Retail banking 2022

Retail customer perspectives and experiences

Contents

1. Retail banking introduction 3

2. Vietnam retail banking landscape 5

3. Bank product penetration and opportunities 15

4. Customer experience 20

5. Retail bank brand momentum 23

6. Retail bank brand equity 27

7. Digital banking revolution 32

2
Retail banking introduction
With middle-class acceleration and lower birth rates, households are
smaller and have become wealthier. Vietnam has experienced a rapid
rise in modern retail trade and e-commerce which promote non-cash
payments. Non-cash payment is growing at a rapid pace via online,
mobile wallets, mobile banking and QR codes. According to the State
Bank*, in the first haft of 2022 compared to the same period of 2021,
non-cash transactions increased 77% in volume and 30% in value.
The same period experienced increases of; 63% (volume) and 32%
(value) for internet banking, 98% (volume) and 84% (value) for mobile
transactions and 86% (volume) and 127% (value) for QR code
payments.

In 2021, retail loans accounted for 40-50% of bank loans. Retail

banking is a trust-based customer-oriented business. Brand image,
customer experience and customer journey play critical roles in any
bank’s competitive position.

Cimigo’s financial services monitor study provides intelligence on

banks’ competitive position. This is essential for both managing
communications and driving operational improvements.

The survey included 2,055 interviews nationwide. The targeted

respondents are aged 18 – 55 years and have a bank account. The
sample covers key cities (Hanoi, HCMC, Danang, Hai Phong and
Can Tho) and both urban and rural strata in other provinces with
respondent profiles in proportion to the population’s demographic
profile.
*https://laodong.vn/kinh-doanh/chay-dua-
thanh-toan-so-1108836.ldo

3
Key takeaways
1
The market is dominated by state-owned commercial
banks. This is driven by physical accessibility, especially
beyond the key cities of Hanoi, HCMC, Danang, Hai
Phong and Can Tho.

2
Retail banking has great growth potential and is
experiencing dynamic competition with other non-bank
financial firms.

3
The top banks deliver good customer experience whilst
strong brand building is nascent. Techcombank performs
strongly in both brand building and customer experience.

4 The rise in non-cash payments, modern trade and e-

commerce means that digital transformation will
continue to change the shape of the retail banking
sector. Improving customers’ digital experience and the
ecosystem of digital products and services is key to
future success.

4
Contents

1. Retail banking introduction

2. Vietnam retail banking landscape

3. Bank product penetration and opportunities

4. Customer experience

5. Retail bank brand momentum

6. Retail bank brand equity

7. Digital banking revolution

5
Vietnam retail banking landscape

Banked national adults 18+ 23% used bank transfer most

70% often for online shopping
Internet national all
73%
Smartphone national adults 13%
97% 15+

23%
64%
62%

Online E-wallet
shopping
Bank transfer
Cash on delivery

Change in wealth 2017 - 2021

6 billionaires 1,530,577 households

=>USD1,000 (monthly income)
Up 200%.
Up 24%

1,228 Ultra high net 9,603,248 households US$500-

worth (>30 US$ million). US$999 (monthly income).
Up 355% Up 21%

69,895 Diaspora remittances

millionaires US$18 billion.
Up 218%. Up 20%

6
 Retail banking promises to thrive in
the coming years.

Cimigo expects Vietnam's gross domestic product to grow 7.4%

in the full year 2022. The Vietnamese banking sector has gone
through an eventful 2021 given the impact of COVID-19. Although
risks and uncertainty remain the sector has benefited from a strong
economic recovery, government support for non-cash payments and
increasing digital transformation. Most banks reported impressive
profits in Q1 and Q2 2022.

Profit reported in first haft of 2022 (billions VND)

Source: financial reports from banks
Banks Profit Growth

Vietcombank 17,373 28%

VPBank* 15,323 70%

Techcombank 14,106 22%
MB 11,898 49%
VietinBank 11,608 7%
BIDV 11,048 38%
ACB 9,028 42%
SHB 5,848 84%
HDBank 5,304 27%
VIB 5,023 27%
TPBank 3,788 26%
LienVietPostBank 3,589 76%
MSB 3,336 7%
Sacombank 2,908 20%
SeABank 2,806 80%

Increase - Decline
*VPbank profit is contributed by notable other income (VND8,433 billions).

