Digital banking essential for Vietnam’s financial sector

Customers use the Viettel Pay app to pay for goods.(Photo: VNA)

The event, themed "Future of Finance Vietnam", was organised by Singapore-based The Asian Banker, a provider of strategic business intelligence to the region’s financial services community.

The event brought financial institutions, regulators, policymakers and service providers together to share professional insights, work on detailed solutions and discuss the latest trends in the banking industry.

“We are living in an era of technological revolution which brings both new opportunities and challenges,” said Huynh Buu Quang, CEO of the Vietnam Maritime Commercial Joint Stock Bank (Maritime Bank). “Currently, 59 percent of Vietnamese people have bank accounts, 67 percent use the internet and 70 percent use smart phones, but less than 20 percent make online banking transactions and digital payments.”

“This presents a huge opportunity for bankers to apply digital technology to bring new and convenient products and services to customers,” Quang said.

According to Nghiem Thanh Son, senior deputy director general of the State Bank of Vietnam (SBV)’s Payment System Department, there is significant potential to apply digital technology to increase the efficiency and quality of services in the country’s banking industry. These opportunities are provided by the country’s good technical infrastructure and streamlined policies.

The SBV pays special attention to fine-tuning legal frameworks and promulgating regulations to enhance the development of information technology infrastructure and security for the banking industry, Son said.

Following the trend, many banks have been embarking on the application of Industry 4.0 technology and the modernisation of their business models, said Nguyen Toan Thang, Secretary General of the Vietnam Banks Association.

The development of mobile internet banking, QR code payment systems and biometric fingerprint and iris scanning has helped improve the quality of banking services and promises to lead to sustainable growth thanks to increased services revenue and a gradual reduction of dependence on lending, Thang said.

Vladislav Solodkiy, Managing Partner of Life.SREDA and CEO and Founder of Arival Bank, told the conference that in Sweden, the government prohibits cash banking transactions to force the banking system to urgently prepare digital infrastructure.

Can Van Luc, chief economist of the Bank for Investment and Development of Vietnam, said that in 2017, Vietnam’s Government triggered a move towards a cashless society by 2020, with a focus on the development of digital payments.

"In the first quarter of 2018, internet payments increased by 33 percent in volume and 18 percent in value, while mobile payments were up 29 percent in volume and 128 percent in value," he said.

"Traditional banks, fintech start-ups and governments, should work together to build a robust and healthy ecosystem to provide more efficient and lower cost digital financial services to customers, including un-banked potential customers," Luc said.