master internship report developing financial risk management of savemoney company

Thus, based on the knowledge of studying and working in a Fintech company like Savemoney, the author has decided to choose topic “Developing financial risk management of Savemoney Compan

UNIVERSITE DE NICE SOPHIA ANTIPOLIS

Institut d’Administration des Entreprises

THANG LONG UNIVERSITY

Hanoi, Vietnam

MASTER INTERNSHIP REPORT:

DEVELOPING FINANCIAL RISK MANAGEMENT OF SAVEMONEY COMPANY

Supervisor : Assoc Pr NGUYEN DINH TAI

Class : Master Affaires et Management International Student Code : CH0122

ACKNOWLEDGEMENTS

This thesis would not have been possible without the ideas and instructions of the following people to whom I would like to express my great appreciations for their efforts and support: - PhD Nguyen Dinh Tai for taking the responsibility of being supervisors of this thesis His instructions always open a broadband way for me to think and to work

- M.A Tran Quang Ninh as well as other staffs of Savemoney for their supporting during this course and their advice encouraged me much to complete this thesis

- PhD Le Anh Duong for supporting my work at the Savemoney and for being willing to help me overpass the difficulties in the work

Last, but not least, I want to thank my family, my friends for all their supports in this endeavor They are always beside me and give me the belief to continue working

ABSTRACT

Financial technology or abbreviated as “Fintech” is a phrase that has been mentioned a lot recent years, it means that use technology to provide the financial solutions It is often seen nowadays that financial services come up with information technology However, the history of the

relationship between finance and technology has a long history and they have evolved together in 21st century which is known as the information technology era It was not until 2008, a new era of Fintech when they have emerged in both developed and developing countries This era is defined not by the financial products or services delivered but by who delivers them and by this period, the information technology was applied at the retail and wholesale levels This latest evolution of Fintech is blooming by start-ups, poses challenges for providers and market participants A problem is balancing the potential benefits of innovation with the possible financial risks of new approaches to the markets for both providers and customers This thesis analyzes the financial risk management in the Fintech era

Thus, based on the knowledge of studying and working in a Fintech company like Savemoney, the author has decided to choose topic “Developing financial risk management of Savemoney Company”

The organization of the thesis is presented as follows:

❖ Chapter I: Background of Savemoney Company and Financial – Technology trending review

❖ Chapter II: Company Structure and Organization Chart of Savemoney Company ❖ Chapter III: Review tasks and goals of internships at Savemoney Company ❖ Chapter IV: Analyzing the market risks for Savemoney Company

❖ Chapter V: Conclusion and some suggestions to improve the efficiency of Savemoney Company

1.1 The company background 2

1.2 Review the financial – technology trend 3

1.3 The main business model 6

CHAPTER 2 8

COMPANY STRUCTURE AND ACHIEVEMENTS OF SAVEMONEY COMPANY 8

2.1 Organization chart of the company 8

2.2 Achievements in implementing projects: 9

1

INTRODUCTION

Financial technology, also known as Fintech, is referred as companies that using information technology to deliver the financial services more safe and efficiently, reduce the financial risks Financial technology companies are generally start-ups founded with the purpose of renovation the current low-technology financial systems and the corporations, banks, services providers do not depend much on technology and apply software to deliver the services This need of the financial system around the world leads to the strong development of Fintech and this is the reason why almost Fintech companies are mainly start-ups On the other hand, the communities of Fintech companies constitute a financial service sector in the 21st century

Fintech companies is not harmful to the activities of banks, big banks seem to be interested in the partner with these start-ups which are bringing the new ideas to the financial services industry From online payments, financial risk management, lending and funding activities, a new generation of Fintech startups is taking aim at the heart of the financial industry and these Fintech companies are developing fast The evident is that they attracted $12 billion of investment in 2014, up from $4 billion the year before According to some online article, the investments in Fintech startups doubled between 2014 and 2015, to $14 billion The majority of the Fintech companies including the Savemoney Company pay attention to the online payment and lending activities which seem to be hot trend For example, the very high portions of online payments in China are handed by the Fintech Companies like Alipay or Tenpay These services are even more successful than PayPal that is popular in America Furthermore, the lending activities also developed without the participation of banks All of these activities of Fintech renovation require these companies to have a strong financial risk management for them and their customers

Fintech companies use the latest technologies to provide financial services and retail for customers from anywhere include increased utility, reward, sale or online booking for the customers The Fintech’s activities seem to take the work of the traditional banks but not Fintech companies are still not attractive to the big customers due to the lack of convenience and the guarantee of hi-tech security These customers require a total of financial risk management

CHAPTER 1

BACKGROUND OF SAVEMONEY COMPANY AND FINANCIAL – TECHNOLOGY TRENDING REVIEW

1.1 The company background

Savemoney was established in August, 2013 First, the company named as Global Communications Corporation - FCOM and then renamed as Savemoney Corp in 2015 The old address of the company is 183/14 Nguyễn Văn Đậu, 11th ward, Bình Thạnh District, Ho Chi Minh city and then relocated in 4th floor of Tuan Minh building at 90 Lê Thị Riêng, Bến Thành ward, District 1, Ho Chi Minh city

