ACB CEO: We’re Grappling with the Low-Interest Loan Race Against Big4

Speaking at the 2025 Business Forum: Pivoting for Growth, hosted by Forbes Vietnam, Mr. Tu Tien Phat, CEO of ACB Bank, highlighted the most pressing issue for banks today: shrinking profit margins.

Elaborating further, Mr. Phat explained that while annual bank profits of 20-30 trillion VND seem substantial, they are minuscule compared to total assets. “ACB is grappling with the challenge of larger banks offering lower lending rates, forcing us to follow suit and further compressing our margins. This creates a vicious cycle—as margins shrink, businesses must expand markets, segments, and customer bases, often accepting higher risks. Without careful management, risk control becomes a significant challenge,” he analyzed.

The second major concern, according to Mr. Phat, is technology investment. The CEO emphasized that digital transformation requires careful technology investment. Missteps can lead to “legacy” systems, burdening businesses, especially SMEs. At ACB, each step in digital transformation is approached with caution.

“In banking, we work closely with consultants, but I always caution: be wary of consultants. Why? While they aim to help, digital transformation is complex, going beyond technology. It’s a multifaceted challenge,” he stated.

Mr. Phat termed this the “digital transformation trap,” affecting both large and small businesses. He cited examples of companies investing millions in CRM systems, only to see employees input “garbage” data, while paying $20–30 per user monthly for software.

“This is clearly a trap—it hinders rather than accelerates digital transformation,” he noted.

Another example is process automation. Businesses often introduce technology to streamline processes, but poor customer experience results if processes aren’t optimized first. Mr. Phat stressed that process optimization should precede technology implementation.

“ACB invests over 1 trillion VND annually in digital transformation and IT. In five years, our assets and credit scale doubled, profits increased 2.5 times, but staff grew only 10%. This reflects our digital transformation success. With 14,000 employees and 6–7 million customers, hundreds of bots automate tasks daily,” he shared.

Mr. Phat concluded that digital transformation is imperative but must be human-led, not technology-driven. Avoid the digital transformation trap and technology pitfalls.

He emphasized three key factors: CEO leadership, business-savvy technology adopters, and organizational alignment. “ACB’s decade-long digital transformation, intensified in the last five years, has been costly but highly rewarding,” he said.