Page 39 - Vol 7- issue 1

Difficulties in risk management in Vietnamese to organize internal training courses and cooperate with
commercial banks international financial organizations to improve risk
management capacity for employees.
The implementation of risk management in Developing a risk management culture
commercial banks in Viet Nam is currently facing many throughout the system
difficulties due to many objective and subjective factors.
First, the legal system and risk management framework Risk management is not only the task of one department
are still in the process of being completed, not really but needs to be integrated into the bank's overall business
synchronized with international standards such as Basel strategy. Therefore, banks need to build a risk management
II, Basel III. This makes it difficult for banks to implement culture, raise awareness among all employees about the
comprehensive risk measurement and control models. roles and responsibilities in risk control.
Second, the limitation of highly qualified human Diversifying investment portfolios and effectively
resources in the field of risk management is also a major managing credit risks: Banks need to have a reasonable
obstacle, especially when modern risk management tools risk dispersion strategy, avoiding focusing on a specific
require a deep understanding of finance, technology field or customer group. In addition, it is necessary to
and data analysis. In addition, the rapid development apply credit scoring models and effectively control bad
of Fintech and new business models also increases new debts to minimize credit risks.
types of risks, requiring banks to constantly update and Strengthening cooperation and learning
adjust their management strategies. Many banks still from international experience
have a short-term profit-seeking mentality and have
not focused on investing in a systematic internal control Banks need to expand cooperation with international
system and risk management. financial institutions and banks to learn from experience,
Finally, ineffective data collection and processing, due update modern risk management trends and apply them
to limitations in information technology infrastructure, appropriately to practice in Viet Nam.
also affects the ability to forecast and manage risks.
These challenges pose an urgent need to improve risk Conclusion
management capacity, invest in technology and train In the context of an increasingly complex financial market,
human resources to ensure the sustainable development improving the effectiveness of risk management in commercial
of the banking system in Viet Nam. banks in Viet Nam is an urgent requirement. By perfecting the
legal framework, investing in technology, improving human
Solutions
resources capacity and strengthening internal controls, banks
To improve risk management to enhance internal can proactively identify, assess and control risks effectively.
control capacity in commercial banks, authors propose At the same time, building a risk management culture and
some solutions as follows: learning from international experience will help the banking
Improving the legal framework and risk system develop sustainably.
management standards References:

The State and the State Bank of Viet Nam need to 1. Nguyen Nam Anh (2023). Improving the financial capacity of commercial banks: A
continue to adjust and improve the legal system towards case study at the Joint Stock Commercial Bank for Foreign Trade of Viet Nam, accessed
approaching international standards such as Basel II and from https://thitruongtaichinhtiente.vn/nang-cao-nang-luc-tai-chinh-cua-ngan-
Basel III. At the same time, there should be specific guidelines hang-thuong-mai-nghien-cuu-dien-hinh-tai-ngan-hang-tmcp-ngoai-thuong-viet-
to help commercial banks easily apply them in practice. nam-44566.html.
Investing in technology and data systems 2. Nguyen Thanh Thuy (2023). The relationship between internal control and risk
management in enterprises, Finance Journal, accessed from https://tapchitaichinh.
Banks need to promote the application of technology vn/moi-quan-he-giua-kiem-soat-noi-bo-va-quan-tri-rui-ro-trong-doanh-nghiep.
in risk management, especially big data analysis tools html?utm_source=chatgpt.com.
(Big Data), artificial intelligence (AI) and machine 3. State Bank of Viet Nam (2016). Overview of Basel II, accessed from http://www.sbv.gov.
learning (Machine Learning) to improve the ability to vn/portal/pages/apph/tcthnh.
forecast and control risks. The data system needs to be 4. State Bank of Viet Nam (2024). Circular 20/VBHN-NHNN regulating the internal control
standardized and synchronized to improve the efficiency system of commercial banks and foreign banks in Viet Nam, issued on July 15 , 2024.
th
of information collection and processing.
Author information:
Improving the quality of human resources Dr. Tran Thi Lan Huong, Nguyen Ngoc Thuy

Banks need to focus on training a team of highly Faculty of Economics - Business Administration
qualified risk management experts, not only in finance Hong Duc University
but also in technology and data analysis. It is necessary Email: Tranthilanhuong@hdu.edu.vn

38