7
Vietcombank dominants the retail
banking sector.

Leading state-owned banks Amongst the private joint stock

dominate the traditional commercial banks, the
transaction point network transaction point network is not
(ATMs, transaction offices and a competitive advantage.
branches). These banks hold According to the Ministry of
long-term competitive Culture, Sports and Tourism*,
advantages derived from their only TPBank which currently
network, trustworthiness and has the smallest physical
high popularity. They perform network, amongst the top 10
well in salience, usage and banks, continue to invest
market share for the most significantly in expanding their
frequently used bank. However, transaction point network.
their customer experience
metric, net promoter score
(NPS), underperforms the
* Source: http://nhipsongkinhte.toquoc.vn/ngan-
average of the top 10 banks hang-viet-nao-dang-dan-dau-ve-mang-luoi-chi-
(BIDV is the one exception). nhanh-phong-giao-dich-4202228282941692.htm

8
Saliency and usage: Vietcombank
dominants the retail banking sector.

Top 5 bank funnel (%) Top 3 reasons to use Number of ATM

Based on Cimigo survey N = 1,522 this bank most often and branches

Awareness • Trustworthy bank

Trial (ever used)
• Wide network of ATM
Current use 1,728
Use most often • Widely used by other

Awareness • Better online services

Trial (ever used)
• Trustworthy bank
Current use 3,005
Use most often • Wide network of ATM

Awareness • Fast money transfer

Trial (ever used)
• Trustworthy bank 812
Current use
• Quick and simple paper
Use most often
work

Awareness • Trustworthy bank

Trial (ever used)
• Wide network of ATM 5,564
Current use
Use most often • Widely used by other

Awareness • Trustworthy bank

Trial (ever used) 2,265
• Fast money transfer
Current use
Use most often • Wide network of ATM

* Partly state-owned bank

9
Saliency and usage: Techcombank
dominants private banks.

Top 6 to 10 bank funnel (%) Top 3 reasons to use Number of ATM

Based on Cimigo survey N = 1,522 this bank most often and branches

Awareness • Trust worthy bank

Trial (ever used)
• Quick receive and payment
Current use process 1,113
Use most often • Quick and simple process
of application

Awareness • Quick receive and payment

process
Trial (ever used)
Current use • Trust worthy bank 1,349
Use most often • Quick and simple process
of application

Awareness • Enthusiastic and

supportive staff
Trial (ever used)
• Quick receive and payment 799
Current use process
Use most often • Quick and simple process
of application

• Transparency, clarity about

Awareness
fees
Trial (ever used) • Provide many ATM at 444
Current use many convenient locations
Use most often • Quick and safe mobile app
and other online services

• Transparency, clarity about

Awareness
fees
Trial (ever used) • Enthusiastic and 441
Current use supportive staff
Use most often • Quick and safe mobile app
and other online services

10
Competition is the most dynamic in
key cities.

In the key cities* both transaction values and customer expectations

are greater. Techcombank demonstrates an impressive performance
in these cities, surpassing both Agribank and Vietinbank to compete
closely with BIDV and MBbank. Techcombank gains the highest
usage share in Hanoi. Both ACB and Sacombank perform
significantly better in HCMC than they do nationally. In fact, in HCMC
the market is more dynamic with smaller banks achieving a share of
use than seen in Hanoi.

Switching banks for a customer is complicated and time-consuming.

Once a new bank has been tried, conversion to the most used bank is
high. Easing the customer process to opening a bank is the key
barrier for banks to overcome in order to improve their performance.

* Hanoi, HCMC, Danang, Hai Phong and Can Tho 11

 Shares of bank used most often
across cities.

