Overviews of digital marketing in banking system

Some international experiences on applying Digital Marketing...12 CHAPTER 3 : METHOLOGY...14 CHAPTER 4: ANALYSING DIGITAL MARKETING USAGE IN VIETNAM PROSPERITY JOIN-STOCK COMMERCIAL BANK

TABLE OF CONTENT

LIST OF FIGURE

LIST OF TABLE

LIST OF ABBREVIATIONS

ACKNOWLEDGEMENTS 1

CHAPTER 1 : INTRODUCTION 2

1.1. Rationale 2

1.2. Research objective 3

1.3. Research question 3

1.4. Research scope 4

1.5. Research Methods 4

1.5.1. The method of data collection 4

1.5.2. Research process 4

1.6 . Research structure 5

CHAPTER 2: OVERVIEWS OF DIGITAL MARKETING IN BANKING SYSTEM 6

2.1 Digital Marketing 6

2.2. Digital Marketing in banking operations 7

2.3. Digital Marketing activities in Commercial bank 8

2.3.1. Differences between Traditional Marketing and Digital Marketing in Commercial bank 8

2.3.2. Introduction of Digital Marketing activities in commercial banks 10

2.3.3. Some international experiences on applying Digital Marketing 12

CHAPTER 3 : METHOLOGY 14

CHAPTER 4: ANALYSING DIGITAL MARKETING USAGE IN VIETNAM PROSPERITY JOIN-STOCK COMMERCIAL BANK 17

4.1: Introduction of Vietnam Prosperrity Join-stock Commercial Bank 17

4.1.1 History of Vietnam Prosperity Join-stock Commercial Bank 17

4.1.2 VPBank’s emblem 18

4.1.3 Vision, Mission, Development Strategy and Core Value of VPBank 19

4.1.4 Organization chart of Vietnam Prosperity Join-stock Bank 20

4.2 Analysing Digital Marketing in Vietnam Prosperity Join-stock

commercial Bank 21

4.2.1 Facts of Digital Marketing in Vietnam Prosperity Join-stock commercial Bank 21

4.2.2 Advantages of applying Digital Marketing in Vietnam Prosperity Join-stock Commercial Bank 26

1. The rapid development of internet in recent years 27

2. The popularity of social networking and smart phones 29

3. The bank's demand for new form of marketing with many advantages 34

4. The development of Digital Marketing 38

4.2.3 The difficulties when applying Digital Marketing in Vietnam Prosperity Join-stock commercial banks 41

1. On the inside of the bank 42

2. On the partner side, the customer 48

CHAPTER 5 : RECOMMENDATION 53

5.1 Recommendation for Vietnam Prosperity Join-stock Bank 53

5.2 Recommendation for State Bank 54

5.3 Limitation 58

REFERENCE 59

APPENDIX 61

LIST OF FIGURE

Figure 3 1 Research Framework 14Figure 4 1 VPB organization chart 20Figure 4 2 : Advantages of Digital Marketing in the opinion of the respondents 26Figure 4 3 The evolution of Internet-based devices in the world, 1984-2011 27Figure 4 4 Top 20 countries by number of Internet users as of 30/06/2017 28Figure 4 5 The benefits that Digital Marketing brings to the bank and itscustomers 34Figure 4 6 Difficulties in applying Digital Marketing in the opinion of surveyedsubjects 41Figure 5 1 Recommendations for State Bank 54

LIST OF TABLE

Table 3.1 Feedback on target group with the Bank: 15Table 3.2 Gender of respondents: 15Table 3.3 Age of respondents: 16

LIST OF ABBREVIATIONS

SME: Small And Medium-Sized Enterprises

ABF: Asian Banking & Finance Magazine

TDWI : The Data Warehousing Institute

FATCA: Foreign Account Tax Compliance Act

ALCO: Assets and Liabilities Committee

I would also like to thank National Economic University (NEU) teachers forthe wonderful knowledge they have taught me wholeheartedly.

Thanks to the help of the teachers of Institute of Finance and Banking atNational Economics University, I had the opportunity to practice at VietnamProsperity Joint Stock Commercial Bank The time I worked in VPBANK as anintern has helped me have more experience, have better understanding of the realworks of the bank, and also accumulate more practical knowledge

In the internship in Vietnam Prosperity Commercial Joint-stock Bank

(VPbank), I am very thankful to have received the thorough guidance from theemployees of

the bank With all their help, I have completed the report and the successfullyfinished my internship

Furthermore, I am grateful for the support from my classmates and my friendsfor the information that they shared

Lastly, I feel very lucky to have the great encouragement from my dearfamily Without their endless love and support, I could never have completedthis study

Nguyen Thanh Thao

CHAPTER 1 : INTRODUCTION

In recent years, with the rapid growth of Internet, more and more people inVietnam are using it in their daily life Acording to IWS (2015) Vietnam is ranked6th in Asia (after China, Japan, India, South Korea and Indonesia) in terms of thenumber of people that use Internet, which is about 20% of the population Most ofthe people who are using Internet in Vietnam are young people under the age of 30(about 80% of the overall amount)  The widespread use of digital devices such assmartphones, tablets, etc; and social networking tools such as Facebook, SEO,Instagram, etc, is making the Internet become a new channel that is expected to behighly effective for marketers who want to reach out to a much more open marketand a large number of potential customers

According to the latest study by research firm Market CIMIGO (2010), theamount of money that companies invest in  Digital Marketing  in Vietnam

is 15 million, accounting for 5% of the total advertising investment The remainingmarketing capital is poured in traditional advertisements, while the percentage ofInternet users in Vietnam is 26%, higher than the average rate of 19% in Asia Itshows that Digital Marketing has not been invested enough to match its potential

Furthermore, the rapid development of the Internet over the past decade hashad a significant impact on the change of bank operations, including marketing. Inpresent commercial banks in Vietnam, the strong development of informationtechnology infrastructure has given great support in banking transactions, as well ascustomers care. However, the image communication of the bank to its curentcustomers and target market has not been effective. The main reason leading to theabove situation is that domestic commercial banks do not pay proper attention tomarketing, especially Digital Marketing - a form of direct image promotion tocustomers through the rapid development of the Internet and the informationtechnology system of the bank

