Deputy General Director of VietinBank: To develop further, Open Banking needs a clear legal corridor!

Sharing about Open Banking trends and implementation experiences at VietinBank at the conference “Open Banking/Open Banking 2023: Shifting business models from closed to open” organized by Vietnam Economic Magazine/VnEconomy, Mr. Tran Cong Quynh Lan, Deputy General Director of Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), said that Open Banking is a customer who uses banking and financial services on channels provided by the bank and channels provided by partners. The third partner, a Fintech company, provides mobile apps to meet a variety of life needs.

Deputy General Director of VietinBank said: When each person wakes up every day, their need is not to go to the bank but to travel, shop, eat and the applications they access such as Grab, Agoda, Shopee… If Banks that do not integrate their operations into their customers’ daily processes are quickly pushed aside.

Therefore, the open banking trend was born. The bank not only provides banking and financial services to customers through its channels, but we see great potential in digital applications that customers use every day.

Digital applications themselves also have a need to call on bank services to ensure a better experience for customers.

The banking side also sees this as a more potential channel than the media. VietinBank has 150 branches and more than 1,000 transaction offices, but Grab, Agoda… customers are much more numerous than that. If the service is integrated into these applications, the bank will be able to reach a very large customer base.

“In short, banks provide services not only through their own channels but through partners and digital applications to customers. That is the Open Banking trend,” Mr. Lan emphasized.

At VietinBank, Open Banking has 4 characteristics: Applying international standards for integration; Microservice architecture makes external integration with internal systems transparent; Easily research and test APIs on the Developer Portal; Encourage API application in new product development.

VietinBank’s open banking system also includes 10 components: API gateway; Portal and Sandbox environment; Customer identification and authentication; Manage services used by customers; Integrate internal information; Partner connection process; Partner lifecycle management; Data analysis; Data security; Activity reports.

Currently, each month there are over 55 million financial transactions performed via the VietinBank iConnect platform: E-wallet transactions account for about 32% of the transaction proportion. ERP transactions, receiving remittances, collecting and paying on behalf and paying bills account for about 55%. The remaining transactions such as balance fluctuations, hospital fee payments, tax payments, and others account for about 13%.

The current problem, according to Deputy General Director of VietinBank, Open Banking is a trend that is no longer new but there are many legal corridors that have not been clarified. Firstly, a banking license is conditional, banking services are conditional. If the service is provided to other partners, who is responsible for legally providing that service? For example, if a gambling or gaming company calls an API service to transfer money, what is the bank’s responsibility? What is the API provider’s responsibility to ensure compliance with the law?

Second, there is no unit that evaluates, certifies, licenses and inspects third parties licensed to use the bank’s Open API.

Finally, Decree 13 on personal data protection: when the Bank provides APIs with third parties and vice versa, it is necessary to obtain the consent of the Customer to ensure that the Customer’s personal data is protected. used for the right purpose.

“If we want to develop further, there must be a clear legal framework for users and API providers,” Mr. Tran Cong Quynh Lan emphasized.

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