Decision 810/QD-NHNN 2021 “Plan on digital transformation of banking sector by 2025, with the orientation towards 2030”

DECISION

Approving the “Plan on digital transformation of

banking sector by 2025, with the orientation towards 2030”

THE GOVERNOR OF THE STATE BANK

Pursuant to the Political Bureau’s Resolution No. 52/NQ-TW dated September 27, 2019, on a number of guidelines and policies for active participation in the fourth industrial revolution;

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated June 16, 2010 and the Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Government’s Decree No. 16/2017/ND-CP dated February 17, 2017, defining the functions, tasks, powers and organizational structure of the State Bank of Vietnam;  

Pursuant to the Prime Minister’s Decision No. 986/QD-TTg dated August 08, 2018, approving the strategy for development of Vietnam’s banking sector by 2025, with the orientation towards 2030;

Pursuant to the Prime Minister’s Decision No. 749/QD-TTg dated June 03, 2020, approving the “Program for national digital transformation by 2025, with the orientation towards 2030”;

At the proposal of the Director of Payment Department.

DECIDES:

Article 1. To approve the “Plan for digital transformation of banking sector by 2025, with the orientation towards 2030”.

Article 2. This Decision takes effect on the date of its signing.

Article 3. The Chief of Office, the Director of Payment Department, heads of units affiliated to the State Bank of Vietnam, chairpersons of Boards of Directors/Boards of Members and General Directors (Directors) of credit institutions and foreign bank branches, and intermediary payment service providers shall implement this Decision./.

The Governor

Nguyen Thi Hong 

PLAN

On digital transformation of banking sector by 2025,

with the orientation towards 2030

(Promulgated together with the Decision No. 810/QD-NHNN dated May 11, 2021 of the Governor of the State Bank)
 

I. GROUNDS FOR PLAN FORMULATION

1. The Political Bureau’s Resolution No. 52-NQ/TW dated September 27, 2019, on a number of guidelines and policies for active participation in the fourth industrial revolution.

2. The Government’s Resolution No. 17/NQ-CP dated March 09, 2019, on certain key tasks and solutions for the development of the electronic Government for the 2019 – 2020 period, with a vision towards 2025.

3. The Government’s Resolution No. 50/NQ-CP dated April 17, 2020, promulgating the action program for materialization of the Political Bureau’s Resolution No. 52-NQ/TW dated September 27, 2019, on a number of guidelines and policies for active participation in the fourth industrial revolution.

4. The Prime Minister’s Decision No. 986/QD-TTg dated August 08, 2018, approving the strategy for development of Vietnam’s banking sector by 2025, with the orientation towards 2030.

5. The Prime Minister’s Decision No. 749/QD-TTg dated June 03, 2020, approving the “Program for national digital transformation by 2025, with the orientation towards 2030”.

6. The Prime Minister’s Decision No. 2289/QD-TTg dated December 31, 2020, promulgating the national strategy for the fourth industrial revolution by 2030.

7. The Prime Minister’s Decision No. 127/QD-TTg dated January 26, 2021, promulgating the national strategy for artificial intelligence research, development and application by 2030.

8. The Decision No. 1726/QD-BTTTT dated October 12, 2020 of the Ministry of Information and Communications, approving the “Scheme for creation of digital transformation indexes applicable to ministries, ministerial-level agencies, governmental agencies, provinces and central-affiliated cities and national digital transformation index”.

9. The Decision No. 34/QD-NHNN dated January 07, 2019 of the Governor of the State Bank of Vietnam, promulgating the action program for materialization of the strategy for development of Vietnam’s banking sector by 2025, with the orientation towards 2030.

10. The Decision No. 528/QD-NHNN dated March 29, 2019 of the Governor of the State Bank of Vietnam, promulgating the State Bank of Vietnam’s action program for materialization of the Government’s Resolution No. 17/NQ-CP on certain key tasks and solutions for development of the electronic Government for the 2019 – 2020 period, with a vision towards 2025.

