Security financial bank

Through acquiring PCI DSS certificate, Bankograph is now ready for business expansion in Vietnam and beyond

Bankograph has just received the latest Payment Card Industry Data Security Standards (PCI DSS) v3.2.1 certificate to secure their customers’ sensitive authentication data, satisfying the highest security standards and ready to continue growing its market share in Vietnam and beyond.

Bankograph is a fintech company headquartered in Singapore providing payment tools for credit, debit, prepaid, mobile, chip, point-of-sale acceptance, and ATMs, with value-added services in fraud and risk management, as well as business data analytics to commercial banks operating in Vietnam.

The purpose of the PCI DSS is to ensure the security of card data as it is processed and stored at banks or paying businesses.

PCI DSS is a set of requirements for meeting security standards, policies, processes, network architecture, software system, and several other factors, developed by the PCI Association.

The purpose of the PCI DSS is to ensure the security of card data as it is processed and stored at banks or paying businesses. PCI DSS helps set card information security standards and is applied globally to develop and implement security standards to protect financial data for a wide range of data security applications.

“As business grows and technology advances, financial institutions become more vulnerable to external threats and security becomes a more crucial factor,” said Alexander Gold, CEO of Bankograph. “Being certified by SISA Information Security, which is known as a pioneer in payment security, allows us to offer the highest international quality standards, especially those that fortify risk management procedures to provide clients with a secure digital banking experience and limiting security vulnerabilities and the risk of information theft, helping to enhance the protection of data stored on cards and card payment transactions to our valued partners.”

Currently in Vietnam, there are a number of units meeting security standards and receiving PCI DSS certificates such as VPBank, TPBank, Sacombank, Techcombank, OnePay Online Payment, VTC Pay International Payment Gateway, Electric Wallet Momo, and Vietnam National Payment JSC (Napas), among others.

The Hanoitimes – The government is responsible for not only promoting innovation in the banking sector, but also maintaining stability and safety of the financial market.

The State Bank of Vietnam (SBV), the country’s central bank, is in the process of revising the Law on Credit Institutions, aiming to create a complete legal framework for fintech and support the digitalization process in the banking sector, according to SBV Governor Le Minh Hung.

SBV’s Governor Le Minh Hung. Photo: VGP.

The rapid development of fintech is putting state authorities under pressure of anti-money laundering/combating the financing of terrorism (AML/CFT), as well as coping with risks related to data privacy and cyber security, among others, said Mr. Hung said at an online conference on September 7.

Under this circumstance, the state is responsible for not only promoting innovation in the banking sector, but also maintaining stability and safety of the financial market and contributing to economic growth, Mr. Hung suggested.

Like many other countries, Vietnam currently does not have proper legislation to regulate operations of fintech companies such as peer-to-peer lending (P2P lending), new payment methods, cross-border transactions, or user information sharing via open application programming interfaces (Open APIs).

Therefore, Mr. Hung stressed the importance of establishing a regulatory sandbox, which would be applied to new and unregulated services.

The SBV is cooperating with related government agencies in drafting a new decree on fintech regulatory sandbox in the banking sector, stated Mr. Hung.

Overview of the conference. Photo: SBV.

In the meantime, the SBV is expected to revise current legislations to support credit institutions and banks applying new technologies during their operation, including new guidance in cashless payment, the adoption of remote verification process, namely e-KYC (electronic Know-Your Customers), or the revision of the Law on Prevention of Money Laundering, among others.

A report on fintech in ASEAN conducted by United Overseas Bank (UOB), PwC and the Singapore Fintech Association (SFA) revealed Vietnam came second behind Singapore in terms of funding attraction for fintech in ASEAN in 2019, accounting for 36% of the total in the region and up 0.4% in 2018.

With regard to the number of funding deals in 2019, Vietnam ranked third at 8% of total deals, up from 2% in 2018, behind Singapore and Indonesia with 51% and 28%, respectively.

Singapore continues to be the preferred base of fintech firms in ASEAN, which is home to 1,157 or 45% of all fintech in ASEAN , while Vietnam, with 136, is hosting the fewest among ASEAN-6 countries (Singapore, Indonesia, Malaysia, Thailand, the Philippines, Vietnam).

The Hanoitimes – Capital and expertise of foreign investors can help speed up the banks’ restructuring process.

Capital and expertise of foreign investors can help speed up the banks’ restructuring process but their plans may face challenges.

Many Vietnamese banks have sold equity to foreign investors. Photo: SeABank

Currently, many Vietnamese banks have sold equity to foreign investors but many still have foreign room (foreign ownership rate).

