The State Bank of Vietnam is introducing a draft decree on a fintech sandbox that will allow the pilot trials of a number of fintech services, such as peer-to-peer lending, open API, customer identification, blockchain apps and credit score, according to Thanh Nien newspaper.
The runtime for each initiative will be one to two years.
The central bank stressed that fintech plays a vital role in improving access to financial services for citizens, especially those who don’t have bank accounts or find it hard to access traditional banking and financial services.
However, the rapid development of fintech can pose several risks, such as money laundering, terrorism financing and risks related to the security and safety of personal data.
Therefore, Vietnam should launch a sandbox for fintech initiatives before officially putting them into service to reduce risks, boost innovation and protect users.
Sandbox is a testing environment that enables users to run programmes and test software without affecting the application, system or platform on which they run. It is one of the most popular tools that many countries use to pilot fintech initiatives and foster innovation in the banking and finance sector.
The central bank is planning to submit the draft decree on the fintech sandbox to the government this year and, if approved, banks and fintech companies would be able to join the fintech sandbox in 2021.
The central bank’s data shows that the number of fintech companies in Vietnam has increased drastically from 40 in 2016 to 150 currently, mainly in the banking sector. In 2019, the country attracted over $400 million in fintech investment, accounting for 36 percent of the total fintech investment of the Association of Southeast Asian Nations.
