Supplier Bargaining Power – High

- As capital is the main resource of any bank and there are 4 main suppliers of capital in the banking
industry which are customer deposits, mortgages and loans, mortgage-backed securities, other financial
institutions ‘loans. Thanks to these 4 sources of supply, banks can ensure that they have the necessary
resources to serve their customers' borrowing needs while they still maintain sufficient capital to meet
withdrawal expectations. The strength of suppliers is mainly based on market factors which often
fluctuate between medium and high.
- The human resource factor plays an important role in the operation of the business. Banks always need a
large number of senior staff. According to a report by the International Labor Organization (ILO),
Vietnam's demand for training new human resources in the banking and finance sector during 2016-2020
is over 1.6 million people and by 2020, the total number of human resources will be more than 1.6
million. About 300,000 people work in the banking industry. The major and existing challenges of the
banking industry before Industry 4.0 are the scarcity of high-quality human resources - a decisive factor
for success, and competition for high-quality resources is the key to success in integration.
- To limit the shortage of high-level labor resources, ACB has organized and trained to improve the
working capacity of employees every month.
- We assess high reliance on different suppliers and they pose a high threat to the company.

The Intensity of Rivalry for the Domestic Market - High

- Vietnam's banking industry is divided into two groups of banks: large banks (AGR, VCB, BID, CTG)
and dynamic joint-stock banks (ACB, MBB, TCB, VPB, VIB, TPB). Besides, there are two main focused
sectors: wholesale and retail banking. Meanwhile, private banks including MBB, TCB, VPB, VIB, TPB,
and ACB are the leading banks in the retail market. It can be seen that the fierce competition in attracting
retail customers and is considered significant for reasons such as: switching costs when customers tend to
choose a service provider with lower fees, the difference in utility technology products is a factor that
affects customers' decisions.
- ACB solves these problems by surveying to better understand desires’ customers through special
incentive programs and providing favorable services, suitable product packages for each segment
customer segment. Thanks to that, ACB can build a strong ecosystem with diverse customer networks.

The Threat of Substitute Products- High

- Facing the trend of digital transformation, many banks draft, plan and have projects related to pilot
management mechanism (Regulatory Sandbox) for financial technology activities (Fintech), horizontal
lending (P2P Lending), a pilot project to use telecommunications accounts to pay for goods and services
of small value (Mobile Money), etc. These moves will have a positive impact on the digital
transformation process and cashless payment of the economy in the coming time. In 2020, the digital
transformation of the banking system and non-cash payment has made remarkable progress. According to
a survey of the SBV, by the end of December 2020, 94% of banks have initially implemented or built a
digital transformation strategy; 59% of banks are implementing digital transformation.
- Currently, ACB is rushing to develop digital and high-tech platforms for easy access to banking
services. Besides, ACB also plans to seek and cooperate with financial technology companies to catch up
with future trends.