In an interview with International Finance, Nguyen Thien Tam, Digital Strategy Director, OCB, spells out the bank’s recent efforts in digitising financial services to great length. 

Why is digitisation of financial services important to OCB at this point? 

Vietnam has a very high rate of the internet and smartphone penetration.  According to the Digital 2020 report, internet penetration in Vietnam stood at 70 percent in January 2020 and it was mostly accessed by smartphones. Therefore, it is very important for OCB to bring the financial services online enabling customers to readily access them anytime, anywhere.  

We started this journey in early 2018 and we have digitised more than 80 percent of the OCB’s financial products and services by July this year. In addition, we have introduced completely new online only services such as loyalty, referral, investment and payment reminders. As an increasing number of customers migrate to our OMNI platforms such as web and app, it is our mission to ensure we fully meet their financial needs and requests online without having to visit a branch.  We continuously develop new online customer journeys and improve existing ones to improve customer experience and comfort.  

How is OCB deepening digital experience for new-age customers in Vietnam’s financial industry? 

The first step toward this goal is to build a solid foundation of financial services online where customers can carry out their day to day banking activities such as transfer, bill payments, account inquiry, shop and purchase. We have to ensure these basic services are easy to use, stable, fast and secure. 

Secondly, we build a portfolio of different financial services that meet different needs of customers, such as safe and high interest rate term deposits, higher yield mutual funds, choice of many different credit cards, personal loans and different suits of insurance products. 

Thirdly, we seek to appreciate our customers with OMNI Rewards — a loyalty programme for customers, OMNI care service to support customers, referral programme to help customers earn more extra cash for referring their friends to OCB and finally regularly carry out attractive promotional customer programs to reward customers for doing transaction with us. Finally, we try to understand our customers better by leveraging on different data points, engaging with customers regularly and providing them with relevant information on banking and offers.  

Can you throw light on OCB Omni Digital Bank? 

OCB OMNI is the digital banking business of the bank focusing on serving customers online. OCB OMNI is one of the leading digital banks in Vietnam focused on product offering, marketing campaigns and adoption of new technology in many different areas of business such as customer acquisition, sales, marketing, customer service and operations.  

OCB OMNI is also growing to be one of the main channels to acquire new customers for the bank with about 30 percent of monthly new customers coming from online channels.  More importantly, OCB OMNI is the main platform for customer engagement, allowing the bank to regularly communicate critical information to customers at very low cost and highly effectively.    

Can you tell us about OCB Omni Digital Bank’s transformation last year? What are the implications of this transformation for the bank and customers? 

1 year is not a long period but many digital transformation initiatives were implemented delivering business value to OCB.  One of which was actively partnering with many local and international Fintech companies to POC and pilot many  advanced technologies face recognition technology, OCR technology – reading data from customer records such as ID card, passport, driver’s license; face payment,  social profile enrichment, customer, Ripple based cross border payments…

Another key milestone in the past year was that OCB had successfully deployed Open API platform, providing the basic banking services such as open new account, view account info, open new term deposit or register for a loan, credit card through partners’ platforms, making OCB a leading name in applying this future banking trending.

All these initiatives pave ways for OCB to access new business opportunities as well as higher capability in existing business functions.  Likewise, our customers can benefit more from better products and solutions in terms of time, convenience, cost and higher value.

What are OCB’s digital transformation plans that will be executed in the next one or two years? 

We define digital transformation as a non-stop mission — and we are aiming for it at a rapid speed. We will gradually transform areas of our banking system with an intent to help customers solve their problems online in a convenient manner. In the second half of 2020, we will introduce a myriad of new products such as international money payment, new investment and insurance products, in addition to applying for a debit, credit card or loan online.  This means our customers can soon experience a wholly digitised end-to-end financial services on their smartphones with OCB OMNI application. 

In the coming years, we will continue to cooperate with many partners and companies to expand our ecosystem. 

That said, OCB is about to launch a nationwide Open API Challenge, inviting different players such as established and fintech startups, universities and tech solution companies to participate and work with us to develop or co-develop new, innovative solutions that solve customer problems and add higher value. We believe that through the challenge, we will find the leading partners to help us escalate our digitalisation journey. I am positive that our valued customers will continue to enjoy better products and services everyday. 