11. The Decision No. 2655/QD-NHNN dated December 26, 2019 of the Governor of the State Bank of Vietnam, approving the strategy for development of information technology of Vietnam’s banking sector by 2025, with the orientation towards 2030.

12. The Decision No. 1238/QD-NHNN dated July 08, 2020 of the Governor of the State Bank of Vietnam, promulgating the banking sector’s for materialization of the Government’s Resolution No. 50/NQ-CP dated April 17, 2020, promulgating the action program for materialization of the Political Bureau’s Resolution No. 52-NQ/TW dated September 27, 2019, on a number of guidelines and policies for active participation in the fourth industrial revolution.

13. The Decision No. 1345/QD-NHNN dated August 04, 2020 of the Governor of the State Bank of Vietnam, promulgating the State Bank of Vietnam’s plan for implementation of the Decree No. 47/2020/ND-CP on management, connection and share of digital data of state agencies.

14. The Decision No. 260/QD-NHNN dated March 04, 2021 of the Governor of the State Bank of Vietnam, promulgating the plan for information technology application, digital Government development and cyber-security in operations of the State Bank of Vietnam for the 2021 – 2025 period.

II. VIEWPOINTS

1. Adhering to the guidelines and of the Communist Party and the Government on policies for active participation in the fourth industrial revolution, national digital transformation program and strategy for banking sector development by 2025, with the orientation towards 2030.

2. Legal framework reform and completion are important factors for promoting the digital transformation in the banking sector.

3. Innovation, improvement of product and service provision quality, enhancement of customer experience and satisfaction of customer’s needs are effective indicators for the digital transformation.

4. Digital transformation must be connected with protection of legitimate interest, rights, security and safety of customers as well as sustainable and efficient development of the whole Vietnamese banking system.

5. Applying international experience on breakthrough solutions for further application of modern science and technology to accelerate the implementation of objectives concerning digital transformation of Vietnam’s banking sector.

III. OBJECTIVES

1. General objectives

1.1. To renovate the management operations of the State Bank in a comprehensive and modern manner based on effective application and exploitation of achievements of the fourth industrial revolution, meeting all digital transformation criteria and indicators of the Government.

1.2. To develop digital bank models, enhance utilities and customer experience, and achieve objectives concerning financial inclusion and sustainable development based on further application of new technology in management and provision of services and products with professional operation optimization and automation.

2. Specific objectives

2.1. Basic objectives by 2025

2.1.1. With regard to the State Bank:

a) 100% of public services of the State Bank are eligible for upgrade to level 4;

b) 100% of level-4 public services are integrated to the national public service portal;

c) 90% of work dossiers of the State Bank are processed and stored in the network environment (except for work dossiers concerning state secrets);

d) At least 50% of inspection and supervision activities of the State Bank are carried out via the digital environment and information system of the State Bank;

dd) 100% of reporting regimes and indicators for periodical reporting under the management of the State Bank (except for state secrets) have digital signatures and are sent via the information technology system to serve the direction and administration;

e) 100% of transactions on the public service portal and single-window information system of the State Bank are authenticated electronically.

2.1.2. With regard to credit institutions and foreign bank branches (hereinafter referred to as “credit institutions”):

a) At least 50% of banking operations can be performed completely by customers via the digital environment;

b) At least 50% of adults use electronic payment services;

c) At least 70% of customer’s transactions can be carried out via digital channels (online channels between customers and banks);

d) More than 30% revenue of at least 60% of credit institutions come from digital channels;

dd) At least 50% of disbursement and lending decisions of commercial banks and financial companies for small loans and consumer loans of individual customers are made in a digital and automated manner;

e) At least 70% of work dossiers of credit institutions are processed and stored in the digital environment (except for work dossiers concerning state secrets);

2.2. Basic objectives by 2030

To maintain achieved basic objectives by 2025 and strive for the specific objectives as follows:

2.2.1. With regard to the State Bank:

a) At least 70% of inspection and supervision activities of the State Bank are carried out via the digital environment and information system of the State Bank;

b) 100% of work dossiers of the State Bank are processed and stored in the network environment (except for work dossiers concerning state secrets).

