Now in the fourth of a five-year transformation strategy, Techcombank has carved out a strong niche for itself in the Vietnamese banking sector.
Simply put, the investments in people, data and digital platforms have given the bank a competitive advantage across financial performance, customer offering, technology and talent development, enabling the bank to realize its vision of ‘changing banking, changing lives’.
The bank’s strategy ensured it had the resilience and financial strength to successfully navigate a volatile 2023. This year, Techcombank has shifted gears and its investments in technology have become a source of real value, allowing it to accelerate the launch of new offerings and drive innovation. and expand its customer base while maintaining industry-leading profitability.
All this means the bank is well-placed to build on its growth momentum as Vietnam’s economy recovers in 2024 and beyond. For example, Vietnam’s GDP grew by almost 6.5% year-on-year in the first half of the year, according to the General Bureau of Statistics. During the same period, Techcombank’s total operating income (TOI) and profit before tax (PBT) each grew by around 37% year-on-year.
“If you look at our return on assets, digital usage and some other growth metrics, they are excellent not only at the ASEAN level, but also across Asia. We don’t necessarily have to become the largest bank; we want to see the right combination of profit growth and capital efficiency.”
Jens LotnerDirector
Built on a foundation of resilience
Techcombank rose to the challenge created by last year’s economic headwinds and reached new heights in profitability, asset quality and balance sheet strength.
Despite high interest rates and uncertainty surrounding Vietnam’s bond and real estate markets, Techcombank’s pre-tax profit exceeded expectations by 4%. “This reflects the robustness and diversity of the business model,” said Lottner.
For example, total assets increased 21.5% year-on-year to VND849.5 trillion (approximately $33.4 billion), while CASA (current account savings account) balances increased 37% year-on-year, resulting in the highest CASA ratio in Vietnam by the end of 2023 almost 40%.
Techcombank’s continued profitability, robust asset quality and strong balance sheet enabled Techcombank to pay a cash dividend to its shareholders in the second quarter of 2024, the highest in the Vietnamese banking sector.
Other achievements included Techcombank generating more fee income than any other bank in Vietnam at VND10.2 trillion, up 9.5% year-on-year, and achieving a number one position in wealth management, card payment volume, commission income, transaction fees. banking and stock brokerage between banks on the Ho Chi Minh Stock Exchange.
Also in 2023, its digital capabilities and unique ecosystem of partnerships enabled the bank to add 2.6 million new customers. This marked a 100% increase over the previous year, bringing the total customer base to 13.4 million.
“These customers were rewarded with a new, cutting-edge financial offering that was easily accessible through the bank’s marketing-leading mobile banking apps and digital platforms,” said Lottner.
Redefining the banking experience
Another key focus for Techcombank is leading the digital transformation of Vietnam’s banking industry by pioneering the application of data analytics and artificial intelligence (AI) to create meaningful experiences for customers. Today, Techcombank has widely applied data analytics and AI within the bank and most major systems have been moved to the cloud.
An example is the bank’s “data lake,” which integrates data from more than 50 of the bank’s systems and combines with the data analytics capabilities of Amazon Web Services (AWS) to create a bank-wide “data brain.” This capability can be used to provide more personalized customer experiences by linking it to the bank’s digital platforms, such as its cloud-based customer relationship management (CRM) solution. This CRM provides a centralized 360˚ view of all customer information to empower relationship managers and ensure seamless online and offline customer journeys.
“This puts us about three years ahead of our competitors in Vietnam,” Lottner revealed. “It allows us to leverage the power of data and AI to deliver unique business results and unparalleled customer focus.”
Techcombank also uses data and AI to create hyper-personalized experiences for customers through its mobile banking apps. For example, the bank uses AI and machine learning to provide personalized financial management advice and insights through the app, helping customers enjoy their money and save for the future. Techcombank has delivered more than 52 million personalized financial advice to more than 4 million customers since launching the experience.
Another example is Techcombank’s new loyalty ecosystem, available through the app, which offers rewards and experiences tailored to individual customers’ preferences and lifestyles. It is already one of the largest and most diverse loyalty programs in the Vietnamese banking sector and includes more than 19,000 points of sale with more than 300 brands where customers can earn loyalty points.
Inevitably, Techcombank’s efforts to recruit and develop diverse, skilled and committed talent are central to Techcombank’s success. And its technology ambition is supported by a workforce of more than 1,800 data scientists, analysts, engineers and IT-related staff.
Such a combination of advanced data capabilities, advanced digital infrastructure and top talent enables a growth strategy that is difficult to copy for other banks in Vietnam, Lottner explains. “We are now ready to go to the next level, compete and win customers to realize our vision.”
Ultimately, this includes reaching $20 billion in market capitalization and 55% CASA, as part of an effort to become a top-10 bank in the region.
Overall, Lottner is confident that these targets – which include a profit of VND27.1 trillion by 2024 – will be achieved in an economy that looks set to remain on track to grow in the second half of the year. “Even though there was a slowdown in 2023, we believe that our diversification strategy will pay off in 2024 and 2025 and that we will achieve our set milestones.”
