Hanoi (VNA)- The State Bank of Vietnam (SBV) and the Republic of Korea (RoK)’s FinancialServices Commission (FSC) has signed a memorandum of understanding oncooperation in the field of financial innovation in Hanoi.

The signing is part ofthe Vietnam-Korea Financial Cooperation Forum, which was jointly organised bythe Vietnam Banks’ Association and Korea Federation of Banks.

This is the firstagreement in this area that SBV has signed with a foreign partner, marking animportant milestone to perfect the legal framework for comprehensiveco-operation between the central bank and FSC.

The agreement is seenas a legal basis for the two sides to enhance exchange, share information andconduct cooperations contents related to the modernisation of the banking andfinancial system as well as application of modern financial technology in theoperation of banking system and services.

Speaking at the forum,SBV Governor Le Minh Hung said the forum was very meaningful in the context ofthe strategic partnership between Vietnam and the RoK, which had beencontinuously developing in the past few years.

The forum is anopportunity for the two sides to further understand the needs and potential infinancial and banking co-operation in the coming time, especially in the timeof the 4.0 industrial revolution that is opening up new developmentpossibilities for the world in general and the banking sector in particular.

Since theestablishment of diplomatic relations more than 25 years ago, Vietnam and theRoK has made remarkable progress in all fields, including politics, economics,trade, investment, culture and tourism, said Hung.

In the banking sector,the RoK is among the top 10 countries and territories in Vietnam with thehighest number of credit institutions, including two banks, seven bankingbranches, six representative offices and two finance leasing companies.

Hung said the RoK’scredit institutions had always been active, dynamic, efficient and law-abiding investorsin Vietnam and that they had made remarkable contributions to the developmentof economy, banking and finance in the country as well as in the co-operationbetween the two countries.

The 4.0 technologyrevolution brings a lot of opportunities, creating added value and drivingforce for economic development. The banking and finance sector is the pioneerin adopting and applying the technology solutions to innovate and improveproducts and services, helping cut costs and bringing many benefits to customers,Hung said.

He, however, pointedout that the financial and banking system would face many challenges due to thereplacement of machines and automation solutions, increase in competition fromFintech companies as well as new risks from the technological environment.

The RoK is a countryperforming well in science, technology and start-up innovation, being thecradle of Fintech development in Asia. As a management body in the Fintechsector, FSC has developed a number of policies to support the development ofthe sector.

Hung emphasised thatthe cooperation was an inevitable trend to bring benefits to businesspeople,investors and citizens of the two countries. He hoped the relationship between Vietnamand the RoK in general and in the banking and finance sector in particularwould develop greatly in the coming time, especially in the field ofinnovation.-VNA