Vietnamese Finance: ICT Investment to Make Breakthrough

<div align="justify">The Vietnamese finance has witnessed significant and positive changes in recent years. The industry&rsquos development is partially attributed to the considerable investment in infrastructures, especially ICT infrastructure. However, apart from satisfactory results and advantages, the industry still faces many challenges.</div> <div align="justify"> </div> <div align="justify"><b>Focus on investment</b></div> <div align="justify">The financial sector has initially built up a good infrastructure to deploy professional applications: Unified communication infrastructure for involved units with two regional centres and 62 provincial centres. A Wide Area Network (WAN) connection has reached all 64 provinces and cities and covers all districts. Currently, all major applications in the sector are run on this communication infrastructure tem. The entire network tem has a controlling tem, security tem and antivirus tem to protect the s operations of the tem at all units.</div> <div align="justify"> </div> <div align="justify">To serve management work, three administrative reform applications have been used, namely, file management programme, personnel management programme, and internal management information site. The financial sector has developed applications since the 1990s and now has programmed and deployed 55 software applications. Nowadays, these applications resolve over 90 per cent of major professional work. </div> <div align="justify"> </div> <div align="justify">The financial sector, tax, customs and securities fields are always the top concerns. Thus, the computerisation of professional works as well as the upgrading of equipment and technology has been regularly carried out. For the taxation sector alone, since 2002, the sping on IT increased 5-6 times. Therefore, this sector has a computer network in all taxation, debt collection and tax inspection offices. With IT applications, tax officers can analyse risks and discover tax violations.</div> <div align="justify"> </div> <div align="justify">Regarding the customs sector, the electronic customs clearance tem had an initial impact in transforming the customs management method from manual work to modern computer-assisted work. The transaction of management work has now added risk management and paper works have been done by computers. Together with electronic customs declaration, in 2007, the customs sector sped up the implementation of customs clearance and related works through the specialised network. With this method, enterprises can information about their imported or exported goods and s it to customs offices thus, shortening the time for customs clearance. Besides, with accurate d information, both enterprises and customs offices can reduce their workload. The General Department of Customs has also announced connection standards of its IT network to help enterprises to develop software applications compatible with its IT network to carry out online customs declaration and electronic payments.</div> <div align="justify"> </div> <div align="justify">The securities sector also saw strong investment. At present, the securities trading centre /stock exchange and securities companies understand the importance of IT and they, therefore, put IT modernisation as a priority. The Ministry of Finance and the State Securities Commission have d ideal conditions for the securities trading centre/stock exchange to deploy a number of technological renovation investment projects to serve securities trading activities. Securities companies also have their own IT development strategies to meet the requirements of the State Securities Commission and securities trading centre/stock exchanges on the one hand and compete with their rivals to attract customers on the other. There are software tems for managing trading floors (custody, issuance, registration, etc). Software programmes are now operated indepently and serve the requirements of each securities transaction at the Ho Chi Minh City Stock Exchange and the Hanoi Securities Trading Centre. This will increase the safety and dynamics in securities transaction works. Besides, transaction monitoring software, member management software, listing management software and market information software were also developed and applied to enhance the efficiency of market management activities.</div> <div align="justify"> </div> <div align="justify"><b>Challenges Ahead</b></div> <div align="justify">Mr Pham Cong Minh, Deputy Director of Department of Financial Informatics and Statistics under the Ministry of Finance, said that the computerisation of the financial industry is now carried out while policies are inconsistent and officials have an inadequate awareness of IT. Besides, the financial industry has a different structure from other industries and this structure plays a decisive role in IT application.</div> <div align="justify"> </div> <div align="justify">The more modern the market is the more risks it confronts. The State Securities Commission, the Ho Chi Minh City Stock Exchange and the Hanoi Securities Trading Centre have to modernise the market but still have to ensure the safety of the market when they apply new trading technologies. For securities companies, their major challenge is to balance technological investment with customer attraction when the number of rivals increases steadily. Meanwhile, the expiture for technological renovation is getting higher.</div> <div align="justify"> </div> <div align="justify">To deal with this issue, according to MrDoan Thanh Tung,Director of IT Centre of the State Securities Commission, market operators and regulators, the State Securities Commission, the Ho Chi Minh City Stock Exchange and the Hanoi Securities Trading Centre, need to have common and compatible technological standards. Then, securities companies will base on these standards to make the right investments at the start. They will also meet the requirements of market operators and regulators and pursue solutions sui with the way forward for long-term market development.