ECO602_Managerial_Economics FIN And Practice

COURSE TITLE:

Managerial Economics
And Practice

Student: Nguyen Tran Luan

ID : 12-01289

COURSE CODE:

ECO602

Monitor: Prof. Dien Trung SON

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COURSE CODE

......

Build a Model:

Technological innovation

The core issue of the banking industry.

A Research Project Presented in Partial

Fulfillment of the Requirement for the
Degree Master of Business Administration

Submitted by: Nguyen Tran Luan

UBIS

OctoberMarch, 2023

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Executive Summary

Sacombank (Saigon Thuong Tin Commercial Joint Stock Bank) is one of the major commercial

banks in Vietnam, established in 1991 and headquartered in Ho Chi Minh City. Sacombank offers a

wide range of financial products and services including deposits, loans, credit cards, securities and

insurance. In addition, Sacombank also has an extensive network of more than 500 branches and

transaction points nationwide, as well as partners with many other banks and financial institutions

around the world. Sacombank is one of the first banks in Vietnam to deploy products and services

through e-banking channels and is strongly developing mobile applications to provide convenient

services to customers.

Besides the advantages of brand reputation, quality of personnel, outstanding technology, network

size, number of transaction points and number of customers, etc., Sacombank has been facing many

challenges: The competition is getting fiercer, the customer's thinking is getting smarter, especially

the race to change digital technology in the banking sector is getting more and more fierce.....

In order to survive and develop sustainably, Sacombank needs to re-evaluate its current situation,

competitors, and the external environment, thereby coming up with appropriate and effective

development strategies to fully exploit opportunities as well as easily overcome challenges.

With knowledge from the Managerial Economics course, let's study together and discuss solutions

to Sacombank's problems.

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Acknowledgement

I am very grateful to Lecturers Tran Hoang Hiep, Pham Quang Vinh and teachers who have
provided valuable documents and useful knowledge for this subject.

Next, I would like to thank my classmates in the process of exchanging, sharing and discussing
the lecture/exercise that helped me better understand the issues related to this subject.

In addition, my knowledge will not be able to meet all the problems of the subject. For that
reason, I have collected additional data from various sources on the Internet to further highlight
the content.

And finally, in the process of research and presentation, it is inevitable that there will be
shortcomings in data and content. I look forward to receiving your understanding, sharing and
sincere suggestions to help me improve more and more.

Sincerely thanks.

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Table of Contents

ts
1 Introduce...............................................................................................................................................6
1.1 About Sacombank..........................................................................................................................6
1.2 Introduction to Vietnam's banking industry...................................................................................6
2 Technological innovation - the core issue of the banking industry.................................................8
3 Expansion and Development of the international market..............................................................10
4 Conclusion...........................................................................................................................................11
5 Reference.............................................................................................................................................12

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1 Introduce

1.1 About Sacombank

Established in the early 90s, Sacombank is one of the very few commercial banks that has been
successfully built, maintained and developed stably to this day.

To have a Sacombank like today with the Banking Brand of Indochina - Scale of TOP 5 largest
banks in Vietnam and Prospects of leading modern retail bank in Vietnam, many generations of
leaders and employees Sacombank's members have gone through a difficult and challenging start-
up period.

However, with the strength of solidarity, the bravery to overcome difficulties, the spirit of
willingness to accept failure to strive to move forward, Sacombank has put its name on many proud
marks on the financial market in Vietnam.

Especially in 2021, when facing the difficulties of the Covid-19 pandemic along with the trend of
global digital transformation, Sacombank still affirms its breakthrough strength through stable
growth results, specifically:

- The best foreign exchange service provider bank in 2021 voted by Global Banking &
Finance Review (UK).
- The best bank for small and medium enterprises in Vietnam in 2021 evaluated and voted by
Asiamoney Magazine.
- Vietnam Bank has an initiative in the field of Digital Banking voted by The Asian Banking
& Finance Magazine. The best foreign exchange service provider in 2021 voted by Global
Banking & Finance Review (UK).

1.2 Introduction to Vietnam's banking industry

On a broader scale, Vietnam's banking industry has been experiencing significant development in
recent years. However, compared with countries in Southeast Asia such as Thailand, Malaysia,
Indonesia or the Philippines, the size of Vietnam's banking industry has not yet achieved the same
development.

According to statistics from the financial statements of the fourth quarter of 2022 of 28 banks, the
total assets of these banks reached more than 12.7 million billion dong, up 17% compared to 2021.

