Banks upskilling staff for digital transformation

Hoang Viet Anh, FPT Digital’s chairman. — Photo courtesy of FPT

FPT Corporation recently established FPT Digital, specialising in providing digital transformation consulting services to businesses.

This is the ninth member company of FPT Corporation and was established with the aim of perfecting the digital transformation service ecosystem for corporate customers.

Its digital transformation consulting service covers three areas including comprehensive digital transformation consulting, digital human resource development consulting and information technology system development consulting.

Hoang Viet Anh, FPT’s deputy general director, will be chairman of FPT Digital and Tran Huy Bao Giang, FPT director on digital transformation, will be its general director.

FPT expects the establishment of FPT Digital to boost revenue in digital transformation consulting, create momentum for the development of technology consulting services. — VNS

Managing director and national head of Healthcare Luke Treloar and Vo Thi Kim Ngan, associate director at KPMG’s Global Strategy Group

Over the past two decades, Vietnam has achieved laudable improvements in key quality of life metrics such as life expectancy, infant mortality, and access to affordable medicines. This success is the result of the government’s concerted effort to modernise the health system and expand access to affordable care.

Up to now, Vietnam has expanded its universal health coverage to 90 per cent of the population, and targets to reach a 95 per cent coverage ratio by 2025, while maintaining a commitment to sustainable healthcare financing. This coverage ratio and ambition leads comparable regional markets.

The country’s potential is nevertheless still constrained by a relatively high out-of-pocket ratio, while spending the most in-region on healthcare as a share of GDP. If Vietnam wishes to continue to expand access to quality care and maintain sustainable health financing, the health system will need to find a way to provide more services to more patients, at a lower incremental cost.

Digital health is one way to achieve scale of access, improve clinical outcomes, and lower incremental costs. To do this, the government needs to expand market access, and encourage international business and clinical partnerships to drive innovation.

Vietnam is rapidly transitioning from a paper-based medical records system to a digital system. Government-funded hospitals of 24 provinces have committed to deploy electronic health records, with six leading as pilot provinces. At least 80 per cent of patients will have access to digital health records services at national and provincially-controlled hospitals in the near-term, and this access should be extended to at least 95 per cent of the nation by 2025.

Though still on a small scale, telemedicine is expected to serve as a stepping stone to the wider adoption of digital health in Vietnam. During the pandemic, the Ministry of Health (MoH) has piloted telemedicine to encourage social distancing and reduce nosocomial infection risks.

At the same time, the government worked with several hospitals such as Hanoi Medical University to enable remote care in satellite facilities and even patient’s homes.

Vietnam is now seeing the slow but gradual application of AI and big data in healthcare. IBM’s supercomputer Watson is now operating in several Vietnamese hospitals on complex cancer diagnoses and treatment recommendations. Also, the Stanford University machine learning AI platform “RAPID” is now deployed by hospitals like People’s Hospital 115 to diagnose and treat stroke victims.

Digital health can help address capacity constraints faced by most public hospitals – and from a health-economics viewpoint, telehealth and electronic health records will help healthcare providers cut costs by reducing paperwork, improving safety, eliminating duplicate tests, and improving health outcomes and lowering readmittance.

The government is encouraging investors to participate in the development of digital health in Vietnam, and the steps above are a testament to this. We will likely see a further expansion of both domestic and international investors eager to enter the market in line with the government’s commitment to the digitisation of the healthcare system.

However, to fully realise growth potential, remaining issues around technology infrastructure, reimbursement, and regulatory framework should be first addressed.

In 2018, the MoH issued a circular which set the regulatory groundwork for telemedicine by allowing doctors to remotely consult patients, subject to certain IT infrastructure and license requirements. It also provides guidelines for a range of telemedicine activities such as consultation, radiology, and even remote surgery.

However, it does not provide guidance on digital health payment schemes from Vietnam’s Social Security or private insurance providers. Also, there is no legislation specifically governing big data and AI health applications yet, which will slow the implementation of these technologies.

The government can take concrete steps to accelerate digital health adoption through several methods.

First is developing regulations – clarifying regulations governing paying for digital health and using technologies like AI to diagnose and treat patients. Second is expanding health infrastructure digitally in rural clinics to improve access to quality care.

