Expanding consumer lending activities at the Joint Stock Commercial Bank for Investment and Development, Thang Long Branch

3.2 Solution to expand CVTD activities at Thang Long Branch

3.2.1 Product and service solution group

3.2.1.1 Perfecting and developing consumer lending products and services

Product improvement and development is one of the basic and very important contents in the product strategy of the bank. A product is considered effective if it ensures diversity to meet the needs, is competitive and has the ability to generate profits. In recent years, commercial banks in our country have made strong progress in developing banking services. Right from the beginning of 2011, the strategy in the service competition applied by joint stock commercial banks is to introduce new products and services to attract customers.

With car loan products: Banks need to build relationships with car manufacturers or car dealers. On the one hand, they can lend to the salons and car manufacturers themselves, on the other hand, they can lend to customers who want to buy cars from these manufacturers. The loan product will create a complete product, serving the needs of both sellers and buyers. Cooperating with car manufacturers will help banks have more information about the origin of the car, car market suppliers, and current consumer trends. In addition, it is necessary to speed up the lending and approval process, and propose car loan products for good customers, with transparency in records and repayment sources, and request to sign a payment commitment to send to the purchasing and selling units first, then complete the paperwork later. It is recommended that the board of directors support contacting and cooperating with car sales units in the area.

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With home loan products: Banks need to build good relationships with investors, especially reputable investors who are building high-rise apartments. With this cooperation, the branch will be able to evaluate and assess the construction capacity because this is the collateral for the bank in the future. When customers come to construction units, they will be introduced to the branch's home loan products. On the other hand, with a good relationship with the investor, they will cooperate with the bank when the bank requires the handover of the customer's house documents after the apartment building is completed to the bank (a basic factor to secure the loan). Regarding product characteristics, the term and maximum loan rate should be extended to create competition with other banks in the same area.

With unsecured loan products, card products: This is a product that contains many risks for the bank, small-scale loans, high costs in loan approval, appraisal, capital use inspection and debt collection. To solve the above difficulties, lending through a representative will overcome these weaknesses. This solution overcomes difficulties for both customers and banks: Loan procedures do not take much time, reducing the difficulty in obtaining confirmation from the unit leader.

With study abroad loan products: You can go to marketing consulting companies and organizations for students to study abroad. This method will be more effective because the representatives who come to meet and discuss with the company are often the ones who decide whether their children study abroad. Through this method, parents will understand more about the branch's study abroad loan products. Another point is that this product should extend the loan period because international students usually study for 2-3 years, and it takes 5-6 years after graduation to be able to stabilize and achieve certain success in their work, and then start to accumulate money to pay off the debt. If they are forced to pay off the debt in 5 years, it will be very difficult for international students and their families, so this product should extend the period to 7-9 years to create conditions for international students and their families.

Developing products that can be transacted via computer, home banking or telephone to take advantage of the development of personal computers and internet connectivity to place orders, make payments, check balances and information on commitments between banks and customers. This is a popular model with very low costs, convenient for both banks and customers. Customers can make transactions anywhere, anytime.

3.2.1.2 Building strategic products

Currently, research and development of new products are carried out at BIDV Headquarters. With the advantage of long-term operation in the capital, the branch has a certain understanding of the market, habits, consumption and business practices of the people. However, in order to reach a variety of customers and expand market share, the branch needs to research and coordinate with departments at BIDV Headquarters to design and deploy loan products suitable for residents and the market in Cau Giay area.

The diversity of loan products will bring many choices for customers, however, not all loan products are equally effective. There are products that will bring high profits, while there are products that are only profitable.

low or no profit. Therefore, banks need to identify the bank's strategic products.

In order to limit the unattractiveness of current personal loan products (rigid interest rates, no incentives, no packages), banks should have incentives through cross-selling and cross-selling of products and services. Cross-selling and cross-selling products can be issuing credit cards, free use of Internet banking and SMS banking services for a certain period of time, and permission to overdraft accounts within a certain limit. Thus, banks can also implement other banking products and services.

Banks need to research to design new products with BIDV's special benefits, to meet more consumer needs, such as loan products for domestic and international travel, convalescence; loans for medical treatment; loans for purchasing furniture, household appliances, loans for funerals, weddings, etc. A personal loan product with many advantages with low cost, low risk, stable profit, etc. is lending through card issuance and use that needs to be further developed at banks.

