Strategies to strengthen the competitiveness of korean banks in vietnam

This study analyzed the Korean banks that entered Vietnam by using EFE, IFE, and TOWS analysis methods to derive the competitiveness of Korean banks in the Vietnamese financial market. After that, the author insisted on the localization and differentiation strategy, which is the main competitive strategy, for Korean banks entering the Vietnamese market, and proposed strategies to strengthen competitiveness by dividing the implementation measures into internal and external. the originality and significance of this thesis is that it has completed a strategy to strengthen the competitiveness of Korean banks, such as expanding their business netwwork and enhancing profitability in Vietnam. Practical applicability, if any: Banking is an industry that is subject to various regulations and standards. As a result, Korean banks in Vietnam need to be flexible in dealing with Vietnamese government policies. In this paper, it is practically applicable to prepare for crisis based on their experienced credit management ability and risk management system. Further research directions, if any: If there is a chance in the future, the author would like to set the number of branch offices and total assets of Korean banks in Vietnam as relevant variables to verify their advancement. Such research is

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - KO CHANGSEOK STRATEGIES TO STRENGTHEN THE COMPETITIVENESS OF KOREAN BANKS IN VIETNAM CHIẾN LƯỢC TĂNG CƯỜNG NĂNG LỰC CẠNH TRANH CỦA CÁC NGÂN HÀNG HÀN QUỐC TẠI VIỆT NAM LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2020 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - KO CHANGSEOK STRATEGIES TO STRENGTHEN THE COMPETITIVENESS OF KOREAN BANKS IN VIETNAM CHIẾN LƯỢC TĂNG CƯỜNG NĂNG LỰC CẠNH TRANH CỦA CÁC NGÂN HÀNG HÀN QUỐC TẠI VIỆT NAM Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS HỒNG ĐÌNH PHI HÀ NỘI - 2020 DECLARATION The author confirms that the research outcome in the thesis is the result of author‟s independent work during study and research period and it is not yet published in other‟s research and article The other‟s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration ACKNOWLEDGEMENT First of all, I would like to express my deepest gratitude and special thanks to Assoc Prof Dr Hoang Dinh Phi for his valuable advice and guidance on every developmental stage of this thesis I especially enjoyed his strategic and interesting classes which inspired me to choose this research topic In the end, his endless support and great kindness and understanding made it much easier for me to complete the research and writing process I would like to send my sincere appreciation to my company, IBK Because they gave me a chance to study for a year and a half In Vietnam, a country I have never been to before, especially in HSB As I live my life, I will never forget their sincere support And I would like to thanks to my friends for helping me a lot during my life in Vietnam The faculty and staff of HSB, the teacher of the Vietnamese language institute, the staff of IBK Hanoi branch and his family, and my MBA class friends were all good enough to inspire me a new inspiration about Vietnam and make me grow more Last but not least, I consider myself as the luckiest person in the world as I have always been given strength and motivation by my wife, Hyun Yunyoung, and my children, Ko Haein and Ko Youngwoo to keep going on my path I would also like to deliver my gratefulness and love to my family who provided so many spiritual supports to help me complete this paper within the given time TABLE OF CONTENTS LIST OF ABBREVIATIONS i LIST OF FIGURES iii LIST OF TABLES ii TITLE CHAPTER 1 Rationale Review of Previous Researches 3 Aims of Research Objects of Research Scope of Research 6 Research Methodology 7 Thesis Structure CHAPTER Basic Theory on Bank's Competitiveness 1.1 Bank's Competitiveness 1.2 Business Environment in Vietnam 12 1.2.1 Market Characteristics and Strategic Values 12 1.2.2 Macroeconomic Indicators and Economic Outlook 14 1.2.3 Current Status of Trade and Investment 16 1.3 Vietnamese Government's Policy on Banking Sector 21 1.3.1 Vietnamese Government's Regulatory Policy 21 1.3.2 Vietnamese Government's Foreign Open Policy 23 1.4 Implications for Foreign Banks in Vietnam 27 CHAPTER Analysis of Korean Banks’ Competitiveness in Vietnam 31 2.1 Analysis of the Banking Industry in Vietnam 31 2.1.1 Growth Process of Vietnamese Banking Industry 31 2.1.2 Current Status and Characteristics of the Banking Industry in Vietnam 33 2.1.3 Challenges of Banking Industry in Vietnam 36 2.2 Analysis of the Current Status of Korean Banks‟ Competitiveness in Vietnam 38 2.2.1 Size and Financial Status of Korean Banks 38 2.2.2 Process of Korean Banks‟ entry into Vietnam 40 2.3 EFE for Korean Banks for 2020-2025 46 2.3.1 Opportunities 47 2.3.2 Threats 48 2.4 IFE for Korean Banks for 2020-2025 48 2.4.1 Strengths 49 2.4.2 Weaknesses 50 CHAPTER Proposal of Strategies and Solutions to Strengthen the Competitiveness of Korean Banks in Vietnam for 2020-2025 Period 51 3.1 TOWS Matrix for Korean Banks‟ Strategies for 2020-2025 51 3.2 Main Competitiveness Strategies 52 3.2.1 Localization strategy 52 3.2.2 Differentiation Strategy 54 3.3 Proposal of Solutions to Implement Competitiveness Strategies 55 3.3.1 Internal Competitiveness Strategy 55 3.3.2 External Competitiveness Strategy 58 CONCLUSION, LIMITATION AND IMPLICATION 63 Conclusions 63 Limitations 64 Implications 65 REFERENCES 67 LIST OF ABBREVIATIONS