Vietnam retail banking 2024
Richard Burrage
Market research in Vietnam and Indonesia. Helping you make better choices.
Vietnam’s retail banking sector is transformative, accelerating digital adoption as customer preferences evolve. Banks are competing with each other and new, agile, digital-only entrants that are reshaping how consumers interact with financial services.
The Vietnam Retail Banking 2024 report from Cimigo reveals critical insights into this transformation based on extensive customer research across key cities in Vietnam. This article highlights the main findings and provides strategic recommendations for banking institutions aiming to succeed in this dynamic environment.
1. Market leadership and the rise of digital competitors
Digital payment methods dominate recent transactions in Vietnam, reflecting the widespread adoption of digital financial solutions. Bank apps are the most popular choice, with users primarily using them to link to websites or e-commerce platforms and perform manual transfers. E-wallets closely follow, driven by similar functionality, including website integration and manual transfers. Bank apps and e-wallets represent the majority of payments, highlighting a clear shift away from traditional methods like bank cards and cash.
Competition among banks has intensified, with notable changes in market leadership. In a shift from previous years, MBBank emerged as the market leader in 2024, overtaking Vietcombank, which traditionally held the top position. This significant change highlights how digital initiatives and customer engagement strategies increasingly influence market dynamics.
Meanwhile, traditional players like BIDV, VietinBank, Agribank, and Sacombank are experiencing declines in their Brand Power Index (BPI). This decline suggests that these banks need help adapting effectively to new consumer expectations, particularly around digital services and customer experience.
At the same time, digital-only banks like CAKE by VPBank and TNEX have gained momentum and are now ranked amongst the top 20 in brand power, illustrating the growing appeal of digital-first services. These banks leverage their lack of physical branches to provide convenient, mobile-centric experiences that resonate with younger, tech-savvy consumers. As these digital players grow in popularity, the competition is set to reshape Vietnam’s banking landscape further.
2. The shift to digital engagement channels
As digital technologies become integral to daily life, Vietnamese consumers increasingly prefer engaging with banks through digital channels. According to the report, online platforms, including social media and streaming services, are now the primary sources of banking information, surpassing traditional communication methods. This trend underscores a strong customer demand for digital convenience and access.
This shift presents an opportunity for banks to strengthen their digital presence. With a 52% engagement rate, social media has become a crucial platform for banks to communicate with customers, followed closely by streaming platforms at 33%. These channels allow banks to interact with customers in a more personalised and accessible way, aligning with the needs of Vietnam’s growing middle class and young, digitally inclined population.
Traditional methods, such as ATM networks and word-of-mouth referrals, still play a role but are overshadowed by digital platforms' ease and immediacy. The report shows that an effective digital communication strategy, supported by mobile apps and optimised websites, will be essential for banks aiming to meet customers where they are. Digital transformation
3. Trends in customer engagement and product usage
Multi-product engagement
Over half of Vietnamese retail banking customers use three or more banking products, and many engage with multiple banks. This trend toward multi-product usage signals a more financially savvy consumer base that values variety and flexibility. Customers are increasingly looking for diverse financial solutions within a single banking ecosystem, which can help them manage different aspects of their financial lives, whether saving, borrowing, or investing.
The report categorises customers into low and high-engagement groups based on product usage. High-engagement customers who use multiple financial products and services represent a lucrative segment for banks aiming to grow their share of wallets. Targeted strategies that offer bundled services, loyalty rewards, or enhanced benefits can help banks strengthen relationships with this high-value segment.
Popular banking products
Term deposits and savings accounts are top choices for Vietnamese consumers, reflecting a cautious financial approach amid economic uncertainties. These products provide the stability that many customers seek, especially during economic volatility. Demand deposits also hold steady appeal, while credit cards are on the rise, especially amongst younger, urban customers who prioritise flexibility in managing finances. The report suggests that as credit card usage expands, it may signal increased financial pressure on consumers, particularly if they use credit to manage daily expenses rather than for planned, more significant purchases.
4. Brand power and competitive insights
Brand awareness and conversion rates
Banks that perform well on the Brand Power Index (BPI) enjoy higher brand loyalty and customer retention levels. MBBank and Vietcombank lead in brand awareness and customer conversion, with MBBank achieving the highest Net Promoter Score (NPS) in the market. This indicates that customers are aware of MBBank and see it as a reliable and trustworthy primary banking partner.
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However, challenges remain for some brands. For instance, VPBank, despite high brand awareness, needs help converting occasional users into loyal customers who use VPBank as their primary banking institution. Similarly, CAKE and Timo, while building strong reputations as digital-first banks, have yet to convert many of their customers into loyal, primary users. This demonstrates that more than awareness is needed; banks must also focus on deepening customer relationships and meeting evolving needs.
Digital brand equity and customer segmentation
Digital-first banks like CAKE and TNEX are popular amongst younger consumers, emphasising convenience, ease of use, and mobile accessibility. They are carving out niches within the market, appealing especially to younger demographics that are less likely to visit physical branches and more inclined to manage their finances digitally. Digital transformation
Regional and demographic preferences vary significantly. MBBank is especially strong in the Mekong Delta and the North, whilst Vietcombank remains the leader in the urban hub of Ho Chi Minh City.
5. Strategic recommendations for 2025
Enhancing digital capabilities
Banks must prioritise their digital offerings to keep up with rapidly increasing digital demands. Key areas for improvement include:
Investing in secure, user-friendly mobile banking options is essential. Digital enhancements will improve customer satisfaction and drive cost efficiencies by reducing reliance on physical branches. Digital transformation
Capitalising on cross-selling opportunities
As customers embrace multiple financial products, banks can offer cross-selling packages tailored to different customer segments. For instance:
By aligning product bundles with customer demographics and usage patterns, banks can deepen customer relationships and enhance lifetime value.
Improving customer experience
Customer experience remains a core differentiator in Vietnam’s retail banking sector. Banks that excel in key areas—such as service quality, staff competence, and efficient transaction processes—are better positioned to earn customer loyalty and high NPS ratings. Banks should continually monitor customer satisfaction and identify areas for improvement, especially given the intense competition from digital-first players that often offer streamlined, user-centric experiences.
Tailoring products to meet diverse needs
Vietnamese consumers’ interest in stable savings products and flexible credit options highlights the need for innovation in these areas. By developing flexible term deposits with varied interest terms or launching secure online credit options, banks can cater to customers seeking stability and convenience. Offering such products digitally will help banks reach a broader customer base, including younger users who prioritise mobile accessibility.
6. Conclusion
Vietnam’s retail banking industry is at a critical juncture, with digital transformation in Vietnamese banking shaping the sector’s future. To thrive in this evolving landscape, banks must embrace digital innovation, enhance customer experience, and tailor their offerings to meet specific demographic needs. Strategic agility and a commitment to customer-centric solutions are essential for banks aiming to succeed as digital competition intensifies and customer expectations grow. By addressing these priorities, banks can strengthen their market position and foster long-term customer loyalty in 2025 and beyond.
Cimigo Vietnam Retail Banking report is now available for purchase and can be tailored to your needs. Pricing starts at VND 60,000,000. If you would like more details, please email us at ask@cimigo.com.
Many thanks, Richard