In addition to customers who need to come to the bank to request card issuance, banks need to be more proactive in expanding this market. Banks can expand the subjects that are issued and use credit cards without collateral to managers and executives of enterprises that have deposit, loan, and L/C relationships with the bank or individual customers with large deposit balances at the bank. In addition, banks can cooperate with travel companies, labor export companies, and study abroad consulting companies to develop credit card issuance activities for subjects going abroad.

Currently, the installment purchase method is very popular in the market. Accordingly, banks establish relationships with retail companies by signing debt purchase contracts. In the contract, the bank sets out terms on customers who can sell on credit, the maximum credit amount, and the type of assets sold on credit. This requires banks to have good relationships with retail companies.

3.2.1.3 Building a reasonable structure of consumer loan product portfolio

Building a reasonable loan product portfolio structure helps banks reach a variety of customers by providing customers with many loan options, so branches need to build a loan portfolio structure according to products at a reasonable level, avoiding the situation of focusing too much on loan products that are not highly stable and have many potential risks when the market situation is not favorable such as: securities trading loans, real estate speculative loans. But the cost

Branches need to promote lending to stable products with high added value such as consumer loans and home loans. These products not only bring high income from interest to the bank but also bring many other sources of income such as: money transfer services, card services, deposit services,... from the borrowers themselves.

Building a reasonable consumer loan product portfolio structure requires the branch to invest in market research, products, competitors as well as analyze population characteristics, product preferences of the branch's headquarters area, from which it can offer the most suitable products and best meet customer needs. A reasonable consumer loan product portfolio structure does not need too many products but needs to have flexible products that change according to market fluctuations: loan conditions, product utilities, interest rate policies, fees, etc.

3.2.2 Solution group on product marketing and promotion

3.2.2.1 Promote marketing activities in banking

It can be seen that in recent times, commercial banks have been very active in conducting marketing activities. Card promotion programs, brand advertising, capital mobilization with high interest rates, advertising programs on mass media, etc. have been continuously and widely applied, creating the premise for commercial banks to achieve certain results and improve banking marketing activities to gradually reach regional and international practices.

Because there are many credit institutions operating in the area, the competition between banks is very fierce, so marketing activities must be paid attention to and developed more strongly by the branch with the aim of strengthening and promoting propaganda and advertising widely about consumer lending services and products. Solutions to focus on promoting marketing:

i. In the immediate future, improve the quality of advertising, leaflets, use mass media to disseminate widely, especially through television and the internet. The requirements for the information conveyed are easy to know, easy to understand, and highly appealing to banking products and services. Such as short films or music clips that convey a meaningful message will help viewers remember the image of the bank.

ii. Strengthening the propaganda and promotion of the branch's image as a convenient and safe place for customers to come to do transactions. Paying attention to cultural - artistic - sports or charity sponsorship activities, granting scholarships to students of universities in the area, organizing lucky draw programs.

lucky to win prizes… to increase attraction and more people will know about the branch's activities, promoting the expansion of the branch's activities.

iii. Build and maintain good relationships between branches and customers. Depending on each customer, branches need to apply different policies:

- For first-time customers, the branch needs to create understanding between the customer and the branch. Customer service staff should proactively learn, guide and help customers carry out procedures, answer questions, and bring customers convenience and comfort.

- For old customers, the branch can have priority in interest rates, loan conditions for customers, and carry out after-sales activities such as giving gifts and greeting cards on holidays.

3.2.2.2 Increase proactive customer search and selection of borrowers

Like many commercial banks in Vietnam, the way Thang Long branch provides products is still heavily traditional, waiting for customers to come to the bank to transact. Therefore, the branch must be proactive in finding customers, marketing products and services to customers, this helps improve the lack of understanding of banking products and services of the majority of the population, and helps the branch screen suitable customers.

The branch's development direction is to build communication - promote products, seek large customers, not small customers, proactively link with many companies related to its products and services to have a market to exploit in the future, provide more effective banking services; while ensuring customers have good credit capacity and goodwill in building a sustainable, long-term relationship with the branch.

Promote CVTD development through affiliated partners. Implement customer flow when coming to transact at the branch, arrange priority transaction space exclusively for important customers. Develop customer policies, marketing policies, product policies suitable for each customer segment, focusing on important customer groups to provide suitable products and achieve the best business efficiency.

