Current Risk Situation in Card Business Activities

Students often sign contracts with agents or do business through more modern channels such as email, phone, etc.

- The network of transaction points, ATM/POS is still limited, many points are ineffective. Currently, SeABank cardholders mainly use machines of other banks in the alliance.

From the above assessments, we can have an overall view of the inside and outside of SeABank card marketing activities to promote strengths, find ways to overcome weaknesses and take advantage of good opportunities to build a comprehensive and effective marketing strategy.

2.5. CURRENT STATE OF RISKS IN CARD BUSINESS ACTIVITIES IN VIETNAM

Maybe you are interested!

VIETNAM IN PAST TIMES

As presented above, card business in Vietnam shows great potential for development. However, the risk problem in this field has also arisen and caused many large losses, causing card business banks to pay attention and implement effective risk management measures. In the current card business, as the issuing bank and the card receiving bank, Vietnamese commercial banks must deal with the risks mentioned below.

2.5.1. Risk of counterfeit cards

Counterfeit cards are always the biggest headache for card-trading banks today. The use of counterfeit cards is very common all over the world. In order to create fake cards, card criminals go online to buy blank plastic cards and a card recorder, then attack the database of some online sales companies in the world or create fake websites of online payment service providers or even websites of card-issuing banks to trick cardholders into providing relevant personal information. Once they have the above information, criminals print fake cards and use the PIN numbers provided by customers to take advantage of spending. Although these cards are fake, they carry the information and PIN numbers of real cards, so they are completely compatible when making transactions. The risk of counterfeit cards not only occurs with foreign cardholders, issued by foreign banks, but also with cards issued by Vietnamese banks. Many customers use credit cards

International cards (Visa, MasterCard,...) issued by Vietnamese commercial banks for spending abroad have had their information stolen to make fake cards and money stolen. Vietnamese commercial banks such as VCB, ACB, ANZ,... had to exchange cards for customers after paying abroad. Besides the problem of cards issued by Vietnamese banks being counterfeited, the situation of counterfeit cards used through the card payment system of card-trading banks in Vietnam in recent years has also been very complicated, causing many difficulties as well as damage to reputation. Although banks do not lose money as payment banks, due to the high rate of counterfeiting, Vietnamese commercial banks have also been reminded many times by international card organizations. The phenomenon of counterfeit card crime in Vietnam recently is that a number of young Vietnamese people with a certain level of computer skills have organized to buy information about credit cards to make fake cards issued by foreign banks and use them in Vietnam through forms such as direct purchases at credit card service providers, cash withdrawals at ATM systems, online purchases, etc. Although cards can be counterfeited, using cards is still much safer than using cash. It is no coincidence that in developed countries, people still consume mainly by cards. In cases of counterfeit card use, financial losses are usually borne by the issuing bank and the international card organization if the cardholder can prove that the counterfeit payment transaction was not made by them.

2.5.2. Risk of card information being stolen

Stealing data on cards to make fake cards is very diverse in many forms. Card criminals can use computer knowledge, attack some websites, online sales systems to steal credit card information, or buy credit card information from other "hackers". Data can even be stolen on the transmission line from the POS to the bank or even on the telephone switchboard where the bank has to rent the line. One of the other popular ways is to install cameras on ATMs and peek at the PIN numbers of the withdrawers, then pickpocket the user's card and use the recorded PIN number to withdraw money. Another trick is to stand over the shoulder of the withdrawer and then steal the card. Banks say this simple form is not new in Vietnam. In Vietnam, the crime of stealing card information, especially credit cards, is increasing and the crime is becoming more and more serious.

