Hanoi (VNA) – Many Vietnamese commercial banks have moved to developretail banking services, seeing it as a strategy to reduce risks and optimisetheir business results, according to insiders.

Retail banking, also known as consumer banking, is the typical mass-marketbanking with services offered to individual customers, including savings andchecking accounts, mortgages, personal loans, debit/credit cards and certificatesof deposit.

Actually, investing heavily in retail services has become an inevitable trendin Vietnam’s financial market as they are a key to make a sustained and stableprofit for the banking sector. This type of service also helps disperse risksdue to a large network of customers while contributing greatly to expandingmarket and improving competitive capacity for commercial banks.

“Retail banking is playing an increasing role in the development of the bankingsector”, said Nguyen Quoc Hung, head of the State Bank of Vietnam (SBV)’sDepartment of Credit for Economic Sectors.

Statistics from the central bank showed that outstanding debt for small-andmedium-sized enterprises accounted for 18.7 percent of the total outstandingdebt, up 12.9 percent from the end of 2018, while that for households made up45.4 percent, increasing 12.19 percent year on year, he said.

Meanwhile, VNDIDRECT Securities Corporation (VNDIRECT) believed that retailbanking would continue to become a primary motive for commercial banks’development.

“Attractive retail services and quality human resources are two main factorsthat help commercial banks gain competitive edge in the field. Ability todistribute products also decides the banks’ market share in this segment;therefore, any bank with strong customer database will gain better advantage”,VNDIRECT experts said.

Besides traditional services, commercial banks are making heavy investment topromote retail sales on digital platforms, which have brought about robustresults in revenue growth rate, business results and service quality, amongothers.

General Secretary of the Vietnam Bank Association Nguyen Toan Thang said thatdigital transformation is important for commercial banks diversify theirservice profile, save time and cost for themselves and their customers.

Hung said that in a bid to endorse retail services of commercial banks, the SBVhas carried out a wide range of measures to stabilise the macro-economy to curbinflation, support the market, and create conditions for enterprises andresidents to get access to banking services and products.

Along with boosting non-cash payment via Internet Payment, Mobile Payment, QRCode, Tokenization, contactless payment, and mPOS, the SBV will study andcomplete legal framework to back retail banking services, as well as encouragethe expansion of credit institutions to mountainous and remote areas, Hungadded./.