3.3. PROPOSE SOLUTIONS FOR DEVELOPING PRODUCTS AND SERVICES IN
BANK FOR INVESTMENT AND DEVELOPMENT THAI NGUYEN BRANCH
3.3.1. Focus on perfecting products, improving product quality, increasing utilities and features of existing products.
Objective of the proposal
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Completing and improving the quality of existing services to contribute greatly to the development of banking services. Through completion, existing banking services will be improved in quality and meet the demands and desires of customers. At the same time, contributing to improving the competitiveness of the Branch, creating prestige and a positive image not only with customers but also with partners and banks with which the Branch has transaction relationships.
To be able to stand firm and develop, the Branch needs to pay attention to the following points:
in its product strategy:
- Create difference and attraction in the process of providing banking products and services.
my goods
- Diversify products and marketing methods
- Innovate and improve processes and procedures to provide products and services that meet
increasingly better customer needs
3.3.1.1. Capital mobilization product group
Abundant capital is the top condition for branches to expand and improve the quality of other products and services. All efforts to improve the quality of credit, guarantees and other activities will be meaningless if the branch's capital mobilization activities are ineffective. Therefore, the first solution that branches must implement to improve the quality of products and services is to strengthen capital mobilization.
Firstly, expanding the forms of deposits among the people including savings deposits, card deposits, bonus savings, cumulative savings, and ladder savings. Diversifying the term of savings deposits: Not only stopping at having only non-term deposits and term deposits of 3 months, 6 months, 1 year... Branches need to have
Automatic solution to convert non-term deposits to term deposits for customers. For example, those who have made non-term deposits at the Branch for 2 months or more can transfer to customers who enjoy the benefits of term deposits. Flexibility in terms of term is also an attractive deposit.
Second , use a purpose-based deposit tool. This is a form of medium and long-term savings. When customers deposit money in the bank in this form, both the bank and the customer clearly know the purpose of the deposit. The main target of this form is people with low but stable income who plan to spend in the future, have a need to buy valuable assets but their savings in a short time cannot meet. By knowing the purpose of the customer's deposit, the bank can advise the customer on the time and method of depositing specifically such as:
- Savings with prizes in installments: Customers who deposit savings will receive interest on a term basis at the time of depositing, and will be able to participate in a lucky draw with many different terms and amounts. The purpose is to bring rewards to lucky customers, creating a mentality for customers to receive interest when depositing, and to be able to participate in a lucky draw.
- Saving grows with love: In order to diversify capital mobilization products, with the goal of building products suitable for each customer group, when customers are parents or relatives who want to give a meaningful gift to children by depositing savings in their name and under their own ownership to be able to accumulate a larger amount of money for children in the future, serving the needs of children such as studying, traveling, shopping, living...
- Housing savings: People who want to build or buy a house but have limited finances can gradually deposit their savings in the bank until they can withdraw them to buy or build a house. Banks need to have preferential lending policies for building or buying a house for those who deposit regularly and consistently and have reached a certain size. They can lend more to buy or build a house by combining the interests of the people with the interests of the bank, which will open up good prospects for this form.
- Savings to buy expensive vehicles (cars, motorbikes, etc.) as well as people who want to build or buy a house, people who buy cars or motorbikes but do not have enough money. The money and monthly income can be deposited in the bank so that at some point they can withdraw it to buy things. Banks also need to have a preferential lending mechanism for those who deposit regularly and have a significant balance.
In addition to considering new forms of capital mobilization for business, capital mobilization through the issuance of valuable papers (such as promissory notes, bonds) also needs attention. Currently, BIDV Thai Nguyen Branch still ignores this form of capital mobilization. Although the cost of capital mobilization through this form is larger than the cost of capital mobilization through deposits, it is smaller than the cost of loans, which helps banks proactively restructure capital sources, increase medium and long-term capital sources, and long-term capital sources.
3.3.1.2. Credit product group
a. Diversified corporate credit products
With the strong development of the economy as it is today, banks compete fiercely to gain market share and customers. Therefore, to attract customers in the coming time, branches need to diversify and expand credit activities to be able to compete.
The Branch's credit products are flexibly built on the basis of applying the Internal Credit Rating System according to international standards, so the Branch can build its own, flexible policies for each customer rating level. For customers with high ratings (AAA, AA, A), the Branch can provide unsecured loans, without conditions on the number of years of operation as well as the number of years of profitable operation before lending, and without conditions on collateral in loan approval. The internal credit rating system helps the business processing process to be specialized and unified so that the provision of products to customers is comprehensive, effective and limits risks right from the first stages of the credit granting process. Creates the premise for implementing effective assessment and controlling credit risks throughout the system based on the assessment of each field and each group.
client.
On that basis, the Branch needs to do well its own specific credit products, unique products that are competitive compared to other banks such as:
- Export support loans
- Loans for real estate project investment
- Hydropower project loans
- Construction loans
- Loan for shipbuilding construction
- Budget support loans
- Discount with recourse of bills of exchange with export documents
- Discount without recourse for export documents under L/C payment method
In addition, to better meet the needs of customers, the Branch needs to launch new products suitable for each customer segment such as:
- Business overdraft
- Import financing secured by imported shipment
In which, business overdraft is a form of credit granted by the Branch to customers by allowing customers to use more than the balance in the customer's payment deposit account opened at the Branch. Purpose: to meet the need to compensate for temporary shortage of working capital in the production and business activities of the enterprise and to be used to pay legal and valid non-cash payment orders.