APEC Asia-Pacific Economic Cooperation ASEAN Association of South-East Asian Nations ATIGA ASEAN Trade in Goods Agreement ATM Automated Teller Machine CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership EAEU Eurasian Economic Union EIU Economist Intelligence Unit EU European Union FDI Foreign Direct Investment FTA Free Trade Agreement GATT General Agreement on Tariffs and Trade IMF International Monetary Fund NAFTA North American Free Trade Agreement OECD Organisation for Economic Co-operation Development PESTLE Political, Economic, Social, Technological analysis, Legal and Environmental RCEP Regional Comprehensive Economic Partnership SME Small and medium-sized enterprises TPP Trans-Pacific Partnership WB World Bank WTO World Trade Organization i and LIST OF TABLES Population Outlook by Age Group, 2015 ~ 2030 14 Vietnam's Trade Volume Trends, 2014~2018 17 Korea-Vietnam Trade Trends, 2014~2018 18 Vietnam's FDI (New and Increased) Trends, 2014~2018 19 Vietnam government's regulatory policy on the banking industry 22 Key Contents of the Five- ear Economic and Social Development Plan 27 Overseas Branches of Korean Banks by Region 39 Current status of Korean banks in Vietnam 40 Entry of Korean banks into Vietnam, Year 1992~1999 42 A data of Korean banks into Vietnamese market accumulated on 2008 43 Status of Korean banks‟ entry into Vietnamese market, Year 2018 E 45 Summarized EFE for Korean banks 47 Summarized IFE for Korean banks 49 Summarized TOWS Matrix for Korean banks 51 ii LIST OF FIGURES Firm‟s Competitiveness Pyramid 10 Vietnam GDP Growth, 2011~2018 16 Trends in Vietnam's Annual Exports, 2013~2018 19 Trend in No of Newly Established Companies in Vietnam, 2013~2018 20 Vietnam's Free Trade Agreement, as of 2016 26 Major Changes in Vietnam's Banking IndustryError! Bookmark not defined Status of Banks in Vietnam, as of 2017Error! Bookmark not defined Asset Status of Banks in Vietnam, as of 2017Error! Bookmark not defined iii TITLE CHAPTER Rationale Vietnam, the central country of the Indochina Peninsula, adopted the „Đổi Mới‟ policy, an external open-door and reform policy focused on the introduction of market economic principles at the 6th Communist Party Congress in 1986 Since then, the Vietnamese government has been able to maintain relatively stable economic growth, such as stabilizing prices, reducing fiscal deficits and increasing foreign investment, as a result of its reform policies such as the Foreign Investment Act, Financial Reforms In particular, Vietnam was able to overcome the collapse of the Asian financial crisis in the late 1990s without much influence by actively pushing for the opening of the country In 2001, the Normal Trade Relation (NTR) with the United States attracted foreign investors Since then, the economy has grown at an annual rate of over 7.5% And at the end of 2006, Vietnam joined the WTO, which had been the desire of the Vietnamese government The Permanent Normal Trade Relation (PNTR) with the U.S was signed immediately to declare its entry into the market economy system Therefore, foreign direct investment has exploded, and it has been evaluated by the world as a successful model of open policy As a result, Vietnam not only recorded an average annual economic growth rate of 7.3% between 1990 and 2010, but also increased per capita income by five times during this period The banking industry in Vietnam has changed a lot due to the rapid improvement in the internal and external environment of the Vietnamese economy Vietnam had to comply with the financial and services market opening schedule by joining the WTO The Vietnamese government also rushed to open the Vietnamese banking industry through restructuring of the banking industry as it hopes to bring in foreign investment for the development of its capital market In addition, the Vietnamese government agreed to open the financial markets through bilateral talks with the U.S government at the APEC summit in Vietnam in November 2006 Its main content is to allow the establishment of a 100% foreign investment local corporation within five years of joining the WTO and to treat domestic banks banks suffer a great deal of damage, so banks must develop while maintaining human resources In addition, Korean dispatched staff of Korean banks in Vietnam has a short working period and the turnover rate of Vietnamese staff is high And there is a common set of problems where the organizational structure of a company is not reasonable and there is a lack of supervision over advanced management In order to solve the problem of human resources and organizational management, I would like to propose the following Maintaining and developing human resources include recruitment, training, promotion, welfare system and working environment Recruitment is employs labor and the placement of it according to the characteristics and needs of the staff's ability, experience, morality and work People with family relationships or acquaintances who lack the ability to meet the needs of their work should be avoided Instead, every year the bank must recruit college students who have graduated with good grades.It should be regularly trained to improve professional work and foster work ethics Work ethics should be an important criterion for recruitment and promotion It is also a good way to set up an academy to train staff to meet the demands of their work An executive who is promoted must have professional work and management skills Creating an equal competitive environment creates opportunities for all employees to