Banks race technology, reduce staff to reduce costs

TPBank is a typical example of applying technology to reduce human resources and operating costs. Photo: Duc Thanh

The layoff plan is not over yet.

Leaders of many joint stock commercial banks said that the mobilization interest rate level is under a lot of pressure due to the heating up of many other investment channels, while the Government and the State Bank still aim to reduce lending interest rates further to support the economy . In this context, banks are cutting costs to have more room to reduce lending interest rates. However, capital costs - which account for the largest proportion of banks' operating costs - are unlikely to decrease further. Therefore, banks are looking for ways to cut other operating costs, including personnel costs.

“Apart from capital costs, the biggest cost for banks is personnel costs. However, boosting investment in technology is helping banks save on this cost,” said Mr. Nguyen Hung, General Director of TPBank.

It is known that in 2024, TPBank will add 500 robots to automate processes, helping to save time, costs, and human resources. Accordingly, in 2024, the Bank's plan is that the number of employees can reach 8,200 people, but in reality, by the end of 2024, the bank's staff will only be 7,700 people and still complete all growth targets.

In 2025, the Bank will continue to innovate technology, apply AI in operations to innovate processes and streamline the apparatus. It is expected that innovating processes and streamlining the apparatus will help TPBank reduce an additional 300-500 employees, further reducing operating costs and optimizing operations.

At the general meeting of shareholders held on the morning of April 25, Mr. Duong Cong Minh, Chairman of the Board of Directors of Sacombank , also said that the bank is strongly implementing digital transformation, gradually reducing traditional transaction offices and continuing to cut staff.

Previously, VietinBank was the first bank in the group of four state-owned commercial banks to announce that it would cut down on physical transaction points and replace them with digital platform applications.

"In 2025, we will implement many activities related to digital transformation, from investment in infrastructure, hardware, software, to human resources. This is one of VietinBank's biggest priorities," said VietinBank Chairman Tran Minh Binh.

Mr. Binh said that the bank is also testing a customer service center model (contact center) applying AI, which can replace up to 70% of operational staff. In the past 2 years, VietinBank has hardly recruited staff for traditional business activities, including credit and capital. However, in 2025, VietinBank will increase recruitment, especially in the field of information technology, increasing the number of staff in this field from 300 to nearly 1,000 (including outsourcing) with expected very high salaries.

In 2024, nearly 30% of listed banks will cut staff. According to a survey by the State Bank, in the first quarter of 2025, more than 21% of banks will continue to cut staff. According to analysts, the acceleration of digital transformation and restructuring of operations will cause the number of physical transaction offices and bank staff to continue to decrease sharply in the coming time.

Shift focus to digital sales

For commercial banks, applying technology not only helps cut costs, but also opens up many new business opportunities.

"Previously, digital channels did not bring direct profits to banks, but mainly increased convenience for customers. However, now, combined with e-commerce and digital transformation, digital channels are opening up huge opportunities and potential for banks. The bank that goes first will have a great competitive advantage," said TPBank General Director Nguyen Hung.

Thanks to the application of technology, many commercial banks in Vietnam have reduced their cost-to-income ratio to below 30%, demonstrating efficiency through comprehensive digital transformation, approaching leading financial institutions in the region.

- Mr. Le Anh Dung, Deputy Director of Payment Department (State Bank)

It is known that 2 years ago, TPBank invested in information technology systems and deployed lending on digital channels. To date, the bank has 4.5 million customers borrowing capital on digital channels. Profits from lending activities on digital channels have been enough to offset technology investment costs and have begun to contribute well to both fees and interest for the bank.

At VietinBank, Mr. Tran Minh Binh said that the Bank is investing heavily in technology, digital transformation, and platform investment. Currently, up to 60% of the Bank's products are put on digital channels and the number of transactions via digital channels accounts for 99% of the Bank's total transactions.

It can be said that after many years of creating a habit of transacting on digital channels for customers, along with expanding the ecosystem and taking advantage of the power of big data, AI, etc., banks are increasingly proficient in selling products, services and approaching customers on digital channels as well as using these technologies to enhance management capacity.

According to the Vietnam Banking Association, in recent times, banks have applied big data and virtual reality (VR) technology in lending activities to individuals and businesses, helping to connect online payments for many types of fees, taxes and services. In addition, banks are actively applying AI in two main areas, including detecting fraud and money laundering risks; data management and analysis for forecasting and business operations.

This year, many banks announced that they would spend thousands of billions of dong on technology investment to cut costs and improve business efficiency. This shows that the competition for “digital customers” among banks will become increasingly fierce. In this race, banks must compete with each other and prevent increasingly sophisticated fraud and scam risks in the digital environment.

Source: https://baodautu.vn/ngan-hang-dua-cong-nghe-giam-nhan-su-de-giam-chi-phi-d273542.html