</div> <div align="justify"> </div> <div align="justify">Regarding the customs sector, the national economic difficulty and challenges will have immediate direct impacts on this sector. Besides, it has to deal with the pressures of international economic integration, comply with many treaties and follow international common practices in customs. Most activities must be carried out based on a legal basis and are involved in many state agencies, organisations and enterprises. Mr Nguyen Cong Binh, Director of Information Technology & Statistics Department under the General Department of Vietnam Customs - Ministry of Finance, added that the implementation of customs IT projects not only relies on the effort of the customs sector but requires a compatible e-government environment. This needs a roadmap and time. However, the customs sector needs to take immediate action otherwise, goods will get stuck at border gates. </div> <div align="justify"> </div> <div align="justify">The basic goal of IT application in the financial industry in the 2007-2010 period is to build up an e-government platform to be used in the financial industry and synchronise financial management IT tems from central to local levels. Besides, it will continue to upgrade and modernise professional tems to serve professional reform and administrative reform from now until 2010. This is a chance for organisations and enterprises to provide IT solutions for the financial industry.</div> <div align="justify"> </div> <div align="justify"><i><span></span></i></div> <div align="justify"><b>Mr Pham Cong Minh, Deputy Director of Department of Financial Informatics and Statistics - Ministry of Finance</b></div> <div align="justify"> <table cellspacing="1" cellpadding="1" width="154" align="left" border="1"> <tbody> <tr> <td><img height="168" alt="" src="../../../../../../../upload/Image/Mr-Minh5.jpg" width="150" /></td> </tr> </tbody> </table> After more than 15 years of computerising the financial industry, the IT tem is now basically supporting most professional work. The infrastructure tem has gradually been built up to meet the deployment of modern professional works. The tem is now capable of meeting minimum requirements but it does not have backup tem and cannot ensure 24 hour operations. </div> <div align="justify">In my opinion, IT application is always an indispensable, increasingly important, tool for national financial management. It will become a driving force to accelerate reform and the modernisation process. </div> <div align="justify"> </div> <div align="justify">Therefore, financial reform is carried out in three main areas: (1) policy reform, (2) organisation strengthening and (3) technological improvement. These three areas have an interchangeable and inseparable relationship in realising the reforms.</div> <div align="justify">We defined that ITP application in the financial industry in the 2007-2010 period has to follow the e-government implementation. At the same time, the industry must ensure the consistency of the tem, promote all available resources and increase the initiative of concerned units from the central to local levels. This plan is the next step for the computerisation process to eliminate weaknesses in the financial industry.</div> <div align="justify"> </div> <div align="justify"><b>Mr Doan Thanh Tung, Director of IT Centre - State Securities Commission</b></div> <div align="justify"> <table style="WIDTH: 100px HEIGHT: 113px" cellspacing="1" cellpadding="1" width="100" align="right" border="1"> <tbody> <tr> <td><img src="../../../../../../../upload/Image/Mr-Tung.jpg" alt="" /></td> </tr> </tbody> </table> In reality, the technology tems at Ho Chi Minh City Stock Exchange and Hanoi Securities Trading Centre are now considered up to scratch as no serious incidents have occurred. IT tems at securities companies have already met with the transaction requirements of customers.</div> <div align="justify"> </div> <div align="justify">Of course, the markets requirement is getting higher and the competition among securities companies is getting stiffer. IT is considered the key to beating rivals thus, they focus more on applying IT to meet the markets requirements. Most IT solutions have to date been bought from foreign partners so, they are very modern and satisfy stock traders.</div> <div align="justify"> </div> <div align="justify">The State Securities Commission is concentrating on increasing the managerial role in the securities and securities market. Hence, a number of technological projects will be carried out to enhance the managing and monitoring role of the commission. The commission will deploy a project to modernise its technological tem to monitor transaction activities on the market, a project to manage the information disclosure of securities companies and public companies to ensure the transparency in the market.</div> <div align="justify"> </div> <div align="justify">Additionally, other technological projects will be carried out. The SSC will issue technology standards to be applied by all securities companies to ensure the compatibility when securities companies connect with the Ho Chi Minh City Stock Exchange, the Hanoi Securities Trading Centre and the Vietnam Securities Depository. The commission will periodically check the compliance of securities companies in implementing the requirements related to technology to ensure safe operations and fair treatment to investors.