Is OCB facing any challenges on the digitisation front? If so, how are they being addressed? 

We are facing many challenges in our digitisation effort. The biggest one would be a regulatory framework where some important customer journeys or processes cannot be fully digitised without proper legal framework in place. In addition, there are also a few internal challenges such as legacy IT infrastructures, shortfall of digital talents and internal policy which are posing hurdles in the implementation of digital initiatives.  Nevertheless, these challenges do not stop or slow down our transformation efforts.  

To address the legal challenge, we work closely with the State Bank of Vietnam to stay updated of latest developments such as ekyc pilot, fintech sandbox and mobile money among others.  In terms of internal challenge, the digital and IT teams are collaborating closely on all digital initiatives. With that, the implementation speed is much better.  To address the talent shortfall, we provide a very open and innovative culture where ideas are freely shared and implemented, attracting and retaining young talents within the OCB OMNI team.

What is OCB’s role in digitising Vietnam’s financial industry at large? 

As one of the leading banks in Vietnam, OCB plays an active role in promoting digital development of financial services as an effort for financial inclusion.  We cooperate with leading ewallet companies to bring payment services to the underbanked segments.  Further, we are very active in implementing new technology solutions in our product offering so that customers can access financial service products at low cost and convenience.  We believe it is our responsibility as one of the players in the financial service industry to deliver financial services products to all customers across the country — and digital is the best means to do so.  We will continue to pursue this responsibility and opportunity in the years to come.

The post Orient Commercial Bank digitises financial services for enhanced customer experience appeared first on International Finance.

The International Finance Banking Awards are presented by International Finance, a premium UK business and finance magazine. The award honours banks for their accomplishments in innovation, infrastructure development, and customer centricity.

OCB is one of the only three Vietnamese lenders to receive the award this year.  The second award it received is a milestone in OCB’s roadmap to achieve the goal of becoming the best digital and modern retail bank for small and medium-sized enterprises in the country by 2020

Established in 1996, OCB offers financial solutions and services to all customer segments. It is focused on expanding its network, improving competitiveness, and strengthening risk management. The bank has been investing in technology and digitising operations for many  years. 

Du Xuan Vu, the bank’s IT director, said, “OCB sees that the adoption of modern technology is an indispensable trend. As part of the development roadmap, the bank will continue to invest in digital technology to design more products and services.” 

OCB OMNI: Innovative digital banking solution

In 2017, OCB began to develop omni-channel which is a cross-channel content strategy that organisations use to improve user experience. One year later, it became the first omni-channel bank in Vietnam. 

The bank launched OCB OMNI platform, digital bank and OMNI PAY in April 2019 — and they have been developed on the most advanced omni-channel foundations in the world.  

OCB OMNI and OMNI PAY offer individuals and enterprises free, rapid, convenient and safe services. Using these platforms, customers can open a new account, get a loan, purchase insurance or invest without visiting the bank branch. 

The two omni-channel platforms also offer customers QR code services, free 24/7 money transfer service within eight seconds and swift payment of electricity, telephone, and internet bills. Customer can access http://go.ocb.com.vn or download the app from the Apple Store or GooglePlay Store to use the service. 

Sanjay Chakrabarty, deputy CEO and head of retail banking at OCB, said, “OCB was one of the first banks in Viet Nam to embark on the digital journey. We were very clear that our digital strategy had to be embedded in our core business. So we didn’t simply go around copying ideas from developed markets and implementing them. We put in a lot of effort to understand where we could harmonise our digital strategy with our ongoing business model, which includes a physical network.”

The launch of OCB OMNI and OMNI PAY is a remarkable achievement for OCB amid the boom in cashless payment in Vietnam. They are a testament to the relentless efforts invested by OCB to introduce better products and services to customers. 

Since the launch, the number of OCB customers using the service has been  increasing sharply. “Our customer service has got the highest ratings from end-users after we automated various process steps and reduced turnaround time for key services,” Chakrabarty said. “Some 90 percent of all new customers we acquire now have at least one online transaction in the first six months. 45 percent of our credit cards are being sold exclusively through digital channels. We have unsecured pre-approved loans that are delivered and fulfilled through digital channels. 

