Personal finance planning for financial inclusion in Vietnam

Ms. Nguyen Thi Hoa, Director of the Banking Strategy Institute, shared that financial inclusion is of great significance, contributing to the poverty reduction, minimising the inequalities, improving the people’s living standards, and promoting the socio-economic development. Accordingly, at Decision No. 149/QD-TTg dated 22 January 2020 of the Prime Minister approving the "National Financial Inclusion Strategy until 2025, Vision to 2030", a group of solutions on "Enhancing financial education, improving the financial capacity and literacy, and protecting financial consumers" was identified as one of the key pillars of the Strategy.

Ms. Nguyen Thi Hoa, Director of the Banking Strategy Institute, speaks at the Seminar

According to Ms. Nguyen Thi Hoa, finance is a unique sector. In order to effectively access and utilise financial products and services, a customer typically has to go through three stages: i) acquiring financial knowledge; ii) developing personal finance management skills; and iii) personal finance planning. Among these, personal finance planning is the highest level of development. Without appropriate financial knowledge and skills, the use of financial products and services would become inefficient and might be prone to arising risks.

Personal finance planning not only helps individuals optimise their financial resources and improve their living quality, but also plays a key role in encouraging people to access formal financial services, contributing to the realisation of the financial inclusion goals. Many countries have developed and implemented national financial education programmes, as well as policies for training, practitioning, and managing the profession of providing consultancy services for personal finance planning.

Mr. Mai Viet Trung, Deputy Director General of the Communications Department of the SBV, shares his views at the Seminar

In Vietnam, personal finance planning is still a relatively new field, and is in the early stage of its development, while there is very big potential from the people’s demand. Many financial institutions have launched their 'personal finance consultancy' services, but have yet fully focused on developing professional finance planning services in its true sense.

The Seminar featured four presentations, two case studies, and many comments of the participants both from and outside the banking sector. Based on the international experience and the exchanges within the context of the practical development of personal finance planning in Vietnam, the participants in the Seminar proposed several key solutions to promote personal finance planning, contributing to the realisation of the goals of the National Financial Inclusion Strategy in the coming time, specifically as follows:

Firstly, it is essential to promote personal finance education through the formal education systems and the national media programmes, alongside the creation of long-term financial planning habits, particularly among younger groups, such as students, undergraduates, and young workers. Additionally, necessary technological tools should be used to help form the mind-set of sustainable finance from an early age.

Secondly, it is important to further improve the relevant regulations, aiming to improve the quality of the consultancy services provided by the financial institutions; encourage the financial institutions to enhance the training and capacity-building for their staff in order to provide finance planning consultancy and services to their clients; thereby striving to offer professional services that meet the international standards and in alignment with the practical conditions in Vietnam.

Thirdly, the financial institutions and the Fintech companies need to be facilitated to apply modern technologies, and develop applications on mobile devices and online platforms that help their customers manage and plan their personal finance easily and effectively, with the support from automatic tools.

In addition, it is also necessary to promote the business associations within the financial sector to issue principles and professional standards to develop best practices in the financial consultancy services. With the customer-centric strategy, special attention should be given to the ethical principles of the consultants, in full compliance with the legal regulations and the applicable standards, with the aim to protect the legitimate rights and interests of the financial consumers.

Lastly, the cooperation among the financial institutions, universities and international training organisations must be strengthened to provide in-depth training programmes on personal finance planning and consultancy, in order to meet the market demands.

HP