Industrial Revolution 4.0 recognizes the great advancement of mankind inthe application of digital achievements that bring major changes to technicalinnovation and production. In response to this development, Philip Kotler (2016)states that Marketing 4.0 is an inevitable trend, with a marketing mix of online andoffline interaction between the company and its customers Marketing 4.0 always

firmly attached to the internet for all of its aspect, from how to reach targetaudiences, how to choose the media channel to advertise on, to boosting buyingactivities of potential customers. Therefore, taking advantage of the number ofInternet users in general and digital technology in particular to promote thedevelopment of Digital Marketing tools alongside of traditional marketing tools is

an indispensable trend in Vietnamese commercial banks. Moreover, marketingthrough digital tools is a needed tool for Vietnamese commercial banks today tocompete with the image of international banks, especially in the 4.0 era

For the above reasons, I would like to choose the subject of “determining thefavorable conditions and barriers in the process of applying Digital Marketing inVietnamese commercial banks and provide recommendations and contributions toimprove our management and execution toward this new field” as the main subject

of this study

1.2. Research objective

The objective of the research is:

- Researching the basic theory of Digital Marketing in commercial banks

- Having general assessment of the of digital marketing’s current state inVietnamese commercial banks

- Assessing the advantages and disadvantages of applying DigitalMarketing in Vietnam commercial banks

- Proposing recommendations to promote the application of DigitalMarketing at the commercial banks in Vietnam

1.4. Research scope

There are many content related to Digital Marketing in Commercial Bank ,however, in this study, we only provide the following content:

Scope of the research: The research is focused on the advantages and

disadvantages of applying Digital Marketing in commercial banks in Vietnam;Digital Marketing in Vietnam Prosperity Join-stock Commercial bank , and offeringrecommendations to customers, commercial banks , state banks and government

Scope of the survey: The research team has produced in-depth interview

questionnaires and 500 general questionnaires for clients, employees and managers

of Vietnam Prosperity Join-stock Commercial bank. The questionnaire wassurveyed online nationally and directly in Hanoi. The in- depth interview will beanswered directly by the bank marketing specialist. In addition, research papers oninternational experiences in applying digital marketing in commercial banks werealso studied by the research team

Scope of the study period: We built up staff survey questionnaires  from

January 2018 to May 2018 The in-depth interview is done and obtained results onMay 25, 2018

1.5. Research Methods

This research uses qualitative research methodology combined with deskresearch to collect data to analyze the advantages and disadvantages of applyingDigital Marketing in Vietnamese commercial banks

1.5.1. The method of data collection

The data for the study were collected from two sources

-      Data collapse: clean and organize information

-      Express information: condense and organize information analysisdiagram

-      Drafting the conclusion and verifying the results

1.6 . Research structure

The paper consists of five chapters

Chapter I: Introduction to the topic

- Rationale and the cause of the research

Chapter II: Overview of Digital Marketing in banking systems

- Presenting an overview of perspectives on Digital Marketing, DigitalMarketing activities in commercial banks

Chapter III: Methology

- Providing research methods and process

Chapter V: Discussion and Analysis

- Analysing the advantages and disadvantages of the application of DigitalMarketing in Vietnam Prosperity Join stock commercial bank according to the datacollected from the survey

Chapter IV: Conclusions and Recommendations

- Making conclusions based on the researches that have been done andgiving some recommendations to commercial banks, state banks and thegovernment

CHAPTER 2: OVERVIEWS OF DIGITAL MARKETING IN

BANKING SYSTEM

2.1 Digital Marketing

According to Digital Marketing Association of Asia ADMA, DigitalMarketing, also known as Interactive Marketing / Internet Marketing ., is a way tohave better product approach and communication to customers by spreading itsimage through the use of Internet. Kent Wertime and Ivan Fenwick (2008) statedthat "Digital Marketing is the future development of digital marketing. It happenswhen most, or all communications, companies use digital channels, allowingmarketers to communicate seamlessly, bi-directionally and personally with eachcustomer . These conversations provide data from each interaction with customers

to forecast for the next like a central network. In addition , marketers continuallyuse real-time information on customer behavior and direct customer feedback toimprove and optimize interactions "

Professor Judy Strauss (2013) has put forward the concept: "Online marketing

is the application of information technology to transform marketing strategies tocreate more value for customers (through segmentation strategies, targeting,differentiating and positioning), planning and implementing effective marketingmix strategies, creating exchanges to satisfy the needs of customers”. 

In summary, the use of information technology affects traditional marketingthrough two methods:

i) Information technology changes the structure of marketing strategies,leading to the development of many new business models, contributing to increasevalue for businesses and individual customers

ii) The application of information technology increases the effectiveness oftraditional marketing

Jared Reitzin (2014), CEO of MobileStorm Inc., said: " Digital Marketing isthe implementation of product and service promotion activities using targeted,online database-driven distribution channels Reach customers at the right time,right people at the right cost ." 

According to Wikipedia (2015): "Digital Marketing is an advertising methodusing electronic devices such as personal computers, smart phones, mobile phones,

tablets and gaming devices to interact with user. Digital Marketing usestechnologies or platforms such as websites, email, applications (basic and mobile)and social networks "

In conclusion , Digital Marketing is the communication of products, services

or brands from banks and businesses through digital tools to achieve businessobjectives

2.2. Digital Marketing in banking operations

Costas (2010) states that " Digital Marketing is an indispensable trend of

marketing in the banking industry, " especially when the internet is used widely by

young generation (in the people who born in the time from 1981 to 2000 , 61%owned social accounts, and 42% used them every day). In Greece, 50 banks haveopened Facebook accounts to reach this potential market segment, hoping toresolve the media crisis and complaints. Susan Marshall (2010) in her studies onDigital Marketing in US banks also agree with the view that in the future, this is aninevitable trend. Cognizant's (2016) brought up a point: " there is an increase inconsumer trends, and a growing number of e-wallet customers Since the amount ofdata that banks has to store increases,they must have a more appropriate way ofmarketing to access and provide services to customers, which emphasizes directinteraction " The two biggest benefits of Internet that bank customers seek are: (1)flexibility and immediate response, and (2) cost savings. However , these twobenefits are also helping customers move from a bank to another easier, leading tothe conclusion: To hold customers in this context, banks need to have a digitalmarketing strategy in line with the development of science and technology and themarket; Enhance digital marketing on social networking sites - alongside withhotlines to address customer needs and digitize bank data