SaveMoney is a financial technology company and it has over 30 employees including product development team, marketing team, operators, IT programmers and sales team The company has an initial charter capital of $ 1 billion VND invested by three founding shareholders The legal representative of the company is Mr Tran Quang Ninh and he is also the biggest shareholder of the company According to the business license granted, the main activities of the company are:

• Advertisements, production of television programs, advertising programs (except for film production, broadcasting)

• Financial support services, investment consultancy, management consultancy (not including financial and accounting consultancy)

• Market research and opinion polls, trade launch organizations and surveys

• Portal: set up general information pages, information technology service activities and other computer related services

• Data processing, rental and related activities

• Insurance coverage, restaurants and mobile services

• Wholesale: computers, peripherals and software, machinery, agro-forestry products from bamboo wood, food, ready-made clothes

Nowadays, technology is growing rapidly and increasing strongly and it changes the way of

3

technology combine together Here, the company leverages the power of technology to create change, a completely new shopping experience for consumers on the products and services provided by financial services firms On the other hand, Savemoney Company is a Fintech company

1.2 Review the financial – technology trend

The biggest advantage of financial-technology companies is the application of modern technology to bring great convenience that customers do not find in traditional financial procurement channels Specifically, on the basis of technology, financial-technology companies have modernized its sales channels, increasing its ability to access services in the simplest way for its customers In particularly, financial technology companies have the ability to highly personalize the shopping needs of each customer, creating the best fit for each individual's shopping needs

In modern technology industry, smartphones are taking up a huge percentage and the popularity of the using internet on mobile phone is growing, which is one of the reasons for the inevitable development of financial technology In Vietnam, there are currently 128 million mobile subscriber accounts, more than half of them are smartphones and more than 40 million internet users This is the potential market for financial technology companies like Savemoney to develop, where the consumers are looking for a modern, time-saving technology platform for simple financial transactions

In the face of the wave of financial technology, many traditional financial service companies are concerned about the risk of losing market share But a survey of financial technology companies around the world by PwC shows that collaboration with financial-technology companies can help businesses in the same industry improve business efficiency, increase the ability to deliver new products differently, retain customers better, and generate more revenue

According to Andre Hesselink, founder of GoBear, Asia's fastest-growing financial-technology company, financial-technology companies help traditional financial firms to save money, charge and create an effective customer access channel in the context of technology dominance that has dramatically changed consumer shopping behaviors

Launched from the idea of create the online tool that helps clients find financial information in a transparent, clear, non-promotional, or promotional manner In the context of financial technology being hot in Vietnam, SaveMoney’s pioneering is gaining market and consumer expectations for the breakthrough benefits and experiences that the company will bring

Savemoney is one of the companies which are leading in providing digital financial services in Vietnam, Lao, Cambodia, and Myanmar The company’s services keep pace with the needs of customers by providing comprehensive banking services, card payment services, investment services and insurance services Savemoney provides new ways for consumers to have direct access to financial services such as a comprehensively financial advisory system, social media, background advice and applications on mobile phone

Customers have trusted Savemoney by the best financial advice to save money including the customers from strong companies like real estate companies, hospitals and financial institutions One of the main tasks of company’s services is to bring added value and optimize profits for partners on the basis of strategic cooperation on sustainable economic benefits

The banking services, credit card companies and insurance companies associated with this company are currently using its digital channels for a variety of purposes including sales & marketing, consumer services and customer relationship management Nowadays, because of the increasing use of mobile devices, the financial services providers of the company are developing a comprehensive customer approach to customer behavior

The goal of Savemoney is to provide consumers with financial services through financial instruments that function to illustrate, analyze and compare financial products, provide information on 'hot' promotions and “Best and useful shopping tips for customers” These will connect products and services to customers as well as promote the brand and market directly to consumers

According to financial reports of the company, thanks to the trend of modern consumption, the idea and strategy of the company has been actively accepted in the markets The evidence is that the company is profitable and growing year by year This development of the company seems to be synonymous with the trend of modern technology and the way of using internet of the society

5

capital that the partners poured in the company to develop and join the bigger projects Outsourcing expenses of the Savemoney mainly on the software which is very important for the financial risk management of the company:

The following statistic show the trend that the Fintech companies around the world pay attention about As can be illustrating from the table that the sector related to online banking have more priority than the others Savemoney Company’s business sectors are almost in the popular sectors like: payments, loyalty and ecommerce, banking and lending activities and financial risk management solutions To be honest, these sectors are much easier than the other to apply in the Vietnam’s market

Savemoney Company's Capital Flow

ProfitCapital Poured inOutsourcing expenses

Fintech Funding By the number of companies

By the fund raise

Securities/Capital Market/Wealth management

15% 2%

1.3 The main business model

Develop finance services business for companies that own huge database of customer The Savemoney management software system connects to all major banks, finance companies, insurance companies, securities companies and partners In addition, Savemoney has enriched its customer database from a number of digital sources: social media, banking, insurance, aircraft carriers, mobile operators, utilities, television, hospitals, hotels, supermarkets