2.5.3. Risk of card theft or loss

Considering the card business in Vietnam in the past, the risk of card theft when the issuing bank sends the card and PIN code to the cardholder by post rarely occurs. The main reason is that the issuing banks in Vietnam are very careful, usually banks often require cardholders to directly receive the card at the bank's transaction counter. However, cases of cardholders losing their cards, revealing their PIN code or "temporarily losing their cards" often occur, cardholders often complain to the bank about the loss of money in their accounts. Disputes about the loss of money in accounts between customers and banks are increasing. Both sides have arguments and evidence to prove that they are right. Regardless of which side is right or wrong, it still causes damage, affecting the entire market. Cardholders suffer losses in terms of time and money. On the bank's side, in addition to the possibility of material damage, there are other intangible damages such as reputation and customer trust in the bank. These are huge losses, once lost they are difficult to recover.

2.5.4. Operational risks

This risk arises in the processing of transactions and the implementation of daily business processes of bank employees. In recent years, as card business activities have developed and transaction volume has increased, risks due to operational errors of bank employees have become quite common. Operational incidents have arisen in all stages of card services such as receiving, processing customer information, installing programs, accounting, debt collection, fund transfer, verification, reimbursement, etc. Among the operational risks, some have been resolved early, money has been recovered, and no material loss has been caused, but in general, most of them have caused losses, greatly affecting the reputation and trust of customers in the bank.

2.5.5. Ethical risks of bank employees

What banks are concerned about is not only external risks such as counterfeit cards, theft of card account information, etc., but also risks from within the banking system. The risk from the ethics of some bank employees is extremely dangerous. In some countries around the world, outside criminals collude with bank employees to commit fraud.

Stealing a camera and reader to capture data on the card's magnetic strip, then counterfeiting the card and using the password obtained from the stolen recording to withdraw money has happened before.

2.5.6. Technical and technological risks

In Vietnam, ATMs often stop working due to congestion or technical failures. In these situations, customers can only wait for the machine to work again to make transactions. In particular, power outages also cause problems with transactions. Many customers have complained to banks when they were making transactions on ATMs when the power went out. Recently, banks have encountered many problems with transmission lines, causing the situation of not being able to withdraw money that has been deducted from the account, or has already been withdrawn.

2.5.7. Credit risk

When the cardholder uses the card, mainly unsecured credit, and does not pay or is unable to pay, the bank cannot collect the debt, leading to credit risk. This risk often occurs when the cardholder has used the card and encountered an unexpected accident, or the cardholder goes bankrupt, loses his job, and has no income to repay the debt to the bank. For this risk, the damage to the card issuer in Vietnam in the past has been relatively low because the credit limit that banks grant to customers is still low and mainly based on collateral.

CONCLUSION OF CHAPTER 2

Thus, it can be said that in the recent past, Southeast Asia Commercial Joint Stock Bank has achieved remarkable achievements in business activities and card product development. Revenue from card business activities has contributed significantly to the total revenue of the Bank. This is largely due to the Bank's own efforts in finding customers, perfecting products and limiting risks in card activities.

However, when compared to other competitors in the card market, the card business of Southeast Asia Commercial Joint Stock Bank is still not commensurate with its scale and inherent potential. This poses a great challenge for the Bank to always innovate, explore, promote advantages and minimize existing shortcomings to bring Southeast Asia Commercial Joint Stock Bank to a new level commensurate with the potential and capacity of the Bank.

Chapter 3

SOLUTIONS FOR CARD PRODUCT DEVELOPMENT

AT SOUTHEAST ASIA COMMERCIAL JOINT STOCK BANK

3.1. DEVELOPMENT ORIENTATION OF SOUTHEAST ASIA COMMERCIAL JOINT STOCK BANK

Established in 1994 in Hai Phong, after 19 years of development, Southeast Asia Commercial Joint Stock Bank has chosen to cooperate with leading domestic and international shareholders, most notably foreign strategic shareholders, the leading European and world banking and financial group, Société Générale (France) with 150 years of experience and domestic strategic shareholders VMS Mobifone, Vietnam Gas Corporation (PV Gas).

