Discussion: Banks and the 4 T's

In a market economy, to survive and thrive in extremely fierce competition, businesses have summarized and learned many lessons; what people are interested in are the 4 Ps and 4 Cs in business:

The four Ps: 1. Product; 2. Price; 3. Place; 4. Promotion.

And the four Cs : 1. Customer Value; 2. Costs; 3. Convenience; 4. Communication.

For a business to survive and thrive in the long term, it needs to:

1. They understand their role very well.

2. Know how to self-regulate.

3. Know how to seize opportunities.

4. Be open to new ideas.

I believe there is no need for further analysis and commentary on the conclusions above, as those within a market economy have already been drawn by many.

In the banking sector's operations in monetary, credit, payment, and banking services, drawing on the experience of commercial banks worldwide, as well as the dynamic reality of 10 years of reform, particularly since the enactment of the two banking ordinances in 1990; and through lessons learned from successes, mistakes, shortcomings, and setbacks, especially through the credit activities of the Vietnam Investment and Development Bank from 1990 onwards, we can initially draw the following lessons:

To survive and thrive in the long term, to maintain our leading position and role in investment and development, to grow and integrate, in governance at all levels as well as in handling professional and technical matters - first and foremost in credit and payment operations - we need to pay close attention to the four T's: Excellence; Integrity; Affection; and Clarity.

1. Essence.

- This means you have to be extremely perceptive, dynamic, intelligent, and resourceful.

- You must be very clear about your role and position.

- It is essential to have a thorough understanding of the market environment, production conditions, legal framework, social environment, and social psychology.

- Must be highly knowledgeable and skilled in the field they are responsible for.

- We must seize opportunities, fully exploit and develop favorable factors, and find solutions to overcome difficulties and challenges.

- Able to assess the situation, propose timely, insightful, appropriate, and effective solutions and policies, know how to adjust strategies, and handle situational measures without violating long-term principles and goals.

2. Calculate:

First and foremost, one must have knowledge, conduct business and management systematically, with careful planning, consideration, and comparison of multiple options. It's impossible to act without calculation; one cannot act enthusiastically without knowledge. One must calculate the gains and losses, the most optimistic (most effective) possibilities, the most pessimistic (worst-case) possibilities, anticipate and predict potential risks, and plan and forecast recovery strategies and possibilities.

This means considering, calculating, and forecasting from multiple perspectives – calculating intelligently, scientifically, and perceptively, which is completely different from conservative, narrow-minded calculations.

3. Love:

Integrity and integrity are absolutely essential, but they must be accompanied by genuine compassion, because the essence of economic phenomena and business activities lies in human relationships. This reflects the inherent superiority of a society, and all economic phenomena are inseparable from social life.

In banking, "compassion" is, first and foremost, the manifestation of ethical principles in banking business; it is the civilized attitude of a cultured person; it is the awareness, spirit, attitude, and style of serving customers. Conversely, compassion builds trust and confidence between customers and the bank. It should not be understood in a narrow sense within the realm of communication, but more importantly, and fundamentally, it is compassion in management, compassion in handling and resolving issues, compassion in reviewing, deciding, and processing loans and debts, and so on and so forth.

4. Province:

First and foremost, in a simplistic sense, it means being alert—alert to the pitfalls of the market mechanism, alert to money, alert to trivial desires, alert to sweet temptations.

Be vigilant when approaching, researching, and assessing the capabilities and credibility of customers; be cautious when evaluating the effectiveness of projects and loans; when reviewing legal documents and records; when disbursing loans; when monitoring the use of loans; including when collecting principal and interest; when considering decisions on debt restructuring, transferring overdue debts, and foreclosing on difficult-to-collect debts, etc.

This means that any task requires alertness and humility; including alertness in receiving praise or criticism... Of course, alertness is completely opposite to suspicion and doubt. Here, we are talking about sentiment, not in the style of a judge, but rather with a careful and open-minded attitude, seeking truth with sincerity and genuine affection.

It is difficult to fully comment on and explain the multifaceted nature of everyday life, which is also highly relevant to banking operations, regarding the four T's. We hope readers will find this information useful and contribute their own ideas.

(Article published in Investment and Development Newsletter No. 30, August 1998)

(*) Kinh Bac : is one of the pseudonyms that the late Chairman of the Board of Directors of BIDV, Nguyen Van Doan, used when writing articles for BIDV's Investment - Development newsletter and the Banking Times. Besides Kinh Bac, he also used the pseudonym Hai Dang.