Accordingly, my work consists of 05 chapters with the following contents: Chapter 1: General description of BIDV: history, products and services, customers, basic financial data for 03 y
COMPANY BACKGROUND
BIDV overview
Full name: Joint Stock Commercial Bank for Investment and Development of Vietnam
Head office: o Address: BIDV Tower, 35 Hang Voi street, Hoan Kiem district, Hanoi o Phone: (84-4) 22205544 o Fax: (84-4) 22200399 o E-mail: info@bidv.com.vn o Website: www.bidv.com.vn
History
April 26, 1957: established with the name Vietnam Construction Bank, under the Ministry of Finance
In 1981, renamed to Bank for Investment and Construction of Vietnam under the State Bank of Vietnam; since 1990 with the name Bank for Investment and Development of Vietnam
1994: Transformation of operation in the model of commercial banks
In 2012: BIDV successfully equitized, transformed into a Bank for Investment and Development of Vietnam
In 2014: BID code is listed and traded on Ho Chi Minh Stock Exchange
Products and services
Commercial banking activities: capital mobilization (deposits, bonds, promissory notes ); credit extension (loans, guarantees, discounts, credit card issuance ); payment services and funds, and other commercial banking business activities
Insurance business activities: through the method of establishing a related company or becoming an agent for insurance companies: life, non-life, reinsurance, others insurance field according to regulations of the Law
Other business activities: through direct or indirect investment BIDV may hold shares or contribute capital as prescribed by law BIDV establishes a debt management and asset exploitation company to receive, manage, exploit and sell other assets of customers used to pay BIDV debts and other activities in accordance with law
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Customers
State-owned, private corporations, corporations/large enterprises
Economic organizations, domestic and international enterprises of all economic sectors
Domestic, international financial institutions, credit institutions
Mission, vision and orientation goals
Mission: BIDV brings the best benefits and utilities to customers, shareholders, employees and social community
Vision to 2020: Striving to become one of the largest banks in Asia; striving to become the leading bank in Southeast Asia
Orientation goals to 2020: o Continuing to be a commercial bank playing the key role in terms of size, market share and market regulation o Improving financial capacity, diversifying ownership structure, achieving capital adequacy ratios prescribed by the State Bank and Basel II standards o Improving credit quality, promoting measures to recover bad debts, off-balance sheet debts and VAMC sale debts o Diversifying customer base and products and services, promoting retail activities, developing customers of small and medium-sized enterprises, foreign-invested enterprises; Increasing the proportion of retail outstanding loans to total outstanding loans, credit market share of small and medium-sized enterprises, foreign-invested enterprises; Diversifying and restructuring the main sources of income, striving to increase the proportion of income from non-credit services/total income o Organizing business administration according to the modern and advanced banking model, aiming at the practices, ensuring transparency, publicity and efficiency, in which priority is given to the development of digital banking strategy in a comprehensive manner all aspects of business operations o Developing of high quality human resources; fostering BIDV corporate culture and developing the brand BIDV to be a valuable bank brand, strong brand, spreading widespread awareness to the domestic and international markets
Basic financial data
Figure 1: Some key business results in the period of 2016 – 2018
No Items 2016 2017 2018 Increase/decre ase 2017/2016
Total assets in 2018 reached VND 1.31 million billion, up 9% compared to 2017, continuing to maintain its position as the bank with the largest total assets in the market Interest and similar income continued to grow well compared to previous years, specifically: an increase of 26% in 2017 and 27% in 2018 Corporate income tax in 2018 only increased by 12% compared to 2017
The growth rate of profit after tax decreased from 12% in 2017 compared to 2016 to 9% in 2018 compared to 2017 By the end of 2018, the bank recorded profit after tax of VND 7,542 billion
Figure 2: BIDV's net interest structure in the period of 2016 – 2018
3 Income from trading gold and foreign currencies 1,193 1.60 2,135 2.31 2,124 2.04
7 Income from capital contribution, share purchase 1,214 1.63 336 0.36 142 0.14
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BIDV's total revenue in 2018 increased by VND 11.8 trillion compared to 2017, reaching VND 104.2 trillion This increase is due to interest and similar incomes increased by 11.4 trillion VND in 2018 compared to 2017 This is also the main source of income in BIDV's total revenue, accounting for 85.15% in 2017 and 86.45% in 2018
Income from services continued to grow well: 2018 increased by VND 1,190 billion, the growth rate of 2017, making the proportion of total income also increased from 6.08% in 2017 to 6.53% 2018
Income from other business activities that declined in 2018, including: income from trading securities (from VND 344 billion to VND 260 billion), income from other activities (from VND 4,594 trillion to VND 3,789 billion) and income from capital contribution and share purchase (from VND 336 billion to VND 142 billion)
Figure 3: Financial situation of BIDV in the period of 2016 – 2018
Authorized capital VND billion 34,187 34,187 34,187 Minimum capital adequacy ratio (CAR) % >9 >9 >9
Profitable assets/Total assets on the balance sheet % 94.46 96.00 95.78
Average profit before tax / Equity capital % 17.7 18.6 14.2 Net income from service activities / Total income % 8.3 7.6 7.7 Net income from service activities / Profit before tax % 32.8 34.2 35