Next up is providing overseas scholarships, by developing collaborations with overseas institutions to train doctors, nurses, and researchers in digital health best practices.

Finally, incentive packages such as tax credits must be created to target the development of digital health infrastructure, in order to promote industry development.

Should these steps be achieved, Vietnam can unlock the full potential of the Vietnamese workforce by promoting the foundation of a digital health ecosystem. Doing so will fuel economic and social development, and further distinguish the country as a regional leader in access to quality medical care.

Domestic and foreign lenders have been ramping up their charter capital to compete in the country. Photo: Le Toan

The Vietnamese banking system was supplemented with more than VND33 trillion ($1.43 billion) of charter capital in 2020. By the end of last year, 18 Vietnamese banks recorded charter capital of over VND10 trillion ($434.8 million).

Earlier this month, digitally-led local lender TPBank was approved by the State Bank of Vietnam to increase its charter capital to more than VND10.71 trillion ($466 million), and is now eligible to open four more branches and two transaction offices nationwide in 2021.

Meanwhile, HDBank, the banking arm of Sovico Group, was among the most active lenders in capital hikes in 2020, increasing its funds by more than VND6.2 trillion ($270 million) to VND16.1 trillion ($700 million).

The bank issued nearly 290 million shares for the first dividend and bonus out of a total of 627.8 million shares approved by its shareholders to increase its capital in 2020.

The bank also issued convertible bonds to a foreign strategic partner, further increasing its capital adequacy ratio, in accordance with Basel II regulations.

SHB also increased its charter capital by more than VND5.5 trillion ($239 million) in the past year thanks to the successful offering of 300 million shares to existing shareholders and the issuance of more than 250 million shares to pay dividends in the 2017-2018 period.

ACB participated in the resources expansion plan by increasing to VND21.61 trillion ($940 million) through issuing shares to pay dividend at a rate of 30 per cent.

A string of other lenders also sharply raised more funds in 2020, including MB, newly-listed OCB, and SeABank.

Chartered capital rankings have changed significantly over the past year. The top 10 largest banks by charter capital at the end of 2020 were BIDV, VietinBank, Vietcombank, Techcombank, Agribank, MB, VPBank, ACB, Sacombank, and SHB. Compared to the end of 2019, SHB has outweighed SCB, while ACB surpassed Sacombank to the seventh place, and MB surpassed VPBank to sixth.

Meanwhile, the five largest banks by charter capital remain BIDV, VietinBank, Vietcombank, Techcombank, and Agribank, and have not changed their financial sources in the past year.

Currently, BIDV has the highest charter capital with more than VND40 trillion ($1.74 billion), followed by VietinBank, Vietcombank, Techcombank, and Agribank.

However, the competition is expected to be more intense in 2021, as a number of banks have specific plans to increase their charter capital.

In the fourth quarter of last year, VietinBank’s board approved to pay cash dividends for 2019 earnings and pay stock dividends for 2017 and 2018 performance at the rate of 28.8 per cent, raising capital charter capital to VND48 trillion ($650 million).

Afterwards, the bank will officially comply with the capital adequacy ratio (CAR) according to Basel II. The application of the standard would help VietinBank increase transparency. Investors, partners, and depositors can then check their own transactions and VietinBank would also have more appropriate risk management policies, thus building more favourable relationships with foreign organisations.

Nguyen Anh Tung, banking analyst at KB Securities, noted that in the long term, VietinBank expects to issue shares to domestic strategic investors and a foreign strategic one to raise charter capital by 2025, thereby lowering the state ownership to 51 per cent.

“This is the best option for VietinBank to improve its CAR, raise the credit growth limit, and limit the loss of market share to commercial banks,” Tung highlighted.

Elsewhere, the National Assembly has recently agreed to add up to VND3.5 trillion ($152.2 million) to increase Agribank’s charter capital.

Other foreign financial institutions are also joining the capital hike bandwagon to ramp up their presence in Vietnam.

South Korean consumer finance firm Lotte Finance has raised its charter capital from VND991 billion ($43.1 million) to nearly VND1.31 trillion ($57.1 million). It is wholly-owned by LOTTE Card Co., Ltd.