Share of bank used most often in different areas (%)

Based on Cimigo survey main sample N = 1,522

Total 19 12 13 13 11 7 9 5 32 6
(N = 1,522)
Key cities - tier 1 16 8 13 13 9 7 13 6 42 9
(N = 958)
Other cities - tier 2 22 17 14 12 13 6 4 312 6
(N = 564)
Urban 19 9 13 12 10 7 9 6 33 9
(N = 762)
Rural 18 14 13 13 12 6 10 3 21 8
(N = 760)

Share of bank used most often across tier 1 cities (%)

Based on Cimigo survey key cities N =958

Key cities - tier 1 16 8 13 13 9 7 13 6 42 9

(N = 958)
Hanoi 14 12 9 16 8 2 27 3 32 4
(N = 251)
Hai Phong
16 4 10 24 13 7 5 333 12
(N = 116)
Da Nang
(N = 117) 13 9 21 9 9 1 9 6 6 3 14

HCMC
(N = 355) 15 7 10 10 8 12 6 11 4 3 14

Can Tho
(N = 119) 24 7 16 8 12 13 8 5 3 4

Vietcombank Agribank BIDV MB bank

Viettinbank Sacombank Techcombank ACB
VPbank TPBank Other banks
12
The top 10 banks achieve more than
90% share of bank usage across
products.

For all loan products

Vietcombank (22%), Agribank (21%) and BIDV
(18%) take the biggest share. Vietcombank
outperforms with house (15%), car (16%) and
unsecured loans (19%) whilst business loans are
led by Agribank.

For credit card

Vietcombank (20%) still dominates followed by
Vietinbank (13%), MBbank (12%) and Agribank
(12%). MBbank and Techcombank lead the
stock/bond trading segment (15% and 14%
respectively).

In the key cities of Hanoi, HCMC, Danang, Hai Phong and Can Tho
the competitive landscape differs. Vietcombank only leads credit
cards (16%) and unsecured loans (15%) whilst Techcombank leads
car loans (15%) and stock/bond trading (18%). BIDV is dominates
secured loans (19%). Agribank dominates business loans (22%).

13
 The top 10 banks achieve more than
90% share of usage across products.

Penetration of products (%)

100 Base on Cimigo survey main sample N = 1,522

22
7 7 5 4 3 5

Transaction Credit Business Unsecured House Secured Car loan Stock/bond

account card loan loan loan loan trading

Share of bank used most often across products (%)

Based on Cimigo survey *total sample N = 2,061
*Total sample includes main sample and booster sample
to achieve adequate sample size for products analysis

Transaction account 21 14 12 10 11 7 10 3 22 9
N = 2,062
Credit card 20 12 8 12 13 7 8 5 42 9
N = 596
Business loan 16 22 10 7 13 7 8 4 33 6
N = 206
Unsecured loan 19 14 16 9 6 8 4 4 9 4 8
N = 111
House loan 15 14 14 13 11 7 7 6 33 6
N = 216
Secured loan 13 15 17 11 13 4 7 8 23 8
N = 127
Car loan 16 10 11 15 12 9 9 4 6 4 3
N = 143
Stock/bond trading 12 13 10 15 12 7 14 4 9 5
N = 109
Vietcombank Agribank BIDV MB bank
Viettinbank Sacombank Techcombank ACB
VPbank TPBank Other banks

14
Contents

1. Retail banking introduction

2. Vietnam retail banking landscape

3. Bank product penetration and opportunities

4. Customer experience

5. Retail bank brand momentum

6. Retail bank brand equity

7. Digital banking revolution

15
Cross selling opportunities for banks.

Target customers who use multiple financial products and services

(more than 3)

25-34 years old White collar workers

48% 32%
Household income
from 15 – 25 VND millions Business owners
64% 37%

Number of financial products and services (%)

Base on main sample N = 1,522

2%

5%

25%
1 to 2 3 to 4
Average
2.22 5 to 6 7 to 8
67%

Who use more than 3 products and services are determined as heavy user.

16
Cross selling opportunities for banks.

To assist banks to penetrate more products amongst their current

customers, the hierarchical cluster analysis and dendrogram shown
below highlight the strongest cross-product selling opportunities.

This indicates the usage of bank products split into 4 sub-groups.

Usage incidence and dendrogram

(Average linkage between groups)

Payment account – 100%

Asset insurance – 4%
Group 4: Asset,
Car insurance – 4%
business insurance,
13%
Business insurance – 4% stock and bond
(Net) trading, car
Stock/bond trading – 5% insurance and car
Car loan – 3% loan.

