Now in the fourth of a five-year transformation strategy, Techcombank has carved out a sweet spot for itself in Vietnam’s banking sector.
Put simply, its investments in people, data and digital platforms have given it a competitive edge in financial performance, customer offerings, technology and talent development that are enabling the bank to fulfil its vision to “Change banking, Change lives”.
The bank’s strategy ensured it had the resilience and financial strength to successfully navigate a volatile 2023. This year, Techcombank has shifted gear and its investments in technology have become a source of real value, enabling it to accelerate the launch of new offerings, drive innovation and expand its customer base – all the while maintaining industry-leading profitability.
All of this means the bank is well-placed to build on its growth momentum as Vietnam’s economy recovers during 2024 and beyond. For example, during the first half of the year Vietnam’s GDP grew by nearly 6.5% year-on-year, according to the General Statistics Office. During this 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 numbers, these are not just outstanding at the ASEAN level, but also across Asia. We do not necessarily have to become the largest bank; we want to see the right combination of profit growth and capital efficiency.”
Jens Lottner, Chief Executive Officer
Built on a bedrock of resilience
Techcombank rose to the challenge created by last year’s economic headwinds, reaching new heights in terms of profitability, asset quality and balance sheet strength.
Despite high interest rates and uncertainty around Vietnam’s bond and real estate markets, Techcombank’s profit before tax exceeded its guidance by 4%. “This reflects the robustness and diversity of the business model,” said Lottner.
For example, its total assets surged by 21.5% year-on-year to VND849.5 trillion (around $33.4 billion),with CASA (current account savings account) balances rising 37% year-on-year, resulting in the highest CASA ratio in Vietnam by the end of 2023, at nearly 40%.
Techcombank’s sustained profitability, robust asset quality and balance sheet strength enabled it to pay a cash dividend to its shareholders in Q2 2024, which was the highest in the Vietnamese banking industry.
Other achievements included Techcombank generating more fee income than any other bank in Vietnam, at VND10.2 trillion, up 9.5% year-on-year, as well as achieving a number-one ranking forwealth management, card payment volume, fee income, transaction banking and equity brokerage among 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 its total customer base to 13.4 million.
“These customers were rewarded with new cutting-edge financial offerings easily accessible through the bank’s marketing-leading mobile banking apps and digital platforms,” added Lottner.
Redefining the banking experience
Another key focus for Techcombank is to lead the digital transformation of Vietnam’s banking sector by pioneering the application of data analysis and artificial intelligence (AI) to create meaningful experiences for customers. Today, Techcombank has broadly applied data analysis and AI across the bank and most major systems have been transitioned to the cloud.
One example is the bank’s “data lake”, which integrates data from over 50 of the bank’s systems and is combined with Amazon Web Services’ (AWS’) data analytics capabilities to create a bank-wide ‘data brain’. This capability can be used to deliver more personalised customer experiences by linking it with the bank’s digital platforms, such as its cloud-based customer relationship management (CRM) solution. This CRM provides a centralised 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,” revealed Lottner. “It enables us to harness the power of data and AI to drive unique business outcomes and unparalleled customer centricity.”
Techcombank is also using data and AI to create hyper-personalised experiences for customersthrough its mobile banking apps. For example, the bank is using AI and machine learning to providepersonalised financial management advice and insights via the app, helping customers to enjoy their money and save for the future. Techcombank has already delivered over 52 million personalised pieces of financial advice to more than 4 million customers since the experience was launched.
Another example is Techcombank’s new loyalty ecosystem, available through the app, and offering rewards and experiences tailored to individual customer’s preferences and lifestyles. It is already one of the largest and most diverse loyalty programmes in the Vietnamese banking industry, encompassing over 19,000 points of sale with over 300 brands where customers can earn reward points.
Inevitably, central to Techcombank’s success is its efforts to recruit and develop diverse, skilled andengaged talent. And its technological ambition is supported by a workforce including over 1,800 data scientists, analysts, engineers and IT-related staff.
Such a combination of advanced data capabilities, state-of-the-art digital infrastructure and top-tier talent enables a growth strategy that is hard for other banks in Vietnam to replicate, explained Lottner. “We are now ready to go to the next level, to compete and win over customers to realise our vision.”
Ultimately, this includes reaching $20 billion in market capitalisation and 55% CASA, as part of a bid to become a top-10 bank in the region.
In general, Lottner is confident of hitting these targets – including VND27.1 trillion in profit in 2024 – in an economy that seems on course to continue growing in the second half of the year. “Even though there was a slowdown in 2023, we believe that in 2024 and 2025, our diversifying strategy will deliver and we will reach our set milestones.”
