Diversifying Transaction Forms and Distribution Channels for Non-Credit Services

Customers use the service with promotional after-sales policy.

Providing quick and effective advice to customers throughout the transaction process will help customers better understand the services, contributing to making the product and service portfolio of Vietnamese commercial banks more attractive to businesses and individuals, thereby helping Vietnamese commercial banks retain customers. Therefore, in the coming time, Vietnamese commercial banks need to focus resources on implementing customer consulting services, customer care support, in which efficiency and professionalism must be put first. At the same time, set up a spacious, airy information desk, waiting counter or consulting room with wifi system and some computers so that customers can access the internet and receive advice on non-credit services, arrange staff with solid professional knowledge, polite and enthusiastic to promptly meet customers' needs such as: Introduction, consultation, explanation of transaction steps/processes, customer guidance.

Vietnamese commercial banks need to soon build a perfect Contact Center system, which is a bridge between customers and banks, a place to focus on handling all customer requests through modern communication channels such as telephone systems, emails and other online media to guide, provide and answer information, bringing satisfaction to customers. In terms of technology, Contact Center is a higher development step of the previous Customer Response Center (Call Center). If the call center is mainly a form of communication via telephone (the most visible image is many employees sitting by the phone to answer customer calls), then Contact Center is a unified combination of methods of interaction with customers, from telephone, email, website to chat (direct conversation) or instant messaging. Contact Center allows comprehensive control of interactions between customers and businesses. Calls, emails, chat sessions to the center are strictly managed and coordinated for timely responses. This not only diversifies the form of communication with customers but also increases the quality of service. Select and train the staff of the Contact Center department to bring the highest efficiency.

As customer needs become more and more diverse, the level of competition

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Competition in the market is increasingly fierce, banks pay attention to improving service quality, ensuring the attractiveness of products to retain and attract customers to use their services. Customer satisfaction with service quality is a vital factor and the main goal that banks pursue.

Not only using direct communication channels with customers, Vietnamese commercial banks can also apply many different forms to strengthen relationships with customers such as: Participating in corporate events (annual summaries, participating in social activities, co-sponsoring with businesses, etc.); personalizing relationships, the board of directors increases meetings and information exchanges with customers, including issues beyond the scope of meetings, which will create a close bond between customers and the bank; organizing sports and cultural exchange programs between banks and businesses; supporting new product introductions for customers. Strengthening connections with customers through signing cooperation programs, strategic partnerships, etc.

3.2.3.5. Building a Marketing Strategy

Banks need to promote marketing activities to create an image in the eyes of customers through the following activities:

Improve marketing skills and knowledge for staff, especially those who directly interact with customers. This is also the face of the bank, which can create sympathy in customers or not.

Participate in advertising, propaganda, product introduction and promotional programs, and leaflet distribution activities.

Participate in social activities, sponsor useful programs on television to create a good image in customers such as sponsoring scholarships, participating in building charity houses, sponsoring programs to surpass oneself...

Design a website with high usability and an interface that can attract customers' attention, advertise new and modern products and services on the website with unique slogans...

In Vietnam, by the end of 2019, there were 64 million internet users, an increase of 28% compared to 2017, accounting for approximately 66% of Vietnam's population and the number of internet users is still increasing rapidly. The number of 64 million internet users has become the target customers of many businesses, including banks.

Like other sectors, banks are also aware of the importance of online marketing, but because online marketing is still quite new in Vietnam, in reality, not all banks can thoroughly implement online marketing. Online marketing tools that can be applied at banks in Vietnam include:

Onsite Marketing: is understood as marketing right on the bank's website.

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SEO: (short for search engine optimization) is the process of optimizing content

text and website structure so that search engines can choose the most suitable website to serve Internet searchers. Simply put, SEO is a set of methods to bring a website to the TOP 10 position (first page) in the search engine results pages.

Online Support: Online Support includes live chat tools and customer support emails.

