Banking industry investing VND15 trillion in digital transformation

The banking industry in Vietnam has initially poured VND15 trillion (US$631.2 million) into its digital transformation process, resulting in impressive achievements such as a 40-percent growth rate in a short time. This is the report in yesterday’s online formal discussion themed ‘Banking Industry as a Pioneer in Digital Transformation: for the Public to Participate and Benefit’.

Participants in the discussion

Implementing the program ‘National Digital Transformation until 2025, with a Direction to 2030’, approved by the Prime Minister, the banking industry of Vietnam set an aim for 50 percent of its professional activities being digitalized and 70 percent of transactions done online by 2025.

Deputy Director Le Anh Dung of the Payment Department (under the State Bank of Vietnam – SBV) affirmed that SBV has priorities in its digital transformation process. The first one is developments in the operative infrastructure and digital payment systems. Using digital technologies in product and service design is also a clear focus of SBV. Digitizing data and forming a digital ecosystem to offer secured products, services to clients on electronic devices is essential in the digital era.

Therefore, SBV has cooperated with the Public Security Ministry to make good use of the national population database for the identification and authentication processes in order to provide safe, quick, convenient, and reputable services.

Also, since 95 percent of banks in the country has already devised their digital transformation strategies, SBV is actively trying to master advanced technologies like cloud computing, big data analysis to upgrade its main IT system for the provision of products and services on the digital system.

Deputy Director Le Anh Dung of the Payment Department, SBV

Economic expert Dr. Pham Xuan Hoe praised SBV for its quick response to this digital transformation regarding institutions: the consideration of a policy on payment intermediary, overdraft operations on customers’ accounts.

More importantly, in the board of director of most banks, there is at least one senior manager who is an expert in IT. SBV is the same, when one of its Deputy Governors is an IT professional.

The Covid-19 pandemic has also promoted the use of digital banking via mobile applications among clients for their daily transactions. Currently, 95 percent of payment and money deposit operations are done through the use of digital technologies. Some individual customers completely transact via these technologies. This has helped Vietnam enter the list of top nations in digital transformation in the banking industry even though it is a developing country.

Recently, SBV has submitted to the Prime Minister its proposal to allow the banking and postal industries to pilot transferring money via the postal system and increasing accessibility to residents in remote areas, which is one critical stage in the digital transformation process of the banking industry.

General Secretary of the Banks Association Nguyen Quoc Hung voiced that over 90 precent of payment services related to money deposit can be digitalized; however, the problem lies in the money loan process and services related to other ministries and state agencies, which can only be addressed when the Law on Electronic Transactions is amended and supplemented.

Another negative issue is frauds via SMS, leading to money loss in bank accounts. The banking industry is not the criminal but the subject that receive the most negative impacts. In the upcoming time, it is going to work with related ministries and state agencies to devise suitable solutions to minimize this situation so that customers can use banking services safely and effectively.

Also, Deputy Director Le Anh Dung reminded that the community should be provided with sufficient information and knowledge, as well as proper training on financial safety skills to prevent themselves from being tricked.