Ensure that new customer development is carefully selected, new customers are good customers and new customer development must be within the control corresponding to the Bank's service capacity and always maintain service quality.

Good customers. Resolutely suspend or politely refuse new customers if the customer does not meet the requirements on safety level or human resources, qualifications, and machinery are not enough to ensure good customer service and control risks.

It is necessary to avoid focusing too much on developing new customers, which will affect the attention and service quality of the branch's existing customers. Therefore, it is necessary to carry out both existing customer care and new customer marketing in parallel. It is necessary to find out customer satisfaction or shortcomings in providing services and serving customers; introduce new products of the branch that can suit the needs of customers; find out new needs (if any) of customers to find new business opportunities.

It is necessary to proactively monitor and evaluate the fluctuations in the existing customer system (number of traditional customers currently doing business, number of old customers who have stopped doing business with the bank and number of new customers) to find out the reasons for the change in the number of old customers, thereby finding measures to maintain the existing customer system.

3.2.2.3 Increase direct marketing of consumer lending products

Currently, the branch is a unit with a large customer base, most of which are customers who have only had relationships with other products such as savings deposits, payment accounts, money transfers, payroll services, etc. This is a very abundant source of customers for the branch to be able to cross-sell CVTD products.

For customers who do not have a credit relationship, the Branch needs to analyze and evaluate to select target customers, from which there are measures to introduce appropriate products, providing the most effective approaches. For example, for customers who use payment account services at the Branch to receive monthly salaries, it is possible to approach and introduce loan products such as consumer loans, consumer support, car loans, overdrafts, etc. Statistics show that customers who transfer money related to business activities account for a fairly large proportion, these customers are potential targets for loan products serving production and business.

Target customers for consumer loan products often focus on two groups: people who live off trading around the area where the bank operates and employees working at businesses. These groups are very suitable for consumer loan products, consumer support loans. Especially employees working at businesses. Because this group is usually people with high income, with income prospects and the need to use products.

Modern retail banking products are very large and therefore they are often interested in car loans and home loans.

3.2.2.4 Strengthen and expand the network providing CVTD products

Nowadays, bank branches develop very quickly, banks always focus on expanding their network of operations, because banks understand that the closer they are to people, the greater the opportunity for service development. Just like the success or failure of a bank is the point of contact with customers (POP - Point of Purchase). Services reach every corner of the city streets and people gradually get used to retail banking services. However, it cannot be denied that some bank brands have a professional style, attracting customers by the quality of service and reputation in the market. Therefore, investing and expanding the service network of branches, building a brand and reputation is really a solution that needs attention.

The contribution of the affiliated transaction offices to the overall performance of the branch is increasingly large and plays a very important role in the development of the branch in the process of expanding CVTD in Hanoi. Therefore, in the coming time, the branch needs to continue to expand the network of affiliated transaction offices along with improving the quality of consumer loans at the transaction offices. However, the expansion of the network needs to be considered according to the following orientations:

- Developing the network taking into account the business performance factor: should open transaction offices in densely populated areas with developed economic and cultural life, only then can ensure that the transaction offices are opened quickly, have a large number of customers, break even and make a profit in the shortest time.

- Network development takes into account the coverage of the operating area to facilitate customer transactions and at the same time reach a large number of customers.

- The branches must be medium-sized or larger: the area must be from 80m2 or more, the staff must be at least 10 people, and the design and equipment must be uniform. This is very important to building the image of the branch in Hanoi.

3.2.2.5 Infrastructure improvement, technology modernization

Modernizing equipment and facilities is a necessary requirement for branches today. This not only helps branch staff work effectively and maximize their potential, but also creates a good impression on customers. Factors related to facilities will affect customers' psychology about the scale and position of the branch.

Branch. Currently, the area of the branch and its affiliated transaction offices is still small, and the outside of the branch does not really attract customers' attention, so it needs to be redecorated to attract more customers' attention.

CVTD activities are characterized by a large number of borrowers but small loan sizes, so the application of modern technology will help increase labor productivity, save time in performing business processes, can solve and handle many jobs in a day, serve customer needs faster, thereby bringing prestige to the branch. Programs for collecting, analyzing, processing information, software for monitoring, managing debt collection processes... applied will contribute to reducing time and effort for credit officers. Currently, the branch is applying T24 technology, this is a modern technology that helps to perform tasks faster and more accurately.