contribute to capacity development and banks If a promoted manager fails to meet the needs of his job, he or she must switch to another competency The welfare system should pay attention to payroll policy and provide the welfare system to employees by law Employees should be given a trip or the most comfortable break each year In addition, they should have training classes to improve their professional work, English skills and computer skills The working environment should create an intimate and active working environment and it is good to hold events such as entertainment contests, sports competitions and fashion shows And social programs such as helping the poor people or giving scholarships to students who study hard in difficult family environments are very good for performance 56 And ultimately, first of all, it is necessary to improve the composition of the board of directors to increase the percentage of Vietnamese directors as much as possible to solve the problem of Korean dispatched directors This will enable the supervisory management functions of the board to be fully exercised to the local management and effectively enhance the independence of the board's resolutions There is also a need to expand the right of the Board to manage personnel If the right to manage personnel there is expanded, the degree of localization of senior and intermediate managers can be improved Furthermore, when selecting and dispatching personnel at the headquarters, ensuring that they have sufficient voice, decision and jurisdiction in the local area can reliably solve the problem of intensively shifting Korean dispatched personnel It can also improve job security and the degree of job convergence among dispatched Korean employees 3.3.1.2 Risk Management and Supervision Strategies The activities of commercial banks are extraordinary projects targeting money and credit, which can increase the risk These risks can cause losses to banks and lead to bankruptcy Therefore, improving risk prevention is a top priority for banking activities Financial and credit activities, including credit risk, interest rate risk, operational risk and exchange rate risk, provide more profits to banks, but most of these are activities exposed to risk In recent years, Korean banks have been expanding very quickly and have seen a number of newly increased branches Thus, a number of problems were exposed in the internal risk management of many newly established branches In order to prevent risk most effectively, the cause of the risk must be found Therefore, banks must have knowledge of risk management In order to prevent this risk, the following four proposals are proposed First, the awareness of preventing and controlling risks should be strengthened, and the level of risk management operation should be enhanced In particular, new tasks and tasks with high operational risks should be continuously assessed to check assets and establish processes for those tasks Second, because of the relatively high liquidity of employees, the pool of people must be strengthened to provide employee stability This is one of the credit 57 procedures for reducing risk and should be maintained by institutions and policies It is also the best way to improve the quality of credit rather than the size Third, risk management of information technology should be strengthened The independence of information technology (IT) risk management personnel should be ensured, and comprehensive measures for internal audit of IT risk should be secured Fourth, credit risk management should be strengthened, loan management systems and processes should be established, and the accuracy of loan risk classification should be improved In particular, the management of loans with relatively high risk should be strengthened In addition, efforts should be made to improve the quality of loan assets by strictly controlling loan risk To this, it is important not to focus credit on a specific customer base or job And finally, the Korean banks in Vietnam are subject to supervision control in terms of deposit loan ratio, liquidity and loans during the development process As a result, they face the situation of not only meeting supervisory indicators, but also achieving a balance between them that can be developed quickly In order to ease the pressure of supervisory management and not be affected by the bank's future development, Korean banks need to make efforts to: To this end, it is important to adjust the ratio of deposit loans by expanding the size of deposits From the deposit structure of Korean banks in Vietnam, the proportion of personal deposits is around 20%, so they should focus on increasing the proportion of personal deposits in the future This is to strengthen the debt management of assets and increase liquidity In order to relieve liquidity pressures, Korean banks need to prevent the occurrence of mis-distribution of assets on loans and securities owned by banks in a timely manner At the same time, banks will need to adjust their credit limit and strengthen marketing activities for Vietnamese companies to reduce their dependence on existing credit customers 3.3.2 External Competitiveness Strategy 3.3.2.1 Focusing on SME Customers and Expanding Target Regions Strategies SMEs are characterized by small size, large quantity and high risk Therefore, most Vietnamese large banks are less reluctant to SME customers than large 58 corporations However, SMEs also develop quickly and have high returns They are often concentrated in areas near large cities and are mainly engaged