Savemoney co-operates with many companies like retail service providers which own the huge financial customer database with contact information By this way, Savemoney can create a professional financial services system like the services for healthcare, consumer loans, loyalty cards, online payment and collection services, reward for loyalty, insurance, retirement plans, personal finance investments; other convenience services include consume loans, home purchases, car loans, installments, etc

The market potential is enormous with a country of 95 million people like Vietnam, of which 45 million are using internet, over 75% have smartphones, and millions people are using web, mobile applications, tele-marketing, Card system This portion is increasing time by time The pie chart below give an overview about the sectors which are concerned and strong investment by Savemoney, these sectors also the are interested by the customers who attention about the Fintech

7

CHAPTER 2

COMPANY STRUCTURE AND ACHIEVEMENTS OF SAVEMONEY COMPANY

2.1 Organization chart of the company

To handle the large amount of information collected, the company has developed a customer management system for analyzing information, providing information for marketing strategies to customers The system can be divided into 4 main departments:

• Prospecting and Marketing Department take responsibilities to the leads and prospects management in order to identify the customer through multichannel campaigns, marketing actions and multi criteria targeting

• Sale Department is the department which has to acquire customers It means that the department builds plans and actions to identify the prospects geolocation, accounts, contacts and opportunities, objectives and forecast

• Support and Accompaniment Department takes care about the multichannel ticket management, knowledge base, and customer portal Furthermore, this department also manages alerts and brings up automating actions

• The last one is the Analysis Department, which has the responsibility for identifying loyalty customers by real time statistics and grade and analyzes the segmentation

Besides that, the company builds up a transform process in order to make the structure of the company can adapt and suitable the requirements of a Fintech company The process include two phases are core and support Each phase has separated functions to make the company better in process the work, point out the responsibilities of each department in order to tighten the relation in work of the company The targets of these processes are to raise the work efficiency, reduce the expenses and risks in particular, especially enhance the financial risk management of Savemoney Company

– Core phase:

9

+ Product design : user intelligence, digital tools and devices, risk prevention services, risk segmentation, big data pricing, risk knowledge, broad offer, minimize time to market and legal constrains

+ Marketing: E-marketing, customer segmentation, protection solutions, customer experience, market survey

+ Distribution: Omni-channel strategy, process and easy services, quality customer experience, time to market, web service, partnerships (social network, etc.)

+ Policy management: advise, Omni-channel, quality

+ Claim/Assistance: Customer oriented process and services (claim declaration), fraud detection, fast claim redemption, prevention, quality of customer experience, Omni-channel

2.2 Achievements in implementing projects:

The key to success of a Fintech is to create an ecosystem that the customers can get all the utilities services from their trusted company provide For example, the customers who use online payment can get the coupons or visit the park that Savemoney Company currently co-operates in selling tickets To make it become true, the company is currently pursuing and developing a range of Fintech projects such as:

• Electronic Ticket Project

This project provides a control system, in which card reader helps minimize the manpower at the ticket gate It builds incentive programs as well as utility lines for ticket buyers: links with hospitals, educational institutions, entertainment resorts, real estate, supermarkets and shopping centers, high-end entertainment areas On the other hand, when customers use the other financial

services provided by Savemoney can award the ticket to visit the entertainment places where is using the electronic ticket system of Savemoney

Due to these services based on the online transactions so that the company must develop a system as financial risk management solutions to protect the company and also the customer’s wallet and personal information

• Card management system

11

• Mobile application programming project

The project offers on multi-platform and operations software for corporate customers who want to promote their business’s chain as well as to give their information to customers such as Unilever with the game show application G-people is a typical example, it is a chain of restaurants which are very popular with high-end restaurant chain management application and card system The point customers get after using G-people services can be used at other restaurants in the same chain

For more information, Savemoney Company is involved in developing utility software such as an application for recognizing text from image file to output text content For example, to get ID information such as ID, full name, date of issue from the image file of ID card

• Financial services

Savemoney Company and Trustpay brand is co-operation in online payments services Savemoney and Trustpay brand also work with mobile network distributors, banks and retailers to collect the potential customer’s information and marketing financial services through the information that the company is collected in order to provide mobile wallet and online payment services to customers and together build up a system of shopping venues for the Savemoney Company’s card holders

• Financial products comparison solution

With the main target of the Savemoney Company when it established that the company provides the banking, lending and financial risk management solutions for the customers, the company works hard on this field and co-operates with experienced partners to come up with reliable products and solutions The case here is the website: topbank.vn, which is considered as a financial risk management tool for the users With the strong development of real estate market, as well as price of a car in Vietnam fall sharply, associate with dealership’s promotions and the open policy of banks Followed by that is the accompanying solution such as e-commerce sites that allow users to sell houses and cars such as Batdongsan.com.vn, Dothi.net, Banxehoi.com and especially the financial services that give advices and calculations to help users avoid financial risk like the website: topbank.vn The dream of the majority of Vietnamese, especially the young generation to buy their own apartment, house or car today is much easier than ever