As blockchain disrupts the banking and finance industry, experts urged caution was needed in its application together with a proper legal framework to limit risks and ensure development is on the right track.

According to Sanjay Chakrabarty, deputy general manager of Orient Commercial Bank (OCB), with blockchain, financial transactions and investment decisions were becoming easier, faster and more convenient.

The banking and finance industry’s readiness in approaching new technologies was very high, he said, adding that the potential of blockchain to the economy was enormous. However, it was not easy to create a business ecosystem on a nationwide scale based on this platform, he warned.

The banking and finance industry itself was pioneering the application of information technology, said Ngo Tan Vu Khanh, director of Kaspersky Viet Nam. However, the wide application of blockchain technologies, such as insurtech in insurance and fintech in finance, tended to go beyond the control of management agencies and the current legal framework.

Robert Trong Tran, PwC Viet Nam’s director of Cybersecurity and Privacy Services, said that technologies based on blockchain, such as virtual currencies, contained risks, pointing out that a significant percentage of cyptocurrency transactions were linked to crime.

Duong Nhu Hung from HCM City University of Technology, said that no countries would want to give up control of their domestic currency as well as cash circulation in the economy. “Imagine what will happen if bitcoin is allowed to be used widely. It will be very difficult to implement monetary policies effectively, resulting in a loss of control over macro-economic balance,” he said.

Experts said caution was needed in the application of technologies based on blockchain. In addition, it was necessary to develop a proper legal framework to manage development.

According to PwC, the banks that will succeed in the future are those that can best employ digital and data technologies to elevate customer experience, automate business processes and improve regulatory compliance.

Technologies are disrupting the banking industry more than ever, however, not all technologies are allowed by management agencies.

Thus, PwC urged banks to actively cooperate with management agencies to develop a legal framework which could stimulate innovation and ensure consumer trust.

Other sectors

Starting from the banking and finance industry with controversial bitcoin, technology based on blockchain is spreading to other sectors such as logistics and origin tracing.

Ha Anh Tuan from IBM Viet Nam, said blockchain-based shipping platform Tradelens developed by IBM and global logistics company Mearsk, for example, could help save US$27 billion from cutting paper, procedures and overlaps.

In addition, the platform would help improve customs clearance and prevent trade fraud.

Tuan still said that $27 billion in the total trade circulation value of $14 trillion was modest, but when blockchain-based technologies were combined with AI, IoT, Big Data and Cloud Computing, the benefits would increase.

Dao Ha Trung, who created food origin tracing app TE-Food, said that blockchain was shortening the supply chain but was still able to provide accurate and updated information to relevant parties involved in the chain, especially management agencies.

According to Hung, the application of blockchain technology in origin tracing would only be a matter of time. — VNS