“We are now selling insurance as well as investments through our mobile app OCB OMNI. This has resulted in significant enhancement of customer experience.”

OCB has also tied up with many technology partners to build a robust and safe technology system. In June, OCB announced the successful deployment of the IBM Integrated Analytics System (IIAS). It is the first bank in Vietnam to have deployed IIAS. 

IIAS is a unified hybrid data-management analytics solution providing massive parallel processing. It comprises a high-performance hardware platform and optimised database query engine software that work together to support various data analysis and business-reporting capabilities.

In May, OCB reported that it is collaborating with Dell to run a solution called Software Defined Everything (SDN), which creates a modern, safe and flexible operating system.

Speaking of technology investment, Chakrabarty said: “We understand this is an ongoing journey. We have a company culture where we seek speed and simplicity in everything we do. 

“The key components that sustain this drive are, of course, embracing new technology, the orientation to automate as many manual processes as possible, using the data to understand customer needs at all times and presenting solutions rather than merely selling products, and, finally, empowering customers to make their own choices.”

OCB sees steady development in Vietnam banking

Besides technology, OCB has also focused on steady growth that is evident from its recent accomplishments.

Last year, it was one of the first banks in Vietnam to achieve Basel II norms. Basel II is the second edition of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on banking supervision. Basel II stipulates minimum capital requirements, supervisory review, and market discipline. It seeks to enhance competition and transparency in the banking system and make banks more resistant to market changes.

Moody’s Investors Service has upgraded OCB’s ratings to B1, a significant landmark in the bank’s efforts to improve its financial capacity and risk management. OCB is one of the six banks to buy back all of its bad debts from the Vietnam Asset Management Company.

The bank’s return on assets (ROA) has grown consistently and has always been among the top 10 banks in the country. It has nearly 120 transaction points in all major cities and economic hubs in the country.

OCB has underlined its leading position with more than 10,000 professional staff, a foundation based on modern technology and well-loved brands. For years, the bank has been growing at double the average rate of the industry.

The post OCB wins International Finance Award for digital banking appeared first on International Finance.

International Finance: Could you please share some facts and figures about the digital transformation process of OCB over recent years? How could these changes help improve your business performance last year?

Sanjay Chakrabarty: Orient Commercial Bank was clear that our digital strategy had to be embedded in our core business. So, we didn’t simply go around copying ideas from developed markets and implementing them. We put in a lot of effort to understand where we could harmonise our digital strategy with our ongoing business model which includes the physical network. We worked with well-established consultants to build out our roadmap and it took us a while to get full clarity on the digital transformation that we wanted to bring about. We realised that it is so such more than just technology, it is also a mindset and a culture. Today, I can confidently say that digitalisation and automation are part of our corporate DNA.

This process has changed the way we do business. Ninety percent of all new customers we acquire now have complete at least one online transaction in the first six months. Forty five percent of our credit cards are being sold exclusively through digital channels. We have unsecured pre-approved loans that are delivered and fulfilled through digital channels. We are now selling insurance as well as investments through our mobile app – the OCB OMNI platform. This has resulted in a significant enhancement of the customer experience we deliver. Our front end staff work seamlessly between digital touchpoints and physical ones.

What kind of technologies has OCB been investing in upgrading your banking system and services in recent years? How is the progress of implementing the digital core banking system to accommodate Internet banking payment services and digital payments at OCB at the moment?

The enhancement of technology is a continuous process. We upgrade our technology, no matter how small the requirement, every month. Today, we have a frontend that cuts across mobile app (OCB OMNI), online banking, and systems used by tellers. What this means is that any customer can interface with us through any of the channels – physical or digital, and still have a consistent experience. But that’s just the frontend. At the backend, we have a customer relationship management system (CRM) that gives us a 360-degree view of the customer at all times.