Research by Wipro and Efma (2013) shows that all customers have the need

to use electronic services to reduce costs and save time, over 70% of commercialbanks customers use at least one medium that can connect to the internet to findinformation about banking services through tools such as (1) social networking siteslike Facebook, Twitter; or (2) advertisements in electronic newspapers. In addition,the bank can save on communication costs based on Digital Marketing The costcan reduce from 55% to 49% for advertising. At the same time, the cost of

buying advertising time on television. Wipro and Efma (2013) also point out that,

"With the current retail trend, contact with customers through electronic sites would

be more beneficial than traditional affiliates." With the same point of view,Olanrewaju (2014) shows that a new trend in Europe is that banks are graduallymoving from providing traditional services to modern banking services using digitaltechnology. The authors estimate that each bank will be able to increase about 30%

of its total revenue and reduce 20-25% of its total cost as labor costs and brokeragefees are reduced

" At the moment, commercial banks in Vietnam are well equipped to

implement Digital Marketing " - Pham Hong Hoa (2013): While Internet

penetration is high, banks need to have an Internet connection that facilitates theexchange of information.  Since this is a huge data warehouse to exploit, theinternet helps banks find customers more easily and also have more information.Some executives can even create many different methods to reach potential

"prospective customers" using the internet. In this research, Pham Hong Hoa (2013)presented a model of Digital Marketing that includes two steps:

(1) Analyzing the marketing environment, including macro analysis, customeranalysis and competitor analysis  She emphasized that Digital Marketing is notallowed to be separated but must be a part of the entire product marketing process

of the bank. General information given at the outset must be consistent with all theinformation the bank gives, and must be updated regularly

(2)  Developing a Digital Marketing mix, by adopting 3-level modelinganalysis , and providing core products from the internet. Price policies also need to

be flexible so that banks and customers can both save time and money

2.3. Digital Marketing activities in Commercial bank

2.3.1. Differences between Traditional Marketing and Digital Marketing in Commercial bank.

Together with the development of the market economy, it is also a challengefor commercial banks to change the quality of their products and services constantly

to match their customers standard At the present, customers have much higherexpectations than they did in the past because they have a lot more choices. Today,customers are king, and they need to be respected, understood, listened and welltaken care of. Therefore, development of Digital Marketing is considered

indispensable and sustainable for commercial banks, where traditional marketing is

no longer suitable for the current market segment

The biggest difference between traditional marketing and digital marketing isthe interaction between the bank and the customer. With Digital marketing,companies do not only convey their message, but they also get feedback from theircustomers. Through social networking sites, and banks’ website, customers cancompare, assess and express their views on a bank products. The development ofthe Internet is also an opportunity for banks’ products to become muchmore accessible to more customers. For example, the bank creates a videoperformance for advertising purpose and then shares it on the means of masscommunication; customers will comment on the video and bring agurements on thebank, thereby causing the curious fondness of new customers

Moreover, Digital Marketing in commercial banks also allows creators tocreate interesting contents, bringing unique ideas for the banks’ products . Forexample, traditional marketing and advertising methods such as flyers, ads at thecounter, paste billboards  can only reach a specific area, but for DigitalMarketing , advertising is digitized through vivid, funny videos, leaving a strongimpression on viewers. Customers are reminded about the product multiple timesand can get more information. At this point, viewers are no longer passive to theraw information, they can raise opinions, ask questions about the product and evenget online support consultants

Especially with banking products, it is high time for banks to bring thefastest, most effective sevices to customers. Digital Marketing can meets thisdemand through e-banking model This interface has been developed onsmartphone, offering customers the most essential services: moneytransfer , savings, look -up information, account payment. In comparison with thetraditional model, this model saves transaction costs for both the Bank and thecustomer. Therefore, Digital Marketing is especially important for banking industry

Because of its benefit, Digital Marketing is being used as a new marketingtool, but banks are trying to ensure that the core value of marketing, which is totransmit, exchange information, set up demand , ideas for 5marketing campaigns,etc, is the main purpose of marketing in each bank. However, with the new

of Digital Marketing is much needed for the operation of commercial banks inparticular and the banking system in Vietnam in general.

2.3.2. Introduction of Digital Marketing activities in commercial banks

Communication on the website of a commercial bank .

Mohammed (2001) states that official website remains the most importantcommunication tool for Digital Marketing activities . Based on its officialwebsite, a bank can easily control the communication, gaining trust fromcustomers. A website’s full content needs to include detail products and servicesinformation writen in an understandable way, and links between advertisingchannels and online banking website. By the ways of communication on thewebsite, the bank can advertise customers anywhere in the world because of thehuge explosion of the Internet

Build media videos

Kenneth Lewis (2014) claims that video communications are the uses of video   in a marketing campaign for advertising and branding purposes so as to

draw more attention. Most banks are now having their media campaigns

using  video . In the matter of this situation, Judy Strauss (2013) has identified video marketing as:   “ a form of high-spread communication, just by

having content that is unique and meets the needs of customers, you can completelybring your products, services and company’s images to customers. In digital age,video communications will be an investment for the future, and it is bound tobecome the main way for commercial banks to promote their brands as well asbanking products effectively and cost-effectively. With digital technology, thebroadband, high speed transmission line with Free Wifi and 3G, 4G arehelping banks being able to fully communicate with customers Banks are havingtheir products introduced by video on technical means such as Internet, television,etc, to help more customers get access to banking products and increase the value ofthe brand. Google now also offers video ads from search results. The increase ofusers’ interest in video ads promises to be an incentive for advertisers to create newvideo ads in places where customers are unawared of, like youtube, zalo, facebook,etc. In addition, Facebook has updated auto-play video on a bulletin board for users

to accelerate video consumption. In addition, Instagram Ads added from facebookalso create an effective channel for Content Videos for advertisers. A video with

compelling content is likely to spill over on youtube at high speeds as well as othersocial media channels, bringing the brand to millions of customers.

