Besides impacting nearly every aspect of everyday life, new technologies are also changing and disrupting the financial industry and the way consumers and firms access financial services.
While technological innovation in finance is not new, investment in technology and the pace of innovation have increased significantly in recent years. These include a wide array of developments in social networks, artificial intelligence, machine learning, mobile applications, distributed ledger technology (DLT), cloud computing and big data analytics. However, a substantial amount of uncertainty and confusion remains.
Blockchain, for instance, is a topic that inspires equal parts fear and excitement.
According to RMIT Acting Discipline Lead Finance Dr Binh Nguyen, blockchain holds great potential across a number of sectors in Vietnam.
“When you think about it, blockchain creates a layer of trust without an intermediary, so for example if you want increased financial inclusion in Vietnam, particularly in rural areas, you can find a way to use it through blockchain infrastructure,” he explained.
“You can basically replace normal banking, which is very relevant when we talk about financial inclusion, particularly in rural areas where we don’t have physical banks.”
According to Dr Nguyen, blockchain could also be used to track traded goods. For example, if an agricultural company wants to track its products from the farm to market, it can do so with a digital ledger, and end consumers would be able to follow this process as well.
“It’s also interesting when you think about property and land registration in Vietnam,” he added. “We have the red book system, which involves a lot of paperwork and it’s quite hard to verify who actually owns land, so if we could bring registration onto the blockchain, then it would be very easy to verify who sold or owns property.”
Dr Nguyen attended the recent conference Digital Trends: Blockchain & Cybersecurity, co-hosted by ACCA and RMIT Vietnam at its Saigon South campus, where issues about blockchain and cybersecurity were discussed.
Presenting at the event, RMIT Head of School of Business & Management, Associate Professor Mathews Nkhoma said: “Rapidly growing connectivity and an accelerating pace of digital transformation make Asia – and particularly Vietnam – vulnerable to cyber exploitation.”
“In a report conducted by Marsh & McLennan Companies in 2017 about cyber risk in the Asia Pacific, Asian organisations take 1.7 times longer than the global median to discover a breach, and 78 per cent of internet users in Asia have not received any education on cyber security.”
He emphasised that Vietnam was in the top ten countries with the most targeted attacks from 2015 to 2017, and in 2017 lost $US542.8 million to cyberattacks.
There was a consensus amongst event speakers that a balanced approach is needed to understand the economic functions of innovations and the risks and benefits that they may bring.
The debate also revealed the urgent need to invest in the skills of people in companies and universities, as with Fintechs, financial knowledge is interdependent with IT competencies. Finance professionals and professional accountants will need to adapt to this fast-moving landscape and maintain an up-to-date understanding of developments to be able guide their clients and organisations who are seeking funding.
Meanwhile, RMIT is ensuring that its students stay ahead of the game by introducing a blockchain minor.
“It will include four courses, including cryptofinance, cryptoeconomics, law related to contracts on blockchain and one on logistics in blockchain,” Dr Nguyen said.
“This is to prepare students for this future technology and how it will impact economics and finance.”
Story: Michael Tatarski