2.2.2. With regard to credit institutions:

a) At least 70% of banking operations can be performed completely by customers via the digital environment;

b) At least 80% of adults use electronic payment services;

c) At least 80% of customer’s transactions can be carried out via digital channels;

d) More than 30% revenue of at least 80% of credit institutions come from digital channels;

dd) At least 70% of disbursement and lending decisions of commercial banks and financial companies for small loans and consumer loans of individual customers are made in a digital and automated manner;

e) At least 90% of work dossiers of credit institutions are processed and stored in the network environment (except for work dossiers concerning state secrets).

IV. TASKS AND SOLUTIONS

1. Cognitive transformation, promotion of communication activities and enhancement of knowledge about digital transformation in banking sector

1.1. Heads of agencies and organizations shall assume the direct responsibility for digital transformation in their units as well as field under their charge; connect digital transformation objectives and tasks with development strategies, action programs and plans of each agency or organization.

1.2. Introducing and celebrating “Digital Transformation Day” of the banking sector on an annual basis.

1.3. Developing communications programs and organizing refresher training classes, activities and events in order to raise the awareness of officials at all levels of the role and benefits of digital transformation.

1.4. Implementing financial education programs for people and enterprises to improve their knowledge and skills in financial management as well as safe and efficient use of banking products and services on digital platforms.

1.5. Integrating contents on the implementation of the Banking Sector’s Digital Transformation Plan into emulation movements to successfully complete the tasks launched by the Governor of the State Bank; commending and rewarding groups and individuals with great achievements in digital transformation.

2. Formulation and completion of legal frameworks to facilitate digital transformation in the banking sector

2.1. Researching on, reviewing and proposing amendments and supplements to matters that need to be legislated to be consistent with the actual situation and trends in application of digital technology in banking operations, gradually creating strong legal foundations for formation and development of digital bank models.

2.2. Reviewing, researching on and proposing promulgation of or amendments and supplements to regulations of law to create favorable conditions for digital transformation of the banking sector with a focus on the following matters:

2.2.1. Regulations on cashless payment and management and supervision of payment, domestic payment and cross-border payment in order to facilitate provision of diverse, modern and safe payment services and products, meeting increasing demand of customers.

2.2.2. Regulations on lending activities to enable electronic lending and automation of procedures for lending to customers of credit institutions.

2.2.3. Regulations aiming to encourage and facilitate application of digital technologies (such as cloud computing, big data, blockchains, artificial intelligence, machine learning, etc.) in banking operations.

2.2.4. Regulations on collection, exploitation, processing and sharing of customer data with third parties, aiming to develop open banking and diverse banking ecosystem.

2.2.5. Regulations on e-transactions in the banking sector.

2.2.6. Regulations on cyber-security, confidentiality and provision of banking services online of the banking sector.

2.2.7. Developing and launching fintech regulatory sandboxes for the banking sector.

2.2.8. Researching on matters concerning central bank digital money.

2.3. Formulating and promulgating data standards and technical standards for the banking sector for data connection, sharing and use within the banking sector and between the banking sector and other sectors.

3. Digital infrastructure development

3.1. Modernizing payment infrastructure and improving connectivity and interoperability:

3.1.1. Upgrading and modernizing interbank payment systems (IBPS), aiming to operate these systems in accordance with international rules and standards; improving connectivity with other systems of the economy and be ready to connect with real-time gross settlement systems (RTGS) of other countries in the region according to an appropriate roadmap.

3.1.2. Expanding and developing electronic switching and clearing systems for retail payments towards establishing a unified and synchronous payment infrastructure capable of integrating and connecting with other sectors, thereby expanding the digital ecosystem and deploying 24/7 payment services; supporting new connection models and payment methods (QR code payment, e-wallets, mobile money, card payments, checking accounts, etc.); establishing connections for cross-border payments.

