 Advantages of ACB in developing digital banking
ACB's digital banking offers numerous advantages, making it a preferred choice for many customers, particularly among Gen Z and younger demographics The strong reputation of ACB further enhances its appeal, positioning it as a leading bank for those seeking efficient digital banking solutions.
ACB can leverage the strengths of its digital banking platform, ACB ONE, to enhance customer attraction and engagement with its banking products and services A recent survey conducted using the Servqual Model provides insights into the quality of ACB's digital banking, focusing on customer satisfaction at the Thang Long Branch The findings will highlight customer feedback and satisfaction levels, offering valuable information to improve ACB's digital banking experience.
ACB, as a joint stock commercial bank in Vietnam, encounters the same challenges as the banking industry, particularly in the development of digital banking products and services Key challenges for ACB in this digital transformation include adapting to rapid technological advancements, meeting customer expectations for seamless online experiences, and ensuring robust cybersecurity measures.
The legal framework for digital banking operations remains inadequate, hindering its growth and development While the digital payment sector is rapidly evolving due to technological advancements, regulatory measures have not kept up, causing commercial banks to hesitate in adopting new technologies and services beyond existing legal boundaries.
Recent cases of fraud in digital payment activities are becoming increasingly sophisticated and complex, highlighting the urgent need for effective prevention measures Both commercial banks and ACB prioritize safeguarding digital banking transactions to combat this rising threat.
The technology race in the banking industry has led to increased security risks, particularly concerning the protection of user information In Vietnam, the ability to secure financial data in the digital landscape remains inadequate, highlighting the need for enhanced cybersecurity measures in digital banking projects.
- Fourthly, users' awareness: When customers are not aware of the risks in online banking transactions, disregarding the security of personal information,
The rise in information leaks from various individuals, including students and employees, has enabled criminals to establish "ghost" accounts, complicating investigations As a result, fraud schemes have become increasingly sophisticated and challenging to detect.
Vietnamese people predominantly rely on cash for transactions, with about 90% of daily payments made in cash, especially in remote areas In contrast, non-cash payment methods are gaining traction primarily in central provinces and cities that boast robust technological infrastructure.
ACB must address its internal weaknesses and general challenges to prevent these factors from hindering its digital banking development.
- Human resources: Quantity, Quality, and Managing
OPPORTUNITIES AND CHALLENGES: BASED ON CUSTOMERS’
I conducted in-depth interviews with customers of ACB Thang Long Branch to gain insights into their perceptions of ACB ONE, ACB's digital banking platform The findings from these interviews revealed customer sentiments towards ACB ONE, their likelihood of continuing to use the service, and areas for potential improvement Ultimately, customer experiences play a crucial role in shaping the development of ACB's digital banking offerings.
In-depth interviews were conducted with four customers of ACB Thang Long branch, including two corporate and two individual clients, to explore their diverse experiences with the bank These insights will help ACB strengthen customer relationships by demonstrating a commitment to listening and addressing feedback beyond transactional interactions The conversations focused on customers' experiences and feelings regarding ACB's digital banking platform, ACB ONE, including their desires for changes or enhancements to the service.
I conducted interviews with two prominent companies in the corporate customer segment, Hoang Viet Co., Ltd and New Century Organic Vietnam Co., Ltd., both of which maintain a long-standing credit relationship with ACB Thang Long Branch Their collaboration is founded on professionalism and mutual trust, making them significant contributors to the branch's earnings, with each client generating approximately 300 million VND annually.
Hoang Viet Co., Ltd is a leading construction materials company specializing in steel and iron products Since its establishment in 2010, the company has maintained a credit arrangement exclusively with ACB The firm is owned by Mr Nguyen Duc Nguyen, with Ms [Name Not Provided] also playing a significant role in its operations.
Trinh Thi Phuong Loan, the direct manager and participant in a recent interview, expressed her enthusiasm for ACB's products and services, highlighting her busy lifestyle and high transaction frequency at the bank She praised the youthful design of ACB ONE, the digital banking platform that aligns with her style However, she noted a minor inconvenience regarding the need to switch to the ACB ONE web version for transfers exceeding 1,500 million VND, which can be cumbersome for frequent large transactions Despite this, Ms Loan stated, "I don't see any disadvantages; the problems are quite acceptable."
