Effective communication brings many practical benefits
According to the International Association of Deposit Insurance (IADI, November 2014), in order to build an effective deposit insurance system, the public must be informed about the benefits and limitations of the deposit insurance system through communication programs regularly and continuously.
Effective communication programs benefit both the public and the deposit insurance, in particular:
Firstly, disseminate information, facilitates public awareness of the concept of deposit insurance, the main features of the deposit insurance system. The public needs to know about how their legitimate rights and interests are protected by the deposit insurance, the scope of insured deposits, insurance coverage limit, basic information about the deposit insurance, thereby limiting excessive expectations that affect the deposit insurance system and financial stability.
Secondly, restore and strengthen confidence in the financial system, especially when the financial system fails. If depositors have confidence in the safety of their deposits at credit institutions participating in the deposit insurance system, the recovery process of the economy in general and the financial system in particular will take place faster. Financial stability is also improved.
Thirdly, provide material information to depositors when risks to deposit insurance participating institutions occur. The deposit insurance organization, the banking inspection and supervision agency should ensure the safety of the insured funds, and at the same time guide and support depositors to carry out legal procedures and documents to receive compensation quickly. Providing timely and accurate information demonstrates the deposit insurance's ability to fully perform its functions, helping to maintain public confidence.
Fourthly, build the image of the deposit insurance in front of the public: Communication activities help the deposit insurance build a solid, professional, effective and reliable image in public, meet the task of protecting depositors and reimbursement in time when failure occurs.
Fifthly, communication activities about the role of deposit insurance also contribute to promoting financial inclusion. Thanks to the communication activities, public awareness of risks and the guarantee of damage compensation in deposit activities at banks is improved. People will trust deposit activities in particular and other products and services of the bank in general, and limit their participation in using informal financial products and services. The general savings source of the economy is also increased, promoting investment capital of the whole society. Financial education communication also contributes to creating discipline for the market, encouraging banks to operate carefully and transparently to bring maximum benefits to the public. This is also an effective method to educate and improve financial literacy for people, especially ones in rural areas and other disadvantaged groups with little financial literacy.
Communication about the deposit insurance system plays an important role, but has not been properly recognized. The reason is that the role and function of the deposit insurance in contributing to the safety of the financial-banking market is often only apparent when there is a system failure. Therefore, communication programs need to be developed with a long-term vision, along with the process of formation and development of the deposit insurance system.
Key tasks to be implemented
To perform the political task of protecting the legitimate rights and interests of depositors, contributing to ensuring the safe operation of credit institutions, preserving the public's trust in the banking system, the DIV determines the target awareness level, and consider this a premise to continue promoting communication in the next period.
Accordingly, Deposit insurance development strategy to 2025, with a vision to 2030 sets a target of 45% by 2025 and striving by 2030 to have 55% of depositors grasp the core contents of the deposit insurance policy, including: how the depositors' legitimate rights and interests are protected by the deposit insurance, the extent of the insured's deposits, the coverage limit, and the basic information about the deposit insurance.
The above goal is determined on the basis of international studies on the level of public awareness to ensure confidence in the banking system and financial stability. reactive, the Canada Deposit Insurance Corporation (CDIC) has a communication strategy built with two objectives: Strengthening confidence in the financial system and minimizing risks. In 2016, CDIC set a target of 65% awareness of Canadians knowing about the deposit insurance system, which has reached 50% today. Or as the Albanian Deposit Insurance Agency (ADIA) has set a strategic communication goal for the period of 2015-2017 to increase the public awareness of deposit insurance from 2-4% and periodically evaluate the communication results. In Taiwan, the level of public awareness of deposit insurance is above 60% and the Central Deposit Insurance Corporation (CDIC, Taipei) is planning to promote media to increase this index to over 70%. The Perbadanan Insurans Deposit Malaysia (PIDM) targets an awareness rate of PIDM at 65-67% and a general deposit insurance awareness rate of 57-60% for the period 2018-2020.< /p>
In order to achieve the awareness level target of 45% by 2025 and 55% by 2030, the DIV has identified the needs to be implemented from now until 2025 as follows:
Firstly, perfect the legal basis for communication activities. DIV proposes to amend the Law on Deposit Insurance, which clearly stipulates the functions and duties of DIV in communicating deposit insurance policies and other policies related to depositor protection. At the same time, it is added that the insured institutions are responsible for communicating the deposit insurance policy and/or coordinating with the deposit insurance in communicating the deposit insurance policy.
Secondly, do research and develop a communication strategy to 2025, with a vision to 2030. The communication strategy of the deposit insurance will closely follow the Deposit insurance development strategy and be compatible with the major policies of the Government and the banking industry. Communication strategy will be the basis and orientation for communication activities at the macro level.
Thirdly, about the target audience, identify the target audience to focus on as depositors, especially those in rural and mountainous areas and have little access to information on banking and deposit insurance activities. Besides, other public objects are also of great concern in communication, including public institutions, policy makers, and relevant agencies.
Fourth, in terms of communication solutions, diversified and regular research, develop and innovate communication forms and tools to reach each target audience in a reasonable and effective manner and at a cost consistent with the deposit insurance's resources. In particular, the DIV will actively use the official communication channels, which are the website at www.div.gov.vn and the Deposit Insurance Bulletin, as well as the mass media (printed and online newspapers, radio and television) to bring information about the deposit insurance policy to a diverse audience. In particular, do research to develop and apply new communication tools in line with the Industrial Revolution 4.0.
For the target audience, organize media events, especially in coordination with socio-political organizations, agencies and units for integrated and continuous communication to increase public awareness of deposit insurance policy. In particular, the DIV will coordinate with credit institutions, Bank Association, People's Credit Fund Association to bring knowledge about deposit insurance into training programs for staff who directly deal with depositors, so they can also disseminate the knowledge and explain the deposit insurance policy.< o:p>
Internal communication is also an important factor. Through events, seminars, trainings, internal communication programs, each staff is equipped with universal knowledge of deposit insurance policy, communication and interpretation skills, to become effective communicator.
Fifthly, coordinate communication in joint programs of the banking industry. The DIV will actively participate in the industry's communication programs, convey to the public the major information and policies of the banking industry, create a general consensus among the public, and at the same time enhance the public's confidence.
Sixthly, gradually apply survey measures, periodically assess the level of depositors' awareness of the core issues of deposit insurance policy, thereby assessing the current status and considering solutions to improve communication effectiveness.
In order to achieve the goals set out by the Deposit insurance development strategy, a clear solution and roadmap is needed. formation, the DIV needs to carry out the communication of deposit insurance policies focusing on the target public in each certain period in accordance with the actual situation; improve efficiency and diversify forms of deposit insurance policy communication; study and propose amendments and supplements to the Law on Deposit Insurance with the content stipulating that insured institutions are responsible for coordinating with the deposit insurance in disseminating deposit insurance policy; conduct a survey on the depositors’ awareness of deposit insurance policy every three years; develop an overall and long-term communication plan in line with the deposit insurance development strategy.
In the trend of modernizing communication activities in the world and the significant influence of the Industrial Revolution 4.0 on the finance - banking - deposit insurance industry in Vietnam, the deposit insurance needs to make efforts to improve the effectiveness of communication activities. Thereby, conveying the deposit insurance policy in order to fulfill the task of protecting depositors, contributing to stabilizing the financial - banking system and social security.