Asia Commercial Bank (ACB) has run out of foreign room of about 30%. Vietnam International Bank (VIB) has capped its foreign ownership at only 20.5% after its foreign strategic shareholder Commonwealth Bank holds a 20% stake.

Techcombank sold its foreign room to Warburg Pincus while Military Bank (MB) raised its foreign ownership rate from 20.9% to nearly 23% in March 2020.

This year, Orient Commercial Bank (OCB) sold 15 per cent of its equity to Japanese partner Aozora Bank. Meanwhile, HDBank decided to reduce its foreign holding from 30% to 21.5% to facilitate its plan of selecting a strategic partner. Previously, in early May 2020, VPBank’s shareholders approved a plan to reduce its foreign holding to 15% from 22.77%.

According to State Bank of Vietnam’s statistics, the capital adequacy ratio (CAR) of commercial banks is currently around 9-10%. There are still half of banks failing to meet Basel II standards. The pressure of the Covid-19 on banks is getting stronger, especially increasing capital to ensure safety operation amid fears of rising bad debts.

In that context, many banks are planning to “clear the way” for foreign investment. However, the State Securities Commission (SSC)’s new proposal to abolish a regulation permitting public companies to decide the maximum foreign ownership rate in their company charters may impede their plans.

The SSC’s proposal is included in a draft decree guiding the 2019 Securities Law which will come into force next year. Many worry if this proposal is endorsed, some specific industries such as banking will find it difficult to seek strategic shareholders.

According to the Saigon Securities Inc’s report, only five listed banks succeeded in raising charter capital in 2019. In particular, Vietcombank, VietinBank and BIDV sold shares to foreign investors at good prices, even higher than the market price.

If without self-determination on foreign room, negotiation with foreign partners will be very difficult, especially for small and medium banks that are in need of foreign investors’ support in technology, management and development strategy.

The deprivation of the right of enterprises to determine foreign ownership cap can facilitate short-term trading of small foreign investors, increasing market liquidity, according to a bank’s leader. However, if this room is secured for strategic partners, both banks and shareholders can benefit as long-term investment of big international financial institutions will help banks improve governance, technology, products and customer services.

However, according to the SSC, empowering companies to decide the foreign room can lead to frequent changes in this ratio, affecting the transparency of the market.

Looking on positive side, General Director of SJC Securities Co Huynh Anh Tuan said unlocking the foreign room will help diversify investors and increase liquidity for the market. As for the banking sector, Mr. Tuan said some countries have certain protection policy and foreign investment in this field is carefully selected.

In some industries, foreign investors, through their subsidiaries in different countries, hold a higher-than-permitted dominant ownership rate in domestic enterprise, spoiling the whole industry. If this happens in a sensitive industry like banking, it will affect financial stability of the whole economy.

The Hanoitimes – Banks in Vietnam are responding to the government’s call in forgoing parts of their profits to support customers affected by the pandemic.

While the third Covid-19 outbreak is again putting the business community under severe stress, major banks, including BIDV, Vietcombank, Vietinbank and Agribank are providing financial packages to help customers overcome such difficulties.

Customers at a Vietinbank branch in Hanoi. Photo: Tien Lam

BIDV has announced a credit aid package with preferential interest rates worth VND10 trillion (US$430.3 million) from February 24-September 30 for small and medium enterprises (SMEs)

Under the program, customers seeking loans of up to three months would be entitled for interest rates from 3.8-5.5% per annum while loans of three to six months would enjoy interest rates of 4-6%; and 4.5-6.5% for loans of up to nine months.

The lender previously offered short and mid-term credit support for SMEs worth over VND100 trillion (US$4.3 billion), while stepping up efforts to assist local enterprises in domestic and international transactions via its iBank app.

Another state-owned bank,  Vietcombank, estimated 105,000 customers would participate in its supporting programs from February 22-May 22 with outstanding loan worth VND350 trillion (US$15.05 billion), or 40% of Vietcombank’s total outstanding loan.

For enterprises, Vietcombank would cut 10% of the interest payment for those severely affected by the pandemic, and 5%  for those being hurt in  a lesser extent.

Meanwhile, the bank is offering a reduction of 0.2% in interest rates per year for individual customers seeking loans for business purpose.

“In 2021, Vietcombank is committed to further providing support for both enterprises and the people,” said the bank’s Chairman of Board Nghiem Xuan Thanh, adding the bank’s target this year is to ensure efficient business performance and sharing difficulties with the society.

With a similar view, Chairman of Board of VietinBank Le Duc Tho stressed the bank plans to assess the impact level of customers to provide supportive measures accordingly.

“Vietinbank aims to further reduce its interest rates for businesses and individual customers,” he noted.

