grokking techtalk #17: interbank transfer systems in vn & some improvement ideas

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Interbank Transfer Systems in VN & some

improvement ideas

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Agenda

3

• Overview/Context• CITAD(IBPS)• NAPASreal-timeinterbanktransfersystems• Relatedsystems• Improvementideas• Conclusion

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Overview &Context

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Overview/Context

5Source:SBV.GOV.VN

q StateBankcentralroleandmonopolyq Complicatedandfragmented1. IBPS/CITAD2.NAPASInstantFundTransfer• ToCardCenter• ToAccountinotherbanks3.SWIFT(forothercurrencyandforeigntransfer)

4.DebitCardswitchsystems

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Overview & Context

6

Waystomovemoneyfromanaccount

BranchWithdraw

nTransfers

InternalTransfe

rDomesticTransfer

International

Transfer

CardSystem

POSATM

Withdrawn

BillPayment

UtilitiesE-

commerce

Topup

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Transfer from you account to other bank

7

SendingBank

Account

StateBank• IBPS(CITAD)• NAPASIBFT

ReceivingBankAccount/Card

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International Transfer Systems

8

SendingBank

AccountSWIFT

ReceivingBank

Account

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Card Spending, Withdrawn

9

Acquirer AcquiringBank

NAPASCardSwitch

IssuingBank

Account

REQUESTFORAPPROVAL(Card/PIN/Token)

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E-Commerce Payment

10

E-Commerce

Sites

TheirBank

E-comPaymentGateway

NAPASPaymentGateway

YourBank

You

REQUESTFORAUTHENTICATIONOFABUY

Receive+provideOTP/Auth token

GetOTP/Auth Verified

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Bill Payment & Topup

11

Vendor VendorBank

NAPASBillPay

Sub-BillPay

YourBank

You

GetBills (CUSTOMERID)

PayBill/Topup

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IBPS(CITAD)

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IBPS/CITAD system overview

13Source:IBPSpackage onSBV.GOV.VN

• RCP:RegionalPaymentCenter

• NHNN:StateBank

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IBPS/CITAD

14Source:SBV.GOV.VN

• HVSSforhigh-value(500M),immediatetransfer• LVSS<500M,cut-off-time• SpecialfieldsforTaxcollectionssupport

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IBPS/CITAD Fund Transfer Process

15

• Manualinputandapprovalprocess• NotintegratedwithCoreBanks*• SupportCreditandDebittransfer,butDebittransferiscumbersomeandcannotapplywide

Source:IBPSpackage onSBV.GOV.VN

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IBPS – Min inputs required

16

•AccountNumber•AccountHolderName*•ReceivingBank•ReceivingBranchCODE*•TransactionDescription

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Sample input screens

17Source:IBPSpackage onSBV.GOV.VN

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Sample input screens

18Source:IBPSpackage onSBV.GOV.VN

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NAPAS IBFT(Smartlink IBFT, BanknetVN IBFT)

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NAPAS (Smartlink/BanknetVN) IBFT

20Source:SBV.GOV.VN

NAPASIBFT

EnquiryName

BankAccount Card#

Transfer

ToBankAcc

ToCard#

Reconcile

Batch AdHoc

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Smartlink Sample API ISO8583 request

21Source:SBV.GOV.VN

<fieldid="0"value=“xxxx"/><fieldid="2"value="9704xxxxxxxxxxxxxxxxxxxx"/><fieldid="3"value=“xxxxxx"/><fieldid="4"value="000000000000"/><fieldid="7"value=“xxxxxxxxx"/><fieldid="11"value=“xxxxx"/>…..

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Smartlink reconciliation and error handling

22Source:SBV.GOV.VN

ü Timeout/errorhandlingü Dailyreconciliation:• SMLsentalistoftransactionsduringlast

period• Bankscompareandfeedbackü Timeout/errorhandlingü Eachtransactioncanhas3states:S/F/UnK

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Other systems

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Other systems used in VN

24Source:SBV.GOV.VN

ü SWIFTü SWIFTcode• Usingforforeigncurrencytransfer• Usingforsendingmoneytoothercountries

ü SongBiên:• Directpropertyinterfacesdefinedbetweenbigbanks

• VCBMoney• NOSTRO/VOSTROaccounts

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Other countries

25

ü Target2Realtime (RTGS)system• Thetransactionisclearedrightawayü SEPAPaneuropan system• SEPACreditTransfer• SEPADirectDebit• SEPACardü ACH(USA)AutomatedClearingHouse• E-Checkprocessing,3daystoclear(batch)

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Startup / New systems

26

ü TransferWise…ü Paypal/Alipayü Bankplus/Momo paymenttophonenumberorWallet

ü …

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Cross Border and Currency Transfer

27Source:TransferWise

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Ideas and Conclusion

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Ideas

29

ü IBPS(CITAD)pronetoerror,hardtoimprove=>Automation,Information,removetheneedforBranchID

ü Napas IBFTwillbebetter=>Businessplanbasedoncheapandfasttransfer

ü ForeignCurrencyTransferandIncomingMoneyFlow

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Conclusion

30

ü Problem:Banksystemsarecomplicatedandbasedonagedtechnology,model

ü EveryProblemisanOpportunity

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