Monday,  Oct 22, 2018,22:23 (GMT+7) 0 0
Cybersecurity, data management crucial for fintech development
By Thuy Dung
Wednesday,  Jun 13, 2018,16:44 (GMT+7)

Cybersecurity, data management crucial for fintech development

By Thuy Dung

HANOI - The State Bank of Vietnam (SBV) encourages cooperation between commercial banks and financial technology (fintech) companies but urges the enhancement of cybersecurity and data management to safeguard consumers’ interests and stabilize the banking system, officials said.

At a seminar titled, “The Fourth Industrial Revolution and Innovations in the Finance-Banking Sector,” held by National Economics University on June 12, Le Anh Dung, director of the Payment Department under SBV, noted that the central bank will manage fintech firms based on risk assessment instead of their compliance with general principles.

According to experts at the seminar, fintech companies have significantly affected the banking system, having transformed banks’ business and administration models into digital ones by applying the achievements of the Fourth Industrial Revolution.

In addition, fintech firms have pushed local banks to change their distribution channels into omni-channels and to redesign banking products and services in a customer-centric manner.

However, fintech companies pose a high risk for cyber attacks due to open and complicated connections. In addition, the facilities of the financial market including the payment system need to be updated to adapt to the Fourth Industrial Revolution.

In particular, the banking apparatus should be downsized, so a large number of banking employees will likely lose their jobs. Further, banking staff must be equipped with digital knowledge.

John Wong from the Paris Graduate School of Management in Vietnam stated that operating costs for banks will be cut by 80% if they apply fintech. Banks can reduce the number of branches, employees and ATMs by cooperating with fintech firms, and Visa, ATM and Master cards will no longer be needed as customers grow more accustomed to smartphone transactions.

According to a survey by SBV conducted in April, featuring credit institutions’ comments on technologies of the Fourth Industrial Revolution, cloud computing has the greatest impact on banks, followed by big data, artificial intelligence and blockchain.

Meanwhile, credit institutions did not rate highly the impact of the Internet of Things or robotics on their operations.

Management agencies have also faced difficulties in managing breakthrough technologies such as blockchain as it is a global technology.

SBV’s fintech steering committee has identified various advanced technologies that should be prioritized for application and provided with a clear legal framework, including peer-to-peer lending, blockchain, open application programming interface and electronic Know Your Customer documentation.

The central bank will also develop and put into use a sandbox framework to pilot fintech products and services and promote international cooperation on fintech.

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