Viet Nam needs a legal framework for the development of digital banking, heard a conference held by the State Bank of Viet Nam in Ha Noi on Tuesday.

Deputy Governor of the central bank Nguyen Kim Anh said the rapid development of information and technology, especially the fourth industrial revolution, was bringing opportunities for digital banking.

The digitalisation of banking services would help the sector improve convenience in providing financial services, Kim Anh said, adding that digital banking had potential to become a core business of banks in Viet Nam.

“This is big opportunities for credit institutions and financial technology (fintech) companies,” he stressed.

However, he added there were risks regarding system errors, security issues and money laundering.

Digital banking was different from traditional banking from policies, products and services, Pham Tien Dung, Director of the central Bank’s Payment Department said.

“It is important to have a legal framework for digital banking development,” Dung said. In the short-term, relevant regulations must be revised for amendments, Dung said, adding that in the long run, a law on payment should be issued to regulate issues such as payment services of non-bank institutions, mechanisms to protect users and data security.

According to Dung, payment was especially important in digital baking.

Many types of payment services have been developed, such as Internet Banking, SMS Banking, Mobile Banking, Mobile Payment and online card payment, but they lacked links and failed to give customers smooth experiences, Dung said.

He cited statistics that 25 fintech companies which provide payment services are licensed in Viet Nam but only five are profitable.

He said Viet Nam was still in the early stages of digital banking.

Pham Anh Tuan from the Joint Stock Commercial Bank for Foreign Trade of Viet Nam said that security must be given special importance in digital baking

Cross-border transactions was also a challenge Viet Nam during the development of digital banking, Tuan said.

Experts said that the legal framework for digital banking should focus on ensuring security, protecting user information and preventing frauds.

A representative from the Ministry of Public Security said that a citizen database was being developed to connect with other systems such as banking and health care in order to simplify procedures in individual verification. — VNS