Branches should focus on building a plan to invest in equipment and technology to gradually introduce and increase the use of credit cards. Credit card products will be a popular product because of its advantages. The trend of globalization makes modern payment tools and means increasingly developed.

2.3.3. 3.2.3 Solution group on procedures, file processing, customer segmentation and improving the quality of consumer lending activities of branches

A bank's lending and loan management process is the totality of the sequences, stages, and steps that must be performed according to a certain procedure in lending and debt collection, starting from reviewing the customer's loan application until the full debt is recovered to ensure credit capital safety.

A strict and scientific lending and loan management process, in which the rights and responsibilities of each department and each officer in each stage of the lending and debt collection process are specifically defined, will help improve the efficiency of lending activities and control loan quality, thereby preventing and limiting credit risks.

3.2.3.1 Improve processes, shorten transaction processing time

Customers who come to the bank to apply for a loan are mostly in a situation where they really need that money immediately to meet their current payment needs. For simple loans of small value, the bank will solve the customer's loan needs in a short time while still ensuring compliance with the correct procedures, which will leave an impression on the customer. This is also what the bank cares about in its customer attraction policy, increasing its competitiveness compared to other commercial banks.

The fastest branch approval time is 3 days for car loans, while large, complex loans take much longer to issue credit.

many. Meanwhile, some banks have made improvements such as Asia Commercial Bank, An Binh or HSBC, all of which have the fastest loan approval time within 8 hours. Some other banks also offer very impressive loan times such as: Dong A Bank offers a loan program within 24 minutes, Exim Bank offers a mortgage loan with a savings book within just 1 hour and a mortgage loan with assets within just 2 days, TienPhong Bank also offers a mortgage loan with a savings book within 60 minutes, a mortgage loan with securities within 4 hours, and a loan with valuable papers within 30 minutes. Thus, it can be seen that the loan approval time is in a state of lack of competitiveness. Therefore, to improve competitiveness to attract customers, improving the process is necessary to create convenience and comfort for customers, especially in transactions with banks.

To gain customer trust and handle operations quickly and accurately, the branch must build a flexible and scientific customer service process based on customer classification and ranking. Currently, the branch is also operating a pilot customer service program, which will classify customers by level (VIP customers, regular customers, walk-in customers), according to the level of need to use the bank's products and services, thereby having appropriate behaviors.

For VIP customers, in addition to special priority in serving and processing daily transactions, loan application processing steps are also performed more quickly, ensuring competitiveness compared to other banks. To do this, identifying VIP customers is very important, the branch will establish a transaction guidance department with the function of contacting and classifying customers to process transactions most effectively.

3.2.3.2 Improving the efficiency of mobilizing capital from the population

Abundant mobilized capital is the basis for banks to expand credit scale, on the contrary, capital shortage can cause banks to reduce credit scale, requirements for customers become more stringent. Therefore, to expand CVTD, branches need to mobilize abundant capital from residential areas. Some measures to improve capital mobilization efficiency such as:

Regularly monitor and promptly adjust deposit interest rates to ensure competitiveness. Develop appropriate interest rate policies, which are one of the top concerns for customers and a criterion for banks to compete to attract customers.

Implement promotional programs with attractive gifts and prizes for depositing customers. Enhance the accompanying benefits for customers.

when using bank products. For customers, their concern when depositing money in a bank is not only the interest rate but also the benefits they receive from that bank. Therefore, the accompanying benefits and services will be essential to bring satisfaction to customers. Branches must have a separate care regime for important customers such as: sending greeting cards to customers on holidays, giving gifts, or issuing VIP cards to customers with large transaction scales...

Proactively diversify savings forms and deposit products to suit people's needs at each time and specific business location, and organize savings mobilization campaigns to increase people's deposits.

Develop special services, specific services to serve specific customer groups such as: social insurance payment, phone bill collection, cash collection at points, increase the issuance of ATM cards, debit cards, etc. Promote electronic payments, bilateral payments, and payment connections with large units to attract capital and services.

