Elevating bank risk management capabilities: A vital imperative in the digital and AI era

Breakthrough opportunities accompanied by non-traditional risks

Addressing the forum on the technological wave, Dr. Dao Minh Tu, Vice Chairman and Secretary General of VNBA, noted that Vietnam’s banking sector is undergoing a profound transformation driven by Artificial Intelligence (AI), Big Data, and Cloud Computing. This shift provides significant opportunities to optimize operating costs and create breakthroughs in traditional business models.

However, these opportunities come with immense challenges. Citing IBM's Cost of a Data Breach Report 2025, Dr. Dao Minh Tu highlighted that the average global cost of a data breach reached a record $4.9 million—stark evidence that cybersecurity has escalated into a top-tier risk for the financial and banking sector.

To respond effectively, strengthening the regulatory framework is an urgent requirement. Recent legal developments, such as the Law on Credit Institutions (Amended 2024), Circular 14/2025/TT-NHNN (governing capital adequacy ratios), and Circular 83/2025/TT-NHNN (governing internal control systems), are laying a solid regulatory foundation. According to VNBA leadership, these regulations provide a crucial basis for Vietnamese banks to progressively implement stringent international governance standards, including Basel III.

Defining three critical risk pillars in the new era

From an operational perspective, Mr. Le Thanh Tung, Head of the VNBA Risk Committee, emphasized that transitioning toward international standards requires credit institutions to commit substantial resources to capital, technology, data, models, and specialized personnel.

During the forum, experts and bank executives converged on three primary risk pillars requiring prioritized oversight and resource allocation:

1. Liquidity Risk: Banks face growing capital mobilization pressures to satisfy increasingly stringent safety ratios approaching Basel III benchmarks.

2. Cybersecurity Risk: No longer merely an IT technical issue, cybersecurity has evolved into a strategic governance risk driven by sophisticated cyber attacks and heightened third-party dependencies.

3. Model Risk (specifically AI): As AI is widely deployed across critical functions—from risk management to customer service—establishing comprehensive governance frameworks to manage model errors and biases is an imperative that cannot be delayed.

Conclusion

Summarizing the key takeaways of the forum, a bank's competitive advantage in the coming period will no longer be measured solely by surface metrics such as asset size or credit growth rate, but rather by its ability to identify and control emerging risks. A sustainable financial system must achieve a balance between innovation and strict risk governance discipline. This serves as the strongest assurance for reinforcing customer and investor confidence while elevating the global standing of Vietnam's banking sector.

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