in foreign trade Korean banks are attracting these SMEs customers, and they have a relatively competitive advantage over other small and medium-sized banks in Vietnam When banks begin to deal with SMEs, they should investigate their financial situation Furthermore, in terms of the value chain of SMEs, it should be possible to combine the upstream and downstream companies' credit situation and finally provide packaged financial products For example, banks can inform companies about their merits in export insurance, etc., and may seek opportunities for business partnership with a credit insurance company in relation to export and import credit Banks can also advance into derivatives-related market areas by raising awareness of exchange rate risks to companies In addition, expanding the sales area is an opportunity to quickly reach bank customers and service them most efficiently The traditional distribution channel of a bank is to expand the network of branches Customers come to the bank and business with the employees of the bank Technology is changing even more these days, and in order to expand a bank's network, ATMs can be installed outside of its branches, or Internet banking can be traded from home and work on a computer Modern channels, rather than traditional distribution channels, can reduce and speed up transaction costs with customers and banks To be good at modern distribution channels, banks need to create professional customer centers And modern distribution channels can lower the competitiveness of traditional distribution channels Time and human resources are needed to improve the technology of expanding the network and to invest in facilities at branches And the expansion of the banks' networks is a necessary factor to take advantage of economies of scale The more networks a bank has, such as branches, the more diversified its products and more developed its retail market Since the Korean bank's main customers are Korean companies, they will have to expand their network of branches and exchanges and have large capital Most of the Korean banks that entered Vietnam are based in Hanoi, Hochiminh City, big cities and surrounding areas, and near the sea However, as 59 there are already many branch offices of Vietnamese banks and foreign banks in this region, the competition is so fierce that Korean banks not have a relative advantage in the competition Korean banks will have to develop markets with a focus on regional hub cities based on the Vietnamese government's „Master plan for socio-economic development by region‟ Through the opening of branch offices in Vietnam, a strategy to expand balanced development between regions can be realized And advanced financial services can be expanded together From the customer's point of view, the Korean banks in Vietnam are still mainly focused on Korean companies and are concentrated in manufacturing This is not only unsuitable for localized development objectives, it is not advantageous in terms of risk management For this reason, the Korean banks need to expand its target areas to increase marketing opportunities for Vietnamese companies In addition, customer development of non-manufacturing companies is also important, and there is a need for a balance between industry sectors and countries 3.3.2.2 Various product development and implementation strategies In order to strengthen the future competitiveness of Korean banks, the bank's technology must be modernized Developing products requires upgrading banking skills based on modern information technology This is because banking technology is an important factor of developing products and services to increase customer value Modernizing banking technology requires the purchase of software and engineering machinery, human resource training and workflow changes This is especially true for card services, Internet banking and mobile banking that require high technology Vietnam is currently facing growing Internet and mobile use, requiring it to enter a bank specializing in digital finance As Vietnam's main customer base for financial demand is in their 20s and 30s (45.6% of the total number of employed), it is necessary to provide services that meet their needs Each bank provides retail banking services to consumers The growth rate of the Vietnamese economy continues to increase, and most of the Vietnamese companies are SMEs Also, many of Vietnam's population and the majority of them are young people As a result, the retail banking market becomes more attractive as the trend of paying with check cards and credit cards is increasing Activities as a 60 retail bank can generate income over the long term and reduce the risk of a bank's work This will not only expand the market but also diversify banks' services However, the number of branches of Korean banks in Vietnam is small and not high-profile, limiting their development Furthermore, each bank had to comply with established regulations when developing products For this reason, the profitability discrimination of each bank in traditional deposit loan products was not significant Under these circumstances, Korean banks must make efforts to develop new product areas such as personal financial products and financial derivatives in order to achieve financial products Vietnam has recently seen an increasing trend in stock investment, and it will be important to try to launch services with new potential There are two main reasons for this aspect: First, the Vietnamese people have low savings rates but high returns Despite the small number