Email marketing: Email marketing is a channel that many banks are using and want to use because email marketing reaches the right target customers, at the right time and information is transmitted quickly. Banks can proactively adjust the time to send and receive emails from customers, can commercialize (integrate website links), have a variety of design styles and rich content expressions. On the other hand, email marketing saves at least 75% compared to other forms of advertising, allowing customers to respond and measure the effectiveness accurately to each recipient of the message.

Social media: Social media is no longer strange to internet users and the use of virtual social networks for marketing is becoming more and more popular. Banks can create accounts on social media and connect with customers.

you with many target customers, or you can create a Fan page and try to attract many customers to participate. Whenever the bank has a promotion program or wants to convey some information, just insert the content on the wall, immediately, that information will appear on the home page of the target customers.

PR online: (abbreviation of Public Relation) is a term referring to work related to public relations, therefore, PR online is understood as work related to public relations on the internet environment. PR online includes building understanding, awareness and creating a good image of the bank on the internet environment; controlling multi-dimensional information about the bank to promptly handle risks and bad information about the bank.

Promotion: Online events are also a very effective channel for banks to use in promoting their image. By sponsoring or being a payment partner for online events (online auctions, online fashion fairs, etc.) or organizing online events themselves, banks can attract the attention of many internet users.

Online advertising: Online advertising is the combination of many different advertising methods to promote products, services or promotional programs of the bank, including: text advertising, banner advertising, video, rich media, etc. For advertising to be highly effective, banks need to pay attention to the target audience and to measure effectiveness. Usually, banks use Google Analytics or build their own software to evaluate effectiveness. Online advertising has a relatively high cost compared to other online marketing tools. [48]

Thus, in order not to ignore the increasing number of potential customers on the internet environment, banks need to pay attention to implementing online marketing. Each marketing plan can use only one tool or combine many online marketing tools at the same time to create the highest efficiency.

3.2.3.6. Diversify transaction forms and distribution channels of non-credit services

With the motto "bringing the bank to the customer" to create convenience for

customers, opening many transaction channels to increase the number of customers and thereby contributing to creating the image and brand of Vietnamese commercial banks to the public. Vietnamese commercial banks need to review the current distribution channel network to adjust the distribution channel density appropriately, avoiding the situation of too many branches/transaction offices/ATMs operating in the same area. It is necessary to expand traditional distribution channels such as branches, transaction offices, transaction points in newly developed areas/regions to capture the market right from the beginning. In addition, Vietnamese commercial banks should study the establishment of transaction points right at the offices of customers with large transaction levels.

Increase the efficiency and self-service capability of the ATM system to provide a variety of services at lower costs, upgrade the ATM system into “mini banks” spread across provinces and cities. At the same time, develop a network of card acceptance points (POS) and strengthen the connection between commercial banks to improve efficiency and expand the ability to use ATM and POS cards.

Develop computer banking and home banking to take advantage of the growth of personal computers and internet connectivity. Vietnamese commercial banks need to soon introduce new services so that customers can place orders, make payments, check balances and receive information about commitments between banks and customers.

Developing telephone banking, this is a popular model with low cost, convenient for both customers and banks. Customers can make transactions at any time, any place.

Expand distribution channels through agents such as remittance payment agents, ATM card issuing agents, and payment agents.

Installing banking kiosks means installing work stations on the street with high-speed internet connection. When customers need to make transactions or request services, they only need to access the system, provide their personal identification number and password to use the banking system to serve them. Initially, this kiosk can be installed at the headquarters of commercial banks, then deployed in two major cities, Ho Chi Minh City and Hanoi. Currently, in Vietnam, banking kiosks

is considered a fairly new transaction channel, so if any commercial bank successfully implements it early, it will raise its reputation and brand to a new level in the Vietnamese service market.

3.2.3.7. Standardize business processes

Vietnamese commercial banks need to pay attention to standardizing business processes to ensure both strictness and convenience for customers when transacting through the following:

Simplify procedures and business processes, shorten transaction time but still ensure strictness, accuracy, timeliness and convenience for customers to serve customers better and better.