Content marketing

Josh Steimle (2014) states: "Content marketing is a marketing strategy thatfocuses on creating and sharing content that is relevant and continuous to the marketwith the goal of getting more customers and followers They could be interested andeventually buy the product "Content marketing can be expressed in many formssuch as article, video, graphic, postcard , ebook ,especially the most prominentand most noticeable form nowadays is Infographic and Case study. Dave Chaffey &Davis Mill (2015) also said that content marketing aim is to attract customers To do

so, businesses must create relevant, attractive, interesting and valuable content. Thiscontent must be provided constantly to maintain or to change the habits ofconsumers. Content marketing is an important marketing activity to retaincustomers, find new customers and help businesses build a strong brandrecognition

Content Marketing plays an important role in bank's marketing strategies,helping to bring information to potential customers and build brand imageclearly. The content of content marketing is very diverse, highly entertaining, easy

to provide necessary knowledge to customers  According to statistics, Contentchannels are currently tending to thrive in Digital Marketing activities .   Animoto's(2015) survey shows that 58% of Internet users said that businesses that make video

(2015) suggested that Content marketing usually cost 62% lower compared to otherforms of marketing communications For the above reasons, developing ContentMarketing is an important step in improving and developing influence of the bank,creating prestige and affirm the brand name of the bank in the market.

These forms of marketing are expected to be entertaining; however, banksmust carefully build an appropriate strategy so as to get the best efficiency.Banks should also set targets to have appropriate exploitation for each object. Inaddition, it should enhance e-banking services and digital technology to increase theinfluence of the economy, bring advantages to banks in this competitive era ofVietnam in particular and the world in general

2.3.3. Some international experiences on applying Digital Marketing

In banks around the world, with the advancement of information technologyand the habit of using the internet, there have been some innovations in marketing

to customers:

Firstly, banks can now reach a large number of customers through mass

media and online communications. Data of customers who have been transacted,rejected transactions or infomation of newly established enterprises on the marketare stored on the basis of bank data Some banks also store personal informationsuch as personality, work, religion, etc., along with the specific objectives that havebeen approached, goals that need to work toward in the future to get morecustomers In addition, banks must store personal information and characteristics

of each customer, which will help the connection between customers and banks getbetter so that the services can meet the right needs of customers Thanks to a largedata system, banks can reduce the costs of human resources training and have a newaproach on banks development and customers care

Secondly, retail banks are getting organizational restructred For wholesale

banks, the provision of services to customers can be done in the same way as it was

in the past: Search - Meet - Agreements - Sign Unlike wholesale, retail banking’scustomers are mainly SMEs (small and medium enterprises) and individualcustomers; These customers often do not want to have to look for and meet toomany banking services (Marshall, 2015) because it takes a lot of time and energy.Nowaday, when Information technology has evolved, there are various ways to seeand find different information of different banks That causes informationdistortion, as customers can not choose the service for themselves Even for the

same marketing methods as advertising in traditional ways or on google, socialnetworking sites, customers would get information densely and chaoticly as theysearch Therefore, in order to develop a new marketing model, the bank shouldallow its customer to experience the services selectively, to make marketingcampain for a product that fit the purpose of customers rather than trying to sellmultiple products at once This way of transmission shows that with the sameamount of products, marketing wisely can help banks save money on promotingproducts and the revenue set out can sometimes be more than expected In addition,major banks around the world have been focusing on cross-selling products to retailclients such as: consulting, lending, loan guarantee, payment (domestic orinternational), and security insurance; with the close link between the products,customers can choose the service they need and give a quality assessment of theproducts and services they provide.

Thirdly, banks can create applications on smart phones. According to the

recommendations of online marketers, the way information displays on television, orapproaches via email, phones in the digital age has grown to be almost one-way butnot bringing interactivity between customers and banks. At the same time, customerswho are using banking services are joining social networks and almost all of themown an electronic device that can access the internet This has affected some majorbanks, especially in Europe and USA, through which they have set up applicationsfor smartphones, enabling customers to make online money transactions. In addition,the development of "Page" on social networking sites works continuously so thatbanks can be able to answer customer questions optimally However, the connectionbetween customer's requirements and processing requirements with the bank'soperations an website management is also a big problem for marketers and banks

Finally, in order to develop digital technology, banks themselves have to

change their minds about banking products and services, Marshall (2015) assertsthat this is the era of direct supply of services from bank to customer through pastbranches At the present time, banks need to expand the scale of virtual distributionchannels to save costs and time Digital Marketing is a new technology that canthrive in the future and may become the best tool to provide virtualization services

Marketing needs to thrive in, traditional services need to be minimized We cannotdevelop digital services as traditional technology is still a consumer habit.

CHAPTER 3 : METHOLOGY

The research will study the basic theories of Digital Marketing in commercialbanks, then focus on the advantages and disadvantages of applying DigitalMarketing in Vietnam Prosperity Join-stock commercial banks in Vietnam

The approach and methodology of the study are shown through research framework:

Figure 3 1 Research Framework

Digital Marketing in Vietnam Prosperity Join-stock Commercial Bank Qualitative

Table Research

Theoretical

Collect data Processing Results Analysis Recommendation

Questionare

Survey-The study uses both primary (Quantitative) and secondary data (Qualitative)tools in data collecting process The secondary data was collected through previousresearches, reviews, journals and websites of top large Commercial banks andCentral Banks to support the research paper Moreover, in the process of collectingprimary data, both qualitative and quantitative researches have been done with in-depth interview as well as survey-questionnaires The questionnaires were designed

to answer three main researches questions and were delivered in online questinaireand on paper at the same time The hard copy of the survey was done in Hanoibecause Hanoi has the headquarter of Vietnam Prosperity Join-stock CommercialBank and large branches, with a large number of transaction offices of commercialbanks; Banking products and services are very diversed, accessible and quite easyfor customers and other stakeholders to use, whereas the online questionnaires wasdone nationaly On the other hand, the in-depth interview was designed for the bankleaders and the authority in order to conduct, edit, complete the questionnaires andafter that, we can check the results in extensive survey

Table 3.1 Feedback on target group with the Bank:

Object Number of respondents Percent

Source: Survey data

Table 3.2 Gender of respondents:

Table 3.3 Age of respondents:

CHAPTER 4: ANALYSING DIGITAL MARKETING USAGE IN VIETNAM PROSPERITY JOIN-STOCK

COMMERCIAL BANK.

