Covid-19 boosts digitalization in banking and finance

While inflicting myriad negative impacts, Covid-19 has also accelerated the digitization process in Vietnam’s banking and finance sector, the “Future Banking 2021” online forum on October 7 heard.

The application of digital technology helps change the face of banks and has brought benefits in terms of process automation and productivity improvements, increased customer experience, and reduced operating costs for banks, according to Mr. Nguyen Quoc Hung, Secretary General of the Vietnam Banking Association.

Moreover, mobile banking apps have now been upgraded to digital banking apps providing a wider range of features, from account opening, financial transactions, and investments to non-financial services such as shopping, education, health, and transportation. Banking services are now combined with other fields and industries to build a smart and comprehensive ecosystem.

Since the outbreak of Covid-19, payment systems, credit information systems, and banks have been operating consistently and smoothly, meeting the needs of people, businesses, and government agencies.

However, there are some matters of concern. Firstly, the legal framework for technology is still under development, and secondly, the mechanism for cooperation as well as data sharing between credit institutions and between credit institutions and the national database system are not clear.

In addition, the rate of cash transactions remains high. Some financial technology (fintech) ecosystems have not really connected with credit institutions to provide full convenience to users. Cooperation between banks and fintech companies is yet to be as deep as expected.

As digital transformation changes consumer behavior, banks need to be dynamic, innovative, and cooperative to offer diverse digital financial products and services to meet customer needs and keep them engaged.