3.2. Expanding information provision and connection infrastructure:

3.2.1. Upgrading infrastructure for credit information provision and classification and data processing based on application of digital technologies such as big data, artificial intelligence, blockchains, etc.

3.2.2. Upgrading the information portal connecting the National Credit Information Center of Vietnam with credit evaluation and risk management systems of credit institutions to enable online use and inspection of customer’s credit information.

3.3. Researching on and implementing centralized infrastructure in order to enable data connection, use and sharing with the national population database, enterprise database and databases of other sectors for use and consolidation of data of use to information verification and customer classification and evaluation.

3.4. Continuing to develop and complete the data connection and sharing platform of the State Bank to provide the platform for establishment of e-Government at the State Bank, and connecting and sharing data with national databases and information systems from central to local levels of the Government and other ministries via data sharing and integration platforms of the Government.

4. Establishment and efficient operation of e-Government at the State Bank

4.1. Deploying digital transformation of operations of the State Bank according to the e-Government architecture 2.0.

4.2. Implementing plans on information technology application according to the State Bank’s plan.

4.3. Promoting application of digital technology in management, inspection, supervision and internal operations of the State Bank.

5. Establishment and development of digital bank models at credit institutions

5.1. Formulating and implementing a digital transformation plans/ strategies with a focus on development of digital banking services based on modern core banking and information technology systems in compliance with Vietnamese and international standards that meet management requirements and are suitable for the needs, capacity and potential of credit institutions.

5.2. Researching on, building and implementing branch models that allow customers to make automatic and self-service transactions based on digital technology application.

5.3. Promoting research on and use of artificial intelligence applications and digital technology in provision of banking products and services: analyzing and forecasting demand, optimizing customer journey and experience; detecting frauds, storing information, analyzing data; optimizing internal business processes, reducing costs and providing customers with instant support via virtual assistants and robots.

5.4. Researching on adoption of credit scoring solutions for customer data warehouses, open data and third party data and reliable scoring models to facilitate customer’s access to loans via electronic means.

5.5. Promoting research on integration and expanded connection with other sectors to establish a digital ecosystem and provide diverse products and services aiming for new business models such as open banking to provide friendly, safe, convenient and affordable products and services.

5.6. Formulating and implementing a general risk management framework for at least operational, professional, information technology and legal risks.

5.7. Deploying operational models and product development methods in a simplified and flexible manner.

5.8. Researching on and implementing fee policies suitable for small transactions via the digital environment to encourage use of banking services via digital channels.

6. Development and efficient use of digital data

6.1. Upgrading centralized databases of the State Bank and credit institutions according to big data models and promoting collection and cleaning of data from digital contact points and other data sources.

6.2. Enhancing knowledge discovery and analysis in order to support product and service individualization, optimizing operations and improving performance.

7. Assurance of cyber safety and security

7.1. Improving capacity for protection of computer networks, databases and information systems exchanging data online in accordance with Vietnamese and international standards.

7.2. Regularly reviewing and assessing risk throughout the processes of design, operation and provision of products and services online to promptly adopt preventive plans and responding solutions.

7.3. Effectively deploying internal control of information security and safety to promptly detect, warn about and take solutions to prevent risks arising from internal operations and professional operations.

7.4. Enhancing information sharing on risks to cyber-security between organizations in the banking sector.

7.5. Researching on and establishing a security operations center (SOC) for the State Bank.

8. Human resource development

8.1. Providing incentive policies to attract high-quality workers who possess information technology knowledge and qualifications and digital transformation skills.

8.2. Regularly implementing programs on training in digital transformation knowledge and skills for workers of the banking sector.

8.3. Amending and supplementing undergraduate and postgraduate programs in banking - finance in terms of banking operations in connection with digital transformation and digital bank models.

8.4. Promoting international cooperation, application of international experience and employment of foreign experts for training activities; participating in network of experts in digital transformation of the banking sector.

