Viewpoints and Solutions for Developing the Market for Retail Lending Services at Joint Stock Commercial Banks

product policy, distribution, promotion mix... to complete the pricing policy suitable to competitive conditions to also increase the adaptability and competitiveness of the Branch.

Fourth , the branch is still facing difficulties in debt settlement, the management staff lacks experience in market research, grasps market trends, is passive in implementing retail services, has not adapted to the market mechanism, and has limited ability to analyze the market and synthesize. In addition, the management work when granting credit has many difficulties when the loan is secured by salary, proving income to repay the debt. The loan application processing stage has been simplified a lot, but there are still cases where the processing time is still prolonged, causing negative psychology for customers. Risk management capacity, control capacity and self-control of retail credit activities are still not high enough to prevent ethical risks and operational risks. The issue of proving personal income when calculating the plan is still not really consistent among departments and divisions. In one specific aspect, the Branch lacks a sustainable long-term business strategy and has not paid adequate attention to this customer segment.

Fifth , the human resources specializing in serving customers are still limited. Currently, at the branch, the sales staff have relatively good basic professional qualifications, but are too young (most have just graduated 1-4 years ago) so they do not have experience in handling customer transactions. Meanwhile, for customers, each bank staff plays an important role in developing the market for the bank's product and service lines. Moreover, the branch has not yet separated the work of customer service staff, and individual customer service staff performing operations throughout the lending process. At the transaction offices, the number of customer service staff is small, leading to each staff managing too many customers. This directly affects the control during and after the lending process and outstanding debt. This limitation will lead to the branch not meeting the needs of potential customers.

Sixth , due to the habit of people using what they have and not using what they don't have, the mentality of being afraid to borrow money to use now and pay later has become ingrained in the subconscious and thinking and living habits of people.

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The large population has caused many difficulties for the development of the market for lending services for science and technology of commercial banks in general and BIDV Hai Duong in particular.

In summary, through the assessment of the current situation of the development of the market for lending services for small and medium enterprises at BIDV Hai Duong, it can be seen that in addition to the achieved results, there are still certain limitations. In the coming years, if there is no proper strategy to improve its market development capacity, the Branch's market share will be difficult to maintain and may be divided when many commercial banks in the area are promoting the development of the market for lending services for small and medium enterprises, especially foreign banks with institutional incentives and advantages in capital scale and technology. To ensure safe and effective operations in the coming years, the Branch must have the right credit orientations and appropriate solutions to improve efficiency. In addition, it is necessary to have appropriate recommendations for the Government and State agencies, the State Bank and the Vietnam Development Bank to jointly remove existing obstacles, thereby developing the market for scientific and technological lending services safely and effectively at the Hai Duong Branch of the Vietnam Development Bank.

CHAPTER 3: PERSPECTIVES AND SOLUTIONS FOR DEVELOPING THE MARKET FOR TECHNOLOGY LOAN SERVICES AT JOINT STOCK COMMERCIAL BANKS

VIETNAM DEVELOPMENT INVESTMENT – HAI DUONG BRANCH

3.1. Forecast of changes in environment, market and development perspective of personal loan service market of Vietnam Joint Stock Commercial Bank for Investment and Development up to 2020

3.1.1 Forecast of changes in the environment and market of personal loan services of commercial banks until 2020

3.1.1.1. Environmental changes

International economic integration is taking place strongly and affecting Vietnam, requiring full implementation of integration commitments in all areas including the banking and finance sector, which will create a driving force to promote the modernization of the Vietnamese banking system, improve the competitiveness and profitability of domestic banking and financial institutions and banking service providers. It is forecasted that by 2020, the Vietnamese financial market will have strong reforms after the crisis, and new financial groups can be established to deeply integrate into the international financial market, with many favorable conditions to expand operations and increase competitiveness in the domestic and international markets.

The integration of the Vietnamese economy into the regional and international economy, the gradual liberalization of finance also requires domestic commercial banks themselves to adjust their operating structure, risk management capacity, and enhance their ability to withstand internal and external shocks, in order to develop sustainably under changes in legal policies towards tighter control according to Circular 36 (effective from March 1, 2015). Therefore, commercial banks need to always grasp changes in the State's legal policies to make appropriate and timely adjustments, changes, and supplements.