Ability to pay immediately (liquidity reserve ratio) % 15.78 15.49 14.24 Ratio of short-term capital is used for medium and long-term loans % 43.05 35.5 33.33
5 Dividend rate/share par value % 7 7 7
BIDV's authorized capital did not increase from 2016 to 2018, at VND 34.18 trillion, with the minimum capital adequacy ratio (CAR) maintained at > 9%
NPL ratio was well controlled at less than 2%, but there were signs of a rebound: in
2017 decreased from 1.99% in 2016 to 1.62% and increased to 1.76% in 2018
The rate of profitable assets/total on the balance sheet assets decreased from 96% in
Regarding business results: profit before tax/equity capital after increasing slightly from 17.7% in 2016 to 18.6% in 2017, has dropped sharply to 14.2% in 2018
The highlight is that the proportion of net income from service activities / profit before tax increased annually from 32.8% in 2016 to 35% in 2018, showing the trend of shifting the structure of income from interest to income from other products and services
Solvency tended to decrease: in 2016 it was 15.78%, in 2017 it was 15.49% and in
2018 it was only 14.24% The ratio of short-term capital used for medium and long- term loans decreased over the years and remained at 33.33% in 2018 The dividend/par value ratio was maintained at 7% in all 3 years
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COMPANY STRUCTURE AND ORGANIZATION CHART
Structure and organization chart of BIDV
BANK FOR INVESTMENT AND DEVELOPMENTOF VIETNAM JSC
Vietnam Aircraft Leasing Joint Stock Company
BIDV MetLife Life Insurance Limited Company
Vietnam- Russia Joint Venture Bank
BIDV Tower Joint Venture Company
Nam Do Debt Settlement Committee
Departments/Center s at Head Office
MARKET AND OPERATION RISK MANAGEMENT DEPT
BOARD OF MANAGEMENT AND CHIEF ACCOUNT
Structure and organization chart of BIDV’s Head Office:
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Structure and organization chart of BIDV’s branches:
Explain the structure and organization chart of BIDV
2.2.1 General structure and organization of BIDV:
BIDV's organization system as described in section 2.1 above including: o Head office; o System of affiliated units: transaction center, branches, representative offices, non-business units; o Subsidiaries; o Joint-venture companies
Overview of the relationship between BIDV and its affiliate systems: o These entities depend entirely on BIDV, deploying business activities, accounting, organization, personnel and other related activities according to the decentralization and authorization of BIDV according to the organizational system Organization and activities apply to these units in each period o Based on the General Director's proposal, the Board of Directors approves the organization and operation regulations of the attached units Accordingly, financial obligations arising from legal contracts and commitments made by the attached units, BIDV will be responsible
Relationship between BIDV and its subsidiaries: o BIDV assigns and assigns the authorized representative to act directly on behalf of BIDV to manage BIDV's investments in subsidiaries within the lawful charter of these entities o Based on the proportion of contributed capital, BIDV may participate in or dominate the subsidiaries in its business operations
Relationship between BIDV and joint venture companies: o BIDV acts as a shareholder contributing capital, having rights and obligations of shareholders in accordance with the company's charter and the provisions of the Law o BIDV may appoint participants to run the company or only receive benefits from shareholders or capital contributors
2.2.2 The management structure of BIDV:
This is highest decision-making authority of BIDV, including all shareholders with voting rights The General Meeting of Shareholders operates through annual or extraordinary meetings in the form of collecting written opinions at the meeting
This is voted by the General Meeting of Shareholders Functions and responsibilities: representing shareholders in independent, objective and honest control and evaluation of BIDV's entire business, administration and administration activities as well as BIDV's financial situation The Supervisory Board is responsible for the scope of responsibility assigned to the General Meeting of Shareholders Number of members: 03 people
This is the governing body of BIDV, in the name of BIDV, at its sole discretion, to perform the rights and obligations of BIDV, except for those within the authority of the General Meeting of Shareholders The Board of Directors is responsible to the shareholders for the performance of BIDV Number of members: 07 people
The Board of Management is responsible for administering and managing BIDV's affairs in accordance with BIDV's charter of operation The Board of Management is the supervising body for the activities of the Board of Management Some councils directly under the Board of Management are: Debt - Asset Management Council; The Credit
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Council and the Debt Sale Council shall account off-balance sheet Number of members:
10 people (including 02 heads of divisions)
Functional blocks at BIDV Head Offices:
Wholesale banking: Maintaining and developing the relationship between BIDV and institutional customers (enterprises, financial institutions, insurance companies, securities, fund management ); carry out the introduction of products, services and business performance management
Retail banking: comprehensively implements research, development, sales and marketing of standard products for individual customers
Treasury: performing capital and currency trading activities according to the management requirements of the Debit - Credit Property Council (ALCO); marketing and directly dealing in capital and currency trading products with external customers and affiliates in BIDV system
Risk Management: controls and manages credit operations and other risks (operational risks, operational risks, etc.) of BIDV Examine the business activities proposed by other businesses (for example, assessing credit risk for credits that are beyond the jurisdiction of branches, etc.)