Import financing secured by imported goods: Provided to customers who need to open LC or borrow capital to pay for import costs of goods and secure with the goods themselves. Loaned costs: Purchase costs, transportation costs, tax costs and other reasonable costs.
b. Expanding indirect credit (three-party)
This is a form of financing for individual customers to borrow cars for business and consumption.
used through car dealers according to the method signed by car dealers and the Bank
cooperation agreement in which dealers introduce car buyers who need bank loans to cover capital shortages. The bank will re-evaluate the customers and provide financing based on the provisions of the cooperation agreement with the dealer.
Currently, the Branch has been developing this form and has achieved encouraging results. Accordingly, the benefits for all parties are very clear, for car dealers: sales increase significantly; for customers: easy access to bank loans; for banks: retail credit growth, insurance premium collection (100% physical insurance for cars), increased payment service fees, shared risks because car dealers are responsible for debt collection, control of cash flow in the business of car dealers; develop banking services to individuals borrowing cars such as ATM cards, payment accounts, etc.
c. Expand lending to small and medium enterprises
The system of small and medium enterprises plays an important role in the economy of each country, even for countries with a high level of development. The source of capital mobilized for production and business of these enterprises is mainly bank loans. This shows that this source of funding plays a very important role in the existence and development of enterprises. Therefore, to expand credit for these enterprises, the Branch needs to carry out the following activities:
- Research on types of small and medium enterprises to accurately assess business performance, development capacity, potential... conduct classification, determine appropriate credit levels and loan forms.
- Encourage lending to businesses that need capital to expand production and innovate technology (usually this is a form of medium and long-term credit)
- Maintain close relationships with long-term, regular customers and customers with good credit relationships. Actively exploit strategic customers and target customers by offering promotions, free consultations, etc.
d. Promote retail credit
Providing personal financial services or retail banking activities is one of the traditional activities that form the world's commercial banking system. Since its inception, retail banking activities have played an important role in creating a foundation for sustainable development for commercial banks. Retail banking activities contribute to creating stable sources of capital and income for banks, diversifying risks and being a field that is less affected by economic cycles. In addition, retail banking activities contribute significantly to expanding the market, improving competitiveness and stabilizing operations for banks.
Previously, BIDV in general and BIDV Thai Nguyen Branch in particular did not focus on retail activities, specifically retail credit. From 2009 to now, promotional activities for retail credit have just begun to be implemented and successfully built a product system applicable to each customer group with specific purposes.
- Salary secured loan.
- Loans to support housing needs.
- Car loans
- Loans for business households
- Overdraft loan
- Mortgage loan
- GTCG discount
- Loans to support studying abroad
- Loans for investment in securities business
- Loan advance for selling securities
- Securities repo lending
- Securities mortgage lending
- Loans for workers working abroad
- Credit card loans
- For retail
+ With the goal of becoming a leading retail bank. BIDV Thai Nguyen promotes retail lending to individual customers to minimize and share risks, while the difference between revenue and expenditure from retail lending is higher than that from lending to businesses...
+ Increase cross-selling of modern products and services along with retail credit products to increase branch revenue: insurance, credit cards, domestic cards, BSMS, VN topup...
+ Minimize paperwork for individual customers to compete
with other Banks.
+ Strengthen training and retraining of individual Customer Relations staff. Provide in-depth training on VIP customer care and potential important customers. In 2011, BIDV issued a customer care policy and the branches implemented it effectively.
+ It is necessary to promote and widely deploy insurance products for retail credit products to limit risks for both customers and banks. Currently, BIDV Thai Nguyen has deployed the sale of BIC Binh An insurance products for auto loans, unsecured loans, VISA cards and aims to sell insurance with business loan products...
Currently, the Branch has built a system of retail credit products, however, the current specific credit products mainly focus on managing and controlling risks well, not focusing much on meeting customer needs. Most of the new specific credit products have only built the main mechanisms, but have not built their own product selling prices (loan interest rates), thus reducing the flexibility when implementing the product. Most of the products when built have not determined the criteria for evaluating product effectiveness and have not been monitored and managed in a unified manner. In the coming time, it is necessary to build and perfect the above products in the direction of simplifying procedures, flexible interest rates, suitable loan terms, and diverse borrowers to better meet customer needs.
3.3.1.3. Guarantee product group
The customer's need for guarantees is an objective factor affecting the development of the business. Some types of guarantees are not that customers do not need them, but that the Branch has not attracted customers. Customers only ask for guarantees when it is a mandatory need for bid guarantees and contract performance. Contractors can accept the contractor to retain an unpaid amount without asking for a bank guarantee. This proves that bank guarantees have not really attracted customers and sometimes procedures and delays obscure the role of bank guarantees.
Thus, to diversify the types of guarantees, first of all, it is necessary to make guarantees truly convenient for customers. From there, the Branch should have measures to stimulate and attract customers. In the coming time, the Branch should diversify the types of guarantees in the following two directions:
- Carry out four types of regularly authorized guarantees
- Develop foreign loan guarantees.
Foreign loan guarantees are essential for Vietnamese businesses in general and the Branch's customers in particular. In the coming time, the Branch needs to approach foreign loan projects, proactively seek customers and propose authorization requests to the central bank. To ensure convenience for customers, the Branch needs to shorten unnecessary procedures, reduce the time for reviewing and signing, creating conditions for customers to meet the contract deadline.
- Research and implement new types of guarantees such as payment guarantees and securities guarantees.
To increase the feasibility of new types of guarantees, branches need to:
+ Research on supply and demand.
+ Consulting and advertising about new types.
+ Attract customers for other activities of the Branch, thereby enhancing the reputation of the Branch and increasing the ability to find customers.