It is necessary to develop standard business processes, then conduct guidance, training and uniform implementation throughout the system to avoid cases where each branch guides customers with inconsistent processes and procedures.

3.2.3.8. Building and controlling the profit ratio from non-credit services

Vietnamese commercial banks are aware that they need to abandon the habit of only doing business in the credit sector, competing with interest rates and exchange rates, and encroaching on market share mainly by expanding their networks because this competition makes input costs high, has many potential risks, and is inefficient... Therefore, first of all, the banks themselves must realize the need to develop non-credit services to limit risks and bring significant benefits to the banks. Only with such awareness can the banks themselves devise a service development strategy with a reasonable structure to minimize risks, in line with the trends and practices of developing banking services.

From awareness to action, Vietnamese commercial banks quickly started to build specific solutions to develop non-credit services.

Joint stock commercial banks need to restructure the proportion of profits from their business activities towards focusing on developing non-credit services and short-term credit. Medium and long-term credit services are transferred to non-bank financial institutions.

Joint Stock Commercial Banks need to build and strictly control the proportion of non-credit services in the total operating income of Joint Stock Commercial Banks. Every year, Joint Stock Commercial Banks need to organize an assessment of the actual achieved proportion compared to the planned proportion and draw out the strengths, weaknesses and causes of limitations in the development of non-credit services.

3.2.3.9. Promoting scientific research activities in Vietnamese commercial banks

Vietnamese commercial banks need to promote scientific research activities to achieve highly applicable topics to contribute to business efficiency for Vietnamese commercial banks. Scientific research needs to be carried out in groups including experts in the fields of finance, banking, law, information technology, etc.

Vietnamese commercial banks need to focus on researching solutions to develop non-credit services in both directions: scale and quality development. Groups need to focus on researching new quality non-credit products to satisfy customer needs. Commercial banks need to have appropriate rewards for highly feasible projects and invest capital in testing the implementation of feasible non-credit products and services.

3.2.3.10. Promote linkage and cooperation between banks

Vietnamese commercial banks need to connect and cooperate to develop together.

For commercial banks with strong financial potential, they should strengthen and expand relations with international banking organizations to learn and exchange experiences for mutual development.

For commercial banks with limited financial and technological capabilities, the linkage between these commercial banks is essential to expand and diversify products.

Strong and weak commercial banks can save costs when investing in facilities to serve customers when they link up and cooperate with each other. This connection creates synchronization in facilities, especially machines serving products with high technology content. Commercial banks can easily integrate with each other when necessary.

3.2.4. Measures to develop non-credit services for each type of non-credit service

3.2.4.1. Measures for deposit account services, payment services and treasury services

For deposit account services, thoroughly apply one-stop transaction forms to simplify procedures for customers in combination with risk control and limitation measures.

Equip a centralized and unified database management system throughout the system so that customers can perform all transactions related to their accounts in many places throughout the system. In the past, many banks only performed all transactions at other branches and customers had to go to the branches where they opened their accounts mainly for reasons such as transactions had to be performed at the place where the original records were stored, because of the attitude of bank employees when transacting with customers of other branches.

Diversify account products and payment services through customer segmentation. For capital mobilization services, it is necessary to segment customers by industry and age to provide appropriate mobilization products; diversify mobilization terms, especially short terms. For payment services, it is necessary to provide professional payment services for which customers must pay fees along with other free services.

Joint stock commercial banks need to provide high quality services accompanying deposit products, in which the most important service groups are money transfer and payment, to be able to have a source of deposits at low cost and not be under much pressure from interest rates.

Banks need to introduce and advise customers on the benefits of each form of payment so that customers can use it appropriately in each specific transaction situation. General product usage instructions need to be brought to the public through mass media so that customers understand how to use it, the benefits, and make customers not feel that banking services are too far away, and that banking transactions are only for those who are not familiar with the product.

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