Along with international economic integration, economic policies have changed to be suitable and have strong breakthroughs to maintain the growth rate at over 6%. This will require increased capital for businesses, organizations and especially the demand for

personal loan demand, individual business investment and development. On the other hand, as the economy continues to grow, people's lives are increasingly improved and there are more opportunities to access and experience new products and services, at the same time, people's level and awareness are also raised, then the use of KHCN loan products and services is gradually favored and developed to achieve desires and needs sooner. For that reason, KHCN financial services will have a lot of potential for development.

Along with positive changing trends, there are also many unpredictable challenges for commercial banks;

- Banks are increasingly facing fierce competition in terms of market share: Currently, the advantage in terms of market share, customers and distribution channels belongs to domestic banks such as VietinBank, Agribank... Besides, the scale of operation and the ability to access the market, develop differentiated products and services, and have more advantages to create new markets, exploit potential markets... of domestic and foreign banks, forcing existing banks to give up part of their customers and market to foreign banks.

- Market risks are really a big challenge in the operations of banks: The banking system in the area also has to face greater risks of crisis and economic and financial shocks in the region and the world. Risks are increasing but the macro management capacity of the State Bank and the risk resistance capacity of commercial banks nationwide are still low. On the other hand, the capacity of the State Bank to supervise banking activities is still weak, especially the ability to monitor risks, detect early, prevent and handle risks promptly.

3.1.1.2. Some forecast results of the market for science and technology lending services

* Forecast of the science and technology lending service market in Hai Duong province

In recent years, Hai Duong province's economy has been a region with a fairly rapid economic growth rate, located in the planned area and identified as Hai Duong City as the "Key Economic Zone of the North and the Red River Delta". Therefore, the demand for loans for business, consumption, and investment is relatively high to meet the needs of the people.

Providing capital for corporate and individual customers to achieve the goal of economic restructuring towards rapid industrialization, cultural and social fields have new developments, political security is consolidated and enhanced; administrative reform has many obvious changes, the provincial competitiveness index has been raised, which is an advantage to make Hai Duong an attractive destination for domestic and foreign enterprises.

Along with that, the large population of about 1.8 million people, of which over 60% are of working age, mainly young and dynamic people, has created the potential for developing commercial bank services, including the KHCN lending service in the province. In addition, the rate of people using banking services is still low, the banking and financial system is newly developed, the average income per capita is constantly increasing at a fairly high level, so the service market in Vietnam in the future promises to develop very strongly.

Another characteristic is that the target group of personal loan customers has gradually become younger in recent years, mainly from the age of 36 to 45, not affected by the fear or hesitation when borrowing money to build a house or do farm business in the districts. This is a group of quite potential customers when the speed of farm economic development has increased quite rapidly in recent years.

However, the potential of the provincial market has brought many difficulties when the increasing number of new commercial banks and the expansion of old commercial banks make the market more and more competitive.

* Forecasting the growth rate of commercial banks

The trend of developing individual customers in the coming time will be modern products with many utilities such as electronic banking, international payment cards, credit cards... and individual customer lending services also have many opportunities to develop. When the economy develops, financial institutions will continuously develop, so the financial services sector has a lot of potential to develop and attract stronger development of old banks and entry of new banks in the market at home and abroad.

In the credit market of Vietnam, there are many opportunities but also great challenges for the banking system in the province. This forces the commercial banking system to constantly innovate and provide modern banking services to be able to compete effectively.