Since its establishment in 2019, New Century Organic Vietnam Co., Ltd has maintained a credit relationship with ACB, primarily exporting cinnamon and star anise to India and Iraq Despite the short duration of this partnership, it has generated consistent revenue for the ACB Thang Long branch and fostered strong personal connections between the business owner and branch employees In a recent interview, director Ms Nguyen Thu Hien shared her perspective, emphasizing her preference for practicality over appearance She expressed frustration with the two-step process required for money transfers, labeling it as "quite unpleasant." Additionally, Ms Hien highlighted recurring issues with ACB's money transfer system, including tracing errors and withheld funds when dealing with state-owned banks, which negatively impact the payment reputation of her business and others.
I invited two customers for the individual customer segment: Ms Tran Thi Thanh Hien and Mr Ta Huu Ngan, a long-time ABC Thang Long customer These two
At the ACB Thang Long branch, 54 customers hold loans exceeding 10 billion VND, actively engaging with ACB's diverse products and services During an interview, Ms Hien and Mr Ngan expressed their satisfaction with ACB ONE, which they use daily for various transactions, including bill payments, utility services, and online savings or insurance purchases Both emphasized that ACB ONE encompasses all essential features to cater to the needs of business owners effectively.
Ms Hien, a frequent user of money transfer services, found that ACB offers exceptionally quick transfer speeds, provided there are no errors or glitches She considers ACB ONE to be the fastest bank for money transfers when compared to Vpbank, Tpbank, and BIDV, which she has also used Mr Ngan shares her opinion, noting that ACB understands customers' concerns about losing money He believes that the ACB Safekey application, which provides "double security," is the best choice for protecting his substantial monthly savings.
ACB ONE has been identified as less than ideal by business customers Hoang Viet and Organic, highlighting ongoing issues that impact many users within the system While ACB and other banks face challenges in their digital banking services, customers generally do not view these limitations as a reason to switch banks The perspectives of interviewed customers regarding ACB's digital banking services are summarized in the table below.
Table Error! No text of specified style in document.-4: Customers' assessment
(Source: Online Survey and Interview)
To align with customer preferences and ACB's strategic goals, it is essential for ACB to thoroughly assess and refine its adjustment strategy, considering both the strengths and weaknesses of its digital banking services.
ACB ONE has consistently provided exceptional experiences for customers, particularly in addressing their everyday needs like bill payments and purchasing plane tickets Insights from two specific customers, Mr Ngan and another user, highlight how ACB ONE effectively meets these demands, showcasing its commitment to enhancing customer convenience and satisfaction.
To enhance customer loyalty and strengthen credibility, ACB must develop a strategy that addresses customer feedback and suggestions regarding digital banking, particularly concerning payment methods and tracing issues Customer perspectives are valuable for continuous improvement, and survey results indicate that most customers are generally satisfied with ACB's digital banking services.
Figure Error! No text of specified style in document.-10: Customers’ satisfaction
Chapter 2 analyzes the commercial performance of Asia Commercial Joint Stock Bank (ACB), highlighting its strengths and weaknesses in expanding digital banking It emphasizes the importance of leveraging strengths while mitigating potential challenges to ensure ACB's digital banking development is comprehensive The ultimate goal is to enhance customer service, fostering a digital banking system that earns the trust of all customers.
An analysis of the current situation and customer feedback on ACB ONE reveals that ACB has earned customers' trust, as evidenced by the growth rate of its business activities in the first quarter The survey conducted at the ACB - Thang Long branch indicates a stable increase in customer market share since the launch of ACB ONE in February 2022 Despite these achievements, ACB must address identified shortcomings to leverage them as opportunities for overcoming challenges and advancing its digital banking development.
This chapter will provide strategic recommendations for ACB to leverage its strengths and opportunities in digital banking, as discussed in Chapter 2 By focusing on these areas, ACB can enhance its digital banking capabilities and foster growth Additionally, the chapter will address how to identify and mitigate weaknesses and challenges to prevent them from escalating into significant obstacles.
