Vietnamese banks face challenges in digital banking transformation

May 17, 2019 - 00:20
Vietnamese banks are facing challenges of network security, customer trust and legal framework during digital transformation in banking, experts said at a conference in HCM City yesterday.


According to Vietcombank, 94 per cent of banks in Việt Nam are investing in digitisation and 42 per cent of them consider digital baking a top priority. Photo courtesy of HDBank

HCM CITY — Challenges related to network security, customer trust and an inadequate legal framework are road blocks to the digital transformation of Vietnamese banks, experts told a conference in HCM City yesterday.

Speaking at Vietnam Banking Conference: Digital Banking, Lê Anh Dũng, deputy head of the State Bank of Việt Nam’s Payment Department, said, “In Việt Nam, security risks such as fraud, customer fraud, network attacks on bank infrastructure, and user data leakage are rising.”

According to Ernst & Young Vietnam, 8,319 cyber attacks occurred on banks last year and 560,000 computers were affected by malwares capable of stealing bank account information.

Banks faced losses of US$642 million caused by computer viruses, while only 52 per cent of customers worried about security while using online banking.

Nguyễn Hưng Nguyên, deputy general director of National Payment Services Vietnam (NAPAS), said, “[The lack of] customer trust is also an obstacle in digital banking.”

He said 90 per cent of payments for e-commerce transactions are done through cash-on-delivery because customers do not trust sellers and deliverers.

Nguyễn Thị Thu Hằng, director of Vietcombank’s e-banking services development department in HCM City, agreed with Nguyên about the preponderance of cash.

“Vietnamese have kept the habit of using cash for a long time. The habit of buying online is gradually forming but the common payment form is still COD.”

According to Vietcombank, 94 per cent of banks in Việt Nam are investing in digitisation and 42 per cent of them consider digital baking a top priority.

Around 30 per cent of the country’s population have a bank account and 70 per cent have smart phones connected to the internet. However, only 20 per cent of customers make online transactions.

Experts at the conference also focused on the lack of regulations governing digital services.

Hằng said, “There is no legal framework for data sharing, storage and exploitation.”

Nguyên said the Government should create a framework for a regulatory sandbox for applying new digital technologies.

He also called for drafting regulations for fintech to serve underbanked customers.

As for the legal framework, Dũng said the Government should instruct relevant ministries and departments to create a national database on the population and allow opening, sharing and connecting with services such as banking, telecommunications and insurance.

The Government should create a legal framework for user data security and information security to create a safe and reliable digital transaction system, he added. — VNS