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In which, 10 banks having the largest asset scale is holding VND 9.97 million billion, equivalent to
77.5% of the total assets of the listed banks. Accordingly, the 10 banks with the largest total assets
include BIDV, Vietcombank, VietinBank, MB, Techcombank, VPBank, ACB, SHB, Sacombank
and HDBank.

Although, according to data from the World Bank, the total assets of Vietnamese banks account for
only about 0.5% of the total assets of banks in the world. However, with government innovation
and reform, combined with economic stability, improvement in digital banking services, the rise of
mobile-online banking platforms has contributed to This will help Vietnam's banking industry gain
advantages and strong growth potential in the future.

From the above information, it can be seen that in the near future, the Vietnamese banking industry
will face many challenges and opportunities, which can be listed as follows:

Challenge:

 Competition: Vietnam's banking industry is facing fierce competition from domestic and
foreign competitors. Small and medium-sized banks will find it more difficult to cope with
competition from financial companies and digital banks.
 Risk management: The banking industry is exposed to credit risk, interest rate risk, market
risk and liquidity risk. This requires the banking industry to have an effective risk
management process.
 Technological innovation: Technology is changing rapidly and banks need to invest heavily
in new technology to improve the customer experience. At the same time, banks are required
to promote the development of technology infrastructure to ensure the safe and secure
operation of the system.

Opportunity:

 Economic growth: Vietnam is experiencing high economic growth and the demand for loans
from businesses is also increasing. This creates opportunities for the banking industry to
develop.
 Technological innovation: Digital services are thriving, creating many opportunities for the
banking industry to increase convenience and reduce costs.

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 Policy reform: The Government of Vietnam is implementing policy reforms to enhance

economic stability and support the development of small and medium-sized enterprises. This
creates opportunities for the banking industry to support businesses.
 Smarter customers: Customers are becoming smarter and demanding more professional
banking services. This creates an opportunity for the banking industry to improve service
quality and customer experience.

2 Technological innovation - the core issue of the banking industry

And in my personal opinion, as a banker, I realize that: Technological innovation is both a

challenge and an opportunity for the banking industry. To survive and develop sustainably, the
banking industry in general and Sacombank in particular need to focus on technological innovation,
pioneering in the digitization of banking services - enhancing customer experience in a genuine,
professional manner and modern.

And in order to develop - innovate technology in the banking sector, Sacombank in particular and
the Vietnamese banking system in general need to have strategic solutions to solve the following
problems, specifically as follows:

 Firstly, the legal corridor is not really complete, especially for new technologies. The time
for legal updates, amendments and supplements is still slow compared to the rapid
development of technology. For example: Law on electronic transactions, Law on e-
commerce, ....
 Second, Vietnam's technology infrastructure has not yet met the requirements of high-tech
development, especially security technology. For example, the old system is outdated, the
hardware and software are not synchronized, creating many holes for hackers to easily
penetrate, causing risks to the system.
 Third, difficulties in the quality of human resources. New solutions require highly qualified
human resources to meet technical requirements for effective solutions.
 Fourth, consumers' awareness of Fintech products is still limited, sometimes creating
"security holes". People are not aware of the security of personal information, which
increases the risk, affecting consumers as well as financial institutions.

Some strategic solutions that Sacombank can apply to solve the above problems, specifically as
follows:
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 Speeding up the process of updating, amending and supplementing legal regulations related
to new technologies, and at the same time creating favorable conditions for banking
businesses to contribute ideas to improve these regulations. In particular, Sacombank can
play a pioneering role in making proposals and recommendations to the authorities to
promote the legal update process related to new technology.
 Upgrade technology infrastructure, especially security system. Sacombank can invest in
advanced security solutions, and at the same time carry out a full inspection and quality
assessment for this system to ensure the safety and confidentiality of customers' information.
 Invest in training and developing human resources with high qualifications, skills and
knowledge to meet the high-tech demands of the banking industry. Sacombank can create
conditions for its employees to participate in training courses and seminars to improve their
knowledge and skills, and at the same time attract and recruit high-quality employees in the
field technology.
 Strengthen communication and education on information security for customers. Sacombank
can offer preferential policies and promotions for customers to use the bank's technology
products, and at the same time strengthen consulting and instructing for customers on how
to protect their personal information and information. your account.

