Sacombank’s Nguyen Duc Thach Diem: “Our transaction points can now offer business consulting to SMEs”

Nguyen Duc Thach Diem, CEO at Sacombank, has led the bank in overcoming challenges and achieved positive growth rate amid the COVID-19 pandemic. Under her leadership, consolidated profit reached VND 3.3 trillion ($146 million) in 2020, exceeding the target by 30%. It has recovered and settled non-performing loans and legacy assets totalling more than VND 15.2 trillion ($668 million).

“When limited in space and means due to the pandemic, customers are forced to change their behaviour and use more non-cash payment methods and online trading channels. This helped us boost the use of digital products and services. At the same time, we redesigned the network of traditional transaction points into digital business consulting points, consolidating digital channels into a unified platform to better serve customers while reducing operating costs and optimising profits,” Nguyen highlighted.

Nguyen has a wide experience in management and banking operations, having worked in finance, accounting, credit, customer service, corporate clients, internal control and debt settlement. Since 2002, she held various positions in Sacombank prior to her appointment as CEO, including deputy general director, regional director, and head of divisions/departments, branches and transaction offices. Nguyen is currently also a member of the board of directors.

The following key points were discussed:

• Sacombank deploys technologies that bring long-term value
• Sacombank implements measures such as debt-restructuring programmes and reduced rates to support customers in need
• Clear development strategy and visionary leadership are among the keys to sustainable growth

The following is the edited transcript of the interview:

Foo Boon Ping (FBP): What is the one key opportunity and challenge that your bank faces in this age of digital innovation and disruption?

Sacombank deploys technologies that bring long-term value

Nguyen Duc Thach Diem (NDTD): Today’s digital era is an inevitable result of the industrial revolution 4.0. This digital innovation and disruption create countless opportunities as well as challenges for many business sectors, including banking. Digital achievements allow Sacombank to approach customers more easily to analyse and accurately predict their needs, thereby improving our products and services in the right direction.

In previous years, customers could provide their personal information online to open an account with Sacombank; however, they would still need to visit a physical branch in person to verify their identity. With the development of technologies to store data, link and compare information, as well as facial and fingerprint recognition, customers can now open an account through Sacombank’s app. When their needs are met, customers will tend to use our products more and the revenue will increase significantly. We also apply technical advances to transaction processing and internal operations, which help shorten the time, improve efficiency and save costs. These factors help us accelerate our digital transformation and grow with market trends.

The digital era also requires us to be very careful and discerning in selecting technologies that are valuable to customers as well as to the organisation. A slow technology implementation process can cause banks to lag behind. However, if the bank only focuses on widespread deployment to chase the trend, it will consume resources, including installation and operational costs. The more versatile and convenient new technology products are, the more “openness” will be required in accessing and connecting information, not to mention infrastructure standards and professional knowledge of the staff. This forces us to always ensure safety and security criteria before deploying new features, while constantly upgrading our technology infrastructure, retraining our staff to immediately adapt to new challenges of this invention and apply it effectively.

FBP: What are your views of digital transformation driving organisational and operational resilience during the COVID-19 pandemic? How has the pandemic catalysed opportunities for digital transformation and how has it impacted your institution?

NDTD: During the COVID-19 pandemic, most businesses moved to remote working arrangements. Interactions and supervision become less effective, productivity decreased and processes were at risk of disruption. The pandemic has also impacted sales as customers limited their visit to shops.

With an effective digital transformation strategy, businesses can actively minimise the impact of the pandemic, preserve and use resources appropriately, continue to maintain business operations, and create motivation for recovery during and after the pandemic. Specifically, businesses can build a remote working model where employees continue to communicate with each other online. Documents are stored and approved on a separate system, allowing easy access. Businesses can develop more online sales channels with cheaper costs and increased reach. Business activities can continue, with cash flow circulating steadily.

Digital transformation is a necessary development strategy for most businesses, it makes us less dependent on conventional physical conditions, reducing costs and increasing profits. During the pandemic, these factors become even more important for a business to survive and thrive.

Before the pandemic occurred, many businesses lacked a methodical investment in their digital transformation strategy. They saw digital transformation as just a “plus point” for branding or as a future project. The pandemic pushed these businesses to shift focus to digital transformation as an immediate “must have” strategy to overcome the slow adaptation, stagnation and poor recovery caused by the lag in digitisation. Sacombank was able to maximise the benefits of digitisation as it embarked on this journey long before the pandemic.

Vietnam’s financial market is undergoing rapid changes through the new wave of digital technology. However, a high proportion of the population still use cash. Financial institutions face significant challenges in the digital transformation of their operations. The pandemic has changed that situation. When limited in space and means, customers are forced to change their behaviour and use more non-cash payment methods and online trading channels. This helped us boost the use of digital products and services. At the same time, we redesigned the network of traditional transaction points into digital business consulting points, consolidating digital channels into a unified platform to better serve customers while reducing operating costs and optimising profits.

