BANKING AT AN TURNING POINT|AI

(ĐTCK) Artificial Intelligence (AI) is triggering a profound transformation in the financial and banking sector. From automating back-office operations to personalizing front-office customer experiences, AI is comprehensively reshaping the rules of the game.

Banks that control data and accelerate AI deployment will hold a decisive competitive edge.

1. AI Penetrates Core Banking Operations

Today, AI deployment in banks has moved beyond the proof-of-concept (PoC) phase and entered the core, mission-critical functions of financial institutions.

First, AI has become a powerful “shield” against fraud and money laundering (AML). Leveraging massive data repositories, banks are using machine learning to build real-time defense systems. Unlike manual review processes, AI can detect transactional anomalies almost instantly, enabling faster and far more accurate risk identification and prevention than human capacity alone.

Dr. Nguyễn Tú Anh, Director of Policy Research, VinUni University

Second, AI is revolutionizing credit scoring. In the digital era, customers leave extensive “digital footprints.” Through supervised learning models and time-series forecasting, AI enables banks to aggregate multidimensional data to assess customers’ financial capacity and risk profiles. This not only improves the accuracy of credit decisions but also enhances the profitability of investment portfolios.

Third, the combination of Robotic Process Automation (RPA) and AI is liberating human resources from repetitive and monotonous tasks. Processes such as account opening, electronic Know Your Customer (eKYC), and data reconciliation have reached high levels of automation, significantly reducing human error.

Fourth, RegTech is emerging as a powerful “legal assistant.” Natural Language Processing (NLP) applications allow financial institutions to review thousands of pages of regulatory and legal documents almost instantly to assess compliance risks. This breakthrough solution reduces pressure on legal departments, accelerates decision-making, and lowers compliance costs.

Fifth, customer experience is entering the era of “hyper-personalization.” Chatbots and 24/7 virtual assistants are becoming standard across Vietnamese banks. Beyond basic customer support, AI analyzes behavioral data to “tailor” financial products for each individual. Meanwhile, robo-advisors are democratizing wealth management services that were once exclusive to high-net-worth clients.

2. The Dual Impact of AI

The adoption of AI delivers dual benefits, both economic and social, across several key dimensions:

Operational optimization: Significantly reduces operating costs while ensuring consistency and efficiency in processing workflows.

Risk mitigation: Enables early detection of non-performing loans and fraudulent activities, helping preserve banking capital.

Revenue growth: Enhances cross-selling effectiveness by uncovering customers’ latent needs.

Expanded financial inclusion: AI-driven credit scoring based on alternative data (such as utility bills, telecommunications usage, and social credibility) opens access to capital for customers without traditional credit histories.

3. The Challenges of Data, Security, and Inequality

AI is not a “magic wand,” but it is a mandatory ticket to the future of banking.

However, the digital transformation journey is far from smooth, especially in developing markets.

First, data reliability remains a critical challenge. AI is only as intelligent as the data it is trained on. In Vietnam, fragmented and inconsistent data poses a major barrier. AI systems trained on biased or inaccurate data may produce flawed decisions. At the same time, increasingly stringent personal data protection regulations impose significant compliance costs on banks.

Second, there is a risk of widening inequality. If algorithms rely on historically biased data to deny credit to vulnerable groups, AI may unintentionally exacerbate wealth gaps through “algorithmic bias,” depriving those who genuinely need support of financial opportunities.

Third, cybersecurity threats and adversarial attacks are intensifying. Hackers now use AI to attack AI. Dangerous scenarios include data poisoning or the spread of misinformation to manipulate a bank’s reputation. If credit assessment systems rely on compromised information streams, the financial consequences could be severe.

Fourth, legacy system burdens remain a major obstacle. Many traditional banks are caught between the need for innovation and the heavy depreciation costs of outdated core banking systems worth hundreds of millions of dollars. The lack of compatibility between old and new technologies presents a formidable challenge.

4. Five Strategic Pillars for Winning the AI Race

To compete effectively, banks must fundamentally transform their operating models in the AI era. The following five pillars are critical:

First, build a centralized data platform. Vietnam possesses a “gold mine” of data, with 84% smartphone penetration and near-universal 4G coverage. However, banks must prioritize investments in data collection, cleansing, classification, governance, and security—developing narrow AI applications before advancing to more complex models.

Second, place financial inclusion at the core strategy. AI should be leveraged to utilize alternative data sources in lending decisions, replacing or supplementing traditional data to effectively expand access for mass-market customers.

Third, collaborate rather than compete. Banks should partner with Fintech firms to leverage their agile core technologies, combining them with banks’ stable customer bases to shorten time-to-market for new products.

Fourth, invest in “defensive AI.” In the face of increasingly sophisticated deepfake fraud, banks must deploy proactive defense systems and establish robust model risk management frameworks.

Fifth, transform human resources. People remain the key. Banks need reskilling strategies to shift employees from manual tasks to roles focused on technology oversight and customer experience management.

5. Conclusion

AI is not a “magic wand,” but it is an unavoidable gateway to the future. For Vietnamese banks, success does not lie in owning the most expensive technology, but in the ability to integrate AI into a transparent, secure, and human-centered governance strat.

Source: tinnhanhchungkhoan.vn