Banks plan to increase investment to promote digital transformation

Digital banking transformation or digital transformation is the integration of digitization and digital technology into all areas of banking.

According to Vietnam Report Joint Stock Company, in June 2023, this agency conducted a survey of most member units of the commercial banking system nationwide and noted that: 100% of banks affirmed that they will continue to promote the process of digital banking transformation and enhance network security in the coming time. This is the number one priority in the Top 5 key strategies that the entire banking industry needs to implement this year.

All banks surveyed said they plan to increase their budget for cybersecurity and safety programs in 2023, with 42.9% of banks planning to increase by 6-10%; 28.6% of banks chose to increase by 15% or more, and the remaining banks increased by less than 5%. Resources are expected to focus most on adding cybersecurity technology solutions as well as focusing on risk management and compliance, with the expectation that these efforts together will contribute to creating a more flexible, convenient, and safer and more secure banking environment.

Based on the survey results, the Top 6 technologies with high application levels and correlations with banking operations have been identified. On a scale of 5, cloud computing is the technology that is rated to have the highest correlation to banking performance with 4.4 points.

It is also the technology with the highest level of application along with multi-channel integration. Cost efficiency is a significant benefit that cloud computing technology brings as it provides banks with the ability to expand their IT infrastructure based on demand, reducing capital investment and maintenance costs on hardware and data centers.

Banks also said that in the coming time, their digital capabilities have great potential to continue to be improved through the ability to exploit the most advanced technology applications such as AI, machine learning, blockchain, etc., contributing to increasing customer experience and promoting new financial products, Mr. Vinh said.

The continuous promotion of digital transformation in the banking industry is an irreversible trend as users increasingly pay attention to digital solutions. A survey of bank customers conducted by Vietnam Report in June 2023 also showed that banks having attractive and convenient digital solutions and applications is the most important concern for customers when choosing banking services, at a rate of 84.5%.

Meanwhile, 85.8% of customers admit to interacting with mobile banking apps on a daily basis, up from 58.1% in 2022. This reflects the growing acceptance and adoption of digital channels for financial activities and demonstrates that these apps are meeting customer expectations for a seamless and efficient banking experience. Customers are embracing the shift to digital banking and are comfortable using mobile devices to manage their finances.

According to statistics from the State Bank, by the end of 2022, the banking industry had invested more than VND 15,000 billion in digital transformation activities. In the past 4 years, the growth of digital payments in Vietnam has been maintained at 40%, making it one of the countries with the fastest growth in digital banking applications.

Witnessing the explosion and rapid acceleration of digital transformation activities in recent years, increasing investment in digital technology is agreed by all banks to be the strongest driving force for the industry's growth in the coming time. Banks participating in Vietnam Report's survey all said that digital transformation has a clear impact on their profits or operating efficiency compared to the previous year; of which, up to 71.4% of banks stated that digitalization has a strong impact on their business results as well as their efficiency, the remaining 28.6% recorded strong impacts from digital transformation in the past year.