2020 has seen many banks performing digitalization in Vietnam. I’ll summarize my understanding of the implications of this trend.

Increase Customer experience

• Imagine us having to drive to a physical bank branch, park the bike, wait in queue for hours, just to do something super simple (e.g: bank account sign up, borrowing), we would appreciate how quickly such things could be done online in only minutes. 
• Therefore, banks would much better improve customer experience if they could bring their services online.

Personnel implications

Reducing the number of bank tellers

• Decreasing customer-facing needs

Increase capability building

“Universal banker”: trained and equipped to handle a wide range of tasks related to banking and can manage sensitive financial customer requests from beginning to end.

• With traditional banking, up to 70% of the daily tasks of a banker is manual work; e.g: hardcoding customer data, filing. This leads to the “specialization” nature for bankers, in which each person has one assigned role (welcoming, instructing customers, …).
• With digitalization, the amount of these tasks is substantially reduced. Instead, bankers are now expected to perform a wider range of tasks, e.g: introducing borrowing options, insurance. This creates a strong demand for bankers to build up their capability.

Revenue implications

Increase the number of customers served

• Think of a simple traditional bank that opens 9-5 (most of us can’t even go outside of work/school during this time) in certain locations that can serve only a limited number of customers. With digitalization, the serving capacity is tremendously widened (not to say unlimited)

Strengthen additional services offered

• The largest proportion of a bank’s revenue is from interests that come from lending.
• However, services revenue is demonstrating an increasing trend. Digitalization’s freeing up manual tasks creates room for more value-added ones, e.g: advisory.

Economies of scale

• In terms of data: the more customers a bank has, the more data it could acquire, and hence possible patterns (e.g: spending, borrowing patterns) could be drawn. That creates chances for banks to offer even more customized extra services that bring income.

Sources:
1. Glassdoor. (2020) What is an Universal Banker?. Available at: https://www.glassdoor.com/Job-Descriptions/Universal-Banker.htm [Accessed on Jan 6th, 2021]