On April 17th, the Banking Academy - Phu Yen Branch and more than 60 people's credit funds (PCFs) nationwide jointly organized a seminar on the topic: "Digital transformation solutions for PCFs".
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| The digital transformation process at people's credit funds is currently progressing quite slowly compared to other credit institution models. |
At this seminar, many People's Credit Funds expressed their desire for an automated online transaction application (similar to the mobile apps of commercial banks but on a smaller and simpler scale) to promote digital transformation in their operations.
Mr. Nguyen Van Quang, Deputy Director of the People's Credit Fund of Ward 2, Bao Loc City, Lam Dong Province, stated that there is currently a huge demand from customers and members of the funds for using online payment methods, online loan transactions, and online savings deposits. However, most transactions at the Ward 2 Fund in Bao Loc City are still done manually. Therefore, the fund is eager to collaborate with providers to develop mobile apps to enhance customer experience and increase the efficiency of its fundraising and lending activities.
Ms. Nguyen Thi Bich Thi, representative of Ninh Hoa People's Credit Fund, Khanh Hoa province, said that for the past two years, the fund has been nurturing the idea and focusing all its resources on building an online app. The unit has contacted dozens of partners, including software and technology providers, to discuss and advise on the process. However, the biggest difficulty is the high cost of investing in apps, which is too much for the capacity and scale of the People's Credit Fund. Typically, the price to build a dedicated app for a People's Credit Fund, as quoted by technology providers, ranges from 150 million VND to less than 1 billion VND. “Some large companies and corporations likeFPT can charge up to 1 million USD. This is an unaffordable amount for a People's Credit Fund,” Ms. Thi stated.
Representatives from the Dong Saigon People's Credit Fund (QTDND Dong Saigon) reported that the fund has begun developing its own app to transition from in-person to online transactions. However, the major challenges are changing members' habits and the cost of upgrading its core banking system. Recently, QTDND Dong Saigon has submitted a proposal to the Vietnam Cooperative Bank (Co.op Bank) to share its core banking system to support other QTDNDs in building online apps, but has not yet received a response. Many QTDNDs hope Co.op Bank will consider their proposals and provide more active support to help them with their digital transformation.
From the perspective of businesses providing online software and applications, Mr. Nguyen Thanh Tung, Director of iSEAS company, believes that the demand from People's Credit Funds for developing online apps is very high. However, for these funds to be able to do this, a roadmap and active support from Co.op Bank, local banking sectors, and technology partners are needed.
According to Mr. Tung, with the current technological potential and connectivity, providers like iSEAS can absolutely create a common app for the entire credit union system in Vietnam. This app would include features such as: automatic connection with the fund's operational management software; provision of information on deposit and lending interest rates; loan and deposit information lookup; principal and interest payments; and online savings deposits…
Mr. Tung believes that once this shared app is developed, credit unions can register as members and open accounts on the app to conduct transactions with customers. The shared app will function as a highly secure platform, and costs will be shared at different levels depending on the scale and usage of each credit union, thus saving initial investment for the funds. However, to achieve this, the technology provider needs to connect with commercial banks, payment intermediaries, and relevant local authorities and agencies. Only after completing the necessary legal procedures can they work directly with individual credit unions to coordinate implementation.
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