In a meeting with the Republic of Korea's Financial Services Commission (FSC) on the afternoon of October 24, 2019, Deputy Governor Nguyen Kim Anh of the State Bank of Vietnam (SBV) emphasized: “Developing a digital banking model is an inevitable trend that the SBV is aiming for in the coming time. Digital banking development cannot be considered as an information technology project, it must be one of the strategies of Vietnam's banking industry for the future.”
SBV Deputy Governor Nguyen Kim Anh speaks at the meeting with the FSC
It was one of the highlights at the meeting between SBV Deputy Governor Nguyen Kim Anh and Mr. Choi Hoon, Deputy Chairman for International Cooperation and Standing Member of the Executive Council of the South Korean FSC.
Overview of the meeting
Also attending the meeting, on the side of the SBV, there were leaders of the Payment Department, the Department of Information Technology, the Banking Supervision Agency, the International Cooperation Department and the SBV Office; on the FSC’s side, there were representatives of the Korean International Cooperation Department, Korea Innovation Finance Division; representatives of the South Korean Embassy and the FSC Representative in Vietnam.
Regarding the cooperation between the two parties, Deputy Governor Nguyen Kim Anh said that Vietnam - ROK relations are in a very strong development stage. ROK continues to be the leading partners of Vietnam, with the largest foreign direct investment (FDI) in Vietnam, and one of the largest trading partners of Vietnam. The SBV Deputy Governor congratulated on the success of the 17th Session of the Vietnam-ROK Intergovernmental Committee co-chaired by the ROK Ministry of Foreign Affairs and the Ministry of Planning and Investment of Vietnam. Deputy Governor Nguyen Kim Anh stated that the cooperation between Vietnam and South Korea in the banking sector has been further enhanced and developed. The monetary management agencies and banks of the two countries have established and implemented effectively many cooperation mechanisms and programs.
SBV Deputy Governor Nguyen Kim Anh speaks at the meeting
Recently, Vietnamese Deputy Prime Minister Vuong Dinh Hue paid an official visit to South Korea and attended the first Vietnam - Korea Deputy Prime Ministers' Economic Dialogue in June. On that occasion, the SBV and the FSC and the Financial Supervisory Service (FSS) signed a Memorandum of Understanding on cooperation and information exchange in banking inspection and supervision, replacing the 2006 MOU, with the presence of the leaders of the two countries. Deputy Governor Nguyen Kim Anh expressed his confidence that, together with the signing the above MOU, the supervision of Korean credit institutions in Vietnam, as well as the coordination, information exchanges and mutual support among the competent agencies of the two sides, will take place smoothly, effectively, in accordance with the current legal and practical requirements.
Speaking at the meeting, Deputy Governor Nguyen Kim Anh also shared information on aspects related to the management and supervision of Korean financial institutions in Vietnam. Korea is currently the country with the largest number of credit institutions present in Vietnam with 02 banks of 100% foreign capital, 08 foreign banks’ branches, 08 representative offices and 05 financial leasing companies. In the recent years, the SBV within its jurisdiction has always created favorable conditions for Korean credit institutions to operate effectively and compete fairly in accordance with the provisions of Vietnamese laws. Korean credit institutions in Vietnam area generally very proactive, dynamic, complying to the laws, and contributing positively to the development of the economy and the banking sector, as well as actively participating in the social welfare activities of the local communities. The SBV always has high evaluation of the performance and contributions of Korean banks, and will continue to support and create favorable conditions for their operations, for the overall development of the banking industry and Vietnam’s economy, as well as the cooperation between the two countries.
Deputy Governor Nguyen Kim Anh also said that currently, the process of restructuring the system of credit institutions in Vietnam has gone to phase 2, with implementation between 2016 to 2020, focusing on reorganizing and restructuring the credit institutions, improving the capacity and applying international standards in the governance, in association with handling with bad debts. In order to ensure the successful implementation of the Scheme on restructuring the system of credit institutions in association with handling with bad debts in the 2016-2020 period, Vietnam's orientation is associating the licensing of new credit institutions with the roadmap for implementing the scheme of restructuring the credit institutions.
The FSC Mission speak at the meeting
Deputy Governor Nguyen Kim Anh also affirmed that FinTech is an extended arm of the credit institutions, and FinTech development has become one of the special interests of the Vietnamese banking sector recently, together with the development of the IR4.0. Vietnam has great potentials to develop FinTech due to its advantages in population size and structure, high proportion of people with access to the Internet and mobile phones... Specifically, among Vietnam’s current population estimated at 96.2 million people, the number of smart phone users is 64 million, accounting for 68.8% of the country population.
Therefore, FinTech is considered to be an effective way to enhance access to financial and banking services for people in the rural, remote and isolated areas in Vietnam. Currently, the SBV has established a FinTech Steering Committee, which is responsible for advising, researching and developing strategies and legal frameworks for the development of this field in the banking system. Recently, the SBV has also submitted to the Government a Scheme on Regulatory Sandbox for financial technology operations (FinTech) in the banking sector, which will be implemented right after it has been approved by the Government. Therefore, at present, the SBV is putting special priority on learning the experiences and building its capacity with the cooperation of the governing bodies, policy makers in the countries that are more advanced, especially South Korea, in building and applying regulatory sandbox mechanisms.
Deputy Governor Nguyen Kim Anh and leaders of the SBV Departments take a photo with the Mission.
The Deputy Governor expressed his hopes that the FSC would continue to work closely with the SBV in coordinating and directing the Korean credit institutions operating in Vietnam to actively comply with Vietnamese relevant laws.
For his part, Mr. Choi Hoon, Deputy Chairman for International Cooperation and Standing Member of the Executive Council of the FSC congratulated Vietnam for its impressive economic growth in the recent years. Mr. Choi Hoon affirmed: “With that development ground, Vietnam is becoming an impressive investment destination for Korean businesses, opening up many opportunities for cooperation between the two sides, especially in the fields of finance and banking.” Emphasizing the cultural, economic and historical similarities between the two countries, Mr. Choi Hoon believed that Vietnam and Korea had a very good ground for further and better cooperation relations in the future.
In thanking the SBV for its active support for the Korean banks and financial companies operating in Vietnam over the past time, Mr. Choi Hoon pledged that the FSC would try its best to make sure that Korean banks and businesses in Vietnam comply strictly with the domestic laws and enhance their risk and crisis management. Mr. Choi Hoon shared some of his experience in handling with crises and promoting FinTech development in Korea; pledged to provide further support in training the SBV’s staff, and believed that the two sides would enjoy a long-term cooperation relationship for mutual development.
VA