Techcombank Case Study

Synopsis

Vietnam Technological and Commercial Joint Stock Bank (Techcombank), a Temenos customer since 2001, has always held technological innovation to be critical to the success of its business. This progressive attitude towards technology has underpinned Techcombank’s consistently high IT investment and has provided the source of enduring competitive advantage that, in turn, has seen Techcombank grow revenue, loans and profits faster than its competitors, while continuing to improve efficiency, customer service and risk management. With the case study, we aim to demonstrate in practical and quantifiable terms the impact that Techcombank’s sustained investment in T24, its core banking application, has made in the areas of customer satisfaction, product innovation, operational efficiency and risk management. Throughout the study, we also aim to benchmark Techcombank’s performance against its domestic and international peers to illustrate its comprehensive outperformance in recent years.

Main findings

• Since going live with T24 in 2003, Techcomank has been the fastest-growing bank in Vietnam, recording a revenue CAGR of 87% over the period;
• The customer-centric nature of T24 has enabled Techcombank to tailor its service to individual customers, translating into the highest customer rating of any Joint Stock Bank and more than 25% annual growth in revenue per customer over the last two years;
• The flexibility in T24 to configure new products has seen Techcombank out-innovate and outmanoeuvre competitors and, in doing so, grow its deposit base at a CAGR of 72% over the last five years, more than twice the rate of the overall market;
• The inherent scalability of T24, coupled with its growing usage throughout the bank, has led to significant economies of scale in IT: IT cost to income, for instance, is 84% below the industry average;
• Despite its exceptional growth, a complete view of the bank’s risk exposure at both the client and aggregate bank level has allowed Techcombank to control risk successfully: while loans grew by 199% between 2006 and 2008, the percentage of non-performing loans actually fell;
• Between 2003 and 2008, Techcombank’s operating profit grew at a compound annual rate of 111%, also faster than any other bank in Vietnam.
  

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