Participants at the conference held on Thursday about the development of the regulatory sandbox, which is expected to give fintech firms a place to freely test new models and applications. – Photo tinnhanhchungkhoan.vn

Opportunities will slip through Vietnamese firms’ hands if a sandbox is not developed soon, NextTech chairman Nguyen Hoa Binh said at a conference on Thursday.

A sandbox is a regulatory field where technological firms operate and test new ideas to help the local economy catch up with the latest global developments.

New, creative business models cannot be handled by a traditional legal framework, he said.

For the last 10 years, electronic payment has become a big sector in Viet Nam. But without the support of the State Bank of Viet Nam (SBV), this sector wouldn’t have developed, nor would financial technology (fintech) firms, Binh said.

If new technologies and applications – which prove efficient for society – are not used broadly, there will be more spending and instability for development, he said.

In addition, the State budget may suffer a big loss of income as the lack of regulations may help foreign traders evade taxes when doing business via tech apps in Viet Nam, he said.

Moreover, foreign investors will be discouraged when finding investment opportunities in the country as they fear a lack of regulations will enhance risks, Binh said.

Nguyen Xuan Viet Binh, executive of e-wallet firm Moca – partner with mobile transport platform Grab, said a regulatory sandbox may force fintech firms to get more creative.

People will be able to get closer access to comprehensive financial and banking services, encouraging the development of a cashless economy in Viet Nam, he said.

He suggested the regulatory sandbox should differentiate already existing ideas from brand new ones as current methods should be monitored in the short term to evaluate their feasibility and efficiency.

Meanwhile, authorities should watch new business models such as peer-to-peer (P2P) lending in the long term so companies can make the best use of those models, he added.

Businesses can develop their products and services, then the outcomes are evaluated by the public. Any advantages and drawbacks would be found, as will solutions, Binh said.

According to Financial Deep Mind general director Bui Viet Dung, a regulatory sandbox should only contains firms with new business models and technologies and Government agencies should watch the sandbox closely with risk-hedging solutions.

Ngo Van Duc, senior official at the Payment Department of the SBV, acknowledged there was no doubt the fintech sector will grow stronger in Viet Nam, however, more could be done to help it.

He said there are no regulations mentioning the management of fintech firms, so it is necessary to make a place where companies are free to test new ideas.

Nguyen Quang Dong, director of the Institute for Policy Studies and Media Development (IPS), suggested the Government form a special unit to take care of the development of the regulatory sandbox.

The unit should include different ministries, the SBV and other agencies so they are all held accountable, he said. – VNS