4.1: Introduction of Vietnam Prosperrity Join-stock Commercial Bank

4.1.1 History of Vietnam Prosperity Join-stock Commercial Bank

Vietnam Prosperity Joint-Stock Commercial Bank (formerly known asVietnam Joint-Stock Commercial Bank for Private Enterprises) was established onAugust 12th 1993 In 25 years of operations, VPBank has increased its chartercapital to 15, 706 billion VND, expanded the number of transaction points to over

219, and developed its workforce to more than 24,000 employees

VPBank is taking big steps to affirm its reputation as a dynamic, financiallystable bank that is reliable and can be responsible to the community 2017 markedthe end of VPBank’s five-year journey to become one of the leading commercialjoint-stock banks in Vietnam, with splendid results in terms of scale and profit.VPBank also reached a historic milestone, bringing nearly 1.5 billion shares on the

Ho Chi Minh City Stock Exchange (HOSE), which has drawn significant attentionfrom both domestic and foreign investors

VPBank’s remarkable growth is vividly illustrated by the expansion of itsbranch and transaction office network and the diversity of its sales anddistribution channels

With the motto “all for customers”, the layout, service model, and amenities oftransaction points have been completely restructured, and VPBank’s products andservices have been continually improved and they are now using numerous tools toincrease customer benefits This has contributed to both satisfying existingcustomers and attracting new customers, thereby rapidly expands VPBank’scustomer base

The Bank has always been a market leader in applying advanced informationtechnology to its products, services, and operational systems Along with building astrong and effective corporate culture, core human resource management systemshave been developed and implemented at VPBank The Bank has done their best todevelop an independent, centralized, and specialized risk management systemwhich meets international standards and aligns with its business strategy While

complying with international best practices in corporate governance, VPBank hasalso refined its organizational structure according to a clear and transparentcorporate governance policy.

With constant efforts, VPBank’s brand has been getting stronger and stronger,which has been affirmed by the receipt of many prestigious awards In 2017 alone,VPBank was presented with 20 awards

Brand Finance, the top independent branded business valuation consultancy,valued VPBank as one of the four most valuable bank brands, and as the 22th mostvaluable enterprise brand in Vietnam

Asia Money named VPBank as “Best Bank for SMEs” Asian Banking &Finance honored VPBank with three awards – “Best SME Bank 2017”, “VietnamDomestic Cash Management Bank of the Year Award” and “New ConsumerLending Product of the Year in Vietnam” The Asian Banker awarded “Best DigitalBanking Initiative in Vietnam”, “Best Unsecured Lending Product in Vietnam” and

“Best Unsecured Lending Product in Asia” to VPBank

These awards once again demonstrate VPBank’s prestige and the quality of itsproducts and services in Vietnam’s banking and financial markets, as well asreaffirming its development strategy VPBank will continue to focus onrejuvenating its products and services to bring outstanding benefits to customers andimprove its services quality to meet international standards

4.1.2 VPBank’s emblem

VPBank’s new brand with the motto "Action for your dreams" was built upfrom the factors: Professionalism, Dedication, Difference, and Simplicity As along-term vision, VPBank determines to promote the image of a bank which alwaysstrives for the best customer service with friendly attitude and fast speed

VPBank’s new emblem is Prosperity flower, redesigned with subtlecombination between sharp and soft curves, demonstrating the flexibility, reliabilityand user-friendliness that VPBank desires to bring to customers The emblem lookslike a pair of hands nurturing aspiration to improve, symbolizing the continuousupward growth and the firm foundation to ensure growth and prosperity It is alsoreminiscent to the image of all hands gather together to build a community as well

as a prosperous Vietnam

The bright red color of the flower petals shows the enthusiasm, willingness,creativity, prosperity and good luck as well as the high responsibility toward societyand the community via VPBank’s every activity.

4.1.3 Vision, Mission, Development Strategy and Core Value of VPBank

As one of the earliest-established Joint-stock Commercial banks in Vietnam,VPBank has achieved steady development throughout its history Especially since

2010, VPBank has grown dramatically, which is shown through the developmentand implementation of the strategic transformation program with the support of one

of the world’s leading consulting companies

Following this strategy, VPBank aimed to become one of the 5 leading stock commercial banks, and one of the 3 leading retail joint-stock commercialbanks in Vietnam by 2017 This vision wass executed through the two-prongedstrategy as follows:

joint- Aggressive organic growth, focusing on personal and SME customers, andexploiting opportunities in the segment of large business customers andconsumer credit

 Building strong foundation systems in terms of organization, humanresources, technology, operation, etc

The support for the implementation of the above strategy is VPBank corporateculture which is nurtured and built on six core values:

 Make the Difference

The achievements of this transition period have determined the right strategy,with the positive changes of image, service quality, professionalism, etc The trust

of customers for VPBank has also strengthened by the constantly increasing number

of new customers and capital mobilization More importantly, VPBank has become

a desirable work place for talents in the banking and finance industry This keyelement had been VPBank’s strategic weapons in the journey towards its aim ofbecoming one of the 5 leading joint-stock commercial banks, and one of the 3leading retail joint-stock commercial banks in Vietnam by 2017

VPBank believes that its above-mentioned vision and strategy will help theBank achieve its mission to maximize customers’ benefits, give special care to theinterests of employees and shareholders, build a strong corporate culture, andcontribute effectively to community development.

4.1.4 Organization chart of Vietnam Prosperity Join-stock Bank

Figure 4 1 VPB organization chart

4.2 Analysing Digital Marketing in Vietnam Prosperity Join-stock commercial Bank

4.2.1 Facts of Digital Marketing in Vietnam Prosperity stock commercial Bank

Join-The results from data collected from questionnaire, survey and in-depthinterview questions helped us analyze the advantages and disadvantages of applyingDigital Marketing in Vietnam Commercial bank as VPBANK

Currently, Vietnam has developed a legal framework for e-commercedevelopment, through a number of documents such as Decision No 1073/2010 /QD-TTG approving the master plan for e-commerce development phase This is afavorable condition for Vietnamese banks to apply e-commerce to increase thevolume of customers and help the banks find a new potential market segment Inaddition, the pressure from foreign banks such as HSBC, Citibank and ANZ toannounce a retail market development strategy has forced Vietnamese banks toreform their operations In 31/7/2016, Vietnam had a total of 34 commercial banks

