Updated: Nov 5, 2019
Credit by: Liz Daunton
The closure of bank branches may be alarming for many consumers. But, a survey from Provident Bank shows that there’s a reason for their decline: many customers are in the habit of using digital banking, and the survey shows they have a strong preference for it.
The rise of mobile banking and mobile payments had led to hundreds of branches being closed in the UK alone. And additionally, according to Which? the number of ATM’s closing was just under 500 a month last year – many of these were free services.
This latest survey, however, shows that consumers seem to prefer digital banking. In fact, of the respondents, only 20% said they would choose the visit a bank rather than using a digital channel. Because of this, it’s important for banks to strike a balance between these two options.
On the whole, consumers said they were satisfied with their bank’s current digital services. When asked if the services met their needs, 66% said they need. In addition to this, 95% of consumers said they were confident their bank was able to protect their data properly.
Younger consumers were the most likely to use digital services, such as Apple Pay or Vemo on a regular basis. Around 30% of all consumers surveyed said they use mobile payments, for example; only 12% of those over 54 said the same.
What holds the key to the Vietnamese banking sector?
Banking is at the cusp of digitalization, and there is a huge potential in Vietnam. With only 20% of more than 90 million citizens in Vietnam holding bank accounts, there is room for greater expansion of the retail banking segment. This is the perfect platform for banks to increase activities in retail banking to grow their loans and deposits in the country and gives them the incentive to reach out to the consumers of today and the future.
Also, with a mere 3% of the population owning credit cards, banks can also look forward to tap on this opportunity to grow transaction values by cards through digitization. Using digital technology, banks can also attract new customers, while simultaneously encouraging existing customers to use more products and services on offer. With the rising popularity of e-commerce in the country, it is estimated that card transaction value will continue to rise by more than 50%. Platforms like PayPal and Facebook are also gaining in popularity as digital payment platforms.
The consumer needs go beyond convenience
87% of the Vietnam population is under the age of 54. That is a huge chunk, and a potential sure shot target to enable digitalization. According to this piece, the middle class in this country will increase to 33 million people in 2020 (approx.). With 60% of Vietnamese under the age of 35, and 58% of the population being digital natives, consumers demand more convenient and accessible financial services.
But this is not all. The correlation between millennial growth and mobile penetration is for all to see. Vietnamese millennials – 20% of the population, are the fastest-growing consumer finance industry’s market segment. And, around 40 Million Vietnamese have now access to the internet which is about 44% of the population. The millennials want a credit card to enable them to satisfy their immediate buying needs. Many of them will qualify to get one within the next 5 years. Additionally, take a look at the image below and see for yourself where digital banking ranks among other activities on a smartphone.
Online activities which people do on their smartphone
This is not a coincidence, and banks will have to pull out all the stops to make sure digitalization is the way forward not only for them but also for the consumers.
But Vietnamese banks have challenges or their own
It goes without saying that technological advancements need to be at the top o