</div> <div align="justify"> </div> <div align="justify"><b>Ms Truong Thi Hai Duong, Director General of Informatics and Statistics Department, General Department for Taxation</b></div> <div align="justify"> <table cellspacing="1" cellpadding="1" width="103" align="right" border="1"> <tbody> <tr> <td><img height="160" alt="" src="http://vibforum.vcci.com.vn/upload/Image/Ms-H-Duongll.jpg" width="122" /></td> </tr> </tbody> </table> The network and communication infrastructure of the tax sector has now reached regional level. (The taxation sector won the ADOC Award 2006 (APEC Digital Opportunity Centre) for network infrastructure).</div> <div align="justify"> </div> <div align="justify">The IT application tem model of the taxation sector, due to its particular structure and management, is built on a decentralised model. Only important information is sent on to the central level. The IT platform in Vietnam has basic differences from other regional countries: decentralised processing tem, two-layer application architecture, low integration level and unfocused security tem. Meanwhile, other regional countries have changed to a central processing model and multilayer application architecture.</div> <div align="justify"> </div> <div align="justify">At present, the customs sector is carrying out an IT project from now to 2010 to modernise its tem and catch up with international levels in all processes like professional work, tax management and organisational structure.</div> <div align="justify"> </div> <div align="justify">By 2010, the General Department of Taxation will have projects to support taxpayers: internet-based tax payment project (e-filling), taxpayer support centre project (Contract Centre), access to payments and taxpayers records, posting of information support taxpayers on the department&rsquos website provision of free barcode software for tax rs and taxpayers.</div> <div align="justify"> </div> <div align="justify"><b><u><font color="#000000"></font></u></b></div> <div align="justify"><b></b></div> <div align="justify"><b>Mr Nguyen Cong Binh, Director of Information Technology & Statistics Department under the General Department of </b><b>Vietnam</b><b> Customs - Ministry of Finance</b></div> <div align="justify"> <table style="WIDTH: 120px HEIGHT: 168px" cellspacing="1" cellpadding="1" width="120" align="left" border="1"> <tbody> <tr> <td><img height="160" src="../../../../../../../upload/Image/Mr-Binh.jpg" width="122" alt="" /></td> </tr> </tbody> </table> IT application in the Vietnamese customs sector is now on the right track as indicated by the Government and Ministry of Finance&rsquos directions. At present, major works include: Piloting electronic customs clearance at Haiphong and Ho Chi Minh City customs offices to lay the groundwork for building new customs clearance processes, applying new customs management software programmes, preparing the infrastructure to expand this model to other localities Expanding distance declaration methods (up to 60 per cent of customs declaration documents were carried out by using this method in the first six months this year) Upgrading existing IT tems to satisfy new management policies like the implementation of the amed Customs Law and Tax Law Upgrading the website of the Vietnamese customs authority toward an electronic portal to increase the transparency of customs management processes and enhance the popularisation of services to facilitate enterprises with customs procedures.</div> <div align="justify"> </div> <div align="justify">We are studying to unify a customs declaration standard and other document exchange standards like Manifet, C/O and Cargo, and to build software to receive adequate customs declaration. The customs sector is also actively carrying out the World Bank-funded customs modernisation project - a modern IT tem of international standard will be in place from 2010. </div> <div align="justify"> </div> <div align="justify">In the 2008-2010 periods the sector will carry out its plans to develop IT approved by the Ministry of Finance. Accordingly, many ongoing projects will be carried out like upgrading software for distance customs declarations, electronic declarations, network infrastructure and human resources training for both customs offices and enterprises.</div> <div align="justify"> </div> <div align="justify"><i><font color="#0000ff">Under permission from the Ministry of Finance, the Department of Financial Informatics and Statistics (the Ministry of Finance) has worked with the International Data Group (IDG) to hold the <span>Vietnam ICT in Finance 2008 (ICTF 08)from September 16 to 19, 2008 at the Melia Hotel in Hanoi. According to the organising committee, this fifth annual event is larger and will attract special interest from organisations and enterprises. This year&rsquos contents are: Building up e-government in the financial sector creating a master plan for implementation of financial informatics and statistics tasks in 2008 business intelligence in the financial industry design and deployment of business continuity and information security and digital certification in the financial industry. </span></font></i></div> <div align="justify"><i><span><font color="#0000ff"></font></span></i></div> <div align="justify"><font color="#0000ff"><i>The 2008 </i><i>Vietnam</i><i> ICT in Finance is also a forum for the leaders of enterprises and IT groups to discuss the ICT demands of the financial industry. It is also a place for people to share and refer to solutions and other experiences in carrying out IT projects to meet the requirements of the financial industry. </i></font></div> <div align="justify"><em><font color="#0000ff"></font></em></div> <div align="justify"><font color="#0000ff"><i>For more information, please visit the website </i><i><a href="http://www.ictfinance.vn/" target="_blank"><span>www.ictfinance.vn.</span></a>.</i></font></div>