Modernization of information technology system –promoting the role of deposit insurance policy

09:16-25/10/2018

The Financial Sector Modernization and Information Management System (FSMIMS) project – component of the Deposit Insurance of Vietnam (DIV) – was completed and has been put into operation helping the DIV to modernize professional processes to better protect depositors’ interests and contribute to the safe and sound operation of credit institutions system. QuangTrungpeople’s credit fund (Ha Dong district, Hanoi city) is one of the project beneficiaries. Ms Mai Thi Minh Huong – the fund’s Managing Director talked about the changes brought about by the project. 

Ms Mai Thi Minh Huong – Director of QuangTrung people’s credit fund, Ha Dong district, Hanoi city

Reporter: the information technology plays an important role in the operation of an organization. In your opinion, what are the changes caused by the DIV’s implementation and accomplishment of FSMIMS project to insured institutions?

Ms Mai Thi Minh Huong: as an insured institution, we know that the DIV has finished the FSMIMS project with the ultimate goal of optimizing its operation as stipulated by law and approaching advanced international practices, thus benefiting insured institutions and depositors. By this time, after nearly 9 years of implementation, this project has finally come into practice.

During that time, we – the insured institutions – longed for the project results because without the software, we had to manuallyexecute data processing steps, with much effort but little outcome. Therefore, the administration was not really effective. I think that the DIV must have faced many difficulties in the administration and reimbursement to protect depositors. Not long ago, QuangTrung people’s credit fund was selected as a pilot unit for the testing of the Information Collection and Management (ICM), a module of the FSMIMS project, and we highly appreciate the structure, contents and criteria of the report built via this software. 

Reporter: After the pilot application, how do you find the effects of the ICM software on the operation of QuangTrung people’s credit fund in particular and other insured institutions in general?  

Ms Mai Thi Minh Huong: After the pilot application, we see many advantages of the ICM software, typically its simplicity and user-friendliness. Besides, in case of arising difficulties during operation, we have received great technical support from the DIV at any time, so we are totally assured.

Previously, our manual making of reports led to the ineffective administration, not to mention the inexactness of the reports due to large numbers of transaction points and customers. For example, QuangTrung people’s credit fund has up to 4,000 depositors so the fund management requires much effort. Therefore, this software with connection and support systems set up right from the beginning would help provide sufficient and exact database without manual data collecting as previously.

Up to now, we have successfully sent 03 reports on schedule. We suppose that if this software is applied throughout the system of insured institutions, the DIV, State Bank of Vietnam (SBV), and relevant agencies will receive reports and data from insured institutions in a accurate, timely and effective manner.

Besides, the burden of making reports by insured institutions will be eased if the information sharing mechanisms between the SBV and the DIV, insured institutions and the DIV are realized in a transparent, confidential and uniform manner. This is also a basis for prompt and precise payouts to depositors, which would contribute to better public confidence in deposit insurance policy and the financial, banking system.

Reporter: the FSMIMS project aims to upgrade the efficiency of protecting depositors’ interests and the resilience of the financial system. From the view point of an insured institution, what do you expect for the coming time when the outputs of the project will be broadly appliedthroughout the whole system?

Ms Mai Thi Minh Huong: I think that the success of the FSMIMS project will help the DIV to promote its role of protecting depositors, contributing to a stable financial system and raising public confidence in the banking system.

For us, as insured institutions, the benefits from the project implementation are quite clear. Thanks to the fact that DIV is entitled to directly retrieve data from the SBV’s database, the DIV would be able to conduct analysis, assessment of financial status, risks, detect violations of insured institutions via offsite supervision, then deliver early warnings to us for timely corrective actions, helping to prevent failures.

In the coming time, I hope for further support from the DIV through technical assistance, training courses to use ICM software so that we can fluently make and send reports via it.It is obvious that the good implementation of the information and reporting regulation by insured institutions would contribute to the protection of legitimate rights and interests of depositors, raising public confidence in deposit insurance policy and the banking system.

QuangTrung people’s credit fund was established and came into operation in 1997. Over the 20-year development, the fund has become a typical model of cooperatives, which gathers resources of its all members and staff. The confidence of local people and customers in the fund has been strengthened over time. Presently, the fund is one of the most prominent people’s credit funds of Hanoi city and top biggest funds of the country.

By the end of June 2018,QuangTrung people’s credit fund had a total capital of more than 400 billion dongs, about 350 billion dongs of which was mobilized from local people, and the total loans reached 250 billion dongs. The fund customers mainly live in urban areas and do business in service sector.

 

Department of Research and International Cooperation