Abhishek kumar financial insights asia pacific may 17 th 2006
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Abhishek Kumar Financial Insights Asia/Pacific May 17 th , 2006. Technology Modernization in the Vietnamese Banking Sector . Capital Markets. Insurance. Banking Services. Institutional Trading, Retail Brokerage, Investment Mgmt. Individual Annuity, Personal Lines — P&C, Life.

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Technology Modernization in the Vietnamese Banking Sector

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Abhishek kumar financial insights asia pacific may 17 th 2006

Abhishek Kumar

Financial Insights Asia/PacificMay 17th, 2006

Technology Modernization in the Vietnamese Banking Sector


Financial insights globally

Capital Markets

Insurance

Banking Services

Institutional Trading,Retail Brokerage,Investment Mgmt.

Individual Annuity,Personal Lines —P&C, Life

ConsumerBanking &Credit

GlobalAnalysis

CorporateBanking

Payments

Risk Management

European Banking Services

European Capital Markets

European Insurance

European Risk Management

RegionalAnalysis

Asia/Pacific Banking Services

Asia/Pacific Capital Markets

Asia/Pacific Insurance

Asia/Pacific Risk Management

ITOServices

Asia/Pacific

IT Benchmarking

Canadian FinancialServices

U.S. ITO

Europe ITO

Brazil ITO

Mexico ITO

Financial Insights - Globally


Current state of bank it

Current State of Bank IT

Growth, Consolidation & Decentralization

Consolidation,Complexity Increases

Dynamic IT Transformation

Growth &Efficiency

Utilities-model,

Convergence,

STP, SOA

Mainframes,

Applications,

Silos.

Centralized - delivery,

Wider access,

Hosted-services,

Outsourcing

Client-Server,

Data-Warehousing, Process- automation, Middleware

1970s–1980s

Mid-80s–Mid-90s

Mid-90s–2004

2005–2010+

10 years

10 years

10 years

~10 years


Strategic top 10 for asia pacific

Strategic Top 10 for Asia/Pacific

  • Core Banking Systems Transformation

  • Channel Investments

  • Profitability and Performance Management

  • Customer Analytics

  • Payments

  • Technology to Support New Business Strategies

  • Regulatory Compliance and Risk Management

  • Security and Fraud Management

  • Business Process Automation/Reengineering

  • Selective Sourcing


Exciting time for vietnam s banks

Exciting Time for Vietnam’s Banks

  • Average Economic Growth: 7.4% over past decade

  • Increasing foreign investment: US$5B+

  • WTO member by end of 2006

  • Banks issuing bonds and increasing savings accounts

  • Privatization: Vietcombank


Vietnamese banking industry

Foreign banks

(8.3%)

Joint-stock

banks

(11.7%)

State-owned

banks (80.0%)

Vietnamese Banking Industry

  • State Owned Commercial Banks (SOCBs)

  • Joint-Stock Banks

  • Entering Foreign Banks

Vietnam Credit Market by Bank Type

Source: Financial Insights, 2005


Socbs

SOCBs

  • Large geographical presence

  • Infrastructure development through government support

  • Financial disclosure rules and capital adequacy

  • NPL confusion


Joint stock banks

Joint-Stock Banks

  • Improve technology infrastructure

  • Expand branch presence

  • Increase capital infusions

  • Hire tech-savvy management


Foreign banks

Foreign Banks

  • WTO and US-Vietnam Bilateral Trade Agreement

    • 100% Foreign invested banks by 2010

  • Growing presence:

    • ANZ and Sacombank

    • Standard Chartered and ACB Bank

    • HSBC and Techcombank


Hurdles to it modernization

Hurdles to IT Modernization

  • Lack of funds for smaller banks

  • Public acceptance of modern banking technology

  • Lack of guidance and poor infrastructure


Government support

Government Support

  • Payment System and Bank Modernization Project (PSBM)

  • PSBM 1: US$49M

  • PSBM 2: More than US$100M

  • Aid filters down to smaller banks


Approaches to it modernization

Approaches to IT Modernization

  • Small to medium sized joint-stock banks

    • Basic upgrades to antiquated systems

    • Focus on channels with cheap transaction costs in order to build customer base

  • Large joint-stock banks

    • Detailed 3 phase approach

    • Networking

    • ATM deployment and major technology upgrades

    • Implementation of complex applications


Approaches to it modernization1

Approaches to IT Modernization

  • SOCBs

    • Larger budgets = bigger projects

    • Core banking systems

    • International banking systems

    • Ebanking services


Essential guidance for local banks

Essential Guidance for Local Banks

  • Improve transparency in financial reporting

  • SOCBs should focus on streamlining operations for greater efficiency

  • Joint stock banks need to be cautious with their IT investments


Essential guidance for vendors

Essential Guidance for Vendors

  • Target banks based on mentioned classifications

  • Banks are looking for easy-to-use, scalable, easily upgradable and compatible products

  • Focus on recurring supervisory or maintenance-related services in order to ensure outsourcing projects in the future


Thank you

Thank You

Contact me at:

[email protected]

or

+65-6228-7739


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