Speaker: Truong Bui - CTO Timo.vn Bio: Truong Bui is the former CTO of Timo.vn, the digital bank platform by VPBank Description: In this talk, Truong will share with you how financial systems are built internally, and explain why something works the way they work. Example: why does it take sometime for the money to delivered when you do online bank transfer in Vietnam. Agenda: - Overview/Context - CITAD (IBPS) - NAPAS real-time interbank transfer systems - Related systems - Improvement ideas - Conclusion

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Interbank Transfer
Systems in VN & some
improvement ideas

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Agenda
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• Overview/Context
• CITAD (IBPS)
• NAPAS real-time interbank transfer systems
• Related systems
• Improvement ideas
• Conclusion

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Overview &
Context

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Overview/Context
5Source: SBV.GOV.VN
q State Bank central role and monopoly
q Complicated and fragmented
1.IBPS/CITAD
2.NAPAS Instant Fund Transfer
• To Card Center
• To Account in other banks
3.SWIFT (for other currency and foreign
transfer)
4.Debit Card switch systems

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Overview & Context
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Ways to move money from an account
Branch
Withdraw
n
Transfers
Internal
Transfe
r
Domestic
Transfer
Internatio
nal
Transfer
Card
System
POS
ATM
Withdraw
n
Bill Payment
Utilities
E-
commerc
e
Topup

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Transfer from you account to other
bank
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Sending
Bank
Account
State Bank
• IBPS (CITAD)
• NAPAS IBFT
Receiving Bank
Account/Card

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International Transfer Systems
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Sending
Bank
Account
SWIFT
Receiving
Bank
Account

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Card Spending, Withdrawn
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Acquirer
Acquiring
Bank
NAPAS
CardSwitch
Issuing
Bank
Account
REQUEST FOR APPROVAL (Card/PIN/Token)

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E-Commerce Payment
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E-
Commerce
Sites
Their
Bank
E-com
Payment
Gateway
NAPAS
Payment
Gateway
Your
Bank
You
REQUEST FOR AUTHENTICATION OF A BUY
Receive + provide OTP/Auth token
Get OTP/Auth Verified

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Bill Payment & Topup
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Vendor
Vendor
Bank
NAPAS
BillPay
Sub-
Bill Pay
Your
Bank
You
GetBills (CUSTOMER ID)
PayBill/Topup

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IBPS
(CITAD)

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IBPS/CITAD system overview
13Source: IBPS package on SBV.GOV.VN
• RCP: Regional
Payment
Center
• NHNN: State
Bank

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IBPS/CITAD
14Source: SBV.GOV.VN
• HVSS for high-value (500M), immediate
transfer
• LVSS <500M, cut-off-time
• Special fields for Tax collections support

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IBPS/CITAD Fund Transfer Process
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• Manual input and approval process
• Not integrated with Core Banks*
• Support Credit and Debit transfer, but Debit
transfer is cumbersome and cannot apply
wide
Source: IBPS package on SBV.GOV.VN

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IBPS – Min inputs required
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•Account Number
•Account Holder Name *
•Receiving Bank
•Receiving Branch CODE *
•Transaction Description

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Sample input screens
17Source: IBPS package on SBV.GOV.VN

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Sample input screens
18Source: IBPS package on SBV.GOV.VN

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NAPAS IBFT
(Smartlink IBFT,
BanknetVN IBFT)

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NAPAS (Smartlink/BanknetVN) IBFT
20Source: SBV.GOV.VN
NAPAS IBFT
Enquiry Name
Bank
Account
Card #
Transfer
To Bank
Acc
To Card
#
Reconcile
Batch AdHoc

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Smartlink Sample API ISO8583 request
21Source: SBV.GOV.VN
<field id="0" value=“xxxx"/>
<field id="2" value="9704xxxxxxxxxxxxxxxxxxxx"/>
<field id="3" value=“xxxxxx"/>
<field id="4" value="000000000000"/>
<field id="7" value=“xxxxxxxxx"/>
<field id="11" value=“xxxxx"/>
…..

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Smartlink reconciliation and error
handling
22Source: SBV.GOV.VN
ü Timeout/error handling
ü Daily reconciliation:
• SML sent a list of transactions during last
period
• Banks compare and feedback
ü Timeout/error handling
ü Each transaction can has 3 states: S/F/UnK

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Other systems

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Other systems used in VN
24Source: SBV.GOV.VN
ü SWIFT
ü SWIFT code
• Using for foreign currency transfer
• Using for sending money to other
countries
ü Song Biên:
• Direct property interfaces defined
between big banks
• VCB Money
• NOSTRO/VOSTRO accounts

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Other countries
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ü Target 2 Realtime (RTGS) system
• The transaction is cleared right away
ü SEPA Pan europan system
• SEPA Credit Transfer
• SEPA Direct Debit
• SEPA Card
ü ACH (USA) Automated Clearing House
• E-Check processing, 3 days to clear
(batch)

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Startup / New systems
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ü TransferWise…
ü Paypal/Alipay
ü Bankplus/Momo payment to phone
number or Wallet
ü …

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Cross Border and Currency Transfer
27Source: TransferWise

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Ideas and Conclusion

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Ideas
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ü IBPS (CITAD) prone to error, hard to
improve => Automation, Information,
remove the need for Branch ID
ü Napas IBFT will be better => Business plan
based on cheap and fast transfer
ü Foreign Currency Transfer and Incoming
Money Flow

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Conclusion
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ü Problem: Bank systems are complicated
and based on aged technology, model
ü Every Problem is an Opportunity

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