Development Orientation of Non-Credit Services of Vietnamese Joint Stock Commercial Banks to 2025 and Vision to 2030 Vietnam is Being

digitalization of services and strong application of digital technology, open cooperation such as: agent banking model; electronic banking identification (e-KYC); e-money, open API; Regulatory Sandbox project for Fintech in the banking sector; Upgrading and building important payment systems in the economy (interbank electronic payment system - IBPS, automatic clearinghouse infrastructure - ACH); building and deploying unified standards for QR Code payment, domestic Chip card standards... ensuring compatibility and interconnectivity.

At the same time, promote international cooperation in the field of financial technology (between Banks and Fintech) to provide convenient, on-demand, and reasonably priced banking and financial services, targeting those who have not accessed traditional banking services (unbanked), contributing to increasing the coverage of banking services to people and businesses. In addition, banks focus on applying digital technology in management, monitoring, data collection and analysis, along with improving and automating processing procedures, promoting cooperation in the field of monitoring and managing cybersecurity risks and enhancing security.

In addition, the banking industry has been actively coordinating to develop and implement the National Strategy on Financial Inclusion, thereby raising awareness, knowledge and financial skills of consumers in the banking-finance-payment sector. Financial communication and education work has been promoted in a familiar, easy-to-understand and practical form aimed at disadvantaged groups in society, thereby improving knowledge and skills in using banking products and services while improving people's access to banking products and services.

Challenges in developing non-credit services of Vietnamese commercial banks in the coming period

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Firstly, the Industrial Revolution 4.0 and the Fintech trend promote strong competition, attracting a large number of technology solution providers, businesses selling goods and providing services to cooperate with commercial banks to provide modern non-credit products, meeting the increasing demand for convenient products and services of customers, maximizing bank profits.

However, this trend is also posing major challenges for the banking community because Fintech companies are competing to attract customers and expand market share, especially in payment transactions, financial management, investment portfolio management, etc., areas previously considered traditional business activities and the exclusive playground of commercial banks. Therefore, if commercial banks do not continue to proactively apply new technology and boldly invest in modern equipment, they will lose market share and customers.

Second, technological advances and forecasts of the emergence of alternative non-credit products in banking transactions and applications in the above-mentioned bank payment services will take place in the coming years, but currently in Vietnam, many commercial banks are still trying to develop the card market. Therefore, Vietnamese commercial banks need to quickly recognize the changes of the majority of customers, and make necessary movements according to the trend of the 4.0 Industrial Revolution.

Third, there is still a legal gap in the banking sector, especially in non-credit services related to digital technology. It is urgent to create a complete legal and policy environment to perfect and develop financial technology solutions, in accordance with market needs and the legal framework according to current practices, to promote safe non-cash payment activities and limit risks for customers when using banking services.

3.1.2. Development orientation of non-credit services of Vietnam Joint Stock Commercial Banks to 2025 and vision to 2030 Vietnam is considered one of the fastest growing economies.

in the world in terms of demand for banking and financial services. Deep and wide economic integration has opened a healthy playing field for banks when Vietnam removed all barriers for foreign commercial banks according to its commitment when joining the WTO. Foreign banks will be able to develop more freely, so Vietnamese commercial banks need to have a policy of constantly improving their products and enhancing their services to compete in the open market.

In the context that the State Bank of Vietnam is requiring commercial banks to control credit growth, Vietnamese commercial banks are finding their own way to develop non-credit services.

Developing non-credit service segments to bring low-risk profits to banks is a policy chosen by many Vietnamese commercial banks. However, this is not an easy channel to increase profits for banks in the current context. In the current period, the development of non-credit services at Vietnamese commercial banks can be implemented according to the following directions:

3.1.2.1. Be proactive and creative in approaching non-credit services suitable to the capabilities of each bank.

In the general context of the economy, banks need to pay more attention to creating creativity and dynamism in developing non-credit services. However, depending on the capacity of each bank, they must know how to choose and focus.

For capital mobilization activities, mobilize maximum domestic and international capital sources to meet the credit capital needs of the economy by diversifying methods and forms of capital mobilization in VND and foreign currencies towards increasing medium and long-term mobilized capital.

