Role of Digital Bank in promoting private economic development:

When it comes to the role of banks in the development of the private economy, it must be said that the role of banks in the economy, because the private economy operates in all fields, including the financial sector. such as commercial banks, credit institutions, financial companies...

the private sector is a solid pillar accounting for about 70% of Vietnam’s GDP.

The basic role of commercial banks in the economy:

Commercial banks are the place to provide capital for the economy: the advent of commercial banks is indispensable for the production of goods. The production of goods has developed, the circulation of goods has expanded, in the exporting society. Currently, people have idle capital, others need capital to conduct production and business activities. This is solved by commercial banks standing out to mobilize temporarily idle capital from businesses and residents later. that will supply back to where capital is needed to conduct production and business investment activities.

The more society develops, the more capital needs for the economy, no one organization can meet.

Only banks - financial intermediaries can stand out to regulate and distribute capital to help. for economic sectors to develop together.

Commercial banks act as a bridge between businesses and the market: commercial banks act as a bridge between businesses and the market from two perspectives. (1) Capital is the basic and important input factor of production and business. When their own capital is not enough to operate, businesses have to look to other sources of capital. Commercial banks will help businesses deal with credit sources. Thus, commercial banks are the bridge to bring businesses to the market by credit methods. (2) commercial banks act as payment intermediaries between enterprises and partners and customers. Thus, commercial banks help businesses and markets closer together in space and time.

Commercial banks are a tool to regulate the macro economy of the State: When the State wants to encourage the development of a certain economic sector, region or field, together with the use of policy mechanisms, the Commercial banks are always used by commercial banks requesting commercial banks to implement preferential policies in investment and capital use such as: preferential interest rates, extending loan terms, and reducing conditions. loans or through the system of State commercial banks to provide preferential capital for certain fields. When the economy grows excessively, the State through the Central Bank implements monetary policies such as: increasing the reserve requirement ratio to reduce the ability to create money, thereby reducing the ability to grant credit to the economy.

Commercial banks are the bridge connecting national finance with international finance:

Currently, there is a trend of globalization of the world economy with the formation of a series of economic organizations and free trade areas. , making trade relations and goods circulation between countries in the world increasingly expanded, in which investment abroad is an important and profitable investment direction. At the same time, countries need to export goods in which they have a comparative advantage and import goods. Commercial banks with business operations such as accepting deposits, lending, guaranteeing, and international payment operations, have contributed to facilitating and promoting international economic relations between countries in the world. world.

The role of digital banks in private economic development:

Digital banking is understood as all business activities, services based on digital platforms and development of digital banks using digital technology and data to create new business models.

In the digital banking background, businesses will innovate the traditional production and business processes to an ecosystem model, linking from production, commerce to use and this will increase productivity. as well as labor efficiency.

Digital banking, business activities are not merely the exchange of goods and services between people but are based on digital technologies. In this economy, various types of markets rely on digital technologies to make it easy to trade and exchange goods and services through e-commerce.

Digital banking allows individuals, organizations and businesses based on information infrastructure technology to exploit digital resources including an open knowledge and data ecosystem, useful for timely prediction. and decision making with high economic efficiency.

Digital banking not only creates scale and growth for businesses, but also changes business activities on two fronts: (i) Production methods (resources, infrastructure, ways production and business operation mode); (ii) Economic structure. In particular, it is noteworthy that besides traditional resources, new development resources appear, which are digital resources and digital wealth. In fact, digital banks help growth more sustainably, because technology will bring better and more effective solutions to resource use, handling environmental pollution problems, etc.

Providing capital needs, non-cash payments and multi-channel services: Digital banks create a variety of capital supply channels for large, small and micro enterprises in urban and rural areas. the ability to access capital through bank channels, shorten loan procedures, create a balance between large-scale private enterprises and private economic groups with position in the region. strong international brand, attracting many foreign strategic shareholders, contributing to improving national competitiveness. Creating a faster capital turnover can control capital when banks provide capital and ensure the safe use of capital of the business.

