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


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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.

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    • Table 1. Summary of variables
    • Table 2. Summary statistics
    • Table 3. Correlation
    • Table 4. Multicollinearity test
    • Table 5. Multiple regression results
    • Conceptualization
      Thuy Thu Pham, Hien Thi Thu Hoang
    • Formal Analysis
      Thuy Thu Pham, Hien Thi Thu Hoang
    • Methodology
      Thuy Thu Pham, Hien Thi Thu Hoang
    • Software
      Thuy Thu Pham
    • Writing – review & editing
      Thuy Thu Pham, Hien Thi Thu Hoang
    • Data curation
      Hien Thi Thu Hoang
    • Writing – original draft
      Hien Thi Thu Hoang
    • Funding acquisition
      Ha Thi Thu Do
    • Investigation
      Ha Thi Thu Do
    • Resources
      Ha Thi Thu Do
    • Visualization
      Ha Thi Thu Do