Secured loan – 4%
Group 3: Secured
25% Business loan – 7% and unsecured loan,
(Net) business loan,
House loan – 5% house loan.
Unsecured loan – 7%
15% Life insurance - 12% Group 2: Health
and life insurance.
(Net) Health insurance – 11%
Term deposit – 23%
53% Group 1: Term
Mobile app – 22% deposit, mobile app
(Net)
Credit card – 24% and credit card.

17
Retail banking has strong growth
potential. Competition from other
financial firms is increasing.
Across all financial products; term deposits, business loans, house
loans and health insurance have the most potential for growth.

Retail banking experienced increased competition from various

financial firms including; consumer finance, e-wallets, digital lending,
personal finance investment, insurance tech, credit scoring and buy
now pay later (BNPL) firms. These other financial firms focus on
mass consumers with their simple processes, digital journeys and
micro products. They are growing and attracted funding of an
estimated US$1.3 billion in 2021.

18% of bank customers use other products

(excluding e-wallets) provided by non-bank
firms. This indicates a high demand for financial
products and raises an opportunity for retail banks to
encourage their current customers to use more
banking products.

18
 Retail banking has strong growth
potential. Competition from other
financial firms is increasing.

Financial products penetration (%)

Based on bank users N = 1,560

100% Net financial 18%

Payment account 100% 18%
products non-bank
73% Loans from 7%
Net _bank products 7%
78% friends/relative
23% 6%
Deposit / Installment loan 5%
Saving book 27%
22% 6%
Credit card Cash loan 5%
23%
3%
Consumer 7%
Tontine* (chơi hụi) 3%
unsecured loan 8%
Day loan (super high 3%
7%
Business loan interest rate) 3%
11%
2%
5% Pawn
Stock/brand trading 7%
2%
24%
5% Net_insurance products
House loan 30%
8%
12%
Consumer 4%
Life insurance 14%
secured loan 5%
11%
3% Health insurance 15%
Car loan 5%
4%
Asset insurance 6%
4%
Car insurance 5%
*Tontine: a traditional capital raising tool
in which individuals pay into a common 4%
Business insurance 4%
pool of money and held by a tontine host.

Current usage Intend to use in next 12 months

19
Contents

1. Retail banking introduction

2. Vietnam retail banking landscape

3. Bank product penetration and opportunities

4. Customer experience
5. Retail bank brand momentum

6. Retail bank brand equity

7. Digital banking revolution

20
Customer experience: TPBank and
ACB achieve the highest Net Promoter
Scores (NPS).
TPBank, ACB, Techcombank, Sacombank, BIDV and MBbank are all
considered excellent.

Net promoter score (NPS) is a widely used market research metric

that is based on a single survey question asking respondents to rate
the likelihood that they would recommend their bank to a friend. The
NPS is typically interpreted and used as an indicator of customer
loyalty as well as relative brand growth within an industry.

The top 10 banks record a

high NPS (74 on
average). Vietcombank,
Agribank and Vietinbank
are strong banks but
clearly need to put more
effort to improve their
customer experience as
they underperform the
average of the top 10
banks. The leading banks
are doing well in bank
staff, facilities and
customer services.

21
 Customer experience: Fees and
product quality are key.
Fees and quality of products and services impact NPS the most. The
top banks receive high satisfaction on these factors. However, online
products and services, efficient processes and procedures are key
NPS drivers which still have vast room for improvement.

Note that branches and ATM networks cease to be a priority in

recommending a bank as digital banking takes hold.