In 2017, Lotte Card fully acquired Techcom Finance, a subsidiary of Techcombank, to become the very first South Korean credit card company to enter the Vietnamese consumer finance market. This move also illustrated Lotte Group’s ambition to gain an upper hand in the battle of the Southeast Asian country’s vast potential.

Sun Life Vietnam has also just been approved by the Ministry of Finance to increase its charter capital from VND5.07 trillion ($220.4 million) to VND14.38 trillion ($625 million). According to general director Larry Madge, this fresh source would help Sun Life Vietnam strengthen its financial capacity, as well as continue to pursue its goal of helping its customers achieve lifetime financial security and enjoy healthier lives.

New platforms are constantly developed to streamline operations, Photo Le Toan

MedPro was established in 2018 as a startup by top-notch experts in the healthcare and technology field to address previously unmet challenges such as the frequent overload at many large hospitals as well as the long waiting times. MedPro provides online booking for healthcare appointment to reduce waiting times. After three years of development, the startup has provided services to 500,000 users in Vietnam.

General director Bui Trieu Anh Tuan noted that MedPro has partnered with nearly 30 hospitals to provide services like online booking, cashless payment system, and smart medical cards. Its partners include leading hospitals in many localities such as Ho Chi Minh City, Ba Ria-Vung Tau, Dong Nai, and Can Tho and this year, the startup will expand its coverage to Hanoi, Haiphong, Danang, Binh Dinh, and Binh Duong, with a potential customer base of two million people.

Similarly, Zoop Care is a platform facilitating communications and collaboration between healthcare providers and consumers. The company is actively expanding its operations in Vietnam to contribute to higher quality and more cost-effective healthcare.

Lucy Duong, COO of Zoop Care, said that during market research, the team noticed that it was common for service providers to sort tasks manually with great difficulties. Daily administrative tasks such as appointment scheduling or patient registration are mostly done on paper, with no effective archiving method in use. In addition, multiple mediums are often employed to contact and manage customers. This disconnected approach prevents them from optimising their operations.

“We developed Zoop Care as a broadly centralised platform to detangle all knotted ends. It serves as an all-encompassing solution, enabling seamless communication with customers,” she said, noting that Zoop Care is designed with many useful features, such as online booking, automatic reminders, smart calendar, treatment reminders, automatic response collection, and real-time reporting.

Meanwhile, eDoctor provides a virtual space to connect patients and doctors during social distancing to prevent the spread of the coronavirus. Deputy CEO Alain Huynh said that the potential for digital healthcare is huge as the healthcare market will double in the next 7-10 years. Digital healthcare makes up less than 1 per cent of the total market size currently, a figure which is projected to skyrocket.

“So we have great room for players in many sub-sectors such as pharmaceuticals, diagnostics, medical technologies, retail, wellness, and telemedicine which are all at the forefront of digital innovation,” Huynh said. “Customer behaviour and the market may change forever if lockdown and social distancing remain the major measures to fight the coronavirus. The right solution at the right time will give startups the greatest competitive edge.”

A report by Fitch Solutions identified great promise in digital healthcare. Internet access is widespread and the country has seen rapid development in 4G and 5G. Building on these foundations, the government is driving a digitalisation agenda in hospitals and clinics. As a result, Vietnam has seen a growing number of foreign players showing eagerness to invest in these startups to capitalise on the market potential.

Medix Global is looking to forge collaborations with local partners, especially in the fields of cancer, cardiovascular, and diabetes, through the company’s investment arm, Medix Ventures.

Medix chief executive and founder Sigal Atzmon said, “Since our launch in July, Medix has already seen significant demand for our services as customers look for support on their medical journey. With this in mind, we are looking for innovative companies in Vietnam or international companies looking to expand into Vietnam that can combine data-driven solutions in the healthcare space. This will increase the efficiency and technologies necessary to bridge gaps and provide better access to quality care.”

She said that Medix would focus on providing personalised support by tapping into innovative services that improve not only the individual’s experience but that also benefit Vietnam’s healthcare landscape.