CHAPTER 3: DIRECTIONS AND SOLUTIONS FOR BUILDING CUSTOMER STRATEGIES OF VIETNAMESE COMMERCIAL BANKS
IN THE PROCESS OF INTERNATIONAL ECONOMIC INTEGRATION.
3.1. Vietnam's international economic integration and issues raised in building customer strategies of Vietnamese commercial banks.
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3.1.1. Requirements of international economic integration for the banking industry
3.1.1.1 Viewpoints of the Party and the banking industry on international economic integration
International economic integration is an inevitable trend and an objective requirement for any country in the context of economic globalization today. Integration is essentially a struggle to gain markets for goods, capital, and technology, in order to take advantage of external potentials, combined with the maximum exploitation of internal resources to continuously enhance the economic potential of the country. All countries strive to integrate into the general trend for their own existence and development. Large and small countries, countries with "closed" economies all adjust their economic structures, implement open-door policies, and gradually integrate into the regional and world economies.
The policy of developing an open economy has been determined by our Party and Government since the founding of the Democratic Republic of Vietnam in 1945 and in the documents of the Party Congress. The 9th Party Congress clearly stated Vietnam's policy and motto as "Proactively integrating into the international and regional economy in the spirit of maximizing internal strength, enhancing the effectiveness of international cooperation, ensuring independence, self-reliance and socialist orientation, protecting national interests...". The policy of integration, participation in regional and global economic organizations, especially joining the WTO, was once again affirmed by the Politburo in Resolution 07-NQ/TW dated November 27, 2001 on economic integration.
international. Accordingly, the goal of international economic integration is to "Proactively integrate into the international economy to expand the market, mobilize more capital, technology, and management knowledge to promote industrialization and modernization in the direction of socialism, realize a rich people, a strong country, a fair, democratic, and civilized society, and first of all successfully carry out the tasks set out in the 5-year plan 2001-2005". Also in the spirit of this Resolution, to gain the initiative in the integration process, Vietnam needs to build a banking system with diverse forms, prestige with customers, effective and safe operations, improve competitiveness, mobilize maximum idle capital in society, and expand investment to meet the needs of industrialization and modernization of the country.
On March 31, 2003, the Governor of the State Bank signed Decision No. 42/2003/QD-NHNN on the Action Program on international economic integration in the banking sector, which clearly stated 7 main tasks of the banking sector in international economic integration, including: Information and propaganda work; Building, amending and supplementing laws; Perfecting the overall strategy on international economic integration; Building financial and monetary policy mechanisms, improving competitiveness; Negotiating to join the WTO; Training human resources; and Expanding the market, attracting investment and technical assistance from countries and international organizations.
International integration poses many challenges but also brings enormous benefits. To avoid being left out of the development process, developing countries have been participating more and more actively in the integration process in the financial and banking sector.
Expanding international economic integration in the financial sector, Vietnam's banking industry has the opportunity to take advantage of capital, technology, management experience and develop various types of business activities, and has the opportunity to exchange and develop.
international cooperation relationships, as well as taking advantage of and promoting their relative advantages. However, Vietnamese banks will also have to face many new challenges and risks in management and competition when foreign banks will soon be allowed to participate in a level playing field with domestic banks.
3.1.1.2 Requirements of international economic integration for the banking industry
In order to integrate into the international economy in general and into the international banking system in particular, in addition to determining the appropriate roadmap and steps, Vietnam needs to make efforts to reform the banking system. The banking system must be strong enough, operate effectively, have the ability to do business independently and adapt to changes in the market economy, creating conditions to promote exports, investment and stabilize economic growth. The direction of reforming the Vietnamese banking system to meet integration requirements is as follows:
Building a strong State Bank.
In the banking system, the State Bank plays the role of macro-management, operating monetary and credit activities. The basic operational objectives of the State Bank are to stabilize the value of money, create conditions for economic development, and ensure that the banking system operates in a legal order, stable, safe and effective.
The State Bank of Vietnam currently operates mainly by direct administrative tools, and has not really promoted its role in macro management and supervision; the organizational apparatus is still cumbersome and ineffective... Compared to the rapid development of the country, especially in the process of international economic integration, the State Bank of Vietnam needs to make bigger changes to become a bank on par with state banks in the region and the world. The reform of the state bank meets the requirements of integration, specifically:
- Create a fair competitive environment among credit institutions with a complete legal environment, in accordance with international standards and practices. Play the role of the final interventionist in the banking system.
- Ability to plan good policy tools, capable of regulating the monetary market and the foreign exchange market to achieve desired goals. The most important thing is to maintain monetary stability with low inflation, stable exchange rate with export encouragement.
- Have a strong, responsive inspection system to maintain the safety of the banking system.
Improving the competitiveness of Vietnamese commercial banks
In the integration trend, the development of a multi-functional commercial banking system with the ability to compete in the international business environment is very important. This is a common trend in the world (merging to form large-scale banks). Moreover, multi-functional banks with strong potential have a competitive advantage in capital mobilization and allocation and greater endurance in unstable situations.
