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On December 7, 2023, in Hanoi, NAPAS, in collaboration with Vietnam Economic Times, the Information Technology Department, and the Payment Department of the State Bank of Vietnam, hosted a conference titled "Open Banking 2023: Transitioning business models from closed to open mode." This marked the first significant gathering of major financial institutions and pioneering Fintech companies embracing the Open Banking trend in Vietnam.

The conference was attended by Mr. Pham Tien Dung - SBV Deputy Governor, Mr. Pham Anh Tuan - Director General of SBV Payment Department, Mr. Doan Thanh Hai - Deputy Director General of SBV Information Technology Department;  Mr. Tran Quang Hung - Deputy Director of Information Security Department of the Ministry of Information and Communications, Mr. Nguyen Quang Hung - Chairman of NAPAS, Mr. Nguyen Quang Minh - General Director of NAPAS and representatives of leaders of banks and Fintech companies. In addition, the conference also welcomed the attendance of Mr. Akira Yamagami, Consulting Expert of NTT Data Company of Japan.

Specially, the conference attracted more than 200 delegates and speakers that are representatives of leaders of banks, Fintech companies and enterprises operating in the finance and banking sector as well as news agencies.

Open Banking trend and transitioning business models from closed to open mode

Speaking at the opening of the conference, SBV Deputy Governor Pham Tien Dung emphasized the role of digital transformation in helping banks improve operational efficiency by streamlining and automating processes and improving the ability to be ready for the future as well as enhancing customer experience, thereby enhancing competitiveness and improving service quality in a rapidly changing ecosystem.

According to the Deputy Governor, one of the breakthrough technologies associated with the 4.0 Technology Revolution, allowing connection and data sharing via open application programming interface (Open API), has been researched and deployed by a number of Vietnamese banks to apply in payment activities, electronic customer identification, and provision of innovative financial products and services. Open Banking / Open Banking - Open API is a new field in terms of both technical and legal factors not only in Vietnam but also in the world.

"The challenges and difficulties in implementing Open API are related not only to technical aspects, but also to the changes in people’s awareness and the legal frameworks. The successful introduction of a legal framework for Open API will create favorable conditions for Fintech communities to provide innovative services, meeting increasing demand of customers in keeping with the worldwide developments in supply and demand. providing banking services." Deputy Governor said.

Open Banking Conference: Transitioning business models from closed to open mode- Ảnh 1.

Mr. Pham Tien Dung, Deputy Governor of the State Bank speaking at the Conference

During the discussion session of the conference, speakers also shared many contents surrounding open banking trends and practical experiences in some countries around the world.

Open Banking Conference: Transitioning business models from closed to open mode- Ảnh 2.

Mr. Pham Anh Tuan, Director of the Payment Department speaking at the Conference

Sharing at the Conference, Mr. Pham Anh Tuan, Director General of the SBV Payment Department, said that 72.3% of the credit institutions have been planning to deploy APIs, of which 47.6% have built APIs for third parties to connections; about 65% of the credit institutions are now ready to deploy Open API, of which over 30% of the credit institutions have a high level of readiness for Open API. Many credit institutions have built APIs that allow third parties to connect and deploy API Portals so that their partners could connect to the banking ecosystem. Besides, there are many open API application solution providers such as: IBM's Open API Connect, WS02 open source, Google's APIGee, IBM's Open API Connect.

However, data management still has the story of decentralizing access and processing data and controlling access and processing data with the right authority and purpose. In addition, security issues require compatibility of technological infrastructure and information security mechanisms between banks and third parties; the risk of data leaks and customer information, or the increasing trend of technology crimes attacking information systems or shared platforms...

Open Banking Conference: Transitioning business models from closed to open mode- Ảnh 3.

Mr. Tran Quang Hung, Deputy Director of the Information Security Department (Ministry of Information and Communications) speaking at the conference

Regarding this issue, Mr. Tran Quang Hung, Deputy Director of the of Information Security Department under Ministry of Information and Communications (MIC) assessed: The immediate risk with the Open Banking model is that there are no adequate mechanisms, policies and standards for security and general information security. In the coming time, the Department of Information Security (Ministry of Information and Communications) will coordinate with the Department of Information Technology (SBV) to strengthen the enforcement of stricter banking information security regulations, thereby enhancing the safety of service delivery systems for customers, especially when building and implementing open banking.

Sharing about international experience implementing open banking, Consulting Expert of NTT Data Japan Company, Mr. Akira Yamagami also stated: Open banking has been strongly deployed in many countries around the world such as the US, UK, Japan, Korea, Japan,.... However, Japan's limitation is that the number of API suppliers is only half that of the UK and there is no significant growth. Meanwhile, despite having more than 7 million registered users, the UK is struggling to maintain its leading position in Europe in implementing open banking. The US has succeeded with the strong development of financial technology and APIs.

Thereby, Mr. Akia Yamagami also suggested Vietnam should standardize API to promote the transition from the traditional banking system to an open banking mode like in the US.

Open Banking Conference: Transitioning business models from closed to open mode- Ảnh 4.

Mr. Akira Yamagami, Consulting Expert of NTT Data Japan Company speaking at the seminar

The need to promulgate a common Open API standard

Within the framework of the program, the majority of delegates, speakers, and guests agreed once being asked for their opinions on "The need to promulgate a common Open API standard in Vietnam".

Commenting on this issue, according to Mr. Doan Thanh Hai - Deputy Director of the Department of Information Technology (SBV), the open banking model operates based on an open API platform to connect with many parties, so the problem that each party is having his own standards for connection and core technology platforms to provide services has caused cross-cooperation, wasting resources and costs.

"In order to deploy open banking effectively, it is necessary to have common connectivity standards, allowing the sharing of customer open banking data including customer information, transaction information, customer account balances, and scores of customers' financial responsibilities...", Mr. Hai shared.

In fact, the problem posed when developing Open API standards in the banking sector has been evaluated by SBV for a long time and has been included in the plan for implementation. SBV has had a draft and sent it to credit institutions for comments for the first time. According to Mr. Hai, Open Banking requires multi-faceted interaction, so building a common Open API standard for related organizations and individuals to connect easily and save costs is a development following objective rules.

On Napa’s behalf, Mr. Nguyen Hoang Long - Deputy General Director also said that promulgating a set of common rules for the market would ensure benefits for customers as well as common ground for parties involved in providing services. Open API is not limited to Open Banking but extends to the entire economy and finance. Through the Open API interface, the banking system can connect and provide all subjects of the economy, not only limited to the financial technology (fintech) and finance industries but also to retail companies, logistics service companies, thereby providing banking services to all people.

Open Banking Conference: Transitioning business models from closed to open mode- Ảnh 5.

Mr. Nguyen Hoang Long, Deputy General Director of Vietnam National Payment Joint Stock Company (NAPAS) speaking at the conference

"I think this connection brings great benefits to the whole society, to the subjects participating in Open Banking and moving towards Open Data. I think such an overall view will bring the development of Open Banking into the Government's development orientation of the digital economy," Mr. Long stated.

Mr. Long also expressed his confidence that the Open Banking trend would be standardized in terms of technique and legal basis in the coming time, especially under SBV’s direction and the support of the banking sector in general. In particular, SBV will issue circulars and instructions so that banks and third parties have a basis to promote Open Banking services for customers. In the coming time, payment infrastructure providers such as NAPAS will be ready to prepare technology systems, products and services to support banks and third parties in transitioning business modes according to trend of Open Banking development.

According to the survey among representatives of banks and payment intermediaries attending the conference, 53% of them are committed to promote Open API in 2024 and 30% of them plan to promote Open API in the next 2 years.

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