ASSESSMENT OF CREDIT RISK MANAGEMENT IN VIETNAMESE COMMERCIAL BANKS

Abstract

Credit risk management is currently one of the strategic priorities for Vietnamese commercial banks, especially in the context of global economic volatility. However, to enhance effectiveness and sustainability, it is essential to approach credit risk management through an integrated framework of systems – technology – data – and legal infrastructure, aligned with the goal of developing a safe and sound financial market. In addition, based on a comprehensive assessment of credit activities across commercial banks, the author suggests that Vietnam should: (i) strengthen automation and the application of risk warning technologies by investing heavily in data infrastructure, developing sophisticated Scoring and Early Warning Systems (EWS) based on AI/Machine Learning, and automating the entire process from credit approval to monitoring; (ii) improve the legal framework for collateral assets and develop a debt trading market; and (iii) accelerate the substantive implementation of Basel II and IFRS 9 across the entire banking system.