For payment services, focus on modernizing the technical infrastructure and banking payment system to ensure safety and reliability. Improve payment utilities through banks and closely cooperate between credit institutions in electronic transactions and online transactions, while promoting investment, research and application of new payment tools according to international standards to encourage economic sectors, including individual customers, to use payment services through banks.

For foreign exchange services and investment operations in the financial market, concentrate foreign currency resources on the banking system to best meet and control the reasonable foreign currency spending needs of businesses and individuals, while reducing dollarization. Deploy foreign currency derivative products: forward trading, foreign currency swaps and option contracts to better meet customers' foreign currency needs, improve the ability to hedge against exchange rate risks and

encourage the development of the foreign exchange market, promote import and export, attract foreign investment capital, remittances, promote economic growth.

For other services such as insurance business, brokerage, underwriting, cash management, portfolio management, financial and investment consulting, custody; asset preservation; asset management services under customer authorization; gold trading... must become important complementary services in the strategy of diversifying business activities, expanding the customer base and maximizing the exploitation of facilities and capacity to provide banking services. Develop banking services in conjunction with non-bank financial services; form a comprehensive and diverse banking service system to meet social needs for financial services to encourage organizations and individuals to save and effectively invest savings assets on the basis of expanding access to financial services, banking and business opportunities.

3.1.2.2. Technology development, focusing on the key goals of a modern bank that can easily compete and integrate

Quickly approach modern management and operation methods. Be bold, take seriously, and focus on researching the expansion of new but potential banking services. Banks need to have a synchronous and smooth coordination in expanding modern banking services that can be linked together to compete effectively and develop together.

There are many relatively new services such as search support services, information forecasting, consulting services, securities underwriting, foreign exchange trading on behalf of a customer... These are services that foreign banks will fully exploit when entering Vietnam.

3.1.2.3. Focus on developing non-bank financial services

This is an important supplementary service in the business strategy of banks such as insurance services, securities trading and brokerage, underwriting, cash and portfolio management, financial consulting, etc.

3.1.2.4. Focus on human resource development

Pay attention to training and improving the qualifications of human resources in the banking industry. Cooperate with training institutions to provide high-quality human resources to find

create active and proactive training models, closely linked to dynamic practice. Banks always pay regular and serious attention to new training and retraining of resources for the banking industry. Support and coordinate with training institutions to train students right from when they are still in school according to the needs of banks.

3.2. SOLUTIONS TO DEVELOP NON-CREDIT SERVICES OF VIETNAMESE JOINT STOCK COMMERCIAL BANKS

3.2.1. Developing the scale of non-credit services

3.2.1.1. Diversify and improve existing products and services

It can be said that diversifying products and services and improving existing products and services are some of the basic solutions to help banks develop the scale of non-credit services, expand customer segment market share, and increase competitiveness in the financial market. Each banking product and service is a combination of closely following customer needs and responding to market trends.

Currently, diversifying and perfecting products and services in a modern direction is a major concern of all banks in order to exploit the retail market with the goal of creating attractive differences for their products. For each different bank, depending on the strategy of developing consumer services, on the characteristics and target customers, the method of developing products and services has differences, however, basically, diversifying and perfecting existing products can be done in the following directions:

Simplify service delivery processes, equip multiple means of transaction for traditional service products .

Traditional banking products and services need to be improved in a more complete, streamlined manner, shortening transaction times, and moving towards customer needs rather than imposing their own products. For traditional payment services, banks need to increase convenience and accessibility for customers, such as placing more ATMs at crowded places, periodically maintaining machines, promptly checking for congestion, running out of money, and temporarily suspending services to promptly fix problems; enhancing current features

There are cards such as paying for electricity, water, internet, shopping quickly and safely; domestic and international money transfer services that customers can perform and check online; money transfer services for studying abroad, medical treatment, remittances, Western Union money transfer services, international payments are performed quickly and safely, customers can withdraw at other branches through linking with many banking systems, reasonable service fees; promote to customers the benefits of treasury services, safe deposit box rental, asset custody, encourage customers to use cheques in payment to ensure safety, ...