of investment channels, the awareness of financial investment techniques is gradually increasing Korean banks can take advantage of these market opportunities and apply Korea's advanced financial product development experience to gain a differentiated competitive advantage in the financial product market Second, Korean banks are limited in expanding their business in Vietnam This is because the supervisory authority is under the control of the deposit loan ratio and the liquidity ratio of funds Therefore, the development of financial products is highly likely to contribute to the future development of Korean banks 3.3.2.3 Marketing and Branding Strategies Nowadays, Providing a good product or service to a customer is not enough for a company to be chosen by customers Marketing and promoting products and services is very important to attract customers Currently, Korean banks are not yet very interested in marketing activities in the media Therefore, marketing activities must be combined with trend research in the banking market, market share, new product research, competitor price research, distribution channels, and consumer behavior research to further their effect The bank's brand should be promoted through the media's program Stephen King said, “A product is something made in a factory; a brand is something that is bought by the customer A product can be copied by a competitor; 61 a brand is unique A product can be quickly outdated; a successful brand is timeless.” The brand is what remains after using the product in the will of the customer Customers not only buy products but also buy brands So a brand is what makes a difference in characteristics of a bank In addition, since the brand provides the quality and safety of the product selected by the customer, it becomes a deciding factor for the customer in the current competitive situation Therefore, in order to build a bank's brand, there must be a schedule for building and developing the brand on purpose And there should be a part responsible for the bank's brand The responsible member should have experience in brand building and development Bank executives should also understand the importance of the brand and think that the brand is an investment, not a cost In addition, every bank employee should be made aware of the concept, role, and meaning of the brand Or there should be a training class to learn the importance of building and developing a brand Brand building should be done in everything from bank envelopes, brochures, paper printing, interior decorating, and employee uniforms 62 CONCLUSION, LIMITATION AND IMPLICATION Conclusions Vietnam has begun to change its financial industry since its WTO accession in 2007, and has been actively opening its financial market and banking industries to the outside world In addition, the Vietnamese banking market was fully opened until 2012 in accordance with the WTO agreements, and phased out entry restrictions on foreign banks As a result, competition between Vietnamese banks and Korean banks is becoming more intense in the Vietnamese financial market at present In this regard, this study first considered the Vietnamese banking industry in order to draw up measures to strengthen the competitiveness of Korean banks in the Vietnamese financial market The overall environment of the Vietnam's banking industry is summarized through the structure, opening process, status, characteristics and prospects of the banking industry Subsequently, a full-scale analysis was conducted on the current status of foreign banks entering the Vietnamese market, especially on the background, necessity, and process of Korean banks' advance into the Vietnamese market under the circumstances of the Vietnamese banking industry The analysis showed that Korean banks are developing in Vietnam and have problems In other words, despite the long time it took to enter Vietnam, Korean banks were still developing more slowly than other foreign banks under favorable circumstances The Korean banks did not enter the Vietnamese market deeply and did not enjoy the development of Vietnam enough Because they only followed their native customers So it could be seen that Korean banks did not develop as quickly as numerous other foreign banks did Next, in order to analyze the competitiveness of Korean banks in Vietnam, the TOWS analysis was conducted to comprehensively analyze the internal and external environment of Korean banks in Vietnam to evaluate the business status and development potential under the existing environment In the internal characteristics of TOWS analysis results, the strengths were derived from the internationalization and financing capabilities of Korean banks, advanced and specialized service quality, leading digital financial technology, and 63 experienced credit management and risk management The weaknesses were the small size and small number of branches of Korean banks in Vietnam, low market share and brand awareness, relatively low level of localization, and a concentration of credit offerings due to customer bias The factors of opportunities in the external environment were derived from the sustainable development of Vietnam's economy, young population structure with a strong interest in purchasing power and IT, open financial markets and a favorable investment environment, and the expansion of trade and investment between South Korea and Vietnam Four threats were increased competition with Vietnamese banks and foreign banks, a lack of diversity in financing methods, possible changes in government policy