Central bank to keep low-interest rate environment

Nguyen Tuan Anh, director of the Credit Department for Economic Sectors of the State Bank of Vietnam (SBV), said the pandemic situation in Vietnam and worldwide have impacted almost all economic sectors.

“It is, therefore, necessary to delay the roadmap for reducing the ratio of short-term capital for medium- and long-term loans at banks, so that lenders are in better position to provide capital for customers affected by the pandemic,” said Tuan Anh.

A report from Viet Dragon Securities Company suggested while the inflation rate in 2021 could expand by 3.5% year-on-year, lower than the government’s target of 4%, lending rates may further be reduced to aid economic recovery.

SSI Securities Corporation noted the recent Covid-19 outbreak could weaken credit demand, as such, interest rates are likely to stay unchanged and even go down in case the pandemic situation becomes worse.

Banking expert Can Van Luc said the government’s priority is to maintain stable interest rate environment as part of the overall efforts to minimize impacts of Covid-19 on the macro-economy.

SSI has just wrapped up a $85 million foreign unsecured loan

The loan has a term of no more than 12 months with the short-term interest rate, according to the international money market. This is the largest sum that a Vietnamese securities firm has secured from a foreign bank so far.

Previously, the SSI also wrapped up a $55 million loan from a financial institution group led by SinoPac to become the first security company in Vietnam to access foreign unsecured loans.

According to SSI, the expansion of foreign loan limits will lay a foundation for the firm to effectively develop its business segments due to the low cost of capital and large volume. It is expected that SSI will allocate capital to investment in securities services and bond dealing to enhance the competitiveness of SSI’s products and services in the market.

As of September 30, SSI has a charter capital of VND6.03 trillion ($262.17 million) and total assets of VND26.93 trillion ($1.17 billion). Among them, its equity reached VND9.49 trillion ($412.6 million).

The Hanoitimes – Prime Minister Nguyen Xuan Phuc wants the MoF to continue its reform process and set up a development strategy for the next five to ten years, which is essential during a strong volatile world with high risk of financial crisis.

Prime Minister Nguyen Xuan Phuc urged the Ministry of Finance (MoF) to increase 2021 budget revenue by minimum 3% higher than the estimate.

Prime Minister Nguyen Xuan Phuc at the meeting. Photo: Quang Hieu.

The government leader made the statement at the meeting discussing Vietnam’s finance-budget results in 2020 on January 8.

Mr. Phuc requested the MoF in 2021 to reduce the ratio of tax arrears to total budget revenue to below 5% while fiscal deficit should be within 4% of the GDP.

He wanted the ministry to continue its reform process and set up a development strategy for the next five to ten years, which is essential during a strong volatile world with high risk of financial crisis.

“The successful realization of the dual target in both containing the pandemic and boosting economic recovery helps Vietnam become a new safe haven for multinationals,” Mr. Phuc said.

“Vietnam has been a world’s spotlight in the Covid-19 fight,” stated Mr. Phuc, referring to the naming of Vietnam by London-based independent brand valuation and strategy consultancy Brand Finance as the fastest-growing nation brand that defied global trend with its brand value skyrocketing 29% year-on-year to US$319 billion.

The PM attributed Vietnam’s success in economic recovery to timely fiscal support for people and businesses affected by the pandemic, including waiving and freezing of taxes and fees worth VND124 trillion (US$5.37 billion).

Meanwhile, the benchmark Vn-Index is on course to 1,200 points and could soon surpass the all-time high of 1,204 in April 2018, for which “a big part is thanks to the Ministry of Finance’s decision to cut and waive near 30 securities fees, “ stated Mr. Phuc.

At the close today, the Vn-Index ended at 1,167.69, up 0.97% or 11.20 points against the previous day.

“With a growth rate of 21% against late 2019, Vietnam’s stock market is one of the world’s best performing in 2020, ” noted Mr. Phuc.

Vietnam’s State budget revenue reached 98% of the estimate in 2020 and was VND184 trillion (US$8 billion) higher than the initial figure reported to the National Assembly, while fiscal deficit and public debts were estimated at 4% and 55.8% of the GDP, respectively, within the limit set by the National Assembly.

For the 2016-20 period, total budget revenue reached VND6,890 trillion (US$297.61 billion), exceeding the 5-year plan.

“This shows Vietnam’s efficient management of finance,” added Mr. Phuc.

Vietnam targets a fiscal deficit of VND343.67 trillion (US$14.82 billion) for the year, equivalent to 4% of GDP, down from an estimated deficit of 4.99. – 5.59% in 2020 (equivalent to VND319.5 – 328 trillion (US$13.78 – 14.15 billion).