Winfield Wong, head of wholesale banking at HSBC Vietnam said that country has potential for a high rate of adoption of new technologies. This prospect is triggered by a young population very open to innovation, along with robust Internet penetration.

As of November last year, 64 million people or 67 per cent of Vietnam’s population had Internet access. And smartphone ownership has exploded, with 84 per cent of mobile-phone owners in 2017 carrying smartphones, up from 78 per cent in 2016, according to Wong.

Government also has put greater effort into promoting a digital economy. In recent years, the Vietnam government encouraged e-payment development to minimise cash payment. The government has approved a master e-commerce development plan for 2016-2020, and is striving to build a network providing e-commerce services nationwide and is promoting cross-border e-commerce activities.

Financial institutions in Vietnam have also been racing to implement comprehensive mobile and Internet banking services.

Meanwhile, Thailand’s former finance minister Korn Chatikavanij said that a large number of consumers in Vietnam are bypassing the inefficient old-style banking system in favour of mobile banking. Still, many Thais feel more comfortable with the brick and mortar banking system and are reluctant to embrace digital banking services, he said.

However, Moody’s Investors Service, is upbeat about Thailand’s trend toward digital banking.

The international rating agency cited the latest figures released by the Bank of Thailand.

The volume of Internet and mobile banking transactions continues to expand at a rapid pace as both Internet and mobile penetration improve in Thailand.

Mobile and Internet banking accounted for 33 per cent of total payment transaction volumes for the first nine months of 2017, a marked increase from 8 per cent in 2010. In value terms, mobile and Internet banking accounted for Bt23.4 trillion in the first nine months of 2017, a 22 per cent compounded annual increase in value since 2010.

Thai people’s increased use of digital banking channels since 2015 reflects the increasing focus on digital strategies of the banks themselves. Kasikornbank in 2014 began investing around Bt480 million annually to enhance its digital banking services. As of year-end 2017, KBank had 7.3 million users on its mobile banking channel, recording around 3 billion transactions during the year, a tenfold increase from 2014.

This year, Bank of Ayudhya said that it would invest Bt20 billion to develop its technology infrastructure and digital banking platform. Siam Commercial Bank last year planned to invest Bt40 billion to enhance its digital banking capability.

The shift to online transactions provides Thai banks an opportunity to rationalise their branch networks, thereby extracting operational cost efficiencies. The number of commercial bank branches decreased to 6,826 as of September 30, 2017 from a peak of 7,061 branches at the end of December 2015, said Moody’s.

“We expect the volume of digital banking channel transactions to continue increasing,” added Moody’s.

Source: http://www.nationmultimedia.com/detail/Economy/30340164