Digitize existing non-credit products and services, especially online services based on financial technology application platforms

Currently, the trend of financial technology associated with the 4.0 industrial revolution not only shifts the distribution channel of traditional banking products and services from physical branches and ATMs to digital, but also helps banks interact effectively with customers. Therefore, commercial banks need to change the structure of non-credit products and services towards digitalization, supporting banks to gradually become digital banks, providing new utilities and experiences and bringing practical benefits to customers.

To digitize existing products and services, commercial banks need to promote the application of some financial technologies such as:

(i) Applying artificial intelligence (AI) in implementing customer services, specifically chatbots and robots, to make customer services as accessible as possible, such as allowing users to access 24/7 to perform banking activities... At the same time, this is also a tool to help banks enhance security; prevent and detect fraud.

(ii) Blockchain technology: this is a technology applied in payment and transfer services in the banking system, helping banks build an automatic customer identification and authentication system (eKYC).

(iii) Big data: collect and analyze data generated by transactions such as credit card swipes, ATM withdrawals, online transactions to determine customer spending behaviors and habits in order to make reasonable decisions in development.

DVPTD and maintain competitive advantage in the future.

(iv ) Robotic Process Automation (RPA): With the advantage of saving manpower, operating costs and minimizing errors, commercial banks need to take advantage of this technology to automate and create the best customer experience to maintain a competitive advantage. When deploying RPA, the software is programmed to allow robots and virtual assistants to complete repetitive and laborious tasks accurately and quickly without human intervention, helping banks handle customer questions and concerns automatically. At the same time, the application of this technology helps commercial banks develop integrated non-credit products and services on an online digital technology platform via the internet and smart mobile devices such as: booking train tickets, bus tickets, airline tickets, hotel rooms, buying movie tickets, depositing savings, paying for essential life services such as electricity and water bills, telecommunications and internet bills, collecting the State budget, bilateral payments between the State Treasury and units, expanding online deposit products, quickly approaching the retail market with diverse personalized products and services to best meet people's spending needs.

(v) Open Application Programming Interface (API) : helps banks access customer data more easily by making customer data available to third parties that do not have a formal relationship with banks. Data sources collected based on customer relationships, banks and fintech companies will help banks make improvements to differentiate customer experiences to maintain and develop existing products and services.

It can be said that the application of science and technology creates a foundation for building strategies to develop consumer services suitable for a variety of customers, specific consumer services suitable for the strengths of each bank's customers. Develop more diverse consumer services in association with financial companies, businesses, insurance, real estate, tourism services, electronics supermarket systems, e-commerce websites, etc. to strengthen the smart supply chain towards many new customer segments. Promote non-cash payment services, e-banking

contribute to promoting the development of the financial ecosystem, becoming a part of the ecosystem in the supply chain of modern financial and banking products and services.

+ International payment services

Continue to expand the network of branches of State-owned commercial banks in the international market by establishing representative offices, establishing agency relationships, participating in international payment associations to continue to seek new markets, expanding the scope of international payments. To do this, State-owned commercial banks must have a team of good employees, knowledgeable about the market, business practices in the international market. Promote the development of new services, package services in international payments for customers such as services combining international payments - foreign currency trading.

+ Treasury services

In addition to existing services such as checking, counting, collecting and paying on behalf of customers

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State-owned commercial banks need to deploy more services such as safe deposit box rental and cash collection and payment.

mobile at personal addresses. As the economy grows, the needs of

The higher the people. To attract this service, the State-owned commercial banks need to ensure factors such as: Modernity, safety, convenience and privacy. For the service of collecting and paying mobile cash at personal addresses, the bank needs to be fast and safe. And this service requires the bank to promote and advertise widely so that customers know.

3.2.1.2. Developing new non-credit services

+ Deposit, payment account and treasury services

In the context of fierce competition in the field of providing financial products, diversifying and developing new products and services has become a vital factor, deciding the retention of old customers and expanding new customer segments for commercial banks.

Develop multi-functional deposit service packages integrating financial management consulting for individual customers.

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