Operations: make direct payment and payment for domestic payment transactions, international money transfer, SWIFT; loan management, customer service, treasury and trade finance
Financial & Accounting: responsible for financial and accounting activities of the banking system, subsidiaries Being the focal point providing accounting information of the whole system; financial management, analysis and monitoring
Investment: manages BIDV's investment and capital contribution activities
Business support: overall support of BIDV's activities
Therefore: o In general, the function blocks at BIDV Head Office are mostly responsible for performing the function of managing and operating the overall operation of the system vertically (according to customer groups); do not directly conduct business and customer management (except for the Treasury) and do not approve centralized credit
12 o Wholesale and retail banking: comprehensive focal points on banking products and services provided to these customers, not business and customer management o Risk management: in the field of credit business, head office (through the Credit Risk Management Committee) will approve credit risk for cases of credit extension beyond its authority ruling of the Branches (according to the amount of money, the specific time of credit extension as stipulated by BIDV for each branch in each period) o Credit card business activities at BIDV (in retail banking): BIDV applies a distributed business model Details:
At the branch: the sales department (customer management) is responsible for marketing, finding customers, approving card credit according to the decentralized authority of the branch, then transferring the dossier to the Head Office to issue a card
At the Head office (Card center): receive the branch's proposal, issue the card to return to the Branch (or pay directly to the customer upon request) The card center is also the unit that sends notices of credit card statements (via email, messages, paper mail) to each customer; performing centralized debt collection operations on the due date of credit card outstanding of customers registering for automatic debit service via payment deposit accounts at BIDV
The branch is still responsible for the comprehensive management of each credit card customer, including the collection of bad debts, indicators of overdue debt ratios, and bad credit card debt of customers
2.2.3 The branch organization structure chart of BIDV:
Currently, BIDV has 191 branches (including 01 branch in Myanmar)
Branches are also divided into 05 blocks, which are divided into 2 groups according to the function of direct business and non-direct business (support, operation):
The intern’s position
At my own request, I was assigned to research and practice at the Card Center under the retail division of BIDV The director of the Card Center is the person who directly guides and supports me during that time
In order to understand BIDV's credit card business in general and BIDV's credit card business in particular, I have built a research plan, general understanding about BIDV's organizational structure, products and services; as well as the current system of documents and processes for issuing credit cards of BIDV
Since then, I have joined and coordinated with business groups to evaluate the influencing factors, competitive advantages, outstanding issues of BIDV credit cards and propose some advanced solutions business performance of BIDV credit card in the next time
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THE MISSION: ASSIGNED TASKS AND GOALS
The tasks assigned
I participated in researching and studying in the following groups: Strategic Reports, International Cards, Card Credit so that I could access and assess more details of BIDV's credit card business, in collaboration with officers/groups who have suggested some solutions to improve the credit card business efficiency of BIDV Including:
Researching and general understanding on BIDV:
BIDV's structure and organization chart from head office to branches
Business lines, products and services of BIDV
BIDV's general financial situation in the last 03 years
Research and learn about BIDV Card Center:
Features and business card model of BIDV
Functions and responsibilities of the groups at the Card Center
Evaluating, analysing and proposing BIDV's credit card business:
Applying the learned knowledge of AMI course to analyze the factors affecting BIDV's current credit card business
Proposing some solutions for BIDV
Recommending some contents for BIDV Card Center
The link between the subject matter and mission
The company supervisor guided me through the steps to link between assigned topics and mission
Firstly, I have to understand the structure and organizational structure of BIDV's business activities from the Head Office to branches, products and services that BIDV is providing to customer groups
Next, I need to learn about the card business model at BIDV, the task of the groups in this unit to be able to answer the question how to operate card business more effective
After that, I need to collect information about external and internal factors related to BIDV's credit card business as a foundation for future proposals
Finally, synthesizing the necessary information, I performed the analysis through the tools PEST, SWOT analysis to suggest some solutions and recommendations for effective credit card business at BIDV in the next time
The goals to reach
With an internship period of more than 04 months, through the guidance and support of my company supervisor, I will have to participate in studying, researching and proposing credit card business solutions at BIDV as a role of a member at the Card Center Therefore, I have developed an individual plan to achieve as follows:
Researching and general understanding about
- Understanding BIDV's model, organizational structure and apparatus from the headquarter to branches,
- Know about BIDV's business activities, products and services,
- Overview of BIDV's general financial situation
- Finding information through annual reports, financial statements, prospectus in the period of 2016 - 2018,
- Discussing and learning through the company supervisor to better understand the model, organizational structure, corporate culture of BIDV
Studying and learning about BIDV Card
Center and credit card business
- Understanding the models, functions and tasks of the groups at the Card Center
- Learning about credit card business models and methods at BIDV
- Searching for information through regulations on functions and duties of BIDV Card Center, assigning tasks to groups at the Card Center
- Directly discussing with the company's supervisor, strategic reporting team, management levels and officials for more detailed information about credit card business activities at BIDV
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Evaluating factors affecting BIDV's credit card business
- Understanding the factors that directly and indirectly affect credit card business
- Collecting valuable information and data to have data for analysis and evaluation of Stakeholder Matrix, PEST, SWOT analysis
- Looking for information through annual evaluation and analysis reports for BIDV's credit card business
- Collecting information and data through analysis, evaluation on the media of credit card business
