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Vietnam: Banks to embrace IT innovation


IT was becoming more and more important to the financial security and operational efficiency of banking services, State Bank of Viet Nam (SBV) Governor Nguyen Van Binh said at a banking technology conference in Hanoi, mid May 2013.

Many areas including payments, lending, e-banking and risk management had been equipped with new and more diversified technology, he said, adding that some services were now completely automated.

Speeding up IT application and upgrading banks’ IT infrastructure were necessary to catch up with the trend, he stressed.

According to the SBV, many weaknesses in risk and banking management were exposed last year. The banking system is currently grappling with one of the region’s highest bad debt ratios, at 8.82 per cent of total loans.

Deputy Minister of Information and Communications Nguyen Minh Hoang singled out cloud computing, mobile computing and social media as major trends that had completely transformed the way banks operate and interact with customers.

“A focus on improving bank governance and risk management practices and pushing the restructuring of under-performing banks will be the main theme for 2013,” he said.

In order to develop banking technology, the country should boost international co-operation and enhancing human resources and management, said SBV’s Banking Strategy Institute director Nguyen Thi Kim Thanh.

World Bank economist Noritaka Akamatsu said that improving insolvency and restructuring State-owned enterprises should be the main goals for the banking sector’s development.

The International Data Group, the co-organiser of the event together with the SBV, said that e-banking and mobile banking were showing great potential.

How MasterCard restructured for IT innovation

Mastercard IT Innovation

How do you push a large organization like MasterCard WorldWide to innovate rapidly and embrace potentially disruptive technologies?

Use enterprise social to drive innovation

Innovation doesn’t bear fruit unless you can create a culture of innovation throughout the organization.

A Web-based idea management program called Aspire has helped to achieve, where anyone can post ideas, comment on them and vote them up or down. It was incorporated single sign-on and a user friendly interface to make the site as easy to use as possible, and then presented specific challenges to the organization — and publicized them. Within three months 47% of employees had signed in and 11% had participated.

Use ad-hoc innovation teams

It was also established Innovation Express, an initiative that pulls together people in the organization from a range of disciplines, locks them in a hotel room for 48 hours, presents them with a challenge, and tells them not to come out until they have a prototype, a go-to-market plan and a video demonstration of their creation.

The approach is a deliberate attempt to break down barriers between people that often crop up in large organizations. There’s a frustration between business and technology people, where the people who understand the problem statement and market never engage directly with the engineers who write the solution because there are so many layers in between. Locking them all in a room together is a direct, if a bit extreme, way to address that.

Get to incubation quickly, fail fast

Promoters of projects that rise to the top of the list create an incubation proposal, a business plan with specific success metrics that goes before an innovation council of business leaders for possible funding.

Most large organizations take a more cumbersome approach. The get an interesting idea and spend a lot of money looking at the size of the market, potential business models and creating a business case. But at such an early stage you’re almost certain to get it wrong. So at MasterCard, the council follows a streamlined, 28-point decision making process.”You can score an idea within 15 minute to determine if it’s worth prototyping.

Approved projects are assigned an “incubation officer, or CEO, who leads the virtual startup within MasterCard. If a project is a phenomenal success it may move on the fast track toward roll-out; others may be spun off as separate businesses. But most projects come back for one or two additional rounds of funding after achieving the initial goals.

Failure is also an option, and the goal is to get to do so quickly and move on. “We want to fail fast, fail cheap, and learn from the failure. The learnings will be applicable to something else in the future,” Garry Lyons says.

From a standing start we’ve created some very interesting payment solutions. Garry Lyons is going to leave MasterCard Labs as a very credible, functional part of MasterCard that delivers on the goal of getting solutions to market faster and cheaper than ever before.

Financial Innovation: new fund to benefit currency dynamics from PIMCO


PIMCO, an Allianz company & a leading global investment management firm, has listed the PIMCO Foreign Currency Strategy Exchange Traded Fund (Ticker: FORX), created to offer investors the potential to benefit from fundamental changes in global currency dynamics by diversifying away from the dollar.

Rising debt levels, limited fiscal flexibility and easy monetary policy in the U.S. may weigh on the dollar for years. FORX is a portfolio of currencies and local currency bonds actively managed to help investors diversify out of the dollar and preserve their purchasing power. The active management is a notable difference for an ETF marketplace made up mostly of passive products in which investors generally must form their own views on individual currencies or currency indexes.

PIMCO has decades of experience managing currencies on behalf of large institutional clients and has deep executional ability in the multi-trillion-dollar foreign currency market. Strategic allocations across developed and emerging currencies are based on the firm’s investment outlook, which includes macroeconomic insights formulated by the firm’s Investment Committee and based on the output of cyclical and secular economic forums.