Deploying Sandbox for Fintech requires a cautious move

17-Sep-2020 Intellasia | Thoi bao Ngan hang | 6:02 AM Print This Post

According to the Draft Decree on a Controlled Test Mechanism (Sandbox) for Fintech operations in the banking sector, the State Bank of Vietnam (SBV) (the drafting agency) proposed areas to participate in the testing mechanism, including payment, credit, peer-to-peer lending (P2P Lending), customer identification support, open application programming interface (Open API), blockchain application, banking support (credit scoring, saving, raising capital, etc.).

Duong Nhu Hung Head of the Faculty of Technology Management the Hochiminh City University of Technology assessed that the selection of these fields was consistent with international practice and Vietnamese conditions. Meanwhile, it was necessary to find solutions to support the development of Fintech companies in order to achieve the goal of expanding and popularising national finance.

An online ATM Company headquartered in Hochiminh City, which was operating under the license of the Enterprise Law, providing small loans in the market under a P2P Lending model. Do Minh Hai director of this company, said that the company’s loans were mainly for consumers who were ineligible for a loan from a bank or a finance company. These loans were made via the website of this company. However, over the past time, there had been many black credit apps hiding the shadow of peer-to-peer loans, causing a bad image for this model.

According to Do Minh Hai, Online ATM’s web lending process was based on 2 million records of customer information collected by different channels (not taking personal information of users through the app download route ). About 300,000 small loans were available so far. It took about 30 minutes to make a loan for a new customer through a video call verification form. A problematic client verification case took two hours and up to two days to complete a loan offer.

Although it was not yet a credit institution, according to Hai, Online ATM Company had built a credit limit for each customer, limiting loans by credit repayment. Accordingly, 98 percent of the company’s loans were used by actual staff. Companies like ATM Online operated under the law, had full audits, fulfill tax obligations to the State. Thus, the regulators needed to have regulations for Sandbox soon to facilitate these companies to operate properly, Hai said.

Caution was needed

Ngo Tan Vu Khanh Development director of Kaspersky Vietnam, said that this global cybersecurity firm had provided Sandbox solutions for some commercial banks to carry out anti-money laundering. After working with SBV, it was found that the management agency had prepared very carefully for the Sandbox mechanism. In particular, the Payment Department of the focal unit of the project had so far gathered very methodical Sandbox research data from countries such as Japan, Korea, Singapore, Russia. Sandbox was a three-way screening mechanism. The passage through a simulated, lifelike environment involved embedding a product, operating, and producing a complete result for social adoption.

According to an interview with the Banking Times Newspaper, a representative of SBV, one of the criteria of the product selected to participate in the Sandbox was undoubtedly experience in the market. However, the Sandbox for fintech products was only part of the experimentation of a new policy framework that covered many different areas of innovation. Accordingly, an important factor was to control the risks for people using post-Sandbox products. Since innovative human products were included in the Sandbox, objectivity in testing and high availability was essential.

Nguyen Viet Dung director of the Department of Science and Technology of Hochiminh City, said that all newly born issues had not had a policy. Typically, Facebook products at the time of the society for everyone to share with, there was also no agency to register. The financial technology sector was a new field, so the construction of the Sandbox mechanism needed to be researched carefully as well as consulting experience from abroad.

Hochiminh City required a policy to support the Sandbox model so that the city government had investment directions to support businesses and individuals to develop in the new environment. Most notably, the model of Thu Duc city coming here with six ecosystems would focus on innovative models with pilot policies that would be more open. The People’s Committee of Hochiminh City had issued a mechanism for the core technology programme in the policy of innovation. Accordingly, Hochiminh City might be at the forefront in the field of testing a new policy framework if it overcame the difficulties of mechanisms and policies.

 


Category: Finance, Vietnam

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