The trend of non-cash payments and digitalisation in personal banking and the explosion of fintech firms in Việt Nam have placed banks ahead of many opportunities and challenges in fourth industrial revolution. Speaking to the media, Dr. Cấn Văn Lực, a financial expert, said that in the long term, co-operation between fintech companies and the commercial banking system needs to be tightened, VietnamPlus reports.

Could you explain the challenges and opportunities facing the banking system with the application of digital technology?

The fourth industrial revolution poses many opportunities and challenges for the Vietnamese banking system. Regarding opportunities, we can see that it will reduce costs and increase competitiveness by developing new markets, changing distribution channels to provide higher quality products and services and also create new business opportunities, especially co-operation opportunities for both domestic and foreign partners. Mobile payments are opening up a global revolution in e-commerce, bringing more opportunities to agents in the economies and playing a key factor in boosting comprehensive finance worldwide.

Currently, non-touch payment solutions, QR codes and e-wallets are really popular in both developed and developing countries. They have contributed positively to the two-digit growth rate of the global non-cash payment market. The agents involved in providing payment solutions are also increasingly diverse, from traditional providers, which are financial institutions, to large technology corporations such as Apple, Google, Samsung or e-commerce companies such as Amazon or Alibaba, telecommunications corporations and fintech firms. However, there are also many challenges facing the banking system.

The first challenge is the change to business models and culture, which leads to questions of how to manage these changes. Secondly, is the investment in information technology including the risks and the cost calculations of this investment. The third issue is human resources – many countries have prepared relatively well for human resources in Industry 4.0, however, Việt Nam has been a bit slow in this regard. I hope the Government will soon develop strategies for the Industry 4.0, especially paying more attention to human resources. Another challenge is the information technology infrastructure of the country, which is now rather good, but stability and safety are issues that need to be addressed in the future. The final challenge is the legal environment of Việt Nam. I hope that the Government will soon guide the legal framework for digital banking and finance to be recognised in a more transparent and full way, from that facilitating both customers and banks.

Currently, digital technology has been implemented in the banking system, bringing many benefits to customers, but there are still risks. What can be done to limit the risks and ensure the safety of customers’ personal information?

I think there are four important solutions.

The first is to increase protection measures to enhance the risk control capacity for information technology, especially cyber security. Secondly, it is necessary to increase the knowledge of customers, people, businesses and bankers themselves to jointly control the risk. To control risks, it requires the involvement of not just one but three sides, namely the financial institutions, customers and regulators. Thirdly, a legal corridor should soon be created to better guide financial institutions in controlling risks. Finally, we need to strengthen the information technology infrastructure to minimise technical errors.

Should banks link up to develop together?

In order for the Vietnamese banking system to implement e-payment systems connected with each other, there should be a common standard for QR codes so that a customer can trade with different banks and use all on a common platform. It is also necessary to standardise the rules to ensure safe transactions for both banks and customers. Some countries have deployed this in recent years such as Singapore and South Korea.

In your viewpoint, should banks consider fintech companies as partners?

I think that they will co-operate with the other in the spirit of fair competition to provide good services at a reasonable price for customers. They should work together to create an e-payment ecosystem as well as financial services model for people and banks.

How do you evaluate the non-cash trend in Việt Nam and its impacts on banking operations?

Non-cash payments will develop rapidly in the near future, alongside Industry 4.0, e-commerce, the rising use of smart phones and online activity.

It is clear that the rate of Vietnamese using e-payment means, especially mobile payments, has grown very fast in recent years. Statistics show that 62 per cent of shoppers in the world have bought and sold online.

At present, 44 per cent of Vietnamese customers have been using digital banking and trading on social networks.

With the current speed, it will grow faster in the future. For example, on the occasion of Black Friday or Online Friday, customers adopted e-payments very quickly, using QR codes to make non-cash payments. Việt Nam’s problem is that there is a need for a better eco-system for e-payments, especially mobile payments, as each mobile company can not do it by itself, but requires an ecosystem of providers, buyers, sellers and the service users, especially the legal corridor along with the information infrastructure to support that ecosystem.

Currently, Vietnamese people are not really familiar with this new form of payment. How can this be improved?

This is right, many Vietnamese people still have the habit of using cash. So, there are three things to do.

Firstly, we need to enhance communication to raise public awareness about electronic financial services, especially relieving people’s anxiety over security in e-payment.

Secondly, it is necessary to strengthen and build a legal corridor to protect the interests of the involved parties including people and enterprises as well as financial institutions when providing e-payment services.

Finally there should be a stable information technology infrastructure to ensure that there are no unfortunate incidents during its operation. — VNS