3.1.2. Development goals and orientations of Vietnam Joint Stock Commercial Bank for Investment and Development - Hai Duong Branch

3.1.2.1. Goals and development orientation of Vietnam Joint Stock Commercial Bank for Investment and Development

Assessment of the results of implementing strategic goals and restructuring in the period of 2011-2015 shows that BIDV's growth in the past 5 years has been very impressive, even and comprehensive in all indicators of total assets, capital mobilization, credit, retail, services... with high growth (average 17%/year), comparing some specific indicators: Total assets increased more than 2.1 times, Capital mobilization increased 2.5 times, Outstanding loans increased 2.6 times, Retail loans increased about 4 times. Pre-tax profit increased 1.7 times. BIDV has comprehensively completed at a high level compared to the restructuring plan targets according to Decision 41 of the State Bank:

(i) Capital mobilization completed 117%;

(ii) Outstanding credit balance completed 118%;

(iii) Retail completed 141%;

(iv) All structural and operational quality indicators are met. Regarding the operational network, BIDV has 182 level 1 branches and nearly 800 transaction offices nationwide, an increase of 63 branches and 284 transaction offices compared to 2011.

Along with fulfilling its role as an effective tool of the Party, the Government and the State Bank in implementing monetary policy, contributing to stabilizing the macro economy, curbing inflation and supporting economic growth. The period of 2020 marks the beginning of a new period with many opportunities and opportunities but also many challenges awaiting, especially in the context that Vietnam has joined the ASEAN community, participated in the Trans-Pacific Partnership (TPP) and signed free trade agreements (FTAs) with the Eurasian Union, Korea, Japan, etc.

To become one of the top 20 modern banks with the highest quality, efficiency and reputation in the region.

- Building and perfecting the organizational and management model to enhance BIDV's management capacity at all levels, creating a solid foundation for development into a leading financial group in Vietnam.

- Focus on comprehensive restructuring of all aspects of business operations to improve efficiency and maintain quality; proactively control risks and achieve sustainable growth;

- Maintain and develop BIDV's position and influence in the financial market, make pioneering efforts to effectively implement national monetary policy;

- Improve risk management capacity; proactively apply and manage according to best practices suitable for business practices in Vietnam;

- Develop retail banking activities, hold a large market share in credit balance, capital mobilization and retail services;

- Improve the capacity to exploit applications and technology in business operations, create breakthroughs to increase efficiency and labor productivity.

- Rapidly develop high-quality human resources and experts, improve labor productivity;

- Striving to become the best credit rated bank in Vietnam by international credit rating organizations;

- Restructuring operations and improving business efficiency of subsidiaries and affiliates, restructuring the Investment Portfolio to focus on core business areas;

- Protect, maintain and promote core values; Build corporate culture and develop BIDV brand.

Therefore, the Bank sets out the following development orientation:

Firstly , modern technological innovation is in line with the development trend of the world. Technological innovation is not simply investing in technical equipment but requires synchronization. In which, the decisive factor for success is the human factor.

issues of policy mechanisms and the management role of the state and functional units. Continue to modernize payment technology along with developing and expanding many channels to provide banking services in a modern direction, meeting the development and integration needs of the country.

Second , ensure the safety of banking operations. Many banking operations are now computerized and automated, and many banking transactions are processed online on computer networks and the Internet. Therefore, banking data information becomes an important resource of the entire banking system, and this resource needs to be strictly protected. Therefore, banking information security and safety is always a key task for the entire banking system.

Third , strengthen communication in the banking sector, especially about banking products and services, so that customers can easily recognize banking services and use them conveniently. Strengthen propaganda and introduce the benefits of modern banking products and services to the general public in society, combined with economic levers to change the awareness and psychology of borrowing of customers in the population to attract customers.

Fourth , thoroughly implement the spirit of implementing banking culture for all employees to introduce banking products and services to each customer.

3.1.2.2. Development goals and orientations of Vietnam Joint Stock Commercial Bank for Investment and Development - Hai Duong Branch

The economic forecast in the province continues to recover, the macro economy is stable, many mechanisms and policies to remove difficulties for production and business, improve the investment environment in the coming time will open up opportunities to promote investment, export, expand the market for products in and outside the province, strive to bring Hai Duong into the group of 25 provinces and cities with the competitiveness index (PCI). Cooperate with provinces and cities in the region, take advantage of the province's advantages to develop Hai Duong into the chain of satellite cities, industry and services for the capital region.

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