- Using analysis tools PEST, SWOT to perform
Proposing solutions and some recommendations for effective credit card business
- Developing at least 4 effective credit card solutions at BIDV
- Proposing at least 4 recommendations for implementing the above credit card business solutions
Applying the learned knowledge of AMI course combined with assessing the actual situation of credit card business to propose solutions and recommendations for BIDV in order to bring better business efficiency
The contribution to the company
With the knowledge learned from AMI course, I believe that I will contribute some contents so that BIDV can improve credit card business efficiency in the future Including:
Complying with the regulations, requirements on working time, labor discipline of BIDV during the internship
Acquiring and following the instructions of the company supervisor, regularly coordinate support with the card center staff to run daily tasks smoothly and promptly Understand and handle corporate culture compliance issues
Aggregating information, analyzing, researching and assessing the credit card market in Vietnam, the competitive situation of banks in credit card business
Applying the learned methods of AMI course to analyze the influencing factors, PEST method SWOT method analysis of BIDV credit card
Proposing some solutions to improve the efficiency of BIDV's credit card business to benefit customers and profit for BIDV
Theoretical knowledge applied
Applying basic knowledge about financial markets, capital markets, bonds and stock markets to understand the sources of capital used by banks in business activities
Understanding the bank's other currency trading channels in foreign exchange and international currency markets, distinguishing debt instruments and equity
Reading, understanding and applying the criteria and financial reporting system (balance sheet, report of business results) of the business according to standard practice
Using methods and subject tools to apply PEST and SWOT analysis models in evaluating factors affecting products and being the basis for proposing solutions
Applying tools and models to analyze the influencing factors to build a business plan for products in general and credit card business in particular
International management Applying business management methods according to the research method to assess the reality
Applying product distribution channels to bring high efficiency, including modern communication and distribution channels in the technology status
Understanding principles of financial risk management in business environment daily, including: operational risk, product market risk, financial risk, legal risk
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DEVELOPMENT
Stakeholder Matrix
Credit card is one of the popular payment services that banks are now offering customers to make cashless payment in the form of “spending first, paying later"
In essence, this is a method of issuing circulating credit card of the bank for customers with a certain spending limit in a certain period of time to make proactive and flexible payment transactions Credit cards can be used at any accepted point of sale, ATMs and E-com
Credit card payment transactions must not be conducted directly between credit cardholders (goods and service buyers) and sellers but must be through payment intermediaries, including: issuing banks, payment banks, international card organization and is shown through the following flow chart:
4.1.1 International card organization (Visa, Master…):
International Card Organization is an association of major credit and financial institutions that manages all card issuance and payment activities with a network of operations worldwide, including organizations: Visa, MasterCard, American Express, JCB, Discover These organizations offer a wide range of card products from all around the globe
BIDV is currently a member of 02 international card organizations: Visa, MasterCard In particular, BIDV is developing and issuing Visa international credit cards, while MasterCard has both MasterCard international debit card and MasterCard international credit card In addition to providing a global payment network, these two organizations regularly support BIDV to handle arising problems and advise solutions to improve card business efficiency at BIDV
Based on the regulations, guiding and management policies of the State Bank of Vietnam in the field of card activities, BIDV as a card issuing bank implements and develops issuing internal regulations on credit card, Visa or MasterCard credit card issuing conditions for credit cardholders
As the issuing bank, BIDV has the right to sign agency contracts with a third party - a bank or other financial or credit institution in payment or credit card issuance
Being a bank that accepts cards (credit, debit) of payment through signing card acceptance contracts with points of sale of products or services
BIDV is the issuing bank and the card payment bank If it is the issuing bank, BIDV's customers are cardholders, as the payment bank, the customers are the units selling products and services that have signed card acceptance contracts with BIDV
The cardholder is an individual or an authorized person (if the corporate credit card is used by an authorized enterprise) meeting the terms and conditions developed by the issuing bank and issued in accordance with the instructions, management requirements of the State Bank in period time, and owning credit card
Using a credit card: paying for the purchase of products and services at points of sale where equipment accepts payment; performing cash advances or withdrawing cash at automatic teller machines or cash advance points within the authorized payment system
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Responsibility to pay credit card debts: The primary cardholder may issue one or more supplementary cards to use the same credit card account During usage, the supplementary cardholder is responsible for paying the issuing bank for transactions arising during the statement period, but the primary cardholder is still the one who is responsible for the final payment for all transactions Translation for card issuing banks
4.1.5 The unit accepts card payment (Merchant)
It is a unit selling products or services that sign contracts to accept card payments with payment banks
The business of merchants that accept card payments in Vietnam currently covers many areas: system of supermarkets, shopping centers, retail stores, restaurants, hotels, education, healthcare, tourism, entertainment, petrol, beauty services
Although card payment merchants must pay a certain percentage of each card payment transaction to the payment bank, the value provided to the card payment accepting units is still very large , there are many competitive advantages such as adding a secure and convenient payment channel for customers, saving cash management costs, promoting increasing sales of products…
Business card services in general and credit cards in particular in Vietnam are under the management and supervision of the State Bank in each period
The State Bank develops and issues a system of legal documents on regulations and guidelines for card business activities in each period Currently, the Circular No 19/2016/TT-NHNN dated June 30, 2016 regulating bank card activities, including: issuance, use, payment, switching and clearing operations and settlement of card transactions and amendments and supplements
