Bank pioneers in digital transformation

Population data interconnection bank

At the Banking Industry Digital Transformation Day 2023 event held this morning (May 18), Governor of the State Bank of Vietnam Nguyen Thi Hong said that credit institutions have continuously researched and widely applied advanced digital technologies such as big data, data analysis, artificial intelligence/machine learning....

These activities aim to optimize and simplify business processes, providing highly personalized products and services that suit customer needs and journeys.

Many credit institutions have deployed solutions that allow customers to open payment accounts based on population data authentication; allow identification and verification of customer information using chip-embedded CCCD cards or VNeID applications; clean customer information with the National Population Database; optimize the lending process with credit scoring solutions, multidimensional information authentication using population data;...

Governor of the State Bank of Vietnam Nguyen Thi Hong.

These results have been demonstrated through outstanding information. Many banks have more than 90% of customer transactions conducted on digital channels. Many credit institutions have good operational efficiency thanks to active digital transformation, reducing the cost-to-income ratio (CIR) to the threshold of 30%, approaching the ratio that many regional and international banks are striving towards in digital transformation.

About 74.63% of adults have bank accounts. 3.71 million Mobile Money accounts have been opened, of which more than 70% are in rural, remote and isolated areas...

In addition, a number of indicators have reached and exceeded the targets set in the Banking Sector Digital Transformation Plan, such as the rate of adults using electronic payment services, the rate of public services of the State Bank eligible to be upgraded to level 4, etc.

Data is a valuable asset

Speaking at the event, Minister of Information and Communications Nguyen Manh Hung assessed that the State Bank of Vietnam is a bright spot in digital transformation with 99% of public service records processed online and completed. Over 50% of the tasks assigned in the national digital transformation program by 2025 have been completed, connected, and shared data with national databases, especially the population database (CSDLvDC).

“The banking industry pioneering digital transformation will lead the entire country to digital transformation. Whether digital transformation is fast or strong depends mainly on the leader,” said Minister Nguyen Manh Hung.

According to Minister Nguyen Manh Hung, by bringing all activities to digital transformation, all activities of the organization will be recorded in the form of data.

Data is generated every day, using digital technology to analyze and evaluate this data will give a comprehensive view of the entire industry.

Decisions will be made based on that data, new values will be created based on data, all of this is done based on digital technology.

Minister of Information and Communications Nguyen Manh Hung.

According to the Minister of Information and Communications, the banking industry has two types of assets. One type is being used very effectively, which is money. The other type is not being exploited to its full capacity, which is data.

“Data is a new type of resource, in which banking is the industry with the most data, and this data is increasing rapidly every day. The banking industry “cultivating” this new land will create a lot of value for the country. Awakened data is like a sleeping tiger being awakened, creating breakthrough development,” Minister Nguyen Manh Hung emphasized.

Therefore, Minister Nguyen Manh Hung said that banks should take the lead in big data analysis, building data infrastructure, building a data industry, including providing data, determining data ownership, etc.

“Data analysis and creating new value from data is the foundation of digital transformation. To promote something, to manage something, you have to measure it. The State Bank of Vietnam can work with the Ministry of Information and Communications to develop a set of indicators to measure the level of digital transformation of banks. This is a good way to promote digital transformation in banks.”

In digital transformation, changing operating models and innovation are important. Up to 23% of innovative startups valued at over $1 billion are fintech companies. Therefore, the Minister believes that the banking industry needs to allow more controlled testing of new technologies.

“The banking industry is an industry with favorable human resources and financial resources, and is a highly integrated industry. The Ministry of Information and Communications really wants the banking industry to take the lead in national digital transformation and has always been in the leading group in digital transformation, creating new developments for the industry and inspiring the country in digital transformation. By doing this, the industry will contribute to new developments for the country, creating a digital transformation market for digital technology enterprises.”

Speaking at the event, Deputy Prime Minister Le Minh Khai affirmed that Banking is considered the lifeblood of the economy. Therefore, the rapid digital transformation of the Banking industry will promote the rapid digital transformation of the whole country, contributing to the effective implementation of the main tasks and solutions set out in 2023, the year of creating and exploiting data to create new values.

The Deputy Prime Minister said that digital transformation is a new, difficult, and complicated field, requiring the absorption of international experience and creative application to suit the specific conditions and circumstances of Vietnam.

Besides the positive results, the Deputy Prime Minister frankly pointed out the problems encountered in the process of national digital transformation and digital transformation of the banking industry.

Specifically, the policy mechanism still has many shortcomings and problems, especially in terms of identification, electronic authentication, etc., the IT infrastructure is still inadequate, and the connection between population data exploitation with health insurance, taxes, etc. is not yet widespread and thorough.
The participation and coordination of enterprises is still limited, high-tech crimes with many forms and tricks are increasingly sophisticated; resources, especially high-level resources for digital transformation are still lacking.

“Digital transformation requires transformation of thinking, awareness and action. It must be widely deployed but must have a focus, be substantial and effective, avoid overlap, spread out investment and waste. Digital transformation must take people and businesses as the center, the goal and motivation to provide higher quality services. There must be no additional cumbersome procedures for people and businesses,” Deputy Prime Minister Le Minh Khai directed.

The Deputy Prime Minister requested that the banking sector continue to promote the achieved results, thoroughly grasp and unify the organization and implementation of the key tasks set out.

The event of the Banking Industry Transformation Day 2023 with the theme message "Application of population data in banking activities - the driving force for digital transformation". With this theme, the Banking industry wants to affirm its initiative in continuing to effectively implement the tasks in Project 06 of the Prime Minister (Decision 06/QD-TTg dated January 6, 2022 of the Prime Minister approving the Project on developing the application of population data, identification and electronic authentication to serve national digital transformation in the period 2022-2025, with a vision to 2030) as well as the Coordination Plan 01/KHPH-BCA-NHNN between the Ministry of Public Security and the State Bank of Vietnam. In particular, focusing on the tasks of connecting and exploiting the National Population Database (CSDLQGvDC) to clean customer data and serve the banking industry's business activities (such as credit scoring, online customer authentication, multidimensional information authentication, etc.).

To date, 95% of credit institutions have developed and are implementing digital transformation strategies at their units. Many leading digital transformation credit institutions have now achieved 90% of customer transactions via digital channels. The work of ensuring information technology system security and safety is focused on. E-commerce transaction indicators have increased in terms of transaction quantity and value.

The State Bank of Vietnam has completed the connection and officially exploited the National Credit Information Database since December 2022 for the State Bank of Vietnam's public services. The State Bank of Vietnam has coordinated with C06 - Ministry of Public Security to cross-check and clean 25 million customer records in the national credit information database. Currently, the review and cleaning of millions of remaining customer records is continuing...

In 2022, a number of units such as Vietcombank, BIDV, VietinBank... coordinated with C06 - Ministry of Public Security to complete the pilot implementation of the authentication application solution via chip-embedded CCCD cards in a number of operations such as authentication and identification of customers at transaction counters; Authentication and identification of customers transacting at ATMs and have initially provided trial services at a number of branches in Hanoi and Quang Ninh since May 2022, and are expanding to other provinces and cities.

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