Three trends of digital banking in Vietnam

Payments, AI and ESG are expected to be key trends that will help promote the development of Vietnam's digital banking industry.

In 2023, the global banking industry will face many challenges due to macroeconomic fluctuations. Therefore, the move by retail banks to focus on recovery and innovation is considered a positive signal, especially in the context that Vietnamese banks are aiming for a breakthrough in 2024.

According to a newly published report, experts from Temenos believe that three trends: Payment, Artificial Intelligence (AI) and ESG (environment - society - governance) will be key trends that help promote the development of Vietnam's digital banking industry.

Specifically, cashless payments will be the first trend that Temenos predicts. In Vietnam, Samsung Pay has been deployed since 2017 and Google Wallet will be launched in November 2022. In 2023, Vietnam will become the third country in Southeast Asia to support Apple Pay, after Malaysia and Singapore.

Along with that, the Vietnamese Government has just extended the pilot period of telecommunications payment accounts used to pay for small-value goods and services until December 31, 2024.

Vietnam has started piloting this form of payment since March 9, 2021, allowing users to conduct various transactions via telecommunications network accounts, such as paying for small-value goods and services, transferring money, depositing and withdrawing money at network operators' transaction points nationwide without having to own a bank account, smartphone or internet connection. The government aims to reduce the rate of cash payments to 8% by 2025.

"This opens up a huge opportunity for banks to increase their fee-based revenue by offering multi-channel payment solutions to customers and merchant partners. These new solutions can act as a 'piece' in the digital services that banks provide," Temenos assessed.

Ba xu hướng của ngân hàng số tại Việt Nam - Ảnh 1.

With the trend of artificial intelligence, according to a recent global study called "Byte-Sized Banking" conducted by Economist Impact Research and Temenos, up to 75% of survey participants believe that AI will have a major impact on the banking sector, and more than 70% believe that exploiting the potential of AI is a core factor that helps banks make important differences in the future.

"Vietnam is in a favorable position to seize the opportunity, leveraging AI to improve the payment experience for both consumers and businesses," Temenos said.

According to Temenos, banks and financial institutions can reshape the competitive landscape in the financial services industry by using AI to engage, enhance customer engagement, and optimize operational efficiency.

AI provides faster credit assessments for both consumers and businesses, while making credit underwriting and debt collection more transparent and trustworthy. It also enhances fraud protection, detection, improves claims and dispute handling, and automates financial advisory services.

Finally, with ESG (Environmental, Social, and Governance), according to a recent study by Economist Impact Research, the trend of customer-centricity is driving the banking industry to actively integrate ESG factors into its products and services (73% of surveyed banks), and to finance environmentally friendly projects (74% of surveyed banks).

“These numbers not only reflect a rising market trend, but also open up huge opportunities for businesses,” Temenos said.

To accelerate and solve the ESG problem, Temenos believes that financial institutions need to develop a comprehensive action plan and integrate ESG into every aspect of their operations.

According to VTV

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