In general, these banks have set up electronic portals and started to implementonline services : Online savings, online payment for customer bills, setting upcenters for customer care This is a very useful information channel for the purpose

of accessing and selecting financial services

In addition, with the application of technological means, most banks usuallyfocus on television advertising, using popular methods as well as using other onlineadvertising trends such as on YouTube, Facebook, google, etc These areadvertising channels that are considered to be interesting to the younger generationwith a high number of users, but the results are rarely noticed Advertising on othermedia such as newspapers, magazines, etc, are also the branches of the initiative,parallel advertisement of the bank In practice, these methods are not very effectiveand difficult to receive direct feedback from customers of the desired segment.Another common way is to send an email or call the customer based on the datacollected at the branch itself or through websites that also provide information aboutcompanies Although it has the same effect as popularizing, introducing, providinginformation to customers as well as promoting their image, this way has causedmany annoyances for customers, many customers even refuse to answer the calls, orthe emails might be send to spam folder, so the bank's purpose has not beenfulfilled Some branches of the bank have established a large network of social

communication, but the number is limited, not really effective for the search forcustomers There is no uniform identity among individuals.

Most of the banks have switched to online banking, however, some banks stilloffer traditional services because a large number of customers are older and areunfamiliar with using digital services It is worth noting that traditional bankingcustomers are spending more money than virtual banking customers, which is also abarrier to widespread adoption of electronic tools Moreover, the cost of developingvirtual banking is much more expensive than traditional services, while the revenue

is much lower Besides, despite the basic foundation of e-commerce development,the situation has not met the satisfactory requirements that has been set out Sincethere is no solid foundation in e-banking and there are not enough technologyplatforms and Digital Marketing does not achieve as well as foreign banks, there is

no direct interaction between supplier’s level and consumer

Email:

In VPBanks, email marketing is the oldest digital marketing channel.Vietnamese businesses use e-mail in their market research activities, some emailsare for the purpose of researching customer information, most of them are foradvertising purpose Internet users on the computer as well as the phone, the regularoperation is to check the email box

Mobile Banking

General:

From now on, customers can easily do banking transactions 24/7 with Androidmobile phones To get started, apply for VPBank Online and VPBank MobileBanking services

VPBank Mobile Banking is an electronic banking application on mobilephones developed by VPBank

Being simple, convenient and safe to use, VPBank Mobile Banking brings anew banking experience with useful features to its customers

Benefit:

ACCOUNT MANAGEMENT 

- To check Account balance, transaction history

- To check Debit/Credit Card Status

- To check Lending contract Information

FINANCIAL TRANSACTIONS

- To pay bills and credit cards

- To transfer money to other VPBank accounts

- To do deposit with VPBank Online Savings 

- To top up and buy prepaid top-up cards 

- To make interbank transfer throughout Vietnam 

- To make transfer to VPBS securities company

- To make immediate interbank transfer

ATM AND BRANCH LOCATIONS

- To find nearest ATM and bank’s branches

- To find ATM and bank’s branches by place

CREDIT CARD MANAGEMENT

- To check account balance and transactions

- To pay card balance

- To increase card limit

Conditions and application process

Mobile Banking Registration

For customers who already have VPBank account with Internet Banking,logon to Internet Banking, select the Mobile Banking registration, and receiveservice activation code immediately via SMS and email

For customers who haven’t had VPBank account for Internet Banking, bring

ID card to a VPBank branch and fill in a registration form to be able to useelectronic banking services at VPBank transaction offices nationwide 

E-commerce service

General:

E-commerce Service of VPBank enables the customers to use the VPBank'sdomestic debit card/current accounts to pay for their purchase, such as hotelreservations, tour bookings, mobile phone purchases, buying books and makingpayments for hotdeals in various group coupons sites and a lot of other usefulfeatures directly

REQUIREMENT

The customers must own VPBank’s debit card/current accounts;

The customers must also subscribe to VPBank'sInternet Banking service

Internet Banking

General

It is very simple Just logon to VPBank’s internet banking site, use a safe and

2 Fund transfer:

You can make the following transfers anywhere, anytime:

Transfer between VND accounts at VPBank

Transfer to accounts of others bank in Vietnam

Transfer between cards 24/7

Transfer to Deposit account

Transfer to VP Securities accounts

3 Payments:

With Internet Banking VPBank (i2b), you also get the following benefits:Choose to pay now or schedule payments for water bills, electronic bills,Cable TV bills, telephone bills,

Quickly view your bill payments

Faster repeat payments as all new bill details are automatically saved afteryour first payment

Top-up

4 Online saving

With I2b, you also get the following benefit:

Customers can save money anytime, anywhere with i2b

Best competitive interest rate

Maximized cash flow

Vietnam has many favorable conditions to apply Digital Marketing incommercial banks, the most favorable factor is the popularity of social network with71.4% of respondents agree That has been statistically based on social andsmartphone users in recent years in Vietnam

In addition to the social networking sites, 60.7% of respondents indicatedthat the strong growth of the Internet in recent years is also a big advantage

supporting Digital Marketing for banks 54.65% of the people who have done theresearch agree on the benefit of Digital Marketing Digital Marketing fullyconverts the trends of businesses needs (animation design platform, managementplatform, customer care platform, platform automation, and platform optimizedanalysis for website) Less people agree on the advantage of saving long-termmarketing costs for commercial banks (46.4%) The choice “Lessons fromcommercial banks in the world” for the reason why banks should use InternetBanking ranked last with 32.1%

4.2.2 Advantages of applying Digital Marketing in Vietnam Prosperity Join-stock Commercial Bank

Vietnam has many favorable conditions to apply Digital Marketing in VietnamJoin-stock commercial banks, the most favorable factor is the popularity of socialnetwork with 71.4% of respondents agree. That has been statistically based onsocial and smartphone users in recent years in Vietnam

In addition to the social network, 60.7% of respondents indicated that thestrong growth of the Internet in recent years is also a big advantagesupporting Digital Marketing for banks. 53.6% agree that companies are benefitedfrom tDigital Marketing as it has fully converts the trends that businesses need(animation design platform, management platform, dear customer care platform,platform automation, and platform optimized analysis for website). Following is theadvantage of saving long-term marketing costs for commercial banks(46.4%). Lessons from commercial banks in the world ranked last with 32.1%

