Techcombank’s tech investments set to fuel record profit

Vietnam’s Techcombank is experiencing strong growth in revenue and operational efficiency by reducing costs and leveraging advanced technologies.

Officially known as Vietnam Technological and Commercial Joint Stock Bank, it has yielded a cost-to-income ratio of 29%, paving the way for record profit of $1bn in 2024.

Key to the bank’s success is a $500m five-year investment in cloud services, artificial intelligence (AI), machine learning and a “customer brain”, which is a sophisticated data engine that replaces reliance on third-party data with a unified profile for each customer.

Integrating structured and unstructured data from internal systems and customer interactions, the system uses 45 machine learning models to score nearly 700 million customer interactions. This data enables hyper-personalisation, fuels generative AI (GenAI) for increased productivity, and identifies new customer segments.

“The customer brain is the omnichannel orchestrator,” said Santhosh Mahendiran, chief data and analytics officer of Techcombank, at the recent Tech Week Singapore conference. “It controls the entire sequencing for the entire band, so whether it’s a decision on AML [anti-money-laundering], or what leads to assign to our salesforce, that decision will be taken through our central brain,” he added.

Mahendiran acknowledged that the journey to achieving this level of personalised engagement with customers has been challenging and ongoing, spanning over five years.

“The core idea is to deeply understand each customer, but consumer behaviours continuously evolve, requiring constant adaptation. The key is to remain as close as possible to these changes, using tools and technologies to monitor and respond to them in real time,” he said.

Techcombank has used the customer brain to identify new customer segments, such as entrepreneurs running small-scale operations from their homes, which is a common business operating model in Vietnam. The initiative generated $50m in revenue within six months.

The bank is also reskilling its workforce, with both front-line and back-office staff being trained in IT and AI. “When we hire a relationship manager, we assess their analytical capabilities,” Mahendiran noted, adding that for salespeople, the bank looks for candidates with digital and data literacy.

The use of GenAI capabilities has also boosted employee productivity, leading to more precise and faster decision-making, driving efficiency while contributing to a projected 20% growth, as the company maintains a flat headcount and reduces its physical branch footprint.

“The opportunity to create impact with data, digital and cloud is exponential,” said Mahendiran. “We are just touching the tip of the iceberg.”