This can be seen that:
The relationship between the payment bank and the issuing bank is a relationship of both competition and benefit sharing
Units accepting card payments should establish and maintain relationships with issuing banks and payment banks to expand non-cash payment channels to bring convenience to customers, contributing to the increase sales and profits
The State Bank of Vietnam has a role to regulate, guide and supervise the activities of participants in the card payment service supply chain in the Vietnamese market
PEST analysis
The regulatory environment is changing in a tight, prudent manner with regard to the risks of the financial system in order to comply with the international framework of risk management competencies The top concern of banks today is the issue of capital, especially for commercial banks in Vietnam Accordingly, the latest roadmap for compliance with Basel II standards will end in June 2020
The emergence and expansion of the scope of operation of technology companies: According to current regulations, electronic wallets are not allowed to deposit cash into wallets but must be from bank accounts Therefore, the cooperative relationship between the bank and wallet is both mutually beneficial, but it could be a risk leading to direct competition between the two sides This will affect the market share of future banks
The law on cyber security officially takes effect from January 1 in 2019, but no decrees and circulars guide its implementation Compliance with cybersecurity law requires banks to comply and strengthen risk management and increase costs
In addition to strictly complying with the regulatory documents required by the government and the state bank for credit card business, commercial banks must invest and develop technology, warning system, preventing and controlling risks in credit card payment transactions to ensure safety for cardholders and improve competitiveness of products
With the determination to continue improving the investment environment, maintaining the Government's stable macroeconomic, the stability of the political system, in the context of deeper and deeper international economic integration, the banking and financial system is healthier and healthier than expected, creating great opportunities for domestic consumption and investment markets
For the card business, the sharing economy is creating a new trend: the cards will be used together for different purposes, the era of card into the cloud - as VISA calls it Accordingly, the card will be integrated into devices such as watches, smartphones to use for payment across the global
In addition, the trend of using Contactless cards using NFC technology is also growing widely: cardholders using smartphones/watches on devices that accept card payments using technology NFC to complete transactions
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Average income: tends to increase in recent years The average income of a middle- class family is about 1,400 USD - 3,400/month (from 30 - 75 million VND/month) Increased income will increase consumer demand and create opportunities for the development of service businesses
Consumer habits and behaviors: Vietnam still use cash in very large payment transactions The Government's determination to implement the cashless payment scheme in the period of 2016-2020 will be a favorable condition for commercial banks to develop new products and services with technology and business card services
Based on analyze customers insights, banks can turn information competitive advantage into competitive advantage of products and distribution channels to innovate and compete by differentiation, rich in technology and highly personalized
Fintech companies in the future will be one of the unit which has deeply joined the global financial system, provides payment services, loans, risk management, investment and become a competitor to the banking system o The big threat to the banking sector is big technology companies – Big-tech, notably large technology corporations: Amazon, Alibaba, Facebook with a large customer base available to encroach on payment channels, financial services and will directly compete with banks o There are more than 67 fin-tech companies operating in payment field in Vietnam (Momo, VN Pay, Moca ), creating a great challenge for the banking system and card service business
As the research data of Visa shows that in Vietnam, the number of contactless card transactions tends to grow by more than 44%/month for about 1 year from December
2017 to December 2018 More than 50% of Vietnamese consumers already know contactless payment technology, more than 30% have used it and more than two- thirds are willing to experience this payment method to replace cash in the future.
SWOT analysis
BIDV has 09 credit card categories to meet the demand of many customer groups:
24 o Group of customers with medium to high incomes: standard credit cards (Visa Flexi, Visa Precious ) to high-class medium cards (BIDV MasterCard Platinum, BIDV Visa Infinite for the rich and super rich customers) o Group of young customers to middle-aged customers o Individual and corporate customer groups o Interest and fee policies: are highly competitive in the market, in which credit card interest rates are at the lowest average level in the market, the difference is low from 5 - 10%/year by credit card category The highest credit card interest rate is only 18%/year
Large customers: BIDV has a long tradition of development with more than 62 years of development, and is one of the top 4 financial institutions in Vietnam Currently, BIDV has a total of nearly 9 million individual customers and a large number of institutional customers BIDV has been a strong brand and reputation for customers in the market Therefore, the potential for intensification based on existing customers for credit card service business is huge
Nationwide sales networks: BIDV has more than 190 branches and more than 800 transaction offices throughout the territory of Vietnam, has deployed sales channels from direct to sale via telesales, via website
Quality of services: BIDV constantly improves and improves the quality of after- sales care policies (24/7 customer care center; Customer support center, continuous and timely communication implement incentive programs to encourage customers to use credit cards)
The list of BIDV credit cards is diverse but not really created separately for each customer group, the connectivity features and technology infrastructure still have limitations compared to the market and are in the process of being completed to improve High experience, utility for customers when using credit card
Business organization model credit card sales process still have some limitations: o Distributed card business model (branch proposed and approved for credit card issuance, Head office issue credit card), the process of improvement has been shortened, it is still a time constraint compared to some other banks
