Central bank plans to pilot fintech regulatory sandbox

The State Bank of Viet Nam is planning to pilot a regulatory sandbox which would allow fintech companies to participate in providing some banking services starting from 2021.

Search results for online lending apps. A regulatory sandbox for fintech was planned to be piloted from 2021. – Photo bizlive.vn

The seven sectors fintech would participate in within the sandbox were payment, credit, peer-to-peer lending, customer identification support, open application programming interface (open API), tech-based solutions and other banking support services, according to the draft decree which the central bank made public for comment this week.

The central bank said that there was a lack of a legal framework to regulate the operation of fintech companies in Viet Nam, which created risks such as financial exclusion, security and data breach, money laundering and financing of terrorism, high intermediary fee and lack of transparency.

Meanwhile, fintech is developing rapidly in Viet Nam.

The central bank said that the past three years saw a rapid increase in the number of fintech start-ups, from 40 in 2016 to more than 150 currently. Of them, 34 operate in payment, 40 in P2P lending while others provided banking support services without directly collecting fees on end-users.

More than 80 per cent of fintech companies in Viet Nam had operation related to banks.

The fintech sector also attracted significant attention of tech giants in Viet Nam like FPT, Viettel and VNPT through the foundation of fintech solution companies, investment funds and incubators to support fintech start-ups.

The central bank cited United Overseas Bank’s Fintech in Asean – From Start-up to Scale up Report 2019 that Viet Nam saw an investment inflow worth US$400 million into fintech last year, accounting for 36 per cent of the total investment poured in fintech in ASEAN and ranking second in ASEAN, only after Singapore.

 

The rapid scale-up and operation expansion of fintech companies could have negative impacts on the stability of the financial and banking system, the central bank stressed.

The participation of Uber and Grab in the transportation market of Viet Nam was an apparent lesson for the financial and banking sector about how to respond to the rapid development of technology, the central bank said.

It was necessary for Viet Nam to have a legal framework for the operation of fintech companies amid Industry 4.0 and the country’s rapid international integration, the central bank said, adding that if the management agency was not active in monitoring the development of fintech from the early stage, their out-of-control development might pose threats to financial and banking stabilities.

The central bank’s task was to promote innovations in the banking sector, at the same time, ensure the financial safety and stability and promote economic growth.

The central bank said that a regulatory sandbox would be suitable in the early stage before the issuance of the official legal framework.

The decree was expected to be submitted to the Government for approval this month.

The central bank planned to allow banks and fintech companies to apply for the participation in the sandbox from 2021 and the sandbox would be piloted in one or two years, depending on each field. – VNS

Regulatory sandbox: the key to fintech success

Regulatory sandbox: the key to fintech success

The Vietnamese fintech startup ecosystem is now home to more than 150 companies and brands, covering a broad range of services from digital payments and alternative finance to wealth management and blockchain.  

 
 

Other News

.
Vietnam’s rice price surges, surpasses that of Thailand
Vietnam’s rice price surges, surpasses that of Thailand
BUSINESSicon  13/10/2021 

The export price of Vietnam’s 5% broken rice has soared recently, surpassing that of Thailand and far outstripping the rice prices of India and Pakistan, according to the Vietnam Food Association.

Local authorities urged to set green corridor for domestic flights
Local authorities urged to set green corridor for domestic flights
FEATUREicon  13/10/2021 

The first commercial flights have been provided in the new normal period. However, the application of different regulations in different localities have caused problems.

Commodity exports via e-commerce promoted during COVID-19 pandemic
Commodity exports via e-commerce promoted during COVID-19 pandemic
BUSINESSicon  13/10/2021 

Representatives from State management bodies and companies speak about the advantages and challenges Vietnamese businesses face in e-commerce, especially commodity exports.

VIETNAM BUSINESS NEWS OCTOBER 13
VIETNAM BUSINESS NEWS OCTOBER 13
BUSINESSicon  13/10/2021 

Vietnam grasps opportunities to expand agricultural export market

Tax cut proposed to stabilise domestic petrol price
Tax cut proposed to stabilise domestic petrol price
BUSINESSicon  13/10/2021 

Calls have been made for tax cuts to stabilise domestic fuel prices as global oil prices see continual increases.

