In order to strengthen the financial capacity of SOEs, the Vietnam government has implemented the SOEs reform and equitisation program, the number of SOEs has been decreasing, the SOEs market is declining. With high market share, BIDV should implement strategies to its maintain market share position and manage for earning. In contrast, the Is&PEs market is rising. BIDV should conduct rapid penetration strategies to develop its market share on this market.
For the prosperity and sustainable development of customer and bank, BIDV performance objectives are to maintain the high market share in SOEs market and to develop the market share in the Is&PEs market by continuing innovation credit products and services and development new ones in line with changing business environment with the assistance of the latest banking technology and to improve financial capacity following the development of BIDV and international standards.
Based on the BIDV performance objectives and resources, some main competitor strategies (appendix 1), market structure and opportunities. BIDV has ditermined to change to adapt with new business environment by following strategies: – Expand network, change organization structure to move closer to customers and apply retail banking models, making branches as distribution channel. – Standardize products, set up a new product section such as credit card, ATM, money transfer, financial consulting, asset management and related services.
Introduce new technology for new advantages such as home banking, phone banking. – Expand both lending to large profitability corporations and consumption, including housing, to diversity products. Combine lending with other financial services like private asset management, investment consulting. Apply the customer classification and lending program. To innovate current products and services: innovation has become the key strategic focus for today’s most successful companies.
To innovate credit product is concentrated in increasing the credit appraisal in order to increase the credit quality, reforming credit processing procedure in line with individual and private enterprise demand and adding more tangible, augmented and even potential products to credit product such as financial advising and insurance services with the purpose to attract the credit needs of profitable SOEs. Further, BIDV should apply new technologies on money transfer in order to increase the money transfer speed, offer various interest rates on deposit service.
To develop new products: environment changes make possible new solutions to both current and new customer needs. The development of new products is one of the most important activities for all the financial firms competing in today’s fast-changing markets and environments. Not only does new knowledge make possible better products and services, but it can also provide the means for lowering costs and improving quality.
To apply latest banking technologies and modern models: Modern banking technologies are the most important factor to ensure the quality of modern banking services. In particular, advances in science, technology and the ability to handle information allow companies to apply this new knowledge to enhance the new product or services which are more efficient than current ones. BIDV should invest more on technology as well as hire skilled people to operate it. Furthermore, BIDV needs to apply latest modern banking models such as one-door transaction and retail banking models.
Innovation credit product: Since 2004, BIDV has implemented the International Standard for Quality Management Systems ISO: 9001-2000, “an international standard, recognized throughout the world for establishing a business management system” (source:http://www. nsf. org/NSF-ISR/standards/iso90012000. asp). Based on main quality management principles such as: customer focus, leadership, system approach to management, continual improvement, that provides a focus on system performance and ongoing improvement.
Furthermore, the credit manual was issued to standardize credit procedure. Credit procedure for Is&PEs was applied to meet the specific demands. The management of credit and investment operations was based on modern procedures in order to ensure the credit quality and prevent new bad debt. Moreover, many tangible and augmented products were added to core products such as borrower can buy insurance from all BIDV branches; SOEs can get the free financial and equitizing advising service.
Many new branches were opened, new technology on money transfer was applied, within 3 years: 2003, 2004 and 2005, 15 new branches were opened increasing the number of BIDV branches to 79 branches over 61 provinces and cities in Vietnam. (BIDV Magazine, January 2005). New product development: In order to provide modern and advanced banking services and products which are comfortable to all individual and enterprise customers, BIDV has offered many new banking services such as debit card with a large ATM system, electronic money transfer, home loan, consumer credit.
Some new modern electronic banking services such as internet, home, and mobile banking, credit card recently ran pilot projects. In present, BIDV customer can draw money from all BIDV’s branches over Vietnam. To be aware of the needs of applying modern technology on modern banking operation, BIDV has been implementing the project entitled ‘Modernizing the banking and payment systems’ that was funded by the World Bank (WB), it is composed of seven sub-projects, the core of which is the construction of an electronic inter-bank payment system.
At present, BIDV has completed phase I of the project, and is actively conducting phase II. That has created favorable conditions for bank’s technology modernization, especially management information system and inter-bank electronic settlement in order to widen the chance to integrate into international financial and helped BIDV achieve certain successes not only in offering new banking products and services but also in controlling the banking operation. Further, the structure of BIDV was changed toward customer, the retail banking and one-door transaction model has been applied.