FBP: With so much uncertainty in 2021, how will your bank remain resilient? How do you plan to support your customers, employees and the community to be resilient?

NDTD: Due to the pandemic, many business operations in Vietnam are suspended. However, Sacombank is allowed to operate as part of the essential industries. Operating amid a fluctuating season is not easy. We faced many problems and were required to be proactive, flexible, decisive and sturdy. We implement short and medium-term plans to solve immediate problems, conserve resources and continue to achieve the business goals we originally set out.

Accordingly, our plan to maintain operations during the pandemic adheres to the following criteria: stabilise the morale of the staff, immediately set up the operation mechanism, maintain customer trust and loyalty and operational goals, and support the community.

The pandemic has a negative impact on the health and mental well-being of each individual. Our staff is no exception. As leaders, we have implemented measures to calm the spirit, show empathy, share, but also skillfully direct them to work seriously and conscientiously. We established an emergency support hotline for the infected employees that were recovering at home; provided knowledge on infection prevention and detection; provide remote working mechanisms and performance evaluation criteria; and on that basis, adjust the salary and bonus structure towards fairness and ensure the highest possible income for employees.

Sacombank also organises working according to the model of “3 on the spot” in the office (work on the spot, eat on the spot, stay on the spot) encouraged by the state, and allows the departments to manage their own personnel to alternate between working from home and the office. With staff working in the office, we conduct free weekly tests, provide medical equipment, a clean working environment and quality food.

As the pandemic disrupted smooth communication, misinformation could easily occur and impact the unified direction of the organisation’s operations. Hence, we use all available channels to communicate our messages, operating strategies and business strategies clearly and smoothly to everyone.

The trust and loyalty of customers is the driving force for the existence and development of an enterprise, especially a financial banking enterprise such as Sacombank. Through certain results of the digital transformation process, we enhanced online interaction with customers provide timely support; promote digitised products and services so that customers can easily access them during the period of travel restrictions.

Sacombank provides debt restructuring and reduced rates to support customers

NDTD: Sacombank implemented programmes to support customers to overcome difficulties, such as debt restructuring, reducing interest rates and payment fees, and providing loans to businesses at preferential interest rates. The bank also prepared medical equipment and complied with the 5K regulations, i.e. Khau trang (facemask), Khu khuan  (disinfection), Khoang cach (distance), Khong tu tap (no gathering) and Khai bao y te (health declaration), at transaction points.

While the pandemic has impacted the way Sacombank operated, the bank’s business goals remain the same. When the pandemic broke out in Vietnam last year, Sacombank were cautious with the business plans including profit targets, cash flow management and risk provisions. Maintaining the development strategy is not only a way to affirm our capacity and prestige but also serves as the basis and guideline for us to assess the current situation and implement corresponding operating methods. This also helps Sacombank maintain its resources, creating momentum for future development when the pandemic ends.

Since its establishment, Sacombank has always believed that it will support the community in common development issues. This relationship between Sacombank and community is even more necessary in the current difficult period. Helping the community to recover sooner provides businesses the foundation to recover. In support of the country’s pandemic prevention activities, Sacombank has provided financial contributions, as well as medical equipment and facilities to build a hospital.

The key for us to cope with this difficult period lies in our ability to anticipate and prepare for possible situations, the ability to improvise immediately, creatively and eliciting the cooperation of stakeholders including individuals, customers and the community. We also look for positive aspects such as seeing this as an opportunity to accelerate the digital transformation process, assess the capacity of the whole system, carry out important projects that require a great investment of time, money and effort.

FBP: In the span of a year, the competitive landscape in banking has changed. Several of the confident challengers from this time last year have struggled or been acquired. What insights into resilience for banks and banking can we gain from this?

Clear development strategy and visionary leadership are keys to sustainable growth

NDTD: The pandemic is a prime example of unpredictable variables in the market. The crisis is persistent and resurgent with each wave of outbreak. If businesses keep a conservative mindset, poor improvisation and ineffective contingency plans during times of crisis or unplanned incidents, they will not be able to sustain themselves.

As a bank with nearly 30 years of operation, with the positive results in restructuring, we find the following lessons to be the most important:

First, businesses need to have a clear development strategy and different response scenarios to market fluctuations. Second, businesses need to speed up digital transformation process to be as fast and comprehensive as possible. The digital transformation helps us take the initiative, limit physical barriers and boost labour productivity while minimising costs.

