Lotte Finance made its first foray into Vietnam’s consumer finance market a year ago, and to mark the meaningful occasion, Kim Jong Geuk, CEO of Lotte Finance Vietnam, talked with VIR’s Ngan Ha about the country’s financial market, the company’s achievements over the past year, and outlines what it will do to bring wealth and value to consumers.

Lotte Finance and Lotte Department Store launched
an associate credit card to optimise customer offers 

What exactly did the company achieve in business in Vietnam in 2019?

Based in Hanoi, Lotte Finance – a subsidiary of Lotte Card, one of the largest credit card companies in South Korea – joined the Vietnamese consumer finance market in 2018. Our company’s main products include cash loans, durable loans, and credit cards.

Since launching with only two service introduction points (SIPs) and close to 200 staff, the company now has more than 20 SIPs in 16 cities and provinces with three offices situated in Hanoi and Ho Chi Minh City, with nearly 1,000 staff members.

With experience inherited from our parent company in the Republic of Korea, Lotte Finance takes advantage of our technology foundation to develop flexible and convenient financial products and solutions that align with the demands of Vietnamese customers. Our products like Lotte Finance Visa, Lotte Finance Visa platinum, Lotte Finance Associate, and Lotte Finance Corporate credit cards are all welcomed by consumers and partners alike.

The grand launch ceremony of Lotte Finance was also participated in by representatives from Vietnamese government agencies, Lotte Finance’s strategic partners, and key stakeholders.

This shows the support and interest of partners for the operations of Lotte Finance. This is great encouragement and momentum to our continuing efforts to make greater contributions to the development of the financial industry in Vietnam.

What potential do you see in Vietnam’s financial sector, especially the consumer credit and private lending business?

Vietnam has in the past few years witnessed strong growth in the consumer loan and credit markets, not only in terms of the numbers of financial corporations joining the market, but also in terms of the market volume. Even though most consumer loans in Vietnam seem to have focused on home improvement, there are still very few real loans to durable goods and consumer services.

The market is forecast to expand faster in the future due to rises in household consumption and because of the large and young population in Vietnam.

The application of advanced technology also excites the market. It allows companies to gain a competitive edge by effectively supporting service quality enhancement, new services development, and business process improvement.

I also see that this industry is contributing well to social development. Thanks to the advances of financial companies, more and more Vietnamese people have the chance to access official resources of consumer finance.

With Lotte Card’s long-term experience in digital finance, auto loans, and corporate financing, how will the company support the local business in extending its profitability and enhancing market share in Vietnam?

The advanced South Korean credit management technology and years-long experience in financial services has placed a solid foundation for our development in Vietnam, as well as helps us to overcome initial challenges in joining this market.

Lotte Finance’s business focuses on convenience for our customers. We are not only providing customers with the benefits from using Lotte’s distribution subsidiaries in Vietnam but are also offering them financial products for their daily activities.

Lotte Card’s entrance into the consumer finance market has helped to expand access to financial services for Vietnamese people, including middle-income earners. Accordingly, we have seen more Vietnamese people who have been able to enjoy the financial benefits through our services during the last year.

In October and November 2019, Lotte Finance together with Lotte Department Store and Lotte Mart launched two brand new associate credit cards. These launches on one hand show the strong collaboration among Lotte Group’s affiliates, and on the other hand will help to generate multiple benefits to Lotte Finance, our partners, and customers by enhancing customer spending in Lotte Department Store and Lotte Mart as well as offering customers more diverse choices of credit card products with optimal benefits.

These initial successes help us to be more confident in achieving our goal of becoming a strategic partner, providing local businesses with such multi-benefit financial products as corporate and associate credit cards, thereby building mutually beneficial partnerships and sustainable values for the community.

The rapid growth of Vietnam’s consumer finance market has caused a lot of challenges for both credit organisations and consumers. Which barriers has Lotte Finance been facing in Vietnam’s fast-growing and competitive private lending industry and how do you overcome it?

One of the barriers is customer awareness about official finance companies. It is still hard for them to identify the legal and trustworthy financial companies.

In addition, customers seem to be hesitant when accessing consumer finance because of some factors such as interest rates and public trust.

Risk management is another challenge. That is because the available information for verifying customer data in Vietnam is quite limited. As mentioned, Lotte Finance takes advantage of our parent company’s technology foundation to overcome this.

Specifically, we make significant investments in developing an effective underwriting process and customer information appraisal system based on advanced credit management technology like fintech, or big data.

Our scoring system also helps us to screen and shortlist the customers effectively. Based on that, we can make rational lending decisions which are appropriate and safe to both our company and customers. This helps to minimise credit risks in the next period. We keep our scoring and appraisal system be continually developed and updated so as to respond quickly to changes and promptly detect new risks arising along with the new market trends.

In addition, we also target customer groups that have good credit history or ones under employment with our partner companies which allows us to filter customers effectively.

With a long-term perspective, what are Lotte Finance’s development plans in the country’s financial sector in the coming year?

As a consumer finance company based on a retail business, we will continue to partner with other affiliates and popular brands in Vietnam in order to provide customers with the most unique financial products and customer experiences.

Moreover, we will continue our application of advanced risk management technology, offering legal financial services to customers who have not experienced these services in the current context, and continue to bring our customerss more diversified financial services. Lotte Finance will grow with Vietnam and strive to contribute to society, create jobs, and improve the standard of living of the Vietnamese people.

We also hope to contribute our experience to the country’s development regarding payment via cards and mobile phones, fintech, and doing business on digital platforms. More importantly, as a South Korean consumer finance company, we always pay due care on compliance. Lotte Finance will continue to research in order to understand Vietnamese government regulations and laws, and will strive to be one of the leading foreign financial companies contributing to the development of a healthy financial market through the expansion of its networks as an officially-licensed credit institution.

Through this, Lotte Finance wishes to become one of the stepping stones to help Vietnam rise to a new level and become a more developed society in terms of credit.

Moving forward, we will continue innovating and challenge ourselves to bring more wealth and value to all interested parties. We wish to become a trusted and beloved financial partner of all Vietnamese people.