Central bank advocates digital banking development

VOV

The State Bank of Vietnam is encouraging credit institutions to forge closer ties with fintech firms in order to develop Industry 4.0-based applications and subsequently offer more benefits to individual users and enterprises.

As an unavoidable development trend for commercial banks, digital banking utilizes a combination of cutting-edge technologies in order to create better experiences for customers.

Amid the widespread adoption of digital technologies, banks are seeking to grasp new opportunities to spread their wings within the domestic market. Digital banking allows all financial transactions to be conducted via the internet, providing users with seamless access on electronic devices such as smart phones, tablets, and laptops.

Le Anh Dung, deputy head of the Department for Payment under the State Bank of Vietnam (SBV), said that digital banking applications helps banks cut down transaction costs, increases their revenues, and improves overall service quality. It is also aimed at leveraging the diversification of banking products and services, realizing the country’s policy on increasing the sharing and use of open data, and easing security risks for customers.

Nguyen Kim Anh, SBV Deputy Governor, said a wide range of challenges are set to arise from the development of digital banking, particularly relating to the completion of a legal framework and the control of payments to ensure rapid yet efficient growth of the sector.

Many economic experts believe that difficulties exist for the expansion of digital banking services as the diversification of banking services remain at low levels, primarily centred on traditional services dedicated to capital mobilization, lending, and payment. The digital banking trend could trigger fierce competition between commercial banks and fintech firms.

As such, the SBV has pledged that it is looking to apply new technologies into developing payment services, based on mobile platforms, fingerprint and face authentication, and QR code.

The central bank advocates the building of a proper legal framework to nurture fruitful operations with fintech firms as well as the issuance of standardized connections among credit institutions and those between these entities and fintech companies.