PM says Gov't to stand with businesses during pandemic
PM says Gov't to stand with businesses during pandemic
BUSINESSicon  13/10/2021 

Prime Minister Pham Minh Chinh congratulated and sent his best regards to all Vietnamese entrepreneurs to mark Vietnam Entrepreneurs' Day (October 13) during a meeting in Hanoi yesterday. 

SOE equitisation slow this year due to COVID-19
SOE equitisation slow this year due to COVID-19
BUSINESSicon  13/10/2021 

The outbreak of COVID-19 in many localities has delayed the equitisation of State-owned enterprises (SOEs).

Unemployment, underemployment unprecedentedly high
Unemployment, underemployment unprecedentedly high
BUSINESSicon  13/10/2021 

The number of employed people in Q3/2021 fell sharply compared to the previous quarter and the same period of last year, while unemployment and underemployment rates increased to an all-time high.

Intel, Samsung eye fully running HCM City plants in late November
Intel, Samsung eye fully running HCM City plants in late November
BUSINESSicon  12/10/2021 

Intel Corp. and Samsung Electronics Co. are both aiming to resume full operations of their HCM City plants by the end of November.

FDI inflow into Vietnam still on upturn trend
FDI inflow into Vietnam still on upturn trend
BUSINESSicon  12/10/2021 

Despite impacts of the COVID-19 pandemic, the inflow of foreign direct investment (FDI) into Vietnam still rose 4.4 percent year on year in the first nine months of 2021 to 22.15 billion USD.

To have free trade zone, Hai Phong needs special mechanism
To have free trade zone, Hai Phong needs special mechanism
BUSINESSicon  12/10/2021 

Some National Assembly Deputies expressed their concerns about the establishment of a free trade zone (FTZ) in Hai Phong at a National Assembly Standing Committee session on October 11.

In new normal, businesses are afraid of ‘sub-licenses’
In new normal, businesses are afraid of ‘sub-licenses’
FEATUREicon  13/10/2021 

Most enterprises can now resume usual operations as Vietnam has entered the new normal period. However, their production and business have been obstructed by ‘sub-licenses’, or new regulations set by agencies.

Two thirds of HCM City industries reopen
Two thirds of HCM City industries reopen
BUSINESSicon  12/10/2021 

The number of enterprises reopening at export processing zones and industrial parks in HCM City has reached 66.8 per cent, while at the Saigon Hi-Tech Park the rate is 74.3 per cent.

Government signs decision on special investment incentives
Government signs decision on special investment incentives
BUSINESSicon  12/10/2021 

Standing Deputy Prime Minister Pham Binh Minh has just signed Decision No 29/2021/QĐ-TTg of the Prime Minister on special investment incentives.

Sugar stocks expected to benefit from trade remedies
Sugar stocks expected to benefit from trade remedies
BUSINESSicon  12/10/2021 

Sugar producers expect the 2021-2022 crop, which is starting from July 1, will be more prosperous. 

Vietnamese-born duo make world’s first sneakers from residual coffee grounds
Vietnamese-born duo make world’s first sneakers from residual coffee grounds
BUSINESSicon  12/10/2021 

More and more startups nowadays are committed themselves to finding innovative solutions to environmental problems. 

VIETNAM BUSINESS NEWS OCTOBER 12
VIETNAM BUSINESS NEWS OCTOBER 12
BUSINESSicon  12/10/2021 

Detailed policies needed to help firms get loans

Vietnam wood industry targets US$15 billion export revenue
Vietnam wood industry targets US$15 billion export revenue
BUSINESSicon  12/10/2021 

This year Vietnam targets earning $14.5 billion of export revenue from wood and forest products.

THACO completes purchase of RoK’s Emart hypermarket in Vietnam
THACO completes purchase of RoK’s Emart hypermarket in Vietnam
BUSINESSicon  12/10/2021 

THACO said it has completed the acquisition of hypermarket business in Vietnam of Emart Inc of the Republic of Korea

Vietnam's economic growth to recover from Q4: Economist
Vietnam's economic growth to recover from Q4: Economist
BUSINESSicon  11/10/2021 

The Vietnamese economy is likely to gradually recover from the fourth quarter of 2021 and escape the minus growth seen in the third quarter.

 
 
 
Leave your comment on an article

OR QUICK LOGIN