toward banks, and the escape of Korean companies from Vietnam in the future Finally, based on the TOWS analysis results, a strategy was developed to emphasize the strengths, compensate for the weaknesses, and minimize the threat while maximizing the opportunities Ultimately, the study found ways to strengthen the competitiveness of Korean banks in Vietnam In other words, in the direction of development strategy, it is necessary to deepen localization development and expand the differentiation advantage In terms of implementation of strategies, internal strategies emphasized strategies for developing local human resources, strengthening risk management and supervision of management In addition, specific implementation measures were presented as external strategies for focusing on SMEs customers and expanding the target areas for business, developing and implementing various products, and suggested specific implementation plans for marketing and brand promotion strategies Limitations The limitations of this study are that there are relatively few professional studies of Korean academics on Korean banks in Vietnam Most of them were limited to master's thesis written by a small number of Vietnamese students The contents of the study were also limited to the current status and problems facing the development of Korean banks in Vietnam Few studies have been conducted by Korean banks on way to strengthen its competitiveness to enter the Vietnamese market In addition, existing statistical texts showed minimal data on Korean banks 64 in Vietnam and limited data inside the banks that were disclosed It was also quite limited to obtain data on the total assets and operating status of Korean banks in Vietnam in the past For this reason, the author had no choice but to limit the number of branches collected when analyzing the business activities of Korean banks entering the Vietnamese financial market for many years If there is a chance in the future, the author would like to set the number of branch offices and total assets of Korean banks in Vietnam as relevant variables to verify their advancement Such research is believed to be more persuasive through empirical analyses of the motivations and achievements of Korean banks in Vietnam It is believed that further research by other scholars will be needed in this regard Implications The Vietnamese market will continue to grow after the economic development It is also obvious that it will become a promising market for Korean banks and other foreign banks to expand their presence This paper confirms what the Korean banks in Vietnam have achieved and failed to meet In addition, this study suggests a practical application for the development of Korean banks These are measures to strengthen banks' competitiveness in the face of integration with the region and the rest of the world First, strengthening strategic cooperative partnerships and increasing social and cultural exchanges is required to further develop the relationship between South Korea and Vietnam Korea and Vietnam should further strengthen their bilateral ties for win-win development based on their cooperation over the past 27 years Korea and Vietnam need to share the recognition that expanding cooperation in the future is a more valuable asset for the continued development of the two countries, based on the development of improved relations for 27 years after diplomatic relations To this end, Korean banks need to learn and adapt to Vietnam's society, economy and history, gain mutual benefit from Vietnam, and show a spirit and attitude to complete and protect Vietnamese financial markets Secondly, localization is an important task for all companies in their overseas expansion The way for Korean banks to strengthen localization in the Vietnamese market is to localize their manpower and localize their relations with the 65 government Recruiting locals has many advantages, such as being good at Vietnam's policies and culture and strengthening the sense of belonging to banks which gives it an advantage in dealing with business It is also expected that good relations with local governments will bring more benefits and successful management Third, Korean banks lack differentiated financial products according to their country characteristics compared to other global banks Therefore, it is necessary to investigate the characteristics of Vietnam's economic development and develop various new products to match them And it will have to make efforts to find potential customers by increasing the network of branches In Vietnam, with the recent rapid development of online technology and the rapid increase in smartphone penetration, more and more people will be active in card payments, the Internet or mobile instead of cash Accordingly, the Korean bank proposes to partner with online companies to develop various attractive card services or innovative mobile banking services To this end, Korean banks need not only to communicate and exchange information with each other, but also to create opportunities to cooperate with foreign banks, and to be active in learning more advanced leadership and marketing strategies Finally, each bank is expected to compete more intensely in the Vietnamese market Thus, existing Korean banks in the Vietnamese market or Korean banks planning to enter the market need to be prepared to take advantage of their respective advantages in order to cope with fierce competition The most important and necessary is to investigate and 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