Photo: HSBC Vietnam
Mr. Sabbir Ahmed, Head of Retail Banking and Wealth Management at HSBC Vietnam, talks with VET about Vietnam's digital banking development.
■ How would you evaluate the competition in Vietnam in digital banking?
We launched a mobile banking app optimized for tablet users in 2013 as we had observed an increasing trend of customers using iPads when visiting HSBC Vietnam’s website. Over a three-year period, before the launch, the number of iPad users visiting the website increased ten-fold and the volume of visits by all mobile devices grew eight-fold in the same period.
Now it seems other banks in Vietnam have seen what we saw. In the last three years, along with growth in internet and mobile device use, banks in Vietnam have been expanding and developing internet banking on mobile devices to offer better services to customers.
I believe that effective digital banking involves taking advantage of innovative technology to facilitate non-cash payments and streamline transfer processes. That is certainly is going to be a new way of banking that all banks aim to achieve.
■ How do you view the infrastructure for digital banking in Vietnam, including ATMs, POS, and internet systems?
According to the State Bank of Vietnam (SBV), between 2011 and 2014 the number of ATMs increased 1.5 times while point-of-sale (POS) rose 2.5 times. The number of banks launching internet banking and mobile banking represents 76.8 per cent of the total while the number launching SMS banking represents 45 per cent.
I can also see a trend in which banks are putting a lot of effort into enhancing their security systems to protect customers, such as applying EMV chips.
All of these achievements have created a solid foundation for the ongoing development of digital banking and related infrastructure in Vietnam.
On the other hand, banks have developed digital services on different platforms. Problems can potentially occur when we exchange data from bank to bank. Perhaps we need to consider a solution to standardize the transaction information we require as banks. One solution could be introducing a new kind of citizen ID - one that would comprise the data/information found on the present ID card but also data/information on household registration, civil status, etc. We could then digitize that database and benefit greatly as a whole.
The banking system also needs to be enhanced so we can apply solutions in order to identify customers in online transactions as well as accelerate data transfer between banks.
■ What are your thoughts on the trend of using digital banking to replace cash payments in Vietnam?
Of Vietnam’s 92 million people, 55 per cent own at least one smartphone and about 55 per cent spend two hours a day browsing the internet and shopping online.
According to our observations, Vietnamese people are becoming more and more familiar with making payments with cards. The trend of using credit cards or debit cards instead of cash in daily transactions like shopping at the supermarket, dining out, or paying for medical expenses is increasing and so is the volume of card payments for airlines tickets and hospitality expenses.
We also see that the trend of using credit cards for overseas payments by Vietnamese is increasing. By the end of 2015 we had observed that overseas payments accounted for 26 per cent of the total payment volume by credit cards in the year, which was a 22 per cent increase compared with 2014. Also in 2015, airline ticket purchases grew 42 per cent, with online transactions accounting for 85 per cent.
Ultimately, with the growth of technology and the welcoming mindset of young Vietnamese people towards technology use in their daily life, it is clear that digital banking can only evolve in this country. Websites such as iTunes and Amazon are now familiar names in Vietnam and require using credit card payments. Paypal is also gaining in popularity as a digital payment platform. We also see a rising trend of making card payments through Lazada, Tiki, Facebook, and other websites.
One of the factors in developing digital banking is to build trust and confidence among consumers about the security of online transactions. According to a survey by MasterCard, the reputation of an issuing bank plays a significant role in earning this trust among Vietnamese consumers. This is why we continue to invest in our security systems as well as our services and why we also became the first bank to cooperate with Visa and MasterCard to introduce verified-by-Visa and MasterCard secure code to enhance security for customers.