NPS drivers
Improve Fees Focus

Quality of products and services

More impactful to NPS

Online products and

services

Process and
procedure

Customer Facilities
services

Promotions Branches and Banks staff

ATMs location

Low priority Maintain

Average performance from top banks

22
Contents

1. Retail banking introduction

2. Vietnam retail banking landscape

3. Bank product penetration and opportunities

4. Customer experience

5. Retail bank brand momentum

6. Retail bank brand equity

7. Digital banking revolution

23
Retail banking digitalisation begins to
shift the shape of the retail banking
landscape.

Non-state-owned banks perform In terms of communication and

better on their customer brand building, all brands exhibit
experience metric net promoter limited performance except
score (NPS). Techcombank. Techcombank’s
brand-building efforts show a
MBbank and Techcombank
positive impact as it is strongly
have significantly better brand
associated with core factors that
performance in the key cities of
impact to the overall bank
Hanoi, HCMC, Danang, Hai
appeal such as being
Phong and Can Tho. These two
recommended, good customer
brands also have the highest
experience, good products and
share of usage for stock trading
is widely used.
and their share of digital
banking services is comparable Some banks have chosen to
to that of the state-owned create their own fully digital
banks. banks, such as; CAKE, TIMO,
TNEX and OCTO.

24
 Retail bank brand power
The brand power index (BPI) is derived from how customers behave and
how they feel towards banks. BPI indicates the potential growth of each
bank.

As the current retail banking sector has been driven by physical saliency
and accessibility, Cimigo’s model plots BPI against physical accessibility
for a deeper understanding of their performance.

Note this model reflects consumer perspective nationally, yet some

banks deliberately focus on specific regions or cities and hence
underperform from a national perspective.

Despite having fewer physical transaction points, MBbank has a high

level of awareness thanks to its extensive nationwide network (covering
53 cities/provinces) whilst Techcombank places a lot of emphasis on key
cities, particularly Hanoi where it dominates in terms of BPI. The bank
shows consistent effort toward its’ strategy; “focus on high-quality
customers only, not the mass market”.
25
Top 10 banks with highest brand power.

Total Ha Noi HCMC

48.3 70.6 28.0

37.0 55.6 22.5

36.4 43.4 18.0

32.5 38.3 17.5

31.2 32.7 16.9

27.5 25.8 16.3

19.8 13.4 13.5

14.5 9.1 11.8

9.1 9.0 8.3

7.4 8.6 7.4

26
Contents

1. Retail banking introduction

2. Vietnam retail banking landscape

3. Bank product penetration and opportunities

4. Customer experience

5. Retail bank brand momentum

6. Retail bank brand equity

7. Digital banking revolution

27
Techcombank has the strongest
brand equity. Retail banks need far
better brand building.

Physical accessibility is the most common reason for using a bank

most often. However to drive appeal to the bank and motivate
customer acquisition banks will need to focus on customer
experience which will promote recommendations. Cimigo expects that
physical accessibility will play a lesser role in bank performance going
forward.

Techcombank stands out for Even Vietcombank, the

being recommended, having strongest bank, will need to pay
good customer experience, far more attention to improving
good products and services and its customer experience and
is widely used which are the key generating recommendations.
drivers to build appeal. Vietcombank’s relative strengths
include widely used, unique
products and services and
physical accessibility.

28
Techcombank has the strongest
brand equity. The top 5 banks need
far better brand building.

Customers are shown a list of key attributes and asked how they
perceive different banks. Brand relative strengths and weaknesses
are analyzed with chi square normalization which corrects the
distortion that the size of a brand has on the absolute scores.

The output (normalized image scores) can be used directly determine

the unique relative advantages and vulnerabilities of each bank.

Bank imagery - Relative strengths and weaknesses

(from customer’s perception towards banks)

29
 In Hanoi, Techcombank is
outstanding with strengths on the
most important equities.

Ha Noi: Bank imagery - Relative strengths and weaknesses

(from customer’s perception towards banks)

More impactful to overall bank appealing

Recommended
Good customer experience
Truthful bank
Good products and services
Widely used
Sustainable development
Unique products and services
Outstanding digital products and services
Good innovation
Social responsibility
Attractive promotion
Wide ATMs and branches network
Reasonable fees

More impactful to overall bank appealing

Recommended
Good customer experience
Truthful bank
Good products and services
Widely used
Sustainable development
Unique products and services
Outstanding digital products and services
Good innovation
Social responsibility
Attractive promotion
Wide ATMs and branches network
Reasonable fees

Relative strengths Neutral Relative weaknesses

30
 In HCMC, top banks tend not to
stand out from their peers.

HCMC: Bank imagery - Relative strengths and weaknesses

(from customer’s perception towards banks)

