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Assoc. Prof. Dr. Hoang Cong Gia Khanh: Fintech should be piloted for banking, securities and insurance

According to Assoc. Prof. Dr. Hoang Cong Gia Khanh, fintech applications are not only limited to the banking sector, but are also used in the securities and insurance sectors. So, besides piloting fintech in banks, pilot both these industries.

Bank number conversion is a must in the digital era

At the 4th Vietnam Economic Forum, Mr. Le Anh Dung, Deputy Director General in charge of Payment Department, State Bank of Vietnam, said that the State Bank of Vietnam considers digital transformation as a mandatory option to help the bank. products to overcome challenges in 4.0 and develop sustainably in the digital era.

Many banking services are now comprehensively digitized. The field of money transfer payments is convenient, 24/7, cheap, even free.

The lending segments gradually, small loans are leading the bank in digital transformation and digitization.

Applying 4.0 technology, big data analysis, cloud computing, AI are applied by many banks in services, creating innovative products and services, creating a seamless superior experience for customers. There have been many leading banks, active in digital transformation, more than 90% of transactions with customers are done through digital channels.

Many related performance indicators such as costs/income dropped to low, only 30-40%, approaching that of banks in the region, and many new products and services were born, combining not only banks but also banks. In addition to banking services, such as car booking, tour booking, public services are also integrated.

Discussing policy directions, Mr. Dung said that, now that the plan for digital transformation of the banking industry has been issued 810 issued by the Governor of the State Bank, in the coming time, he will still persist and implement this plan.

Mr. Dung also said that the State Bank will now focus on 5 major pillars of digital transformation:

Firstly, completing the legal framework, focusing on 2 Decrees that are due to be submitted to the Government, which is the Decree replacing Decree 101 on non-cash payments, and the second Decree is the Decree on the Controlled Trial Mechanism. The control panel (sandbox) is also urgently submitted in June. At the same time, giving positive comments to 2 important Decrees, namely Electronic Identity and Decree on Personal Data Protection, and comments on the Law on Electronic Transactions. The amendment creates positive support for the banking industry.

Secondly, on the data exchange mechanism, the banking industry will actively coordinate with the Ministry of Public Security, allowing banks to connect the National Population Database, implementing the Prime Minister’s Decision 06 on development developing population data applications, allowing banks to apply electronic identification, deploying safe, convenient and low-cost digital banking services.

Third, develop banking industry infrastructure: such as banking electronic payment system, electronic clearing and financial switching system, CIC credit information system to create digital infrastructure for safe operation. , support for other areas.

Fourth, develop industry human resources, provide new skills, adapt to 4.0.

Fifth, develop industry human resources, provide new skills, adapt to 4.0; emphasize financial transactions, disseminate knowledge, avoid risks in the digital era.

Bank digital transformation is mostly in phase 1 – technology adaptation

From the perspective of scientific research, Assoc. Prof. Dr. Hoang Cong Gia Khanh, Rector of the University of Economics and Law, Vietnam National University, Ho Chi Minh City, said that technology development affects the financial industry in all three areas. level.

Firstly, within the organization there is an increase in process automation, improving customer experience through developing direct sales. The second level of impact is that of business networks, financial institutions they open very close links with specialized organizations outside of financial institutions, especially banks. fintech companies – a group of organizations whose cultures are very different from traditional financial institutions. At the 3rd level, the impact on the external environment of the organization, there is a major change in the legal framework, financial institutions are increasingly facing stricter requirements for compliance monitoring at the global level. .

State agencies, centralized organizations are no longer the only place to provide important financial infrastructure, instead there are other organizations that can provide this infrastructure on a decentralized basis. neutralization.

Regarding the banking industry, Assoc. Prof. Dr. Hoang Cong Gia Khanh said that the digital transformation of banks usually goes through 3 stages:

Phase 1, adapting to the new competitive mode through the development of digital channels, digital products and digitizing interfaces.

In the second phase, banks adapt to technology and renovate and improve their technology platforms, conduct digital transformation of modules, and be flexible in product supply.

Phase 3, positioning strategy, some big banks leading in phase 2 will make great efforts to invest in big technology to create a competitive position, they adopt a comprehensive digital transformation strategy, organizational structure. organization to become a bank of digital nature. In Vietnam, the digital transformation process has taken place strongly in the past 3-5 years.

However, Khanh said that a survey of banks and users in 2021 showed that only a few large banks have made significant investments in technology adaptation, ie digital transformation in phase 2. the rest mostly stop at phase 1 – based on online banking application.

“The digital transformation strategy of Vietnamese banks is concentrated in the retail banking sector, with mobile banking and web banking applications. There is a divergence in scale, whereby small-scale banks have tends to depend on low-priced IT providers, simply because they lack the capital, technology, and personnel capacity to receive information technology applications like big banks,” Assoc. Prof. Dr. Hoang Cong Gia Khanh speak.

Fintech can be tested with securities and insurance

Discussing legal issues, Assoc. Prof. Dr. Hoang Cong Gia Khanh said that the most concerned issue of leaders of Vietnamese banks is legal.

In fact, in many countries, the experimental regulatory framework plays an important role in the innovation and digital transformation of the banking and financial sector. In Vietnam, this sandbox has just stopped at the draft Decree to prepare for issuance – in which, there are 6 solutions expected to be piloted such as bank lending, credit scoring, and technology-based credit granting. , blockchain application and distributed ledger, and currently in the draft SBV is this pilot licensing agency.

“Practice shows that fintech application does not stop only in the banking sector, but is also used in the securities and insurance sectors. So, in addition to the fintech pilot in the bank, the pilot should also be piloted. In order to avoid legal loopholes, there should be a common legal framework for testing in all these fields, thereby providing specific conditions and regulations for each field of operation. certain, because each field has different potential risks, it is difficult to apply a general rule for all fields”, said Associate Professor Dr. Hoang Cong Gia Khanh.

Assoc. Prof. Dr. Hoang Cong Gia Khanh said that management agencies and policy makers should approach with an open perspective, balancing the goal of promoting innovation and digital transformation, and protecting consumers. , market stability – not only the concern of Vietnam but many countries are also focusing on this goal.

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