As many as 72 per cent of Vietnamese fintech companies were opting to co-operate with local banks instead of competing, according to Lê Anh Dũng, director of the Payment Department under the State Bank of Việt Nam.— Photo dangcongsan.vn

HÀ NỘI — As many as 72 per cent of Vietnamese fintech companies were opting to co-operate with local banks instead of competing, according to Lê Anh Dũng, director of the Payment Department under the State Bank of Việt Nam.

Dũng told a conference on the Fourth Industrial Revolution and updates in the financial and banking sector held in Hà Nội on Tuesday that fintech and banks were co-operating to provide services and products to customers.

Fintech, or financial technology, covers different sectors and applies new technology such as cloud computing, big data, artificial intelligence and biometric systems.

Dũng said that the banking sector had been slow and lacked flexibility in terms of applying new technology, resulting in high transaction costs.

“Fintech is a rapidly developing sector, a combination of technology and financial services. It is evidence of the affects of what the Fourth Industrial Revolution could have on the finance and banking sector,” he added.

Sharing the idea, Prof. John Wong from the Paris Corporation University said the operating costs for banks could fall by up to 80 per cent if they used fintech.

Wong said banks could reduce the number of branches and ATMs by co-operating with fintech firms. Visa and Mastercard could be replaced by smartphones using fintech.

However, Nguyễn Đình Thắng, chairman of LienVietPostBank’s management board, said commercial banks would face major challenges in developing the digital banking system, including the legal environment; capital; human resources and risk management.

Thắng said the current legal regulations had not kept up with new technological developments, thus deterring hi-tech applications and digital banking. These could cause risks to banks and fintech companies when they deployed hi-tech applications.

In addition, the cost of research and development would be high.

Dũng from the central bank said the SBV recognised the risks of network security with the rapid development of new technology.

Commercial banks should enhance security measures to prevent illegal withdrawals that would affect their reputation and the banking sector in general, he added. — VNS