Monday, 22 April 2024

TPBank's Tran: “One million of our new customers are from third-party platforms”

5 min read

By Foo Boon Ping

James Tran, digital bank centre head, TPBank, highlighted that the bank's digital transformation is made possible by shifting to a digital-focused business model, rolling out new digital products and services, redesigning end-to-end digitalised operations and automated processes and risk management.

TPBank’s digital transformation is built on the four pillars of new digital business model, a full suite of digital product and services, redesigned end-to-end digitalised operations and automated processes, and risk management, said James Tran, head of the bank’s digital bank centre.

The bank claims to be the first in Vietnam to introduce open banking and convenient banking services to consumers through its various online-to-offline (OTO) ecosystem platforms. It has published numerous application programming interfaces (APIs) to offer more than 2,000 beyond banking products and services, with over 50 third-party ecosystem partnerships such as the ones it has with Shopee, MoMo, Zalo, etc.

Tran shared that one million of the three million new customers that it expects to onboard by the end 2022 will be from third-party platforms. The bank has experienced exponential growth in its customer base since it started such partnerships, from a total of three million customers in 2020, to five million in 2021 and eight million by 2022, growing an average of about 63% per year.

He said that such customers have a lower cost of acquisition, less than the average of $10 per customer. They also have a higher number of potential product holdings, averaging three, comprising a basic deposit, a credit and a transactional product such as a card or wallet. For example, with Shopee, TPBank has rolled out instant card issuance and a buy now pay later facility, and aims to do the same with other partners.

Such digitally onboarded customers are also more active, about 50% are, and the bank has about 1.5 million monthly active users.

Currently, 95% of TPBank’s products and services are available on digital channels. This has also contributed to the bottomline, from about 9% of total retail banking profit, to about 20% by 2022. The bank reported that in the first nine months of 2022, it saw a 78% increase in retail banking revenue, which reached $81.5 million. Its pre-tax profit during the period hit $261 million, an increase of $66.6 million or 35% year-on-year, in line with its full year projection.

Tran said that as digital products and services have smaller margins and contribution as compared to traditional secured products such as mortgage and auto loans but are growing in importance and will be run as a separate business unit as management expects contribution to hit 40% by 2025. The bank has also introduced specific digital channel, such as Savy, to serve this segment of younger digitally savvy customers.

The bank has also redesigned its internal operations and processes, 95% of processes have been digitalised and automated, reducing 40% of operating costs and one-third of turnaround time. It has also introduced warning systems to better manage and mitigate credit and operation risks such as cybersecurity and fraud. In addition, it created a data academy to instil a data culture and facilitate the use of data throughout the organisation.

Keywords: Digital Transformation, Digitalisation, Digital Bank, Risk Management, Open Banking, API, Digital Platforms, Customer Onboarding, Profit, Data
Institution: TPBank, Shopee, MoMo, Zalo
Country: Vietnam
Region: Southeast Asia
People: James Tran
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