Editor’s note: Alex Macaire (pictured), Group CFO of Techcombank in Vietnam shared the bank’s ongoing digital transformation journey, its learning along the way, and the results it’s seen so far with FutureCFO and his peers.
Macaire joined Techcombank from HSBC, where he worked for 15 years in senior leadership roles across investment banking, capital management, and finance. Most recently, he was CFO for Wealth and Personal Banking Asia Pacific at HSBC.
FutureCFO: How is Techcombank transforming with digital and cloud technologies?
Alex Macaire (AM): The way I would put it is that digital and cloud technologies are, for us, much more than a tool toward achieving certain objectives: they are at the very core of our identity as a bank.
We were born 30 years ago as Vietnam’s technological and commercial Bank and, to this day, we still believe that we have a distinct responsibility to lead the financial industry’s digital transformation.
Our vision is to use the best technology available to "Change Banking, Change Lives", empowering our customers in their financial decisions and help them reach their full potential.
Our ongoing digital transformation, including the integration of cloud, is a core component of this vision.
It’s expressed through the digital pillar of our three-pronged 2025 strategy while also running throughout our other two pillars of data and talent.
For example, when we provide our talent with the tools to harness the power of digital technologies in their day-to-day activities, we are also making an investment in their future at a very fundamental level.
Our level of investment is consistent with our ambition. In 2023, our annual spend on technology is expected to exceed US$100 million and we estimate that we currently have over 1,000 people working on transformation across the organisation.
There are not many tech companies, particularly in the financial sector, that are able to mobilise that level of resources so the advantage it gives us will be hard to replicate.
FutureCFO: What has the bank achieved so far in terms of digital transformation, particularly in the area of cloud technologies?
AM: On the back of this investment, we shifted 43 systems to the cloud over the last 12 months, to allow us to scale rapidly and in a cost-efficient manner.
We further implemented 10 new platforms from leading global players into the bank’s cloud, many of which represented “first in cloud” achievements for the Vietnamese banking industry.
We also used our cloud first strategy to build a “data brain” foundation for the bank, allowing us to strengthen our customer insights and enhance our payment and unsecured lending capabilities, particularly for high-net-worth and SME customers.
This is key to transforming Techcombank into being more proactive and predictive with customer requirements. All of this is supported by best-in-class cybersecurity processes leveraging Amazon cloud security protocols, alongside strong governance mechanisms across the organisation including talent development initiatives and robust oversight.
Looking now at a few figures: 90% of our customers are digitally active, which is among the best rates in the global industry.
We built a fully automated credit card underwriting process on the cloud and brought down the “time to yes” from days to seconds.
Our infrastructure provisioning time has been reduced significantly, which means a campaign or initiative which would have required weeks to sort out the technical requirements can now be expedited in days.
The efficiency of our IT Ops team has improved and our TOI per employee has increased by 40% since 2020.
We are incredibly excited to continue this journey and unlock game-changing benefits for ourselves and the wider sector.
You must have the humility and awareness to constantly learn and work quickly to rectify any shortcomings
FutureCFO: Where is the bank currently on its cloud journey? What are the cost and efficiency implications of shifting to the cloud?
AM: Before progressing our cloud first strategy, we undertook an extensive analysis of the total cost of ownership of around 20 production applications that had been migrated to the cloud.
We found that the migration generated cost saves from day one for some, while for others the costs were slightly higher.
Overall, the costs post-migration were lower in the range of 3-5% — good, but not ground-breaking.
Our effort then centred on how we can make this even more efficient and bring our costs down even further, whether that be through planning computing resources, selecting optimal pricing models or increasing cost accountability across the organisation.
We therefore put in place a joint “FinOps” optimisation squad including members of our IT and finance teams to work across cloud economics and enterprise support.
It was a new approach for us and we looked to leverage the collaborative tools previously developed as part of the more mature “DevOps” and “SecOps” methodologies.
It allowed us to reduce wastage, monitor usage and improve the overall efficiency of the cloud.
We are already seeing some exciting results: in the first three months after implementation our cloud costs dropped by 20%, and since then they have kept decreasing month after month, despite the fact that the bank is growing at a pace of 20%+ per year across most metrics, with ever more computing power pushed to the cloud.
In fact, we’re continuously discovering new ways of leveraging the unique flexibility offered by the cloud.
As an example, we were able to completely shut down our non-critical compute instances during Vietnam’s Tet week, bringing our related IT costs to exactly zero during this period. Such feats would just be impossible with a more traditional on-premise IT estate.
We are fully focused on continuing our improvement of cloud and making the activities sustainable and not a single "point in time" exercise.
Investment into the team is vital which is why over 2800 of our “Techcomers” have been trained in the use of cloud technologies, acquiring more than 250 specialised certifications.
We are still at an early stage of our cloud journey and it is a continuous learning process.
However, we remain convinced it has the potential to not only significantly improve the experience of our customers but also reframe our mindset to become a much more agile and efficient organisation.
The efficiency of our IT Ops team has improved and our TOI per employee has increased by 40% since 2020
FutureCFO: Digital transformation requires a mindset change of the team. How do you go about this? Any particular issues that you've encountered and how did you resolve them?
