As Vietnam steadily adapts to the post-lockdown normalcy, digital transformation plays a crucial role in unlocking Vietnam’s next chapter of economic growth and wealth creation. On November 5, Vietcetera hosted Shaping The Future In The Digital Age: Financial Services Outlook webinar to discuss how financial institutions in Vietnam have taken this opportunity to digitize and further expand their scope and services.
In this webinar, host and Vietcetera CEO Hao Tran, had in-depth discussions with four expert speakers: Wayne Besant (CEO, AIA Vietnam), Bruce Delteil (Managing Partner, McKinsey & Company Vietnam), Manisha Shah (CFO, MoMo), and Winnie Wong (Country Manager of Vietnam, Cambodia & Laos, Mastercard).
Missed this session? Read the summary or listen to the webinar replay below.
Digitization is creating more relevant and straightforward products
AIA Vietnam’s CEO, Wayne Besant, started the session by explaining the factors that make AIA unique and resilient and how this century-old business can help people live longer, better and healthier lives in this digital world. As one of the world’s largest insurance companies, AIA is a leading life insurer and also offers accident and health insurance and savings plans. In Asian developing countries, including Vietnam, where low insurance penetration remained a challenge, AIA found a promising market to expand its business and raise awareness of healthy living. This stems from “the company’s core essence on vitality, facilitating longer-living and healthier lives for their staff members, partners and clients,” said Besant.
To adapt to a new normal in Vietnam, Besant ensures that AIA Vietnam focuses on creating more simple, transparent, and relevant products to “enhance customers’ experience in the digital space.” For instance, customers will be able to access AIA Vietnam’s new Vitality app coming next year, which provides personalized exercises and diets for physical and mental health and rewards and motivates customers to take on healthier lifestyles with things like free vouchers and premium discounts, and all centered around our Healthier, Longer, Better Lives proposition. The customers will have access to all the touch-points, whether it’s from the initial application for taking the policy right through to the claims and the fulfillment part of the proposition as well,” said Besant.
The AIA Vietnam CEO added that everything has to be integrated, simple, and easy to use. And that the ongoing opportunity and challenge for the company is “to make sure that the customer experience is at the heart of everything we do. Companies that provide customer-centric solutions are the ones who continue to win in the market.”
The growing importance of digital ecosystems for insurance and financial companies
Bruce Delteil, Managing Partner, McKinsey & Company Vietnam, continued the webinar by bringing insights on what it means to be a digital ecosystem in the financial and insurance sectors in Vietnam. Broadly defined, an ecosystem is an interconnected, aggregated value proposition that serves a holistic purpose. For example, a home buying process involves working with architectural firms, construction companies and lenders. “The ability to build all of these elements together as one value proposition and leveraging technology to have that seamless integration is what we call an ecosystem,” said Delteil.
Ecosystems will be the future of any business model because, firstly, they lower costs for acquiring consumers, he said. After all, you can get your customers on existing platforms or platforms you have built yourself rather than taking several physical steps between you and the customers. Second, ecosystems give you valuable data that will eventually be aggregated. Third, he added, they facilitate your relationship with customers because you already know what they want, but you will also get more novelty in making new products and services. “Companies become part of an ecosystem either by joining an existing one or creating their own ecosystem from scratch.”
For Vietnam moving forward, the value proposition of ecosystem services will become more important than ever, because customers are looking for quick, affordable solutions. “It’s all about companies adopting an ecosystem mindset and not thinking within the boundaries of sectors. If data is valued, follow the data, which platforms will give you the most data or most transactions to play with. Lastly, digital ecosystems will give rise to many talents such as designers, data scientists and technologists,” said Delteil.
Panel discussion: Key takeaways
Although more and more people are making online payments, Manisha Shah, the CFO of MoMo indicated that customers still have barriers to adopting new payment technologies, such as lack of education and awareness. “Once people start making digital payments, the number ramps up very quickly due to networking effects,” Shah said. “But small and medium merchants are one of the most difficult markets to reach, because the challenge they face within the uncertainties of the COVID-19 pandemic is a lack of human resources. They have a minimal understanding of how the digital world works and limited time to learn this. Finally, not only that, in the last two years many of them live in survival mode, which means they were thinking in short terms. But also all competitors prefer cash,” said Shah.
“What we’ve been deeply focused on in the last two years was trying to create products where the mindset of merchants on digital payments shifts from being a cost to having a value proposition. When you offer values of going digital into your products then it will be worth the merchants’ time.”
One major benefit of going digital is that it can help SMEs with liquidity and getting financing. “People tend to think that ‘banks don’t want to lend to me,’ but the truth is it’s tough for banks and licensed lenders to lend when there’s a lack of data. So by going digital, the data and transparency are all there,” said Wong, Country Manager of Mastercard in Vietnam, Cambodia and Laos.
“The pandemic has made SMEs start thinking about going digital because anyone who didn’t go online, at least in the last five months, would probably suffer. It started last year but these last five months have shown that. Now there has been more acceptance from SMEs to think that ‘Now I can do something online and not just offline, I can do something about cashless and not just cash’.”
To address the concerns of whether advanced technology to improve efficiency could lead to the redundancy of jobs, Delteil said that “they will help jobs evolve instead of replacing them.” For instance, innovations in mobile and digital platforms gave rise to universal bankers who would be trained to handle a wide range of walk-in customer requests from beginning to end.
Besant highlighted that companies are proactively tackling the challenges of COVID-19 by adopting a blend between a face-to-face connection and digital enablement that enables them to reach new customers. “As people are looking for ways to fulfill their needs through seamless and simple transactions, companies are working closely together to bring that value proposition to their customers.”
For financial institutions to stay in operation, Shah believed that “having customers’ trust is critical in Vietnam. As more people start using e-wallet and as more companies start offering it, it will become easier to gain people’s trust,” said Shah. “But companies or platforms that survive in the industry are the ones who create more value in their products and know-how to engage with their customers and create a good customer experience.”
“At the end of the day, it is about evolving with consumer needs,” Wong echoed. “Companies should think about how they can meet their customers’ needs better using innovative technologies to stay ahead of the curve.”