RECOMMENDATION
TOWARDS THE GOVERNMENT
To enhance the banking industry's future, it is essential to consolidate legal frameworks based on technology and international standards This initiative aims to establish robust legal corridors for new financial services and products, enabling banks to develop faster and more secure digital offerings Prioritizing the security of customer data and information management is critical, as it lays the groundwork for implementing key technologies from the Fourth Industrial Revolution, ensuring the banking sector evolves effectively and modernly.
To achieve efficient digital banking, it is essential to eliminate data silos and develop extensive databases that integrate services within the financial ecosystem, facilitating seamless digital transfers The transition to cloud-based data storage is rapidly advancing, highlighting the need for a unified market standard for QR codes and the establishment of an inter-bank information exchange system Additionally, enhancing technology for electronic document usage over paper and encouraging the adoption of electronic signatures are critical steps in this transformation.
Embracing modern technology in management is crucial for advancing scientific and technological research, particularly in the realm of digitization By leveraging these innovations, we can effectively shape policies and establish legal frameworks that support applied research, ultimately enhancing the overall effectiveness of governance and decision-making processes.
TOWARDS VIETNAMESE COMMERCIAL BANKS
The Vietnamese banking industry holds significant promise for digital transformation To capitalize on this potential, commercial banks in Vietnam should explore various strategic solutions.
- First of all, cooperate with partners
To thrive in the digital operating ecosystem, commercial banks should collaborate with potential Fintech partners, shifting from competition to cooperation This strategic partnership allows banks to access modern technologies without significant initial investments in infrastructure, fostering a win-win scenario that enhances their operational capabilities.
As customer expectations for quality, price, and reliability continue to rise, fintech companies leverage banks' customer networks, data, and capital International surveys highlight the critical importance of collaboration between the banking sector and fintechs, suggesting that this partnership is essential for traditional banks to implement technological solutions and deliver products and services that align with market demands The synergy between banks and fintechs is significant, exemplified by the collaboration of various popular e-wallet fintech companies with commercial banks in Vietnam.
Shopeepay, an e-wallet under SeaMoney, a prominent digital payments provider in Southeast Asia, aims to enhance the lives of individuals and businesses through innovative financial services, including mobile wallet solutions and payment processing In Vietnam, Shopeepay stands out as a leading e-wallet Similarly, ZaloPay, owned by VNG, leverages its integration with 70 million Zalo users to facilitate online transactions via mobile devices, rapidly advancing in the online payment sector Additionally, VNPay, developed by the esteemed Fintech company VNPAY, positions itself as a "Family Wallet," offering a multi-utility solution designed to simplify users' lives, allowing them to dedicate more time to family.
MoMo is a mobile e-wallet that enables users to easily top up, transfer money, and conduct rapid buying and selling transactions through their smartphones As the flagship service of M-Service Online Mobile Service Joint Stock Company, MoMo stands out as one of Vietnam's leading "Top Unicorns." Founded in 2007, M-Service specializes in the fintech sector, focusing on mobile payment solutions.
A 2017 KPMG survey on global Fintech activities revealed that 81% of banks prefer a cooperative model for Fintech development strategies, indicating a significant trend towards collaboration in the banking sector, while other development approaches are declining.
According to the Global Fintech 2017 report by Capgemini Information Technology Group, banks are increasingly viewing Fintech companies as potential partners rather than competitors, with 77% of bank managers expressing this sentiment This shift highlights the growing trend of collaboration in the financial industry, emphasizing the importance of strategic alliances between traditional banks and innovative Fintech firms.
To fully leverage the opportunities presented by Industry 4.0, commercial banks must strategically embrace the advancements of this technological revolution, which offers significant benefits for businesses, including enhanced efficiency and innovation in the banking sector.
Promoting the digitization of services, including biometric security for payment and savings, is essential for modern financial transactions By integrating new technologies like NFC (Near Field Communication) on mobile devices, we can replace traditional bank cards, enhancing convenience and security in payment activities.
