(Source: GSMA Mobile Money for the Unbanked , Cira , Citi GTS ) - Disadvantages:
In general, the model is not led by banks but it provides banking and financial services, which will result in difficulty in designing, building, adopting services.
Telecommunications companies cannot be fully experienced as much as banks in payment and risk management. Moreover, each country has a policy, specific regulations on payment, so the managers are still quite cautious when implementing this model.
In addition, for the model with the participation of agents: To be able to develop services, one important factor is the network of collecting cash and making cash payment - the extended arm of the bank. The investigation, selection, training agents also cost time and resources. Besides, after dealers start operating, there must be continuous inspection, monitoring everything to ensure compliance with regulations and avoid the arising risks.
CHAPTER II: CURRENT SITUATION OF MOBILE BANKING DEPLOYMENT AT VIETCOMBANK
2.1 Current situation of mobile banking deployment in Vietnam 2.1.1 Bank – led model
Among models used for mobile banking development, bank – led model was introduced first and has played the vital role in Vietnam.
Banks are increasingly aware of providing a channel, which offers convenient banking transactions, has flexibility and portable. This will bring good opportunities for having customer satisfaction and retaining existing customers as well as attracting many new customers, who are young, energetic, high - tech lovers.
Due to the strong development of mobile market, 3G technology, wifi, and an increasing number of people using mobile phones, and smart phone users, methods of providing mobile banking become more modern. Up to July 2012, there have been 26 Vietnamese commercial banks, which provide mobile banking services through mobile phone text message. With the advantage of easy usage, simple operation, reasonable price and no application installation, SMS banking has become a popular concept with customers.
Some banks choose web-based method such as Maritime Bank and ACB to offer a wider variety of banking services to customers. This approach allows the customers, who have internet access are able to use banking services through the bank websites.
Meanwhile, many banks invest in the provision of mobile banking services through the application settings. The enhanced security, the simple interface design, more suitable phone screen are the advantages of this method. First bank developing this method is Dong A bank. On 01/23/2008, Dong A bank introduced mobile banking product with transactions operated through DongA Mobile Internet application installed on the mobile of clients. Up to the present time, the number of banks developing mobile banking services based on application setting has increased dramatically, including VCB, VP, VIB, MB, ..
Another method of providing mobile banking services is quite common across SIM applications or USSD. These two methods are implemented through collaboration between banks and telecommunication companies. The popular model in Vietnam is BankPlus offered by Viettel cooperate with such banks as VCB, VietinBank, VIB, BIDV, An Binh Bank, HD Bank, MB, ...
Table 2.1: Methods Launch Mobile Banking
Method Lauching Banks
Web-based VIB, MSB, ACB
Application VCB, BIDV, Đông Á, MSB, HSBC
Sim-tool-kit VCB, VietinBank, VIB, BIDV, An Bình Bank, HDBank, MB, LienVietPostBank, Agribank
In general, from the most primitive form of Mobile banking services, within 5 years, in Vietnam there has been the presence of adequate methods of mobile banking service provision. Although a number of methods are still primitive, mobile banking services promise growing stronger in the future.
In specific, for SMS banking method, features provided are quite limit. Most banks today offer only balance inquiries, basic banking information queries (ATM locations, interest rates, exchange rates,...), phone recharge, and proactive notification account balance/ credit card fluctuations. Some banks, such as Dong A, Techcombank, MSB, ACB, Vietinbank provide additional features such as bill payment, wire transfer, e- recharge through the messages that client send to the message operator according to standard message syntax. However, the effectiveness of this service is not high. The first reason is that it is hard to use because customers must remember the message syntax prescribed by the bank.
Besides, it is the poor security because the message content is usually stored in the outgoing box of the phone. Data sent from the phone to the bank is not encrypted and digitally signed so safety is not high.
For example in the case of VietinBank, money transfer feature through SMS is provided with security made by the message syntax consisting of a static password character by registered customers. Although complex message syntax increases security information, but this is not really the solution to ensure the safety of transactions. Due to the limitations mentioned, in order to control risks of financial transactions using messaging method, banks just provide information or perform financial transactions with a low line.
Table 2.2: The features are implemented through SMS Banking
Criteria VCB VietinBan
k BID
V VIB Dong
A TCB MSB ACB I. Information
inquiries x x x x
II. Financial transactions Money transfer in
system x x
Money transfer in
different systems x
Credit card
payment x
Bill payment x x x x x
Recharge e – wallet x x x x
Recharge mobile
phone x x x x x x
III. Get balance fluctuation notification
x x x x x
(Source: Websites of many commercial banks)
Compared to SMS banking methods, the method of downloading application is more superior over safety and user-friendly interface, and it provides customers a
wider variety of features such as information inquiries, transfer, bill payment, electronic recharge, savings online, information management, etc. However, due to the fact that most banks are implementing this method in the early stages so the features are still very basic. In addition, this method is only suitable for smart phones and requires customers to install applications. Therefore, the target customers of mobile banking services through the downloading application are quite limited, mainly concentrated in the office population, with knowledge of technology.
Table 2.3: The features implemented by means of downloading applications, web-based
Criteria VCB VietinBank BIDV VIB SCB TCB MSB ACB Account
information inquiries
x x x x x x x
Money transfer
in system x x x x x x x x
Money transfer in different systems
x Credit card
payment x
Bill payment x x x x x x x x
Recharge e –
wallet x x x
Recharge mobile
phone x x x x x x x
Online savings x x
Ultilities
(Looking up for ATM, interest rate, exchange rate, etc.)
x x x x
(Source: Websites of many commercial banks)
Some banks provide services by method of WAP mobile banking to simplify user participation and more quickly in the introduction of many utilities to customers. However, the number of customers generally have not achieved as expected.
Currently, due to the fact that there is no centralized and transparent database of electronic banking services in Vietnam, the precise quantitative information about the development of mobile banking services for the purpose of research this study is limited. Estimated up to May 7/2012, there were 26 commercial banks providing SMS Banking service with over 4.1 million customers, performing over 2.2 million transactions , and 19 commercial banks providing mobile banking services to over 2.9 million customers, performed 11.9 million transactions (as shared at the Banking Vietnam 2013 conference of Payment Department, State Bank of Vietnam). Accordingly, the number of users and transactions via Mobile Banking is too small compared to the potential of the 90 million people of our country.
2.1.2 Telco – led model
The typical model of telco–led model in Vietnam is BankPlus service model developed by Viettel. It is also the first network provider developing mobile payments services linked to the bank. BankPlus services are provided through the application pre-installed in the customer's phone SIM. Conditions for participation are people who are Viettel subscribers and open accounts at banks associated with Viettel to deploy the service. Currently, services are supplying basic utilities such as balance inquiries and transaction history, fund transfer and bill payment. Firstly deployed with Military Bank in 2011, up to now, Viettel BankPlus services have presented in 7 other banks: Vietcombank, Vietinbank, BIDV, HD Bank, ABBANK, VIB, Agribank.
Viettel also continuously improves services to become more convenient and attractive by the implementation of USSD and WAP BankPlus. In addition to distribution through affiliate banks, selling and promoting aggressively deployment
in both the trading points of Viettel. Thus, the number of registered customers to use increased rapidly in 2013. As of the end of the month 10/2013, there were 640,000 new clients compared with late 2012. Especially in the September and October, on average, each month there are about 165,000 new customers registering BankPlus. It is expected that customers will continue rising in time when Viettel expand cooperation with 3 other banks and deployment features of bill payment for electricity, water, taxi, plane tickets.