And implement customer care forms such as: sending congratulations and gifts (if possible) on the occasion of the customer's birthday; regularly sending customers (via email) information about the program of issuing promissory notes, certificates of deposit with attractive interest rates, information about the program of issuing free ATM cards or upcoming promotions or information about new products and services that are about to be implemented, ... When receiving this information, customers will feel that they are still cared for by the bank, even after the loan contract has ended. From there, whenever there is a need, customers will continue to come to the bank to perform banking services. Thus, the customer care policy will help the bank maintain a good team of traditional customers.

3.2.3.4 Building BIDV's transaction culture

The quality of a bank's customer service will be closely related to the effectiveness of expanding lending activities, and the most important thing is to make customers satisfied when making transactions at the bank. Therefore, to expand CVTD, the branch needs to build a standard transaction culture, creating a good impression with customers. Every time they transact with the bank, customers will evaluate and record the image of the bank through the efforts of the bank staff with whom they transact. In the current fiercely competitive situation, improving the quality of customer service must be a top priority. To do this, the branch needs to seriously implement and build a BIDV transaction culture. In the immediate future, to complete

In terms of brand when transacting, all bank staff in general and customer service staff in particular of the branch need to perform well the following contents:

- Create a style and manner of serving customers wholeheartedly, thoughtfully, working effectively, quickly and accurately.

- Always improve professional knowledge to serve customers better, consider customers as the center.

- Create a friendly professional image. When interacting with customers, customer service officers must identify themselves as the ones bringing the bank's products and services to consumers.

- Dress code and working style with customers must comply with BIDV's two sets of standards for communication, conduct and professional ethics.

3.2.3.5 Strengthening the inspection and supervision of loan use

Branches need to pay more attention to checking and monitoring customers' use of loans to ensure that the capital provided by the bank is invested for the right purpose and not contrary to the provisions of law, thereby improving the efficiency of investment capital.

Customer service and risk management staff must always be proactive, monitor the activities, work status and income of customers, and regularly update customer information such as:

Closely monitor the borrower’s work status, monthly income, changes related to health, work, and family. Periodic medium-term loans must have measures to check capital usage, collateral, and principal repayment status of each period…

2.3.4. 3.2.4 Solution group on organization and personnel

3.2.4.1 Improve the effectiveness of human resource development and management strategies

Human is an important factor that determines the success or failure of any field of activity, and for lending activities, the human factor plays an even more important role. The human factor determines the quality of lending activities, the quality of products and services, and the image of the bank, and thereby determines the efficiency of the bank's operations.

Customer service staff is one of the three factors in providing banking products and services. The bank's customer service staff is the one who directly guides and implements the business process. They not only play a decisive role in the quantity and quality of products and services provided but also contribute to creating the branch's image in the minds of customers - a factor in creating, maintaining and developing relationships with customers. Therefore, to expand and improve the efficiency of personal credit lending activities, the core issue is to continuously improve the quality of the staff working in personal credit, recruit staff with sufficient talent and ethics, and the strategy for developing and managing human resources must be identified as an important part of the branch's strategy.

The strategy's goal is to develop human resource management for lending, ensuring quantity and quality. Branches must clearly recognize the important role of customer service staff, considering them as the first customers, internal customers, internal customers, and the factor that creates the development of the bank. Branches need to focus on improving the effectiveness of human resource development and management strategies in the following directions:

Building a recruitment culture to find suitable customer service officers

Recruitment culture reflects the style of the manager recruiting employees. This is one of the ways that the branch leaves a good first impression on the candidates, creates trust and creates the premise for long-term cooperation and commitment to the bank. This is the first opportunity for managers and leaders to communicate with people who will contribute and create the image of the branch in the future. Recruitment culture must bear the branch's own mark. If the branch invests in building a recruitment culture, it will select the most capable and qualified staff for the job, bringing efficiency to the bank's business activities in general and CVTD activities in particular.

Build a professional and effective recruitment process at the branch

The recruitment process needs to achieve the goal of discovering the right abilities of candidates, thereby not only selecting talented people but also people who are suitable for the characteristics of the branch. Recruitment needs to be carried out on a large scale, possibly in association with universities of economics, finance, banking, organizing internships for students and always selecting students who are qualified to meet the requirements of the job during this internship period. In the recruitment process, it is necessary to build

Expanding consumer lending activities at the Joint Stock Commercial Bank for Investment and Development, Thang Long Branch - 8

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