As analyzed in chapter 2, the current system of Vietnamese commercial banks has low competitiveness, weak financial capacity, too small equity, and monotonous banking products and services. Participating in international integration in banking, Vietnamese commercial banks are forced to improve and enhance their financial capacity and operational quality to compete with foreign banks. Banks must specialize more deeply in their operations, improve credit quality, constantly improve and develop new products and services, modernize banking technology, and improve human resources to regional standards. Build and develop appropriate operational strategies based on a correct assessment of strengths, weaknesses, challenges, opportunities, and the new business environment, in line with the roadmap for opening the financial market.
The Government has committed to multilateral and bilateral agreements on trade in services.
Developing banking technology to catch up and be on par with the region and the world
gender.
Modernizing banking technology and information technology in the system
The banking system is both an internal requirement and an urgent requirement of development and international economic integration.
Currently, banking technology and information technology in our country's banking system are still very backward compared to other countries in the region and the world. The modernization of banking technology has only stopped at the implementation of electronic banking services, modern payment tools have not been popularized. The level of application of information technology in the banking system such as management information systems, interbank payment systems, and electronic transaction systems is still low. The situation of cash payment is still common, causing difficulties in the management and regulation of currency circulation.
In the coming time, Vietnam needs to combine the process of perfecting, improving, and enhancing the financial potential of banks with accelerating the process of modernizing banking technology to bring the level of banking technology and information technology of our country's banking system up to par with advanced countries in the region and the world.
3.1.2. Impact of international economic integration on customer strategy of Vietnamese commercial banks
In the process of international economic integration, Vietnamese commercial banks will have more opportunities in terms of resources, technology, and market, but on the other hand, they will have to face challenges and risks when the current competitiveness of banks is still low compared to other commercial banks in the region. Advantages and disadvantages
This difficulty also has an increasing impact on the customer strategy of Vietnamese commercial banks.
Opportunity:
International economic integration creates many opportunities for international exchange and cooperation on financial and monetary issues, attracting international capital flows, accessing modern technology and management skills, thereby enhancing the prestige and position of the Vietnamese banking system. Economic integration creates a driving force for banks to improve their management and business operations capacity, and operate according to well-developed strategies. Vietnamese banks have more business opportunities and more customers in the import-export sector.
Economic integration and development bring about changes in business culture and public consumption of banking services and utilities. The constantly improving per capita income will increase the public's demand for savings and financial investment and the use of banking services for daily life. Many new banking products and services will have the conditions to be successfully implemented.
With advantages in branch network, scope of operations, customer relations and deep penetration of the domestic market, Vietnamese commercial banks can further expand and exploit their market share to target customers.
The development of information and communication technology will create a new technical foundation for the development of advanced banking technology with high-tech products to meet the diverse and civilized needs of customers. This will bring banks to a modern business culture, changing the way of doing business and banking transactions, especially when
Internet - an indispensable means in community life and e-commerce, has become an important part of business.
Challenge:
In the process of international integration, opening up the financial market, loosening restrictions on access to the domestic financial market for foreign banks will increase the number of competitors. Vietnamese commercial banks with small charter capital and business scale will have to face competitors with economic potential, management level as well as business ability.
Increasing international integration in the banking sector, opening up the financial market, and loosening restrictions on access to the domestic financial market for foreign banks will increase the number of competitors. Domestic commercial banks will have to accept fierce competition to survive and develop.
Customer demands are becoming more and more demanding and this can be considered as one of the results of increased competition. Meanwhile, the level, capacity and many types of domestic banking operations have not yet reached the rapid development of the international and regional currency market. Banks still lack highly qualified staff to meet the increasingly high development needs of customers, especially the analysis, forecasting, evaluation and strategic planning departments. Vietnamese commercial banks will increasingly find it difficult to attract customers, and the market may gradually narrow.
The process of international economic integration with commitments to reduce tariffs and eliminate State protection policies will negatively affect the business results of many enterprises in fields such as fuel, fertilizer, iron, steel, cement, sugar, paper, etc. These are fields that are being
The state protects tariffs, so there are not many competitive advantages when integrating. Meanwhile, Vietnamese commercial banks are currently investing quite heavily in these areas. International economic integration puts banks and businesses in front of great challenges and vulnerabilities.
3.2. Experience in building customer strategy of foreign commercial banks
The process of customer strategy planning is a separate management activity of each bank, which is confidential and cannot be made public. Therefore, this thesis studies the experience of implementing modern technology applications of some Asian banks to create conveniences for customers and customer attraction strategies at an American commercial bank.
3.2.1 Customer strategy at commercial banks in some countries around the world
Asian Commercial Banks [4]
After the Asian financial crisis, the market has changed a lot, the competitive pressure is stronger due to the trend of financial liberalization, leading to banks having to provide depositors with diverse services with more flexible and attractive terms. Asian commercial banks compete to create convenience for customers through many activities such as: retail banking services, mergers and acquisitions of small banks to attract new customers, joint ventures with foreign countries to learn experience in capital management and securities brokerage. For example, Sakura Bank recently joined with Fuzitsu, one of the largest computer manufacturers in Japan to establish a bank specializing in Internet banking services. In 2001, Dai-ichi Kangyo Bank provided telephone deposit services with special interest rates 0.5% higher than normal deposit rates for foreign currency term deposits with a value of 10,000 USD or more. In addition, the bank also provides special term deposit services, allowing customers to withdraw