Leveraging big data allows banks to effectively store customer information, analyze behavior to gain a competitive edge, assess risks, and optimize operations Leading financial institutions like Barclays, HSBC, Deutsche Bank, Bank of America, OCBC, and MayBank are already utilizing big data analytics to enhance their services and improve decision-making processes.
According to Accenture's 2017 Banking Technology Vision report, artificial intelligence (AI) is poised to revolutionize customer interactions in the banking sector, becoming the primary mode of communication within five years, by 2022 The swift advancements in AI technology are driving this transformation.
AI recently, the future of banks with AI-based voice recognition software along with the creations of Fintech companies, will help change the face of the banking industry
Integrating the Internet of Things (IoT) into payment methods enables transactions through various smart devices connected to the Internet For successful adoption, banks must possess advanced technology to process payments from any device and location Additionally, leveraging IoT in banking goes beyond merely offering services via connected devices; it also involves the collection and analysis of extensive data.
To enhance IT risk management and security, banks must allocate more resources towards solutions that bolster the safety of online services and card payments With the advancement of digital banking, the threats to network information security are escalating, accompanied by increasingly sophisticated online attack methods These challenges pose significant risks to IT systems and customer databases, leading to potential reputational and financial damage for banks, as well as heightened risks for customers Consequently, it is essential for banks to foster the development of robust internal security policies, emphasizing the creation of advanced security utilities, functions, and authentication methods.
To ensure the safety and security of online banking transactions, it is essential to adhere to the regulations and guidelines set forth by the State Bank Additionally, developing comprehensive scenarios, processes, and clear instructions for addressing incidents of online fraud is crucial for effective risk management.
To enhance their operations, banks should implement targeted training programs for employees and focus on recruiting skilled professionals in banking technology, offering competitive compensation Additionally, it is essential to innovate and promote new electronic products, streamline service registration processes, and provide robust customer support for digital banking users.
TOWARDS ASIA COMMERCIAL JOINT STOCK BANK
ACB, a prominent joint stock commercial bank in Vietnam, must take strategic steps to advance its digital banking services To ensure continuous development in this area, several recommendations are proposed for ACB to enhance its digital banking capabilities effectively.
To remain relevant and competitive, ACB must stay abreast of the rapidly evolving legal environment Adhering to established regulations is essential, as it not only enhances ACB's operational framework but also contributes to the overall improvement of Vietnam's banking system.
Establishing a robust digital network for ACB's banking services is essential for fostering customer trust and enhancing the bank's competitive edge in the market A dependable digital banking system will not only reassure customers but also position ACB favorably against its competitors.
The advancement of technology, especially through digitization, is crucial for the growth of various industries, with the banking sector benefiting significantly ACB, a prominent bank, exemplifies how innovative technological techniques can enhance operational efficiency and strengthen overall performance in the financial landscape.
To enhance brand identity, ACB must strengthen its presence in the North, where its market share lags behind that in the South Establishing a strong brand identity encourages customers to frequently use and recommend ACB's products and services, creating a "hot trend." As customers become more familiar with ACB through regular use, their loyalty increases, especially if they find the bank's offerings suitable for their needs.
- Focusing on human resources: In order to avoid unwanted situations, ACB should focus on training investing in “Human” factor, such as:
+ Having employees trained often There should be more specific training courses for ACB’s employees in the whole context of developing digital banking.
Focusing on the "human" aspect in digital banking is essential for enhancing customer experience By placing customers at the heart of our services, we ensure they feel valued and respected, which fosters ongoing engagement with the bank's products This approach not only boosts customer satisfaction but also strengthens their loyalty to the bank.
- Managing the finance: It will be costless if the bank knows what is prior to doing when developing their digital banking Moreover, a project with a plan will likely be successful
By addressing its weaknesses and viewing them as opportunities for growth, ACB can enhance its digital banking capabilities This proactive approach will enable ACB to refine its digitization system and deliver comprehensive, innovative products and services that provide customers with exceptional experiences.
To achieve significant growth, ACB must address the conservative mindset of its management By embracing change, ACB has the potential to become one of the most widely used banks in the industry.