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25 o The business staffs at the branch still have to perform other manual tasks every day, so the labor productivity is low, not including credit cards as a business indicator in KPI for sale staffs o Not implemented other direct sale channels such as selling through the third partner, no centralized selling center; sale channel management process
Marketing, promotion and communication programs have not caught the trend, thus reducing the impact on customers' credit card spending behavior In addition, web communication channel has not achieved the desired effect
Vietnam's economy is growing steadily, maintaining an annual growth rate, the population size has reached more than 96 million people, with the rate of 60% of the population aged 15 and older having accounts Bank The average income of the people is improving day by day, corresponding to the increase in the number of high- income people, which will be a potential market to develop credit card business and financial products for wealthy customers
The Government of Vietnam aggressively implements extensive cashless payment scheme in various fields to achieve the goal of reducing the proportion of cash on total payment facilities to less than 10% This is a favorable condition for the banking system in general and BIDV in particular to promote the development of electronic banking and payment services to change spending habits of the people in the future
Increasing technology creates a shift in distribution channels in business activities with the tendency to gradually shift the traditional distribution channel into a modern one, deploying a multi-channel platform on a uniform basis channels (Omi Channel)
Industrial Revolution 4.0 provides opportunities for reducing management costs; apply technology to improve the quality of products and services, increase labor productivity, reduce costs; providing many new, modern and safe products to better meet customers' needs and increase customer experience
BIDV has established a digital banking center to gradually digitize products, processes and distribution channels to keep up with the trend of the booming technology revolution 4.0 globally
BIDV has also cooperated with Fintech units to create a new ecosystem in providing products and services to customers In addition, with the development of information
26 technology, the investment of bank to enhance security has also reduced the anxiety of customers when using and paying with credit cards compared to before
The payment market is growing very strongly, the impact of Industry 4.0 is creating a new development trend in the field of payment card Credit cardholders are demanding more and more on card products that are not only the usual payment feature but need to be personalized to each customer needs such as cashback / rewards /0% interest installment, travel
With the advantage of technology platform, flexibility in business strategy, technology companies, fin-tech is gradually becoming a major competitor to banks in the field of online payment The advent and explosive development of new payment technologies such as Bitcoin, Libra virtual currency of Facebook empire, e- wallet payment, physical card replacement products will have a significant impact on the operation activities of card services in general and BIDV's credit cards in particular
The more technology develops, the more sophisticated and complex technology crime will cause banks to invest heavily in infrastructure and technology solutions to control and prevent risks, security to protect customers and business data.
Proposing solutions for BIDV
With the research, evaluation and analysis in the above chapters, after my internship at BIDV Card Center, I propose some solutions to improve the efficiency of BIDV's credit card business in the next time:
4.4.1 Identifying target groups of customers, target products of credit card business:
Identifying groups of customers who need to use credit cards:
Basic characteristics Main demands The benefits for BIDV
(owning a large block of assets/owner of large
- Frequent domestic/international travel, consumption of high-end products (shopping, concessions
- Expense spending are very large, the trend is to pay 100% of the outstanding loan when it is due
Payment and spending for high- quality and high- value consumer products and services
Income from other cross- selling products
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27 enterprises, whether or not listed on the stock market
- Has been a VIP customer of many other banks for high-end products and services (including credit cards)
- High requirements on the differences of products, high-end features, utilities linking card products with other consumer products and services;
- Requesting customer care and support skills of business staff must be comprehensive, understand the psychology of customers while using the card
Features, utilities and experience of product services need to be constantly improved to increase customer satisfaction and maintain relationships with the bank
(having/need of a loan to buy houses, cars for daily life and work)
- There is a trend of rejuvenation, a modern lifestyle, spending time with social networks, shopping online, enjoying experiences, moving so the shopping needs for tourism, culinary services, and consumption increasingly higher
- As a group of potential customers, many banks compete, attract by promotions, giving gifts, stimulating shopping, daily living expenses (eating and drinking, tuition costs) However, the ability to leave the product if it sees the differences, benefits in the short term
Payment, spending for monthly living needs (travel, shopping, food, tuition )
Pay much attention to the programs of giving gifts, refunds, promotions, stimulating spending, especially the installment feature
Income from transaction fees, annual fee;
Income from cross-selling other retail products (credit, payment, installments);
Increase credit card debt balance from the installment service
(with demand for a consumer credit card)
- Use credit cards as a short-term consumer loan channel, including the need to withdraw cash from cards to spend
- The work is not really stable (just going to work/not yet holding a managerial position )
- There is a tendency to leave credit card balances if the interest rate is in line with the bank's consumer loan product Payment of outstanding loans in the form of overlap
- Interested in the credit card interest rate policy (the closer the distance to ordinary consumer loans, the higher the demand)
- Borrowing for daily life via credit card
- Increasing demand for credit card installment services
Interest income; increase card debt; from the installment service
Identifying credit card business target products:
Customers groups Target products The solutions should improve
- The product must constantly increase customer satisfaction and experience when using the card to feel the special priority for special and high-class customers
- Products to focus on: Platinum, Infinite cards (including co-branded cards): utilities and links with major partners need to be different (high-end consumer services, aviation, cuisine, travel) calendar, cashback )
- Continue to improve the product features (accumulation/redemption), policies to associate with major partners (aviation services, sports, tourism, resorts ) to maintain customer cohesion
- Supporting quickly and promptly problems arising during the use of cards to maintain relationships
