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Fintech approach essential for banking system development

Thuy Dung
Monday,  Nov 13,2017,22:30 (GMT+7)
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Fintech approach essential for banking system development

Thuy Dung

Banks introduce their digital banking services at the conference - PHOTO: THUY DUNG

HANOI – Commercial banks should cooperate with financial technology (fintech) companies to reach out to new customers rather than considering them rivals, said experts at a conference in Hanoi on November 10.

At the conference “Banks and Fintech: Opportunities and Challenges” held by the Institute of Manpower, Banking and Finance, general director of McKinsey & Company Vietnam Marco Breu cited a recent survey showing that an average person check his or her smartphone 85 times a day.

Besides, more than 70% of adults use social media and 80% of households have access to the internet. This is an opportunity for banks to develop online and digital banking, with the help of fintech.

According to Marco Breu, more than 50% of people living in cities are willing to use e-banking.

If banks keep on with their traditional banking services, they would be outdated and left far behind. Therefore, the fintech approach is vital to banks’ survival as it helps them improve banking services, thus reaching out to new customers.

Nguyen Quang Huy, chairman of the board of GBA Fintech, said by working with fintech startups as well as banks, he realized that there are still some barriers to their cooperation.

According to Huy, many startups have failed to realize their ideas, and they need support from banks and investment funds.

Fintech makes banking services more convenient and instant, but at the same time requires fewer workers. Therefore, some groups oppose to fintech as they are afraid of losing their jobs.

Moreover, Vietnam’s legal frameworks have not been able to catch up with the development of fintech, creating barriers to the cooperation between fintech companies and banks.

Speaking at the conference, Nguyen Kim Anh, deputy governor of the State Bank of Vietnam (SBV), said fintech firms have advanced technologies and innovative business models that create better customer experiences, but they lack experiences in the banking industry.

On the other hand, banks have a large customer network, strong workforce and developed information technology infrastructure.

Therefore, cooperation between fintech companies and banks will combine strengths of both sides, enhance their competitiveness and contribute to boosting economic development.

Anh said SBV always support the cooperation between banks and fintech companies, and has established a steering committee which is tasked to complete the legal framework for the fintech industry, ensure the healthy development of the banking system, and create a favorable business environment for fintech companies.

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