Speaking at Vietnam-Korea Finance Cooperation Forum, organised by the Vietnam Bank Association and the Korea Bank Association, Le Minh Hung, Governor of the State Bank of Vietnam (SBV), stressed that the Industrial Revolution 4.0 is a considerable development in technology, bringing many opportunities, creating added value and being a great driving force for economic development.
Finance and banking is the pioneer sector in rapidly adopting and applying superior characteristics of technology solutions to enhance innovation, improve products and services, cut costs, etc., thereby bringing about many benefits and values to customers.
“In the opposite direction, the financial and banking system may face many challenges due to the replacement of machines and automation solutions, the increase in competition from FinTech companies or the appearance of a series of new risks from technology environment”, said SBV Governor.
Obviously, the requirement is to make a change. Sangho Sohn, President of the Korea Institute of Finance, said that any business that comes closer to customers in the future will be the winner in the market. As such, we need to prioritise the study about customers’ needs, using channels that have the advantage to deliver services in accordance with users’ requirements at low cost.
“If we do not catch up with the change of the world’s technology, we will inevitably become obsolete and losers in the marketplace. Therefore, this is the time where the close cooperation of all financial institutions is required”, Sangho Sohn emphasized.
At the forum, Nguyen Toan Thang, general Secretary of Vietnam Banks Association, said that in the global trend, the banking sector is one of the areas witnessing the strong impacts of the industrial revolution 4.0. With the introduction of many new technology solutions in the banking and finance sector, there requires a lot of change from banks to keep up with the development of technology and meet the demand and expectation of customers.
Yoo Shin Jung, Chair of FinTech Support centre Korea, said that the development prospects for FinTech Vietnam are very large because of the rapidly growing smartphone usage, young population, etc. but there still remain difficulties that need to be solved.
“Vietnam is a potential development market for FinTech, based on comparative advantages in population scale, knowledge of the IT sector, the high level of people accessing the Internet and mobile phones. However, the FinTech field in Vietnam is in the early stage of development”, SBV governor said.
In this regard, Nghiem Thanh Son, deputy director of the State Bank’s Payment Department said that the five challenges faced by FinTech Vietnam include: First is an incomplete legal framework for full management; Second is the difficulty in capital mobilisation; Third, the business model of FinTech companies is insufficent, not ensuring the sustainable existence; Fourth is the limitation in providing services to the market; Fifth, financial market infrastructure is still inadequate.
However, Son also shared some remarkable information. Specifically, in May 2018, the State Bank will hold the National Fintech Day. This is the first major event of domestic FinTechs with the participation of FinTech management agencies, FinTech start-up community, commercial banks, FinTech experts from Vietnam and foreign countries.
Accordingly, a “controlled trial legal framework” will be adopted to issue regulations for FinTech’s start-ups, allowing them to pilot their own measures under the supervision of the State Bank, thereby facilitating the business development of domestic Fintechs and not putting pressure on consumers”.
“On the basis of evaluations in the research report, the State Bank issues appropriate guidelines and policies, apart from continuing to improve legal framework related to electronic payment and encourage commercial banks to cooperate with FinTech”, Son said.
