Impacts of revolution 4.0 on Vietnam banking sector

Updated On : November 2020

In recent years, Vietnam's banking industry has been a pioneer in joining the Fourth Industrial Revolution. Specifically, Vietnamese commercial banks have quickly adapted to and applied financial technologies to banking operations, such as mobile and QR code payments, electronic wallets, tokenization, payments via chip cards for domestic cards, etc.

Digital transformations have helped Vietnam’s banking sector improve its competitiveness and expand the access to banking services of all consumers in the rural and remote areas.

In Vietnam, the 4.0 industrial revolution had a strong impact to create more opportunities for commercial banks to develop retail banking, especially in enhancing the application of innovative business solutions and breakthrough technology to improve management capabilities, automate business processes and develop cutting-edge retail banking services to deliver seamless customer experience for developing the payment.

The major opportunities, as well as challenges for retail banks during the fourth industrial revolution (Industry 4.0), will create more opportunities for Vietnamese banks to develop retail banking, enhancing the application of innovative business solutions and technologies to meet the needs of customers, especially those sensitive to new technology.”

Mr. Nguyen Toan Thang, Secretary-General of the Vietnam Banks Association, told the forum that Vietnamese banks are now moving in line with new technology trends. “They are transitioning from traditional banking to digital banking, transforming their business model, enhancing the customer experience with new products and solutions for business, building modern digital infrastructure, managing data, and applying artificial intelligence.

At present the banks in Vietnam are highly investing in IT infrastructure, new generation Core banking system, and application of innovative solutions in line with the general trends of digitalization to provide digital banking products and services in a simple, friendly, automated, smart and omnichannel approach.

In addition to the exposure and application of digital technologies, there is the development and expansion of the domestic financial services ecosystem with the presence of fintech companies. The main development trend in the financial market and Vietnamese banks today are creating quality relations between banks and fintech companies.

Digital transformation and digital banking have become a necessity to help banks overcome the challenges, create competitive advantages, proactively adapt to and develop sustainably in the context of Industry 4.0 and the emergence of a digital economy.

Change from traditional banking to digital banking is required in the bank’s operations to satisfy and serve the customer better. Thus, banks need to prioritize and create a strategy to select the right solution provider for long-term growth. Moving forward occur many challenges and along with the opportunities of digital transformation in the bank in Viet Nam.

Overall, the increasing use of digital banking services has resulted in greater access to technology and mobile infrastructure globally.