The strong development of the Internet in recent years The widespread of social media and smartphone Digital marketing contain all the trends that a bank needs (dynamic image design base, management base, customer care base, etc)

Saving long- term marketing cost for commercial banks Ability to learn from experiences of other commercial banks around the world

0 10 20 30 40 50 60 70 80

60.7 71.4 53.6 46.4 32.1

Advantages of Digital Marketing in the opinion of the

re-spondents

1. The rapid development of internet in recent years

The explosion of the Internet in recent years has brought many developmentopportunities for Digital Marketing

The Internet is now a familiar term for people, becoming indispensable fordaily work, daily live and entertainment for millions of people around the world

An astounding statistic shows the Internet size developing speed through themilestones of a thousand equipment, one million devices, one billion devices andten billion devices were achieved in 1984, 1992, 2008 and 2011 (Dahir & Dry,2015). The chart below illustrates the growth of Internet. This indicates that theInternet is not only thriving but also has an important place in the technology space

Figure 4 3 The evolution of Internet-based devices in the world, 1984-2011

(Source: Dahir & Dry, 2015)

After 20 years of Internet emergence, Vietnam has become one of thecountries which has the fastest growing number of Internet users in the world with

58 million Internet users, leading the Southeast Asian countries in the number ofdomain names, Ranked 12th among countries with the highest number of Internetusers in the world

Internet in Vietnam has been established and developed since 1997 Sincethen, Vietnam has always been regarded by the world as one of the countrieswith the fastest growing internet usage. As of June 30, 2017, the whole world

has 3.835 billion Internet users. As the world population at the time of the

survey was 8.5 billion people, 47% of the world's population is connected to theinternet. The top 20 countries with the largest number of users had 2.768 billionusers in total, accounting for 72% of the world Internet users at the

time. Vietnam ranked 12th   on the top 20 charts, with   64

million Internet users. This demonstrates the continued development of the

communication infrastructure, the rational development of science andtechnology, the rapid integration of Vietnamese youth into the world, and thedevelopment of policies and orientations propriety from the state

Figure 4 4 Top 20 countries by number of Internet users as of 30/06/2017

(source: internetworldstats)

development of the internet has created an explosion of information With just onetouch of the finger, we can search a lot of interstitial contents about economic,political, social, etc And thanks to the internet, customers can quickly findinformation about banks’products, through which to compare, choose the bestproducts from the most suitable bank to use. It can be seen that the development ofthe internet in particular and digital technology in general has created a new trendfor the marketing industry in general and banking in particular. Digital Marketing iscreating a close connection between customers and banks, improving operationalefficiency and service quality, bringing the best experience to customers.

In short, the rapid development of the internet is the catalyst of DigitalMarketing, accelerating the implementation of broad and fast product promotionand banking services through direct distribution channels The bank's products andservices are delivered to the right target customers, with the right price, to achievethe business objectives of the bank

2. The popularity of social networking and smart phones

All Digital Marketing tools are intended to help customers use the service orproduct in the most convenient way. Marketing through social networks and mobilemarketing are two of the most effective ways

Marketing through social networking sites is a way of advertising and

conveying messages to users through social networks. Social networking is asimple, effective and low cost way to promote new products and services, increasebrand awareness, keep loyal customers, increase the amount of access to yourwebsite, and enhance user experience. Thus, social networking has become aefficient tool  to exploit new client files as well as to maintain customerloyalty. Banks need to use social networks to have multiple channels ofcommunication for marketers to build and maintain online image and reach onlinecustomers. Banks can simply set up an account, create a fan page on socialnetworks, and then they can try to attract more customers This can bring impressivebrand awareness and save a lot of advertising fee. The products, services,promotions, incentives, etc of the bank are updated on the bank’s fan page and willappear on the home page of other banks as well as target customers, improvingthe spread of information. There are many great social networking sites to work on,including Facebook, Twitter, Google+, LinkedIn, Pinterest and Instagram. Thereare also tools for managing social accounts such as Hootsuite, Podium and Buffer

These are the tools commonly used by Digital Marketing people to monitor, analyzetraffic, demand, and feedback of customer,

For customers, the information shared through Digital Marketing is morebeneficial than Traditional Marketing. For example, people can freely participate in,create and share their own content, receive feedback. Customers can also access andcomment on the published posts of the Bank on social networks. In addition, theeffect spread through sharing on social networks and get feedback on products andservices of the bank helps banks exploit new customer channel from oldcustomers. Therefore, the bank can use this tool to reach the right target customers,

as well as seeking an in- depth understanding of customer needs and behaviors todevelop a tailor-made marketing strategy row

" IBA's research shows that when a brand tries to create a deeper emotional

connection with its customers, it's clear, " says IBA's Kristin Brewe, Head of

Communications and Marketing  Social networking is an essential channel for

branding. This is not a surprising conclusion, because social networking is the only channel that allows consumers and brands to interact and engage in two dimensions at once, making the link stronger  "; At the same time, Ian Ralph,

director of the Marketing Science Association, who conducted the research, added:

"Clearly, social networks have the potential to turn brand customers into brandfans." "By making love, not just by brand, we are influencing future demand andcontributing to increased sales," he added

In another recent study by Exact Taget, digital devices have spawned arevolution in global retail purchasing decisions, more than 90% of consumersbelieve in reviews and 18% of customers were less affected by online ads in thelast 12 months

According to the research that’s shown in the link: http://www.statista.com/ ,which has some of the most popular information about popular networks around theworld until September 2016, ranked by number of active accounts,  Market leader,Facebook, is the first social network to surpass 1 billion registrations

Recognizing the rapid spread of this promotion channel, recently, somecommercial banks in Vietnam such as Vietcombank, Techcombank, VIB, etc, havemade their personal accounts on sites such as Facebook, Google+, Twitter, etc

BIDV, ACB, Techcombank, VPBank , Agribank, MB, Maritime Bank and SHBfrom 2016 to 2017.

