On September 25, 2018, in Hanoi, the State Bank of Vietnam (SBV), in collaboration with the Asian Development Bank (ADB) and VinaCapital Ventures, organized a workshop on “International Experience in Fintech Regulatory Sandbox”.
Attending the workshop were Mr. Nghiem Thanh Son, Deputy Director General of the Payment Department, cum Vice Chairperson of the SBV’s Steering Committee on Fintech; Ms. Sona Shrestha, Senior Advisor to Vice President for Operations in East Asia, Southeast Asia and the Pacific, the ADB; specialists from the Bank of Thailand, the Monetary Authority of Singapore (MAS), the Financial Services Authority of Indonesia; and representatives from Fintech enterprises, the relevant ministries and agencies.
Fintech is a new technology field with rapid and continuous development and innovations
In his opening speech, the Deputy Director General of the Payment Department said that Fintech is a new technology field with rapid and continuous development and innovations, which makes conventional legal frameworks for Fintech basically inadequate or not satisfactory for the market development in Vietnam in particular and in the world in general. In that context, a number of countries with developed financial markets and technologies have been pioneering in the formulation and development of legal frameworks for operations of fintech enterprises through the promulgation of pilot mechanisms for operations of fintech companies, which is called Fintech Regulatory Sandbox.
Mr. Nghiem Thanh Son, Deputy Director General of the Payment Department, cum Vice Chairperson of the SBV’s Steering Committee on Fintech, speaks at the workshop
According to Mr. Nghiem Thanh Son, the Fintech Regulatory Sandbox has been formulated and implemented in many financial centers in the region and around the globe; there have been four countries in Southeast Asia that have formulated and been implementing the Fintech Regulatory Sandbox, namely Singapore, Thailand, Malaysia and Indonesia. He believed that the Workshop would help the SBV and the relevant ministries and agencies acquire in-depth understanding of the model of Fintech Regulatory Sandbox in other countries and the possibilities of application and formulation of a similar model in Vietnam, thereby contributing to enhancing the development of Fintech in Vietnam in the coming time.
At the Workshop, Mr. Ngo Van Duc, Deputy Head of the Payment Systems Oversight Division of the SBV Payment Department, gave an overview of the Fintech situation in Vietnam. Specifically, there have been 27 institutions licensed by the SBV to provide payment intermediary services, 12 banks implementing the QR Code payment services with 5000 points accepting QR Code payments, 78 institutions providing online payment services, and 41 institutions providing mobile payment solutions.
Mr. Ngo Van Duc, Deputy Head of the Payment Systems Oversight Division of the SBV Payment Department, speaks at the workshop
Mr. Ngo Van Duc said that, in 2018, the SBV would formulate a fintech regulatory sandbox, study and improve the legal framework for such issues as agency banks, crypto currencies, policies on banking operations in the context of the Fourth Industrial Revolution, promulgate policies and regulations on encouraging the development of innovative payment solutions and technologies aiming at the facilitation of financial education in Vietnam, then formulating a Decree on a pilot machanism for Fintech operations management in the banking sector.
International experience in management and incentivization of Fintech development
At the workshop, the representatives from the monetary and financial management authorities, and the leading specialists on Fintech shared different approaches regarding Fintech in Southeast Asia; introduced the on-going Fintech Regulatory Sandbox being implemented in Thailand, Indonesia and Singapore; discussed the situations of licensing and supervision of the regulatory sandbox for payments and P2P lending in Thailand and Indonesia; studied the situations concerning P2P lending of Fintech start-ups; and several lessons for Vietnam.
Mr. Buncha Monoonkunchai from the Bank of Thailand (BOT) introduced about Fintech development and cash-to-digital payments in Thailand, and the projects within Thailand’s National E-Payment Master Plan. Accordingly, there have been six revolutionary fundamental technologies applied in Thailand, namely QR Code Payments, Blockchains and DPL, Biometrics, Big Data, Machine Learning/Artificial Intelligence and Open APIs.
Mr. Ken Chua, presenter from MAS, shared the experiences in Fintech regulatory sandbox and the process of formulating the sandbox through the main channels, such as MAS’s working group on Fintech regulatory sandbox, community consultation, applications for participating in the sandbox, the interactions with Fintech participants and other management authorities…
In concluding the workshop, Mr. Nghiem Thanh Son believed that the information and experiences shared by the attendants were helpful and practical for the SBV to study and formulate the Fintech regulatory sandbox in order to strengthen the development of Fintech enterprises in compliance with the directions and orientations of the Government of Vietnam, and to create a favorable legal and business environment for start-ups and innovation in line with Decision No. 844/QD-TTg dated April 18, 2018 of the Prime Miniser approving the Scheme on incentive policies for the national innovative startup ecosystem to 2025. In the coming time, the SBV hopes to get more support from the specialists, the Fintech business community in the process of improving the Fintech regulatory sandbox and the Strategy for fintech development in Vietnam in the long term.
Le Hang