Sharing mechanism needed for fintech development

According to Nguyen Thanh Binh, acting discipline lead at the economics and finance department of RMIT University, the existing legal framework is unclear and does not cover the development and penetration of new technological products in Viet Nam.

The Government needed to develop a regulatory sandbox – a space where new financial technology products are developed and tested – to reassure customers, Binh told reporters.

A regulatory sandbox would help Vietnamese fintech companies and start-up businesses hasten their development, he said.

The fintech sector has a lot of potential to change the country’s banking-finance industry, according to Binh.

Fintech companies will introduce new technological finance instruments that help customers secure loans, pay debts and carry out transactions.

With a population of nearly 100 million, most of whom are young and technologically savvy, Viet Nam is a worthwhile market for fintech companies.

Another problem for the Vietnamese fintech sector was the lack of co-operation between commercial banks, Nguyen The Hien, sales director at the HCM City-based telecommunications firm VHT, told Viet Nam News.

The problem among banks was that they do not share the customer data with application developers, he said.

“Customers are not allowed to connect their different bank accounts to one application, so they have to use different applications for different bank accounts,” Hien said.

As telecommunication has become more important to connect banks and customers, commercial banks should work together to allow customers use different bank accounts in the same application, he said.

“But that would raise concerns about data security and there needs to be stricter rules for this issue,” he warned.

In addition, Vietnamese fintech firms should be allowed to take part in a sandbox where they can develop and test their ideas, he said.

“As technology changes rapidly, the sandbox will help local tech firms operate more easily and the Government improve its control over new technologies,” said Hien.

“Any tech firms that are incapable of producing and testing their own technologies will be removed from the sandbox, so it would improve the Government’s supervision over the Vietnamese technology industry,” Hien said.

The seminar was organised by the Israeli Export Institute and the Israeli Ministry of Economy and Industry’s Foreign Trade Administration.