9. Some other solutions and tasks

9.1. Boosting up cooperation and exchange and sharing of experience concerning digital transformation of the banking sector with foreign partners; actively participating in regional and international bilateral and multilateral cooperation forums in relation to renovation and innovation; taking charge of application of some ideas for digital transformation in the banking sector.

9.2. Promoting scientific research and digital technology application in banking operations.

9.3. Organizing a conference for bank - digital transformation enterprise connection on an annual basis; closely cooperating with local administrations in launching incentive credit programs (programs on lending for stimulation of investment demand, concessional loans) for digital technology enterprises to support key digital transformation products and enterprises undergoing digital transformation.

V. FUNDING

1. Funding sources for implementing the Plan shall be allocated from state budget, concessional loans, sponsorship from international and Vietnamese organizations, funding from credit institutions and intermediary payment service providers and other lawful funding sources.

2. Funding is prioritized for activities supporting cognitive transformation, institution formulation, digital infrastructure development, digital platform development, trust building, cyber safety and security assurance, international cooperation, research, development and innovation in the digital environment, and skill transformation in the digital environment and other tasks and projects in charge by state agencies.

VI. ORGANIZATION OF IMPLEMENTATION

1. Establishing the Steering Committee for digital transformation of the banking sector to perform the functions and tasks of researching and proposing guidelines, strategies, mechanisms and policies providing the legal environment for digital transformation and expedite and direct the implementation of the Plan. The Governor of the State Bank shall be the head of the committee and assume the power to decide functions, tasks, regulation on operations and personnel of this steering committee.

2. Assigning responsibilities for performing a number of key tasks

2.1. Units affiliated to the State Bank and chairpersons of Boards of Directors/Boards of Members and General Directors (Directors) of credit institutions and intermediary payment service providers shall proactively organize the implementation of this Plan based on their assigned functions and tasks and Appendix on key tasks promulgated together with this Decision. On an annual basis, reporting on results of the implementation of this Plan to the Governor of the State Bank (via the Payment Department) before November 15 for monitoring and consolidation.

2.2. The Payment Department shall:

2.2.1. Organize, provide guidelines for, expedite and assess the implementation of this Plan and prepare reports on difficulties arising from such implementation and assessment of results of such implementation on an annual basis.

2.2.2. Act as the focal point to coordinate with the Information Technology Department, Communications Department and relevant units in advising the Governor of the State Bank on selection, announcement and annual celebration of “Digital Transformation Day” of the banking sector. Concurrently, cooperating with the Communication Department in relevant communications activities, cognitive transformation and enhancement of knowledge about digital transformation of the banking sector.

2.2.3. Act as the focal point to coordinate with relevant units in:

a) In 2025, organizing a preliminary assessment of the implementation of the Plan, and proposing objectives and targets as well as revising tasks and solutions (if necessary) for the following period;

b) In 2030, organizing a review and evaluation of the implementation of the Plan.

2.3. The Credit Department for Economic Sectors shall take charge of advising the Governor of the State Bank on organization of the annual conference for bank - digital transformation enterprise connection and implement incentive credit programs (programs on lending for stimulation of investment demand, concessional loans) for digital technology enterprises to support key digital transformation products and enterprises undergoing digital transformation.

2.4. The Information Technology Department shall:

Act as the focal point to coordinate with the Office of the State Bank and relevant units in tasks and solutions regarding digital transformation at the State Bank.

2.5. The Emulation and Reward Department shall:

Cooperate with the Payment Department and relevant units in selecting and proposing commendation of groups and individuals with excellent achievements in digital transformation for preliminary and summary assessments of the Plan implementation.

2.6. The Finance - Accounting Department shall:

Allocate funding for regular operations of the State Bank to serve the research and performance of the tasks and solutions to implement the State Bank’s Digital Transformation Plan specified in this Decision./.

THE STATE BANK OF VIETNAM

* All Appendices are not translated herein.