Open banking can drive financial inclusion by reducing barriers to access and enabling the use of alternative financial data for credit scoring and risk assessment. Although financial institutions have realised the potential of open banking to enable more inclusive and accessible financial services, a patchy legal framework is hampering their efforts to join the data revolution. Although open banking remains a new concept, the trend holds tremendous potential, especially considering Vietnam’s young and connected population, rising mobile banking usage, and booming e-commerce activities. The financial institution has been working on an open banking strategy since 2017, citing the concept as being of “utmost importance” to its digital transformation journey. VietinBank’s head start has allowed it to amass a partner base of more than 100 companies that include superapp and ride-hailing giant Grab, as well as mobile payment leader MoMo (M_Service). These companies now use VietinBank’s iConnect open banking framework to access customers’ data and provide superior experiences as well as personalized products and services.
Even though industry participants have made significant strides, the lack of a comprehensive regulatory framework around open banking is hindering their efforts to fully embrace the concept. The major challenge in implementing open banking is that there are no guidelines on open APIs and that there were no common standards on information technology systems, data storage, security, connectivity. The existing legislative framework for open banking in Vietnam is in place, but is, however, insufficient in dealing with the fast pace of development the sector is witnessing. Provisions are dispersed throughout several laws, ranging from electronic transactions and credit institutions to cybersecurity and personal information rules, and no comprehensive regulatory framework currently exists.