More impactful to overall bank appealing

Recommended
Good customer experience
Truthful bank
Good products and services
Widely used
Sustainable development
Unique products and services
Outstanding digital products and services
Good innovation
Social responsibility
Attractive promotion
Wide ATMs and branches network
Reasonable fees

More impactful to overall bank appealing

Recommended
Good customer experience
Truthful bank
Good products and services
Widely used
Sustainable development
Unique products and services
Outstanding digital products and services
Good innovation
Social responsibility
Attractive promotion
Wide ATMs and branches network
Reasonable fees

Relative strengths Neutral Relative weaknesses

31
Contents

1. Retail banking introduction

2. Vietnam retail banking landscape

3. Bank product penetration and opportunities

4. Customer experience

5. Retail bank brand momentum

6. Retail bank brand equity

7. Digital banking revolution

32
Digital banking is key to attracting
retail customers.

The quality of mobile banking applications and online services is a

key reason to use a bank and a driver for the customer experience
metric net promoter score (NPS). Banks are investing to digitalise
their products and services as a core strategy to compete for retail
banking customers.

Use of mobile banking applications

15%

20%
14%

13%

In the key cities of Hanoi, HCMC, Danang, Hai Phong and Can Tho
Techcombank (20%) has surpassed Vietcombank (18%) to be the
mobile banking application used most often.

33
Digital transformation is changing the
shape of the retail banking landscape.

Share of bank application used most often (%)

Based on bank app users N = 342

VP Bank Others
TPBank
2% 4%
Sacombank
3% Vietcombank

ACB 4% 20%
5%

Viettinbank
9%

15%
MBbank
10%
Agribank

13% 14%

BIDV Techcombank

Key digital banks

34
Digital transformation is changing the
shape of the retail banking landscape.

E-wallet brands used most often (%)

Based on who use e-wallets in past month N=249

ZaloPay
11% ShopeePay
15%
Bankplus
4% Others *
Moca/Grab pay 16%
Momo
2%
51%

39% of retail bank users are using an e-wallet

35
Digital transformation is key to
attracting retail customers.

Four in ten retail banking As an alternate strategy, some

customers are using e-wallets banks have launched all new
which are very strong for their brands for their digital bank (a
user experience, eco-system new form of banking that
and promotions. E-wallet users
digitises all the activities and
need to link their e-wallet to their
services). Micro products,
bank account, which raises an
ecosystems and personal
opportunity for banks to
financial management tools are
leverage e-wallets as a bridge to
increase their saliency and being promoted as the key
usage. triggers to attract customers.

The top banks keep improving Instead of expanding physical

their current mobile application accessibility, digital banking is a
by integrating various products more efficient solution to simplify
and features. processes, develop micro
products and encourage
customer recruitment for retail
banks.

36
Digital transformation is key to
attract retail customers.

As an example Cake (powered by VPbank in cooperation with Be

Group) claim an impressive number of users (more than 2 million).
Big data and AI technology provide an advantage to support digital
banks to offer the most suitable products to customers as well as
more efficient credit risk management. Building trustworthiness and
overcoming concerns with cyber risks are the biggest barriers to
overcome for digital banks.

31% of retail bank customers claim that they feel insecure when
using digital and online bank products and services.

37
Banks growth navigators.

To foster awareness beyond physical accessibility, social media, e-

wallet and e-commerce platform linkage are the key sources.

Acquiring customers beyond the key cities of Hanoi, HCMC, Danang,

Hai Phong and Can Tho requires significant resources in
communication and currently (although Cimigo expects this to
dissipate rapidly) expanding branches and ATMs networks.

Trustworthy image, simple process and procedure need to be

highlighted in communication and delivered throughout customer
journeys.

In the key cities where customers less rely on physical accessibility

and customer experience is more important, banks should prioritise
resources to improve their customer experience to generate
recommendations and build trust. Digital transformation is changing
retail banking dynamics. Improving customers’ digital experience and
the ecosystem of digital products and services is key.

38
Get in touch for a report customised
to your bank.
Customised reports with analysis specific to your bank relative to your
strategies and target retail banking customers are available for a fee of
VND120,000,000.

Helping you make better choices

Find out more at www.cimigo.com or [email protected]