Partnered with VP Bank for its launch of Vietnam's first digital bank, YOLO through conducting market research, conceptualizing and creating a minimum viable product. The digital bank solution which EY provided empowered VP Bank in targeting the unbanked with fast and easy registration while also appealing to young people with its lively interface and by offering integrated services that are relevant to their daily lives.

1. How a pioneer
commercial bank in
Vietnam fundamentally
changed banking for
the unbanked

2. In 2017, it established a digital
lab, which pools together the
internal resources and skills for
digitizing customer journeys
and incubating new digital
business models. In the same
year, it established VPDirect
in pursuit of the ambition to
develop a digital-only bank.
In September 2018, the bank
launched YOLO, the first
digital bank in Vietnam, after
working with Ernst & Young
Vietnam Limited on the
process from market research,
conceptualization to creating
minimum viable product.

3. 3How a pioneer commercial bank in Vietnam fundamentally changed banking for the unbanked |
Vietnam’s population is young and tech-savvy. The median
age is 30.9. As of January 2018, 72% of the population
were smartphone users and 64% of the population accessed
the internet through their mobile phones.
Banks have moved to take advantage of the wide and fast-
growing smartphone and mobile internet penetration. Most
banks in Vietnam have online banking and mobile banking,
which allow customers to view balance, transfer money and
pay utility bills.
Much has changed for Vietnamese in the way they use
banking services. However, the process of opening a bank
account is still the same. In order to open a bank account,
customers have to go to a branch to fill out several pages of
forms, submit a copy of their ID and sign a contract.
Having to show up physically at a bank branch apparently
is a roadblock for customers. According to the World Bank’s
Global Findex database, only 31% of the population over
the age of 15 in Vietnam have a bank account at the end
of 2017.
The discrepancy between the percentage of people with
a bank account and the percentage of people with mobile
internet means there is a large room to grow for VPBank.
As customers are used to doing a lot of their daily activities
on their mobile phone, VPBank thought of providing a
product that is lighter in terms of functions compared to its
traditional bank account, easy to register via mobile phone,
and fun to use for young customers. This would help VPBank
to rapidly expand its customer base.
As e-wallets, which are currently providing the basic
payments function but have much easier sign up procedures
are gaining popularity, the risk is high for banks to become
redundant if they do not move fast.
Does rapid mobile adoption and the resulting
customer behavior change mean challenge
or opportunity for a bank?
Traditional institutions risk being left behind unless they adapt to
rapid technological changes.
Source:
1. https://www.slideshare.net/wearesocial/digital-in-2018-in-southeast-asia-part-1-northwest-86866386
2. https://www.vpbank.com.vn/bai-viet/press-releases/vpbank-launched-yolo-digital-banking-youth?target=en
3. https://www.vpbank.com.vn/sites/default/files/pictures/1.%20CEO%20report%20%28ENG%29.pdf

4. 4 | How a pioneer commercial bank in Vietnam fundamentally changed banking for the unbanked
Source:
4. https://play.google.com/store/appsdetails?id=vpbank.yolo.pay.naptien&hl=en_US
Starting in June 2017, VPBank and EY worked together
for 10 weeks from conceptualization to creating minimum
viable product of what would become the YOLO app, the first
digital bank in Vietnam.
EY teams conducted market research, defining the target
customers and use cases, to identify and evaluate business
opportunities.
Even though this is the first time such a product was
conceptualized in Vietnam, the team benefited from global
EY resources and was able to leverage experience from other
markets, including India and Singapore.
In addition, the leaders from VPDirect were also experienced
in digital transformation in the financial service industry,
which enabled both parties to understand one another fast
and cooperate efficiently.
Launched in September 2018, YOLO was conceptualized to
be part of a user’s day to day life and transactions which may
or may not be traditional banking transactions. It’s built to
engage with customers using a host of ecosystem partners
who provide different services.
Acquiring a YOLO prepaid account requires only name,
phone number, and email to register, and the app is available
for both Android and iOS users.4
The account is opened
within seconds with an instant virtual MasterCard.
The YOLO app provides the functions of any mobile banking
app, including paying bills, transferring money, and option
for an interest generating account with savings product
such as term deposits and a unique super saver (the YOLO
super saving product optimizes customers’ idle money with
freedom to use the balance at any time).
Embracing changing customer
behavior
With a mobile-first mindset, VPBank and the EY member firm
reinvent banking for Vietnamese unbanked.
In addition, customers can book travel tours and
accommodations, reserve tables at restaurants as well
as order takeouts, and buy flight tickets or book taxis.
Customers receive cashback through qualifying transactions
and accumulate points that can be redeemed for discounts.
In order to use the money transfer and saving functions,
customers can apply for an upgraded account which is like
any full-service bank account. For the know your customer
(KYC) process, instead of going to a bank branch, customers
can request a home visit by an authorized officer, reducing
the dropout rates of those interested in full service account.
A physical card that can be used to withdraw cash at ATMs is
provided. The conversion rate from prepaid account to full-
service account has been encouraging so far.
YOLO thus offers its customers the convenience of a wallet
but better experience of being a banking product without the
traditional account opening road blocks of branch visit, etc.

5. 5How a pioneer commercial bank in Vietnam fundamentally changed banking for the unbanked |
VPBank’s YOLO targets the unbanked with fast and easy
registration, while appealing to young people with its lively
interface and by offering integrated services that are relevant
to their daily lives. Within first five months of launch YOLO has
acquired nearly 500,000 users. The app has helped VPBank
acquire customers faster than any other method, and at the
same time, changed Vietnamese customers’ perception,
first by introducing the concept of a digital bank, where all
procedures starting from registration are done digitally and
then by raising their expectations of an online banking app.
Customer behavior has changed especially fast in emerging
markets like Vietnam, where smartphone penetration and
mobile internet penetration have grown in double digit rate
in recent years. Only banks that respond fast to this change
will win.
Bringing a new way of banking
to the market
Digital helps VPBank better meet customer needs and move
ahead of competition.

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Contact us
Varun Mittal
Global Emerging Markets FinTech
Leader, Associate Partner
+65 94 450 420
varun.mittal@sg.ey.com