Hanoi (VNS/VNA) - The State Bank of Vietnam (SBV) has been developing asandbox for fintech banking and gathering feedback on a draft regulating thesector.

The SBV said the rapid development of fintech posed many challenges tofinancial authorities worldwide as they have to fight illegal financialactivities on a new front.

Numerous fields, notably peer-to-peer lending and data sharing via theapplication programming interfaces, are emerging without adequate legalframeworks established, putting stakeholders at risk.

“Most of these fields have not been fully regulated, posing new risks tohealthy competition, financial stability, data security and client interests,” saidthe SBV.

Accordingly, the central bank has to develop a controlled testing mechanism toget first-hand experience in managing the sector and allow fintech firms totest their novel products in a regulatory environment.

Notably, the SBV will allow some risks in the sandbox to gain abetter understanding of the dangers, thereby building a full-fledged legalframework that encourages innovation, prevents financial risk and promotesfinancial stability.

Additionally, fintech firms are required to test their products on a limitedscale and under the supervision of the SBV to keep the risks under control.

According to the SBV, the number of fintech firms in Vietnam has increasedfour-fold since 2016.

Around 76 percent of the firms cooperate with banks, 14 percent develop theirown products and the rest are bank competitors.

BIDV has partnered with 24 fintech firms and 756 service providers to make over1,500 financial services available to its clients.

MB and Boomerang Technology have cooperated to launch the eMBee fan page,allowing clients to check their bank balances, transfer money, buy insuranceand take out loans by chatting with eMBee on Facebook Messenger.

Almost all Vietnamese banks are now rolling out e-wallets with the help ofMoMo./.