- Sales/care staff should be carefully selected, highly specialized in products, have good soft skills to satisfy customers
Group 2 - Products with continuous promotions
(gifts, incentives annual fee 2nd year)
- Product policy needs to be finalized towards simplifying the card issuance process
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- Products to focus on: Platinum,
Precious, Premier (including co- branded cards), cashback cards
- Develop and expand installment partners to stimulate card consumption
- Promote communication, image promotion of promotions, incentives through social networks, messages, email
- Cooperate with installment partners to introduce customers, sell credit card products
- Products with preferential interest rate policy (equivalent to unsecured
/lower consumer loan products) card issuance promotions, credit card spending incentives
- Products to focus on: Visa Smile,
Flexi (including co-branded cards)
- Product policies should be reviewed in the direction of selecting customers with appropriate financial capacity, card issuance documents and processes should be tight enough to minimize risks
- Organize a batch sale, regularly evaluate customer's debt repayment behavior to change customers' debt repayment behavior to increase loan balance and credit card interest
- There is a solution to use outsourced services to recover bad debts to control risks
Other groups Business credit card
Regularly review and re-evaluate the product comprehensively, propose adjustments to the product mechanism (documents, vouchers proving the purpose of capital use, the plan to allow cash withdrawal from cards), as appropriate, actual implementation conditions Promoting the sale of corporate credit cards at BIDV branches has the advantage of institutional customers to exploit more effectively
4.4.2 Upgrading, completing technology infrastructure, researching new credit card lines:
Need to plan and standardize card payment technology infrastructure: modernize systems towards fully supporting modern card payment features and methods, easy in upgrading and fully integrating with external systems (such as core-banking systems, external card organizations Napas/Visa/MasterCard / JCB )
Enhancing the use of big data analysis, applying artificial intelligence to analyze such as: data structure; real-time and daily analysis; provide complete and accurate data; flexible forecasting This is aimed at several goals as follows: o Increasing the size of new customers, experience and level of product use; o Supporting in managing market risk, credit, financial crimes, o Organizing effective business: sales team, channel management, professional units
Developing high-end cards to increase competition in the market, attract customers in the rich and super rich customer segments: cards with cashback feature
Researching and cooperating to issue co-branded card lines with large enterprises in the retail business; high-class service products or businesses in the transport sector or product line for customers who share similar characteristics
4.4.3 Innovating and creating product marketing programs:
When launching a new credit card product, consider adopting a 5-stage model that leads to buying behavior in Marketing: (i) creating public interest - (ii) creating excitement - (iii) create a desire, a desire for a product - (iv) a purchase action - (v) share a product with multiple people to buy it together
Besides the current communication tools, consider using KOLs (Key Opinion Leader) to introduce new credit card line (Techcombank, Vietcombank, Vinfast have implemented) via digital channels (social networks), television ) to attract customers
4.4.4 Developing and diversify credit card sales channels:
In addition to the main channels of branches, telesales, online (web, fanpage, Email, messages), BIDV needs to research the plan to sell credit cards directly at the Head Office to make the most of the advantage of selling in batches, Shorten card issuance time for customers
Enhancing cooperation with partners having relations with BIDV (deposits, credit, services ) to exchange and expand each other's customer base (aviation, telecommunications, tourism, real estate, hospital…)
Continuing to expand the combination of selling and placing BIDV credit cards in the ecosystem of BIDV products that are provided to individual and corporate customers
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CONCLUSION
How the goals have been reached
With more than 04 months of internship at BIDV Card Center, I had a good understanding of basic information about BIDV: organizational structure, operational fields, products, services, customers, basic financial data In addition, during my direct study and research at the card center of BIDV's retail block, I also had more knowledge about card service business activities, recommendations Some solutions to increase the efficiency of credit card business at this institution Specifically, I have achieved:
Understanding of BIDV's model and organizational structure from Head Office to branches/affiliates
Understanding of business operations, products and services, major customer groups of BIDV, data on BIDV's financial situation
Understanding of functions and tasks of all divisions in BIDV's organizational structure The card center is a unit of BIDV's retail banking division, divided into 13 groups with different tasks to operate and manage the entire card service business of the whole BIDV system
Research, explore functions and tasks of groups directly related to credit card business at BIDV, including: Strategic reports; International card; Credit card for researching and proposing a number of credit card business proposals for BIDV
Applying some knowledge learned at AMI course to have research and analysis on factors affecting credit card business activities at BIDV: Stakeholder Matrix analysis, PEST analysis, SWOT analysis
Combining information, knowledge of AMI course and practical research to assess the trend of credit card business activities in the near future, as a basis for proposing a number of credit card business solutions at BIDV to increase efficiency for the unit While studying at the Card Center, I have learned a lot of knowledge from one of the leading financial institutions in Vietnam, facilitated by the leaders of the units and professional groups advantage and support in the learning process, learn about card service business in general and credit cards in particular Including:
Learning the corporate culture of BIDV, understanding the roles and responsibilities of the units at the Head Office in managing business operations of the whole system,
32 supporting Branches as unit direct business in each field, products and services vertically
Learning and improving communication skills between the unit at the Head Office and the Branches in daily business activities, including credit card business activities at the Card Center
Learning and improving working skills, coordination between groups (business, support, operations) at the Card Center in card business activities in general and credit card business in particular
Having an opportunity to expand and develop relationships with the officials and leaders working at BIDV, creating conditions for their future development process.