- Selecting, and Cooperating: The selective combination with partners will help
ACB have a stable and huge customer database In addition, it also helps to increase ACB's position in the market
To align with the "2022 Plan," ACB's 2021 annual report emphasizes the need to consolidate and enhance human resources, actively promote digital banking initiatives, strengthen risk management strategies, and bolster ACB's competitive position in targeted markets.
Asia Commercial Joint Stock Bank (ACB) faces both opportunities and challenges in the development of digital banking By assessing ACB's strengths and weaknesses, the bank can leverage its advantages to enhance digital banking quality while addressing its weaknesses to prevent them from becoming significant obstacles.
Chapter 3 has proposed solutions, and recommendations to contribute to improve the efficiency and quality of ACB’s digital banking in particular, and Vietnam's joint stock commercial banks in general The recommendations raised include: Cooperation, taking advantage of the 4.0 technology era, risks management, legal compliance, digital ecosystem, brand identity enhancement, focusing on training the quality of human resources All recommendations are aimed at improving the efficiency and quality of ACB’s digital banking products, helping ACB gradually develop a more complete digital banking
Chapter 3 emphasizes the need for state management to amend legal frameworks to accommodate the rising prevalence of digital products and banks, while also enhancing regulations to protect customer information and data security It advocates for the establishment of a comprehensive technology application platform for banks Additionally, the chapter calls for a national focus on advancing technology application across various industries, positioning technology as a key driver for organizational and business development, with digital technology emerging as a significant trend for future growth.
1 Gaurav Sarma (2017), “What is digital banking”, https://www.ventureskies.com/blog/digital-banking
2 Tunde Olanrewaju (2014), “The rise of the digital bank”, https://www.mckinsey.com/business-functions/mckinsey-digital/our- insights/the-rise-of-the-digital-bank
3 Prime Minister (2020), Decision No 645/QD-TTg "Approval of the national e-commerce development plan for the period of 2021 - 2025", dated May 15,
4 Government (2012), Decree No 101/2012/ND-CP dated 22/11/2012 of the
Government on non-cash payment
5 State Bank (2014), Circular No 46/2014/TT-NHNN dated December 31,
2014 of the Governor of the State Bank guiding non-cash payment services
6 Annual reports, consolidated financial statements of ACB in 2019, 2020,
- https://acb.com.vn/ : Asia Commercial Joint Stock Bank
- https://www.sbv.gov.vn/ : The State Bank of Vietnam
- https://www.bidv.com.vn/bidv/bidv-blog/bao-mat/ngan-hang-dien-tu-la-gi
- https://www.bidv.com.vn/bidv/bidv-blog/bao-mat/xu-huong-ngan-hang- dien-tu
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I don't know!
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The article discusses the evolution of digital banking, highlighting international experiences and proposing solutions tailored for Vietnamese commercial banks It emphasizes the importance of adopting innovative technologies to enhance customer service and operational efficiency The piece also explores successful case studies from around the world, offering insights that can be leveraged by Vietnamese banks to improve their digital banking strategies By implementing these global best practices, Vietnamese financial institutions can better meet the demands of a rapidly changing market.
- Developing digital banking for Vietnamese commercial banks (2021) Retrieved 28 April 2022, from https://tapchinganhang.gov.vn/phat-trien- ngan-hang-so-cho-cac-ngan-hang-thuong-mai-viet-nam.htm
- Opportunities and challenges in developing digital banking in Vietnam
(2021) Retrieved 29 April 2022, from https://tapchitaichinh.vn/ngan- hang/co-hoi-va-thach-thuc-trong-phat-trien-ngan-hang-so-tai-viet-nam- 335492.html
- Opportunities and challenges in digital transformation for Vietnamese banks
(2022) Retrieved 29 April 2022, from https://thitruongtaichinhtiente.vn/co- hoi-va-thach-thuc-trong-chuyen-doi-so-doi-voi-ngan-hang-viet-nam-
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- What opportunities for digital banking? (2021) Retrieved 29 April 2022, from https://tapchitaichinh.vn/ngan-hang/co-hoi-nao-cho-linh-vuc-ngan- hang-so-342114.html
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2022, from https://tapchitaichinh.vn/ngan-hang/thuc-day-dich-vu-ngan- hang-so-loi-ca-doi-duong-339061.html