On LinkedIn, VIB is the number one online social referral site for businessesand professionals who share information about professional experience, jobpostings, and jobs.VietinBank is the second largest bank in terms of followers whileMaritime Bank and VPBank together hold the third position as their number offollowers is approximately equal, with only less than 50 datadifference. Techcombank is also one of the top names on LinkedIn with a muchhigher result than the rest

In January 2015, BIDV launched social networking pages on Facebookand LinkedIn, regarded as a channel to receive feedbacks from customers, as apart of their overall strategy for social networking, renovating the businessmodel of the bank

BIDV will also launch its own social network operators in the near future,helping to monitor and collect social network data more frequently and actively

To attract customers, commercial banks also launched contests, mini games

on their social networking pages Customers can win gifts from the bank with just afew clicks. For example, Vietcombank, on the 52nd anniversary of its founding,opened a mini game "Choose winning numbers" on their Facebook page. Thebank’s members just need to like the fanpape, changing their avatar into the bank’sanniversary logo, sharing the article to have the opportunity to receive gifts fromVietcombank

VIB is the first bank in Vietnam to conduct recruitment through Facebook, in

3 simple steps: access VIB Facebook page, click selection, select a job and applyfor recruitment

Thus, through social networks, banks have initially achieved many interestsfrom old and new customers. On Facebook, Techcombank is the most popular bankwith over 612,700 likes; ranked second place is VIB with more than 412,800 likesand BIDV Bank ranked third with more than 344,700 likes

In addition, the development of banking services via mobile marketing is

also a development trend of Digital Marketing. Mobile phones, especiallysmartphones, have almost become an indispensable tool for Vietnamese people. Theuse of smartphones for everyday purposes such as entertainment, digital interactionincluding sending text messages, browsing the Internet, and checking

emails. Therefore, contact information and mobile marketing messages bring thehighest number of interactions with customers.

Currently, banks use their phones to develop digital marketing through threemethods: text messaging (SMS), telesales and Internet banking

Marketing through SMS advertise products to customers by sending the

message  with the information of new products, new service packages, sales, events,etc directly to customer’s phone

This is the highest rated way of interaction with the customer. While theemail has been sent may not be seen, the device may not have been able to hear thephone ring and the flyers may be thrown away when not seen, text messages areusually read, or at least quickly checked. "There will be at least 95 out of 100 ofyour customers who choose to use the service," said James Citron, executivedirector of messaging services for Mogreet “they would usually open-and-readmessages within 3 minutes "(2015)

Marketing through SMS helps the bank take care of customers  They couldanswer questions that are frequently asked by sending interest rate information, how tochange balance, their current credit card balance, ATM card notice, SMS notificationwhen there is important email, etc,   directly, conveniently, quickly. Marketing throughSMS is the most familiar way to customers, helping customers identify the brand betterthan any other method of Digital Marketing to customers

Currently, most banks are using a website-based program Banks can sendbulk messages to customers, set up a campaign to send discounts on programs toattract customers. With the advantage of fast, convinient message transmission ,SMS marketing is indispensable for banks

Phone sales, also called telesales, is a form of direct marketing that can

receive immediate feedback and interaction from customers (from 30 to 40%) Theadvantage of this form of sales is that it can search, reach potential customersquickly; Save time and money to get in touch with many potential customers, hasbetter quality than using other sales and marketing methods. Another benefit fromtelesales is that it can be done anywhere

Currently, banks in Vietnam are seeking and reaching potential customers bybuying data or running marketing campaign to get customer files. Once the data is

through the phone is different. If the bank's customer data comes from the purchase,the chance that they become frequent customers can be 50/50 because bankers need

to filter customers according to potential customers. But if marketing runs to getdata, the probability of up to 80% is higher

The benefits that telesales brings to the bank include:

- Market research through customer interviews by phone: Banks can explorethe market, customer reactions and needs, customers thought on the product orservice of the bank at any point

- Communication for campaigns, events:   Prior to each sale or referral event,customer relations specialists can do telesales to test the market response, as well asoffer referrals for new products, register for event reservations, gifts, promotions,

- Customer satisfaction surveys on products or services:   In order to increasecustomer experience and quality, banks can use telephone sales to interviewcustomer satisfaction, thereby improving efficiency

- Customer service and sales to prospective customers:   Caring and selling toold customers is a smart choice. This is also a form of connecting and keeping intouch with potential customers

Another form of digital marketing through the phone is Internet banking. Currently, Internet Banking products and services are becoming

increasingly popular in Vietnam. Customers benefited from the new technology,and this is also a potential business opportunity for banks.  

According to World Retail Bank (2016), 44% of Vietnamese banks'customers are using mobile / internet banking services. This is the average in Asia,specificly in China (57%), Japan (83%), South Korea (96%), and Singapore (94%)but higher than ASEAN countries such as Malaysia (41%), Thailand (19%),Indonesia (36%), Philippines (13%), etc

Internet banking services meet the financial needs of customers almostimmediately. From the payment of bills to electricity, telephone, etc to the purchase

of goods through electronic payment gateway, buy airfare, hotel booking, etc, withjust a phone and a few simple actions, the demand of customers is met quickly, theneed to go out and make direct transactions at the bank’s branches are minimized

Not only that, customers can save and make loan online without having to go

to the transaction room to be served. Moreover, when there is a need to use cash, or

to transfer cash to relatives at home , users can be do it easily and quickly withoutthe presence of ATM card.

It can be said that it is a revolution for users of banking services inVietnam. In addition, the number of internet users in Vietnam continues to increase,not to mention, the transaction through Internet Banking is quite simple, costssaving, time of customers and banks is also saved This will ensure the potential ofInternet Banking development in Vietnam.  

Building a modern technology platform to develop advanced bankingservices such as Internet Banking is a strategy for sustainable development of thebank. International commercial banks in the region and the world that have a strongcapital strength and reputation has usual high profits earned from the serviceactivities of these banks accounted for about 40% -50 % of totalincome. Vietnamese banks in the restructuring strategy, will have to invest more inthe service sector to keep up with this trend.  

3. The bank's demand for new form of marketing with many advantages

Unlimited market Improve service quality of the bank Getting rid of the barrier causing by intermediaries

Reasonable cost, highly effective and measurable

Flexible content, high interactive abillity Reaching out to more potential customers

Shorten geography distance Unlimited operating time

0 10 20 30 40 50 6060.7 70

57.1 50 53 62 30

22

58.3

The benefits that Digital Marketing brings to the

bank and its customers

Figure 4 5 The benefits that Digital Marketing brings to

the bank and its customers

Source: Survey data

Figure 7 shows the results obtained from the survey, the benefits that Digital