Vietnam’s banks are racing to invest in new technology, infrastructure, and marketing schemes meant to put them on par with evolving global standards for personal banking.

The country’s financial institutions are racing to catch up with banks in developed countries who have been allowing customers to access cashless banking platforms for quite some time.

Techombank was one of Vietnam’s first banks to develop cashless options for its customers, investing US$300 million in 2015 towards technology infrastructure that allowed customers to make transactions via e-banking and mobile platforms, as well as allowing account holders to make ATM withdrawals using an OTP (one-time password) sent via text message in lieu of a bank card, according to CEO Nguyen Le Quoc Anh.

In addition, the Hanoi-based lender also made heavy investments in its marketing, including promotions that allowed customers to make free transactions both inside and outside the bank using E-banking, and providing refunds on goods and services purchased nationwide using a Techcombank card.

As a result, about 42 percent of Techcombank’s 2018 pre-tax profit came from service revenue.

Following the tech-banking trend, Vietcombank, one of Vietnam’s “big five” state-owned banks, introduced VCB QRPAY in 2018, an option which allows its customers to make payments by simply scanning a QR.

With strong telecommunication infrastructure, high rate of Internet penetration and smartphone ownership, Vietnam’s tip toe towards a cash-free economy is expected to hasten over the next few years, according to Dao Minh Tuan, Vietcombank’s deputy general director and president of the Vietnam Bank Card Association.

Digital banking platforms which allow customers access to the exact same services they might find at a bank’s head office are quickly become the norm in Vietnam.

Hanoi-based lender TPBank officially launched its 24/7 online banking platform LiveBank in Hanoi and Ho Chi Minh City in 2016. 

Two years later, on September 14, 2018, nationwide lender VPBank launched its own digital platform, YOLO, to compete.

At the recent opening of a new branch of Malaysia-headquartered CIMB Bank in Ho Chi Minh City, Zafrul Aziz, Executive Director of CIMB Group, surprised attendees by announcing that the bank will pilot its Southeast Asian digital banking platform in Vietnam.

The investments each of these banks are making in technology, infrastructure, and marketing seem to be paying off. 

The number of products purchased using mobile payment options increased 30 percent from Q1 to Q3 in 2017 compared to the same period in 2016 while the number of goods and services bought via Internet surged by 33 percent and products purchased using electronic wallets soared by 21 percent, according to the State Bank of Vietnam.

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