Page 500 - ISC PROCEEDINGS 21.4

DIGITAL INFRASTRUCTURE AND ECONOMIC TRANSFORMATION IN
VIETNAM’S BANKING SECTOR:
EVIDENCE FROM LISTED COMMERCIAL BANKS

1
Ngo Anh Nguyet* , Pham Doan Khanh Thi 2

1 Banking Academy of Vietnam, Hanoi, Vietnam.
2 Ruben S. Ayala High School, California, America.
(*E-mail: nguyetna@hvnh.edu.vn)

ABSTRACT
This paper examines the role of digital infrastructure, data, and technology -
particularly artificial intelligence (AI) - in driving economic transformation within
Vietnam’s commercial banking sector over 2018–2024, against the backdrop of an AI era
reshaping global financial systems. The study makes three academic contributions: (1)
developing a four-cluster analytical typology of Vietnam’s listed commercial banks based
on IT expenditure intensity and digital adoption profile, enabling a systematic cross-
cluster comparative framework for studying banking digital investment in developing
economies; (2) providing the first systematic cross-cluster empirical mapping of IT
investment intensity and financial performance differentiation across all 27 listed
Vietnamese commercial banks over a seven-year panel (2018–2024, 189 bank-year
observations), addressing the absence of validated multi-dimensional evidence on the
ASEAN banking digitalisation–performance nexus; and (3) identifying three specific
transmission channels linking banking technology investment to broader economic
transformation. Results show that total IT expenditure reached an estimated VND 32,437
billion (14.85% of operating costs) in 2024, digital channel transaction shares at leading
banks exceeded 90%, and adult bank account penetration rose from 63.86% to 86.97%
over the study period. Descriptive analysis reveals pronounced financial performance
differentiation across four bank clusters defined by IT investment intensity and business
model orientation. The paper proposes five policy recommendations to advance
comprehensive digital economic transformation in Vietnam’s AI era.
Keywords: Artificial intelligence; banking digital transformation; digital economy;
digital infrastructure; economic transformation.

1. Introduction
Digital transformation has become a strategic imperative reshaping the business
model of banks worldwide. The process not only alters service delivery but demands
comprehensive restructuring of technology infrastructure, data capabilities, and digital
human capital - factors that ultimately determine the degree of economic transformation
achieved in the financial sector (World Bank, 2022). In Vietnam, the banking sector
simultaneously drives and benefits from this process.
Over 2018–2024, Vietnam’s banking industry recorded substantial progress. Total IT
expenditure by 27 listed joint-stock commercial banks reached an estimated VND 32,437
billion in 2024, representing 14.85% of industry-wide operating costs - a sharp increase
from the 5–7% recorded before 2020 (Ministry of Information and Communications [MIC],
2018–2024). Transactions processed through the NAPAS interbank switching system grew
from approximately 2 billion in 2018 to over 12 billion in 2024, implying a compound

499