What is the future of the bank branch in the midst of the 4.0 industrial revolution? Answers from Vietnam

Abstract

Digital channels (websites, bank apps, mobile banking) are incrementally improving as a result of technology innovation and changing customer behavior. The unprecedented Covid-19 pandemic has just added to this trend by urging people to work and make all financial transaction through the Internet. In this context, the question arises of whether banks should revive their physical branches or take the opportunity to shift to mainly digital platform? This research focuses on the branch network trend of Vietnamese commercial banks during the period 2012–2019 to answer the question, what is the contribution of bank branch networks to the banks’ profits. Panel data from 22 largest Vietnamese commercial banks in terms of owners’ capital has been analyzed, using Random Effect Model (REM) regression models. The results show that Vietnamese banks are still expanding their branch networks, despite the fact that bank customers are increasingly engaging in digital bank services. The number of branches has a positive correlation with the banks’ profits, although there is a disparity between large network banks and the rest. The research suggests some implications that can help optimize the branch network in the context of digitalization in an emerging market.

Examining the Implementation of Green Banking and Intellectual Capital on Bank’s Profitability in Indonesia

“…The expansion of digital channels, like websites, banking applications, and mobile banking, may be linked to the improvement of technology as well as the changing needs of consumers. The pandemic caused by the Covid-19 virus has further exacerbated this tendency [39]. Furthermore, [40] employed the measure of internet banking volume as an independent proxy to examine the correlation between the intensity of internet banking and bank performance.…”