- Green Growth
- Your Consultant
It’s said that Vietnam’s current tight monetary policies have raised more risks for local banks, especially the small banks. In your opinion, what are the most concerning risks for Vietnam banks?
The biggest risks that we see for Vietnamese banks is the inability to make informed, quick and accurate credit decisions. High levels of bad debts and subsequent write offs are a direct result of having no, or limited, access to comprehensive credit data either from within the banks own databases and/or from a credit reference agency. This limits the ability to develop analytics to predict credit risk outcomes.
Building sound analytical models coupled with the right customer acquisition and mangement systems is key, as is the governements establishment of competing private credit bureau. Collecting and sharing comprehensive credit information will allow innovative analytics and tools to support sound credit practice. An important point to reiterate is that there should be competing bureau, not a single bureau, to drive best practice and innovation to meet the fast growing needs of the banks and their customers.
Reducing bad debts will have immediate positive effects for the banks, their customers, whose fees and interest rates support those losses, and for the Vietnamese economy.
Do you think that the poor infrastructure and other increasing risks of Vietnam’s banking industry would create a great opportunity for Experian in this market?
We believe that Vietnam is well positioned to take advantage of global best practice and innovations to move ahead and develop a robust, sound and leading edge banking system. To do this the banks and government agencies will need a truly global partner, a partner with global best practice, one with a proven track record, one with the latest in technologies and one that is dedicated to the region and in particulaly Vietnam. Experian is the only company in the world that can meet these requirements and so yes, we are very excited about the opportunities for Experian, as well as for the banks, their customers and the economy as a whole.
By using Experian’s application processing and decisioning system, which risks that the banks can reduce?
The system helps Techcombank accurately recognise the risk of individual customers and its overall portfolios in the credit application process, by using sophisticated segmentation and scoring techniques to pre-screen customers so as to increase/decrease credit line amount for their lending decisions. This helps determine the optimal offering to fit the need of individual customers and Techcombank, and identify the key profitability drivers for Techcombank and assist the refinement of credit risk strategies.
After the signed contract with Techcombank, could you please share your next steps in Vietnam?
Experian is committed to enhance our presence and deliver our proven capabilities in credit risk management in Vietnam. We plan to expand our footprint in the country and introduce our global best practices and full range of services to help Vietnam retail banks acquire profitable customer relationships, manage exposure to risk, increase operational efficiency, manage fraud and debt, so as to maximise customer value in every step of the credit lifecycle and raise the quality of banking services to Vietnam consumers.