Third, businesses must have flexibility, responsiveness and high requirements for the organisation and its employees to find the best solutions to cope with the worst situations. There must be a method to connect all employees and build trust with customers, shareholders and partners. Solidarity and trust are a must-have if you want to overcome any ups and downs on the development journey.

Fourth, businesses should have a convergence of strong, proactive, visionary leaders who are able to lead the organisation through difficult times, while still being able to outline their visions and future orientation.

FBP: Tell us your personal story. How were you in your younger years or early days of your career? Did you always want to work in a bank?  How did you rise up the ranks to be the CEO of the bank?

NDTD: My career with Sacombank started as a middle manager in 2002. I was quite young at that time and Sacombank was a very large organisation. Even though I had experience in the financial sector, I started as a teller to fully understand the culture and working methods of the organisation.

With enthusiasm, self-motivation, responsibility and eagerness to learn, I had many achievements and I experienced working in many different positions. Before taking over the CEO position at Sacombank, I held the positions of deputy general director, regional director and before that was the leader of divisions/departments, branches and transaction offices. In each position, I try to grasp the job as fast as possible, grasp the profession and devote a lot of enthusiasm to achieve the best results for my team. I confronted the challenges, understood and shared the hardships of employees, but remained firm and decisive.

I face many difficulties, especially in persuading and building trust with people who are used to the old way of working. The challenge is to test my ideas and overcoming this helps me gain valuable knowledge. As a result, the fields I was in charge of have achieved impressive results, and I gained a lot of experience in market assessment, human resource management and improvisation to arising situations. With my experience, I have an understanding of the duties of each department, the problems of the working process, as well as the thoughts and expectations of the staff.

When Sacombank entered the restructuring phase, the CEO position carried a lot of pressure that not everyone was willing to take on. I have been with Sacombank long enough to feel a responsibility to support the bank to overcome difficulties. The bank’s positive achievements in the last few years is a satisfactory response to those who have entrusted me with this responsibility and also a testament to the outstanding efforts of me and my whole team.

FBP: What does resilience mean to you personally? How does one become resilient?

NDTD: Resilience is a special word that implies a good knowledge base, strength, determination, self-control, patience, ability to overcome difficulties and positive thinking. It also implies good listening and networking, improvisation, flexibility and creativity. It seems to contain all the basic qualities a leader needs.

For those who hold leadership and management roles like me, resilience is not simply a method of operating, it must become who you are, your personality and life motto. The market is always full of surprises; opportunities and risks go hand in hand. Without resilience, it is difficult to stand firm in all situations. More than 18,000 employees of Sacombank look to me for action orientation and faith in the bank, thereby creating a driving force for Sacombank to develop.

I believe that no human being is perfect and good qualities can be forged gradually. A person may become resilient when he trains himself in the following ways:

First, we should accept change and never stop learning. Life is always moving and change is always happening. Instead of resisting or taking it for granted, see it as an opportunity to grow and hone yourself. Such continuous learning not only helps us to respond well to events but also helps us find new directions for familiar problems, shortening processing time and increasing efficiency.

Second, we must take responsibility for our decisions. Once we accept the responsibility, we have an awareness of what we have done. This is the basis for an objective assessment of what is lacking and what needs to be promoted for future experience. This also helps us to be careful and think from different perspectives before deciding to do something.

Third, we should build sustainable connections with stakeholders. The collective power is always greater than an individual. The trust and contribution of resources from stakeholders will be one of the solid foundations to support us in achieving our goals when faced with difficulties.

Fourth, always evaluate and improve yourself. I often call this the process of self-growth. I will understand myself best and only I will know what my limitations are. Recognising and overcoming it will help us develop more comprehensively.

FBP: COVID-19 is a crucible within which resilient leadership has been refined. What do you think is at the heart of resilient leadership?

NDTD: The key point of persistent leadership is empathy, alertness in strategic planning, management and execution of work and consistency in each set of goals. If the desired goals are not achieved, it is necessary to be determined to find another method to achieve them.

From the perspective of a business, we often see the pandemic as having a negative impact on the market economy. But by extension, the pandemic hurts the social life, health and spirituality of each individual. If there is no empathy for these issues, no action to comfort or support, business decisions will only be rigid and cold, and can even backfire. If stuck in the past, the whole organisation will stagnate, lag behind and face the risk of disintegration. The person taking the lead must be alert to stabilise the situation, look for an opportunity to survive or thrive in any given situation, seize it, and skillfully navigate the whole team.

When these factors are combined, I believe that the given strategies will be the most reasonable strategies that can mobilise cooperation among stakeholders while showing the goal for the whole team to achieve together, out of the confusion and disruption caused by the immediate crisis. Above all, when these factors converge, leaders will build their own sustainable credibility.