Mr. Phung Duy Khuong, Director of Retail Banking at Vietinbank, believes demand for retail banking in Vietnam will continue on its upwards trajectory.
There can be no question about the potential of retail banking in Vietnam. Over the last three to five years many banks, especially joint stock commercial banks, have paid significant attention to its development. With the country’s micro-economic stability, incomes have risen and led to greater demand for spending and using retail banking services and this presents a range of opportunities to commercial banks. Similar to other countries in the Asia - Pacific region, the development of retail banking is here to stay and the potential for large commercial banks remains substantial.
As for challenges, retail banking consists of various products and services: individual deposits, credit products, bank cards, and e-banking, among others, each of which are accompanied by their own particular difficulties. For example, in credit products, the opportunity lies in how many individuals would like to take out loans, but verifying their income is problematic. In other countries, 80 per cent of individual customers earn a salary, so verification is quite straightforward. In Vietnam, however, 80 per cent of individuals earn income from self-employment, which makes verification so much harder. Information on historical transactions is also not available, while in other countries customers will have a transaction history with at least one bank.
We have seen positive growth in recent years but it remains modest compared with regional countries such as Singapore and the Philippines. Changing customer behavior and encouraging them using bank cards instead of cash is the greatest challenge to be overcome.