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truongbx@gmail.com
Interbank Transfer
Systems in VN & some
improvement ideas
truongbx@gmail.com
Agenda
3
• Overview/Context
• CITAD	(IBPS)
• NAPAS	real-time	interbank	transfer	systems
• Related	syste...
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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	fragmente...
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Overview & Context
6
Ways	to	move	money	from	an	account
Branch
Withdraw
n
Transfers
Internal	
Transfe
r...
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Transfer from you account to other
bank
7
Sending	
Bank
Account
State	Bank
• IBPS	(CITAD)
• NAPAS	IBFT
...
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International Transfer Systems
8
Sending	
Bank		
Account
SWIFT
Receiving	
Bank	
Account
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Card Spending, Withdrawn
9
Acquirer
Acquiring	
Bank
NAPAS		
CardSwitch
Issuing	
Bank	
Account
REQUEST	F...
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E-Commerce Payment
10
E-
Commerce	
Sites
Their	
Bank
E-com	
Payment	
Gateway
NAPAS		
Payment	
Gateway
Y...
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Bill Payment & Topup
11
Vendor
Vendor	
Bank
NAPAS
BillPay
Sub-
Bill	Pay
Your
Bank
You
GetBills (CUSTOME...
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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...
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IBPS/CITAD
14Source:	SBV.GOV.VN
• HVSS	for	high-value	(500M),	immediate	
transfer
• LVSS	<500M,	cut-off...
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IBPS/CITAD Fund Transfer Process
15
• Manual	input	and	approval	process
• Not	integrated	with	Core	Bank...
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IBPS – Min inputs required
16
•Account	Number
•Account	Holder	Name		*
•Receiving	Bank
•Receiving	Branch...
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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	#
Tran...
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Smartlink Sample API ISO8583 request
21Source:	SBV.GOV.VN
<field	id="0"	value=“xxxx"/>
<field	id="2"	va...
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Smartlink reconciliation and error
handling
22Source:	SBV.GOV.VN
ü Timeout/error	handling
ü Daily	recon...
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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	transfe...
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Other countries
25
ü Target	2	Realtime (RTGS)	system
• The	transaction	is	cleared	right	away
ü SEPA		Pa...
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Startup / New systems
26
ü TransferWise…
ü Paypal/Alipay
ü Bankplus/Momo payment	to	phone	
number	or	Wa...
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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)	prone	to	error,	hard	to	
improve	=>	Automation,	Information,	
remove	the	need	f...
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Conclusion
30
ü Problem:	Bank	systems	are	complicated	
and	based	on	aged	technology,	model
ü Every	Prob...
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Grokking TechTalk #17: Interbank Transfer Systems in VN & some improvement ideas
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Grokking TechTalk #17: Interbank Transfer Systems in VN & some improvement ideas

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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

Published in: Technology
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Grokking TechTalk #17: Interbank Transfer Systems in VN & some improvement ideas

  1. 1. truongbx@gmail.com Interbank Transfer Systems in VN & some improvement ideas
  2. 2. truongbx@gmail.com Agenda 3 • Overview/Context • CITAD (IBPS) • NAPAS real-time interbank transfer systems • Related systems • Improvement ideas • Conclusion
  3. 3. truongbx@gmail.com Overview & Context
  4. 4. truongbx@gmail.com 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
  5. 5. truongbx@gmail.com Overview & Context 6 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
  6. 6. truongbx@gmail.com Transfer from you account to other bank 7 Sending Bank Account State Bank • IBPS (CITAD) • NAPAS IBFT Receiving Bank Account/Card
  7. 7. truongbx@gmail.com International Transfer Systems 8 Sending Bank Account SWIFT Receiving Bank Account
  8. 8. truongbx@gmail.com Card Spending, Withdrawn 9 Acquirer Acquiring Bank NAPAS CardSwitch Issuing Bank Account REQUEST FOR APPROVAL (Card/PIN/Token)
  9. 9. truongbx@gmail.com E-Commerce Payment 10 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
  10. 10. truongbx@gmail.com Bill Payment & Topup 11 Vendor Vendor Bank NAPAS BillPay Sub- Bill Pay Your Bank You GetBills (CUSTOMER ID) PayBill/Topup
  11. 11. truongbx@gmail.com IBPS (CITAD)
  12. 12. truongbx@gmail.com IBPS/CITAD system overview 13Source: IBPS package on SBV.GOV.VN • RCP: Regional Payment Center • NHNN: State Bank
  13. 13. truongbx@gmail.com IBPS/CITAD 14Source: SBV.GOV.VN • HVSS for high-value (500M), immediate transfer • LVSS <500M, cut-off-time • Special fields for Tax collections support
  14. 14. truongbx@gmail.com IBPS/CITAD Fund Transfer Process 15 • 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
  15. 15. truongbx@gmail.com IBPS – Min inputs required 16 •Account Number •Account Holder Name * •Receiving Bank •Receiving Branch CODE * •Transaction Description
  16. 16. truongbx@gmail.com Sample input screens 17Source: IBPS package on SBV.GOV.VN
  17. 17. truongbx@gmail.com Sample input screens 18Source: IBPS package on SBV.GOV.VN
  18. 18. truongbx@gmail.com NAPAS IBFT (Smartlink IBFT, BanknetVN IBFT)
  19. 19. truongbx@gmail.com NAPAS (Smartlink/BanknetVN) IBFT 20Source: SBV.GOV.VN NAPAS IBFT Enquiry Name Bank Account Card # Transfer To Bank Acc To Card # Reconcile Batch AdHoc
  20. 20. truongbx@gmail.com 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"/> …..
  21. 21. truongbx@gmail.com 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
  22. 22. truongbx@gmail.com Other systems
  23. 23. truongbx@gmail.com 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
  24. 24. truongbx@gmail.com Other countries 25 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)
  25. 25. truongbx@gmail.com Startup / New systems 26 ü TransferWise… ü Paypal/Alipay ü Bankplus/Momo payment to phone number or Wallet ü …
  26. 26. truongbx@gmail.com Cross Border and Currency Transfer 27Source: TransferWise
  27. 27. truongbx@gmail.com Ideas and Conclusion
  28. 28. truongbx@gmail.com Ideas 29 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
  29. 29. truongbx@gmail.com Conclusion 30 ü Problem: Bank systems are complicated and based on aged technology, model ü Every Problem is an Opportunity
  30. 30. truongbx@gmail.com

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