In addition, besides the above solutions, Sacombank needs to simultaneously apply and implement
the following solutions:

 Focus on technology products and services: Sacombank needs to invest in technology

products and services to meet customers' needs. This may include improvements to mobile
banking, internet banking and online payment applications.
 Training employees on technology: Sacombank needs to create conditions for its employees
to be trained and improve their technology capacity. This gives employees the ability to use
the latest technologies and helps bring new products and services to life. For example, new
working thinking like Design Thinking, Agile, ....
 Cooperation with technology companies: Sacombank needs to establish cooperative
relationships with technology companies to achieve the best technology solutions and the
most reasonable prices. This helps Sacombank quickly launch the latest products and
services on the market.

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 Actively promote cashless payments: Cashless payments are a popular trend in modern
society. Sacombank needs to actively promote non-cash payment methods such as credit
cards, debit cards, e-wallets, QR codes... to meet customers' needs.
 Developing digital ecosystem: Sacombank needs to invest in digital systems and platforms
to create a sustainable digital ecosystem. This can help Sacombank increase its
competitiveness and provide the best products and services to customers.

In short, in order to effectively innovate technology and improve customer experience, Sacombank
needs to apply policies and strategies in line with the development trend of the banking industry and
customers' needs.

3 Expansion and Development of the international market

I am very proud to be a member of the great family named Sacombank. I always hope that when
everyone has a need for banking services, Sacombank will be the first name they think of. And
there are many people asking: Can Sacombank expand and develop to countries in Southeast Asia
and the world? My answer is yes and surely Sacombank will do it.

With 10 years of experience of successful expansion and development in Laos and Cambodia, along
with a team of loyal-enthusiastic-experienced employees, with a modern technology background
and a wide range of products. Sacombank is fully confident that it can expand and develop in
countries in Southeast Asia and the world. However, that is the future and the result of the present.
Expansion into new markets is an important strategic decision of Sacombank and should be
carefully considered. Before deciding to expand into new markets, Sacombank needs to carefully
evaluate the following factors:

 Economic and financial situation of target markets: Sacombank needs to learn about
economic and financial situation of target markets, including opportunities and challenges.
Different markets have different legal regulations, cultures and markets, which affect
Sacombank's operations there.
 Personnel and skills: Expansion into new markets requires Sacombank to have skilled and
experienced personnel to deal with legal, cultural and market challenges.
 Technology and information systems: Sacombank needs to ensure that its technology and
information systems meet the requirements of the new market. If necessary, Sacombank
needs to invest and upgrade the system to meet the requirements of the new market.
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 Marketing strategy: Sacombank needs to develop a marketing strategy suitable for the new
market, ensuring that its message is clearly understood and attractive to customers.
 Competition: Sacombank needs to research competitors in new markets and find ways to
compete effectively with them.

If Sacombank fully evaluates and prepares the above factors and has appropriate plans, the
expansion into new markets will be an opportunity for Sacombank to develop further. However, this
expansion needs to be done carefully and with a clear strategy to ensure success. And most of all, I
believe that Sacombank can do more than that.




4 Conclusion

Technology improvement and international market expansion is an important development direction

of Sacombank in the context of increasingly fierce competition and the Vietnamese banking market
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facing many challenges and opportunities. However, before expanding into new markets,
Sacombank needs to focus on promoting technological innovation and enhancing competitiveness
to create added value for customers. At the same time, Sacombank needs to be cautious about
possible risks when expanding into new markets, such as lower profit expectations, strong
competitors, changes in policies, laws, and markets unstable finances, etc.

Regarding the expansion into Thailand, Singapore, the US or other markets, Sacombank needs to
conduct market research, assessment, competitor analysis, access assessment and market
understanding. market, and have a detailed business, financial, and technology plan to ensure
success when expanding into new markets. In the process of expansion, Sacombank also needs to
strengthen communication and cooperation with local partners to help achieve the best results and
quickly adapt to the market.

5 Reference
- MindTap - Cengage Learning
https://ng.cengage.com/static/nb/ui/evo/index.html?
snapshotId=3365882&id=1732416529&deploymentId=5796252486494163608499764845
&eISBN=9781337106603
- Sacombank
https://www.sacombank.com.vn/company/BaoCaoThuongNien/2021/SAcombank_STB_AR
2021.pdf
- Nhịp sống kinh tế Việt Nam & Thế giới - Ngân hàng Việt và hành trình vươn tầm quốc tế
https://vneconomy.vn/ngan-hang-viet-va-hanh-trinh-vuon-tam-quoc-te.htm
- Tạp chí Tài chính - Cơ hội và thách thức phát triển công nghệ trong lĩnh vực ngân hàng tại
Việt Nam

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https://tapchitaichinh.vn/co-hoi-va-thach-thuc-phat-trien-cong-nghe-trong-linh-vuc-ngan-
hang-tai-viet-nam.html

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