Most people in Vietnam don’t have a bank. Techcombank wants to change that.

Vietnam ranks as one of the fastest-growing economies in the world, with a booming middle and upper-income population reminiscent of China in previous decades.

But 71 percent of the adult population doesn’t have a bank account, according to the World Bank 2017 Global Index. And 39 percent of Vietnam’s adults save money outside the formal sector. Another 65 percent send or receive payments outside the formal system and pay school fees or utility bills in cash.

For nearly three-quarters of the Vietnamese population, being unbanked comes with a host of issues. Everyday transactions usually free with a bank account—check cashing or sending money electronically—are costly. Receiving money can take weeks because of extensive identification processes. Payday lenders and prepaid card suppliers that claim to help their clients often end up preying on their financial vulnerability.

Learn how IBM is shaping next-generation banking at SIBOS

So why do so few Vietnamese have bank accounts? There are a number of factors at play. For millions of adults, banks are located too far away from their homes. Others find that they don’t have the necessary documents to open an account, while some feel the costs of maintaining an account are too much to bear. There’s also a lack of trust generally in the financial sector.

Nevertheless, banks are finding innovative ways to serve the unbanked of Vietnam.

“We have a great opportunity to bring banking to a whole new generation of people and help improve their financial lives,” Chester Gorski, Techcombank’s chief technology and operations officer told Industrious.

To serve Vietnam’s unbanked, banks first need a way to reach them. Fortunately, cheap smartphones, tablets, and phone service subscriptions are bringing millions of Vietnamese online, and offering a way for the banking industry to access the underserved and underbanked people of Vietnam.

Techcombank, one of Vietnam’s leading commercial banks, saw an opportunity to position itself as the go-to bank for this new generation of mobile consumers by providing a new suite of low-cost and easy-to-use digital banking options.

“We have lots of opportunities to bring banking to customers, for them to transact with banks through mobile phones,” said Ng Teck Huat, Techcombank’s application development director.

For new customers to make the most of the new offerings, however, Techcombank recognized it needed to transform both its IT infrastructure and the way its employees worked with that technology.

“Technology is only one part of the picture,” said Gorski. “We were also looking to drive a broader cultural change in the IT department.”

Techcombank undertook a rigorous selection process to find the perfect technology fit for its needs. First and foremost, it needed a mobile-first platform with the scalability, performance, and flexibility to handle large and variable workloads, as well as strong security and cost-efficiency. IBM LinuxONE seemed to be the solution the bank needed.

“The banking market in Vietnam is rapidly evolving, and IBM LinuxONE provides the fast, flexible foundation to support our growth trajectory and the dynamic needs of the future,” Gorski said.

The Lunar New Year is one of the bank’s busiest times, and it proved the perfect opportunity to test how LinuxONE absorbs dynamic workloads without compromising normal production performance.

“Even as transaction volumes increased to four times their normal daily levels, IBM LinuxONE delivered a flawless performance,” said Gorski. “We didn’t miss a beat.”

Since Techcombank shifted its focus to reaching Vietnam’s unbanked, both the transaction volume and the value of its e-banking services have increased more than 100 percent year-over-year from 2015 to 2017. Its customer base, meanwhile, is growing 30 percent year-on-year.

“For a platform to bring that many benefits has really helped Techcombank,” Gorski said. “This is going to be a platform for us to continue to build on and grow as our markets and customers do.”

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