With its strong internal strength and foundation, SeABank always aims to become a typical retail bank in Vietnam with outstanding values in terms of brand reputation and product and service quality. All transaction points of the bank nationwide are deployed to build interiors and exteriors according to international standards, ensuring technical, aesthetic and brand identity, thereby contributing to creating a professional transaction space of a typical retail bank, bringing convenience to customers when coming to transact.

Development strategy

Building and developing SeABank to become a typical retail bank in Vietnam is SeABank's core development strategy in the coming time. In the retail banking development strategy, SeABank will focus specifically on individual customers (starting with the mass market and middle-class market, then moving towards the high-end market), but still developing small and medium-sized enterprises and some large enterprises. SeABank's products and services are designed to be diverse to suit the needs and financial capacity of each customer segment and segment.

Mission

SeABank strives to become a typical retail banking and financial group in Vietnam with outstanding values in terms of brand reputation and quality of products, services, assets... We are committed to bringing customers a set of products -

Highly professional services to meet the maximum needs of each customer, optimize customer values, shareholder benefits and sustainable development of the group, contributing to the common development of the community and society.

Vision

Strongly develop the system according to the structure of a retail bank, gradually create the model of a specialized investment bank and fully develop according to the model of a multi-functional, modern banking and financial group with outstanding value in terms of product and service quality and brand reputation.

Operating principles

Comprehensive, safe, effective and sustainable development.

3.2. IMPROVING THE UTILITIES OF THE CARD PRODUCT

Solution 1: Perfect the card product's utility to suit all customer segments.

3.2.1. Basis for solution formation

Along with the development trend of the economy in general and the card sector in particular, competition in the card market is increasingly fierce, requiring banks to constantly improve the quality of card products, bringing more benefits to users.

Currently, the current Vietnamese card market can be divided into 3 groups of banks: the market leader group, the developing and challenging group, and the third group is the late entrant or entering the market. SeABank is in the second group - the developing and challenging group. Therefore, perfecting the utility of card products has become an urgent requirement for SeABank to maintain and enhance its position in the card market.

In addition, perfecting the utility of card products is completely consistent with the development orientation of becoming a typical retail bank in Vietnam with many diverse products and services.

3.2.2. Objectives

Perfecting the utility of card products to attract a large number of customers to use this popular payment channel at Southeast Asia Commercial Joint Stock Bank, especially

especially targeting new customers, potential target customers. Through that, Southeast Asia Commercial Joint Stock Bank gets closer to the direction and strategy of developing card products, creating a certain position for the Bank in the increasingly competitive card market.

3.2.3. Implementation content

To complete the utility of the card product, attention should be paid to the following aspects:

3.2.3.1. Increase payment limit and withdrawal limit of issued card

All cards issued by SeABank divide the daily transaction limit into 2 types: payment limit and cash withdrawal limit. However, with the characteristics of the current Vietnamese economy and the cash spending habits of Vietnamese people, the withdrawal limit of SeABank's S 24+ card needs to be increased. Although the card's cash withdrawal limit has been changed many times to suit the market and the Government's cashless policy, the current cash withdrawal limit of 20 million/day and a maximum of 2 million/time still does not satisfy customers' cash needs.

With SeABank visa cards (including Deferr and Debit) used for more payments, although the payment limit is divided according to the card class for customers to choose according to their spending needs, customers have to pay a higher annual fee corresponding to the card class used. This is the deciding factor for customers to see which bank's card to use for more convenience and lower costs. To compete with strong card banks such as ACB, VCB, SCB, Dong A..., SeABank needs to increase its Visa card payment limit corresponding to these banks.

3.2.3.2. Diversify types of issued cards

Bank cards need to be diversified to suit different customer groups.

to get advantages and benefits that are superior to using cash.

SeABank's current card users are limited to: Students, civil servants, employees, businessmen, and high-income earners. Therefore, in the near future, SeABank needs to target the temporarily overlooked customer groups: Teenagers (15-18 years old) and employees with different consumption characteristics that have not been paid attention to, so there are still no products.

Comment