AM: The mindset shift is vital as, ultimately, our people must take the lead of our transformation.
Our focus has therefore been on constant upskilling of our workforce, including the finance team, and building new internal partnerships across the bank, for example between Finance and IT.
Focusing on the finance function, our Techcomers have taken part in a workforce transformation plan anchored by our digital transformation, including a joint-skills acquisition programme that provides instructor-led training, digital courses, game days and other education activities. We provide further training on cloud cost visibility, how services are charged and how to identify cost reduction opportunities across the business.
The old saying ‘you don’t know what you don’t know’ has certainly been true and we have discovered there is no ‘one size fits all’ model with cloud implementation; all related factors including usage patterns, capacity and demand planning have to be considered right from the beginning.
We are also refining our ability to save costs with our cloud migration and retain control of the associated costs.
The massive flexibility and scalability of the cloud means costs can go in both directions pretty fast.
A seemingly anodyne decision taken by a junior staff member, for example with regard to a testing strategy, can end up costing several thousands of dollars to the bank. It is therefore important to create awareness and foster an appropriate mindset across the whole organisation.
FutureCFO: What’s your perspective on the CFO-CIO relationship when it comes to achieving successful transformation? In your view what's the right role for a CFO to play in digital transformation?
AM: Ultimately, the relationship between a CFO and CIO is a partnership and it has to be a positive one for the transformation to work.
Our cloud journey has allowed us to work much more closely together and use our collective expertise to address the challenges, including how to improve resource planning, select optimal pricing models, or increase cost accountability in the organisation.
Beyond this, I’ve taken a lot of inspiration from my IT colleagues. The way they organise their work, for example, is very interesting and can be replicated to drive the operating model of the finance function.
This is why we have created dedicated chat channels for staff to exchange ideas and resolve problems in real time, as well as introducing hackathons to improve our design thinking ability.
Our testing of a ticket system and usage of a chatbot to answer queries allows us to work effectively together and optimise workflows.
This has been a very positive legacy from this transformation and is inspired by the close relationship between the finance and IT functions.
Coming to your second question, the primary role of a CFO in a high-paced change environment should be to monitor the reality of the costs involved and understand how to implement the transformation in the most effective and efficient manner.
As our technology investments are bound to keep rising, the CFO must have full oversight of all cost implications and support the development of an effective business model.
In this respect, there must be a completely seamless integration between the frontline digital bank, the middle layer of decision engines and the backbone of IT Operations. Finance has a critical role to play in ensuring that.
First, by assessing the IT investments required, but also by putting in place the data flows which support the interactions between the various layers, particularly the integration of financial parameters, like risk-adjusted returns by product or customer, into pricing and credit decisions.
We are fully focused on continuing our cloud improvement and making the activities sustainable and not a single "point in time" exercise
FutureCFO: How does shifting from a capex-orientated model to an on-demand consumption model effecting the bank’s metrics?
AM: In most situations, and especially for a transformation such as this, capitalisation is unavoidable. IT systems are expensive and, generally speaking, the only way you can create stability in the P&L is by capitalising the costs.
The beauty of moving to a cloud and software approach is that it removes the need for such capitalisation and this is what underpins an on-demand consumption model where you only pay when you use the service.
There is complete flexibility and you no longer need to worry quite as much about your cost-income ratio.
This is an incremental process, however, and the initial implementation period may not lead to immediate benefits. For example, you may have a period of time where you end up paying for new cloud services while still amortising your previous on-premises infrastructure. This has been something we’ve had to navigate as a bank and it gives us further incentive to complete the transition as quickly as possible.
At the end of the day, flexibility gives us an enormous advantage and, once we’ve come through the initial transition, we can fully unlock the long-term benefits of cloud and create a much better customer experience.
FutureCFO: What are some of the key learnings for other CFOs who’re embarking on a cloud transformation journey?
AM: Firstly you have to be clear about the ‘end-state’. If you try and undertake a transformation half-heartedly, it will end up being twice as expensive.
It is critical that, from the very beginning, you communicate the vision clearly to employees of all levels and provide the necessary capabilities for them to achieve this goal.
The partnership between finance and IT has been a critical one as, not only does it optimise our collective expertise, but it also encourages close working relationships and knowledge-sharing across the company more broadly.
It is crucial to make the necessary investments, particularly around a dedicated Finops function, and to have full monitoring capabilities of usage and demand across the cloud services. This extends to making the necessary investments into your people as a skill shortage, at whatever level, is one of the main threats to cloud adoption or any major organisational change.
There must be a relentless focus on extracting business value.
As we have seen, this is not a ‘quick fix’ and migrating such large amounts of data, not to mention implementing an entirely new platform, is not simply a case of execution.
You must have the humility and awareness to constantly learn and work quickly to rectify any shortcomings, as well as look continuously at how you can improve efficiencies right across the journey, including areas you may not have considered.
CFOs who can get ahead of cloud adoption can seize the opportunity to be more nimble, adaptable and resilient while managing costs and driving value.
Most important of all is recognising this journey is about pivoting from a traditional banking corporation with incremental growth toward a technology-led agile venture with exponential growth.
This is a radical mindset shift and a once-in-a-lifetime opportunity for all those involved in this re-invention of the financial and banking paradigm.