The shortcomings of the internship
During my internship, I was assisted by the leaders of the unit, the support of professional groups and officers at BIDV Card Center However, due to the time is just over 04 months, I personally have some limitations, including:
BIDV is a large financial institution in scale, number of member units as well as personnel so in the short term I could not get more detailed research results on business operations in general and credit card business in particular of BIDV
Some collected information used for analysis and assessment is still in the form of sources from units, internet, reports In addition, there is no more detailed analysis of business activity between credit card business of competitors and BIDV
Research report and proposal on solutions to improve the efficiency of BIDV's credit card business, excluding construction, budget planning, and financial detail for a new line of credit card
The forecast of risks in BIDV's credit card business has not been mentioned much because the bad debt of BIDV Credit card is small in both percentage and scale.
Recommendations
With a short internship at the Card Center, combined with the learned knowledge of the AMI course, I have some recommendations to implement some credit card business solutions of BIDV in the future such as:
5.3.1 Credit card business model at BIDV:
At branches, establish a card service business team, which has a person in charge of credit card business to increase operational efficiency
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Supplementing the number of credit cards in the business plan targets of branches and transaction offices to take the initiative in credit card growth from the unit to the sale staffs
Researching and deploying credit card sales channels directly at the Head Office to exploit a group of customers with a strategic partnership with BIDV, putting credit cards in the ecosystem of banking products and services
Innovating training methods and increasing the level of intensive training in sales and customer service skills for credit card business officers to increase service quality
Effectively exploit the support of international card organizations (Visa, Master) to deploy consulting service packages for credit card business, especially card issuance, risk management in accordance with international practices
5.3.2 Deploying customer-focused credit card business with the strong support of
In order to maintain the regular, continuous interaction of customers with the bank, not only needs payment, lending, deposit, services the bank must have a strategy towards building a digital ecosystem increasingly complete and varied Over time, the bank will accumulate, enrich data, consolidate the basis for customer analysis from large data management models
In order to provide credit card services to meet customer needs, banks need to understand the true needs of customers, the motivation to buy products and the benefits, value of use brought by the products In addition, the bank must have good service quality and maintain stability This requires the bank to have the capacity to analyse data and improve processes to focus on customers
Banks should focus on investing resources to exploit customer information because this will be a huge competitive advantage compared to other competitors (other banks, fin-tech companies) in long-term development strategy retail banking business in general and credit card business in particular
5.3.3 Improving customer base quality, increase scale and improve service quality for
Developing a plan to evaluate customers using BIDV credit cards in many dimensions (demand, age, income, consumption behavior ), by location to identify target customer groups, target markets Business credit card spend
Applying information technology in analysing customer behavior, cooperating and exploiting potential customers / bringing valuable values to take care of, marketing, and suggesting appropriate credit card sales for each customer / customer group
Applying technology to implement marketing and communication activities on the values/utilities/services provided by BIDV credit card to customers to increase experience, improve service quality and loyalty of customer
Developing interactive multi-channel to support customers, expanding new channels such as virtual consultants, mobile apps, video calls
5.3.4 Completing the portfolio of BIDV credit cards to meet market demands, increase competitiveness:
Developing a list of BIDV credit card for each customer group, trends/behaviors of using credit cards: groups with large transactions, paying 100% of credit card debt to build develop utilities, consumer preferences, complete credit card features (with 0% interest, bonus points )
Policies on interest rates and credit card fees need to be flexible, ensure competitiveness in the market and suitable for each group of customers and specific credit card lines
5.3.5 Shifting the channels of selling credit cards in the direction of digitizing and multi-channel to exploit existing customers and developing new customers:
Focusing on exploiting, developing and increasing the effectiveness of sales channels, promoting sales at the Transaction Office network, Contact Center channels (voice, website, email, social networks) and digital channels such as internet and mobile
Continuing to deploy the mechanism of selling and combining credit cards with retail packages/preferential credit programs of BIDV to increase the usage rate of retail banking products/customers, improving operational efficiency
5.3.6 Risk management, improving the efficiency of credit cards
Building and implementing A-score and B-score credit scoring systems to support credit risk assessment of credit card customers, this system needs to be connected to the issuing system and Current bank management card
Centralizing and automating business operations and managing credit card risk, improving business processes to improve labor productivity and improve service quality
Regularly strictly controlling credit card ratios, implementing outsourcing services to handle bad credit cards
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Conclusion
In summary, I had an internship at BIDV Card Center with very good results Thanks to supervisors and professional groups for supporting throughout the time of learning, studying and researching at the Card Center, I have tried to complete the assigned tasks of internship This is a period that I have practically experienced with card service business in general and credit card business in particular at BIDV Card Center These experiences are very valuable and help me learn and improve many personally development skills in the future Although my proposals and recommendations for some credit card business solutions in this report have not immediately brought results for BIDV
However, I hope that my proposed content will benefit BIDV in the future to contribute efficiency and create greater profits from BIDV credit card business in the next time.