Investment & Finance

Basel III - the journey continues in Vietnam

VIR
In recent years, the banking system has experienced many strong transformation trends such as digital transformation, process automation, and strong investments in information technology. Alongside with these innovations, banks have also devoted considerable resources to enhancing the risk management foundation towards leading practices. In Vietnam, some pioneering banks have proactively piloted Basel III and Basel IV standards in order to stay competitive and ensure a sustainable growth.

Pham Do Nhat Vinh, Director of Risk Consulting Services, KPMG in Vietnam

Pham Do Nhat Vinh, Director of Risk Consulting Services, KPMG in Vietnam

Objectively, the State Bank of Vietnam’s landmark regulations have created a fundamental foundation for risk management (Circular No.13/2018/TT-NHNN) and enhanced capital adequacy standards (Circular No.41/2016/TT-NHNN). Thereby, the drastic implementation of banks has contributed to improving the prudence and especially the resistance of the banking system to unexpected events of the economy.

With the trend of continuous development, many opinions share the same view that the two circulars are the beginnings of a longer-term journey, and it can be predicted that the regulator will continue to set a roadmap to promote the whole system towards higher standards, starting a new journey – Basel III.

In order to adapt to the local and global context, many countries have been updating and implementing the latest Basel Committee regulations, which are known as Basel III and Basel IV. In Vietnam, with the aim of proactively taking the lead, some banks have actively researched and piloted these leading standards. This positive signal shows the willingness and proactivity of pioneering credit institutions.

In a survey on this topic, a leader of a pioneering bank which is collaborating with KPMG to implement Basel III said the proactive implementation will help the bank recognise practical and operational challenges and implication of Basel III, hence proactively create investment plans to deploy the system, accomplish the database and regulations to meet these requirements. Early implementation is also an opportunity for the bank to early achieve important benefits of a modern risk management system. “Having thoughts on common benefits, I acknowledge this as an opportunity for the bank to share with the whole industry lessons learned and make practical contributions to the regulator’s development of the Basel III implementation roadmap in the coming years,” the leader added.

With the strong commitment to contribute and promote the safe and soundness of the banking system, especially in light of the need to transform risk management due to the pandemic, KPMG has supported many global financial institutions to carry out reforms and transform its risk management system such as digitalisation and optimisation of risk processes, enhancement of capital measurement methods, and comprehensive implementation of Basel III.

In Vietnam, KPMG is proud to be the first consulting firm accompanying with a leading bank to develop and implement the core requirements of Basel III.


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