To meet the needs of customers, banks must modernize to have many channels to connect with businesses such as branches and transaction points, Internet Banking, Mobile Banking, Kiosk. Customer care center is business/Contact Center, Social Networking channel…. Digital banking has a solid technology foundation to ensure that banking services are provided easily on many different channels with the same quality, information flows through channels. Digital banks will promote the development of channels, combine distribution channels with over-the-counter channels and digitize counter channels to provide the best customer experience. A very important requirement of a digital bank when the bank deploys many channels to connect with businesses is that those channels must be interconnected and ensure uniformity of services between the channels that businesses have transacted.

Improve business efficiency: To shorten the speed of goods circulation and capital turnover, thanks to modern information technology, banks can focus on collecting data about businesses operating in Vietnam, performance of obligations to state agencies.

Contributing to the production and business of enterprises in the economy takes place without interruption, providing investment capital and credit circulation tools. Due to process automation, which today requires maximum automation of product and service delivery processes, banking

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operations through non-human channels is a mandatory requirement of digital banks. In building the process, adjust the process. Banks are equipped with supporting solutions for automating product creation and supply processes to combine with digital distribution channels, providing products with high technology content to customers. For example, when a bank wants to make an online loan on Internet Banking, without human intervention, the bank must have sufficient information about the customer, choose and design a simple and secure loan product. entirely for application on software systems. Decision making, in order to simplify the process, provide the right products, quickly to the right customers across different channels, handle large volumes of data within the bank as well as within the bank. External data for decision making. Therefore, the application system of a digital bank needs to be able to analyze data for more accurate, faster and better decision making based on customer choice and risk management principles. of the bank.

The higher the proportion of automated business decisions made based on data analysis, the higher the degree of digitization.

Digital banking is the optimal solution to overcome existing limitations on current distribution channels thanks to the combination of features and characteristics of all channels, bringing the best satisfaction and experience to customers. customers, as well as helping the bank increase its competitiveness, affirm its brand and reputation in the market. The advantages of Digital Banking are reflected in the following aspects:

Digital banks save transaction costs, travel costs, guide customers to switch transactions to automatic transaction channels, which will save business management costs, contributing to increasing net income for businesses. With the benefits that digital banking services bring in reducing the number of transactions at the counter, businesses have significantly reduced the number of employees.

Manage interactions of businesses with banks through channels. When the bank integrates the distribution channels, the bank will be able to stimulate customer demand through the use of analytical and sales tools on modern channels for customers to choose their own products and services. transaction services on self-service channels, saving costs. Increase sales productivity of sales team and sales productivity across channels. Digital banking will support the transmission of sales opportunities to specific salespeople on mobile devices, support the calculation and issuance of product and service offers, including product pricing. products for each business, providing modern and simple business care and payment solutions. Digital banking creates a premise for banks to reach the business class that do not have a bank account. Improve online service registration process, reform administrative procedures, shorten service registration time for businesses.

Making a digital bank think less of competitors, think more cooperatively, cooperate with Fintech, both domestically and regionally, can create more competitive advantages for Vietnamese banks and at the same time create favorable conditions. for customers. In the digital world, banks are no longer the only party that creates value for customers. Today, competitive power comes from connecting well with other players, increasing and sharing value.Banks must use open APIs to connect, both internally and to third parties. In Vietnam, the trend of cooperation between Fintech, Mobile Money and banks is also increasingly encouraged. Banks who want to expand the digital space need to find friends, not alone. Instead of seeing each other as rivals, banks can cooperate

with each other to create a shared data set of digital identifiers. They can also see Mobile Money as a channel to educate financial habits for those who do not have one. Bank account.

Mobile money helps businesses get used to and access banking services through the network.

Initially, they only paid a few hundred thousand…but when the demand reached millions of dong, they had to go through the bank. Then the bank must cooperate to receive it because the network operators can only do some simple things. So think less about the opponent, think about the partner, and cooperate more.

The rapid development of the digital economy is driving electronic payments with Fintech, e-wallets and other non-banking solutions to fill the gap left by traditional banks.

From the analysis of the four main contents of digital banking above, it can be understood that digital banking is a combination of new and developed technology applications and digitization of banking activities from traditional distribution channels. and modernize operational processes, decision-making processes and banking products and services in order to improve services and customer experience effectively, improve adaptive capacity, and adapt to changes in the banking system. changes in the business environment inside as well as outside the bank, affirming its position and increasing competitiveness in the market.