We have a workflow system for loans, so that we can track loan applications as they go through different stages and we can keep the customers informed. Our data hub that ties in with the 360-degree customer view, can make trigger-based offers for various products on a real-time basis through mobile apps. We connect to our partners through APIs which then support frictionless payments through our bank. All these capabilities have required significant upgrade of systems, but more importantly they have called for re-orientation of the mindset of our people who design products and customer experience.

As you have alluded to in your question, one of the most primary needs for a retail customer is to be able to make payments. For a customer to stay loyal to a bank, the bank must enable frictionless payments for most of the recurring payment needs of a customer. If the bank cannot do that, it will not be relevant to the customer anymore. We understand that. So, we have built a direct payment network with phone companies and utility companies, hundreds of schools, key universities, and hospitals. We have also tied up with platforms that gives us access to large merchant networks where we have set up our QR code-based payments platform.

At OCB, we have also continued to enhance our credit card and debit card capabilities which were the first means for cashless payments. The internet economy of Vietnam is roughly three percent of GDP which is one of the highest in this part of the world and that has been made possible by banks such as ours that have relentlessly pursued digital payments.

How has OCB’s operational model and business strategy changed in order to adapt to the digital transformation trend as well as to capture opportunities from the local banking sector?

I would like to look at this question at a little differently. For OCB, digital transformation is embedded in operational model and business strategy. So, digital transformation does not change operational model, but it is the other way around where we are using digital capabilities to change our operational model.

For instance, we have been able to build ecosystems for most of our partners across SME and retail banking product lines. Our retail banking products are used by our partners to serve their employees and customers better. The interconnectivity of products and services across different financial needs is possible only because we can build and support it digitally. Now with open APIs, we support real-time interactions with most of our partners. Digital transformation has allowed banks like ours to assemble their complete suite of products and services on one single platform that the customers can access seamlessly. This is important for the customers to be loyal to banks. If a bank offering is discrete and siloed, if they cannot build out product compositions that remove the pain-points of businesses and individuals, they will lose their customers to fintechs who are so much better at addressing a narrow vertical in the financial value chain.

Vietnamese banks consider the interaction with customers among the most important challenges of digital banking in Vietnam. What do you think about this view? What barriers has OCB been facing in the process of digital banking implementation?

Interaction between customers and businesses on digital platforms for any industry is not without challenges. Besides, banking has another very important aspect to it – trust, which is difficult to establish purely on digital channels. So, for digital banks this can be a struggle. However, for OCB, we harmonise physical and digital touchpoints. We have clear understanding of the strengths that each channel brings and so this issue is not so much of a problem for us.

Digital platform is great for simple transactions such as payments and paying bills or even gathering information while deciding on investments or while buying insurance. However, for value added products and services such as getting a mortgage loan, digital channels have to be supported with face-to-face interactions. I think the banks need to understand that clearly.

With regard to challenges, OCB is not facing any barrier in digital expansion that is unique to it. Vietnam is still going through transformation of its regulatory framework that will set clear guidelines for e-KYC or electronic signatures and, once that happens, the banks will be able to onboard a lot more customers and serve them online. This will drive financial inclusion in the country where the ratio of banked population is still quite small at 30 to 35 percent.

What are strategies are you pursuing to accelerate technology investment for OCB’s digitalisation process in future?

OCB is committed to digitisation and digitalisation. This is true not just for customer interfaces, but for every aspect of the business. We have partnered with various consultants and even fintechs to accelerate the digital journey. Our mobile application has been recognised as one of the best in the market. We have built products and services that are targeted at digital platforms. Our customer service has highest ratings from end-users after we automated various process steps and reduced turnaround time for key services. We have loyalty of our partners as we have built out eco-systems for them that offer financial products to their employees and customers with least friction. We are seeing progress and value from different parts of the business coming through from digitisation and digitalisation.

We understand that this is an ongoing journey. We have a company culture where we seek speed and simplicity in everything we do. The key components that sustain this drive are of course, embracing new technology, the orientation to automate as many manual processes as possible, using the data to understand customer needs at all times and present solutions rather than sell products and finally, empowering the customers to make their own choices.

The post OCB: Pioneering Vietnam bank in digital technology appeared first on International Finance.