Solution to develop application information system in the current Vietnamese banking system - 2

The country in the region has gone bankrupt. typically Thailand, Japan, Indonesia, Philippines... many small banks have had to merge or be acquired by big banks, many financial companies and stockbrokers have gone bankrupt. The most recent is the terrible collapse and bankruptcy in the US in 2001-2002, typically the bankruptcy of Wordcom and Enron energy corporation, with total debt assets of more than 500 billion USD. Or the chain bankruptcies in Korea, Hong Kong, and Singapore in 2002-2003.

If the losses caused by the credit risk are small, it is relatively easy to deal with. But when the loss is large, beyond the ability of the bank to handle, the problem will become serious, causing unpredictable consequences for the bank itself, for other banks and related customers, affecting the bank. to the interests of depositors and ultimately, affecting the entire economy, can be a potential risk for an economic crisis. Therefore, it is very important to limit risks in banking activities, not only for the benefit of banks but also for the common interests of the entire economy.

The causes of risks in the credit activities of commercial banks are diverse, but one of the significant causes is the lack of information about customers, or the lack of credit information to consider when granting credit and monitoring loans. On the part of borrowers due to low equity, business mainly relies on bank loans, lack of market information, partners and customers, and also the reason that borrowers lack of willingness to repay bank loans. row. Thus, the cause of the lack of information is very noticeable, including information about the borrower and information about the business environment in which that customer operates.

Demand for credit information for commercial banks' credit activities

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Credit activity of commercial banks is to lend with confidence that customers will repay as agreed. Therefore, in order to ensure safe lending, commercial banks must have full knowledge of customers, including information on financial status, debt status, collateral, repayment ability and other financial statements. pine

Solution to develop application information system in the current Vietnamese banking system - 2

Other necessary information of borrowers. Specifically, the content of credit information required about customers for commercial banks to consider and decide on loans and loan supervision usually includes:

- Information about the client's legal profile such as the client's name, address, establishment decision, business registration, branches or affiliated units, full name and qualifications of the leader, business profession business, main production and trading products, product consumption market...

- Information on the financial position of the customer, including the capital situation, production and business results, cash flow, through which the lending institution can assess the financial ability, operation and development of the customer. client.

- Information about the customer's credit relationship, including loans at other credit institutions and organizations, the repayment term of those loans, the customer's credit history with respect to the customer. credit institutions have lent (Is it fair? Is there any overdue debt?)...

- Information on credit rating of customers from external rating agencies and the results of internal rating of commercial banks.

- Information related to the customer's loan application project, the bank needs to consider the customer's debt repayment ability from the project implementation; other information regarding the feasibility of the project from.

- Information on the business environment related to the industry, the field of operation of the borrower, economic information, market, development trend, and potential of the industry.

Thus, in credit activities, information about borrowers of commercial banks is very important to prevent risks and contribute to stabilizing the banking system. To be able to provide such information to commercial banks fully and effectively, it is necessary to have specialized agencies to collect, process and provide credit information.

1.1.2. Bank credit information Information overview

The concept of information has appeared for a long time, although the research, application of information and information systems has made rapid progress, but so far there is no unified definition. about information. In modern science, there are three most general concepts: energy, matter, and information. The first two concepts are completely deterministic, mankind already knows the relationship between energy and matter through Einstein's famous equation E = mc 2 . What about the concept and nature of information?

is still a question of modern science.

There has been a lot of research and many concepts have been introduced. According to Lenin, “Information is a property unique to highly organized matter, which arises with life and characterizes the organic world, human society, and the technology that man has accumulated in his life. management process” [04]. Another view holds that information, like reflection, is a property of material objects, living as well as non-living. A representative of this group is GlouchKov, who states that “Information in its most general sense is a measure of the unevenness in the distribution of matter and energy in space and time, a measure of the changes associated with it. all processes taking place in the universe” [04]. Recently, in a number of research works related to the knowledge economy, a narrow way of understanding information has been given through the "information pyramid" model.

[04] as diagram 1.01.

From here, for the purpose of studying information for economic management, we will study and use the concept in the narrow sense as mentioned above "Information is data that has been recorded, classified, organized, organization, association, or interpretation within a meaningful expression framework. Data consists of facts, which become information when they are viewed in context and the meaning conveyed to people” [26] . However, this distinction is only relative.

Because information for one person may be data for another, and it may be knowledge for another.

Information processing level (broad meaning)


Knowledge Knowledge (meaning



Diagram 1.01 Information tower model

Although there are different views, scientists have agreed to recognize 5 main characteristics of information:

- Information always belongs to a certain system, and each system always needs certain information and sources of information. Thus, system and information are a pair of dialectical categories.

- Information is represented, transmitted and stored on different "carriers". Therefore, the concept of "Beared Belief" and "Beared Information" is a pair of dialectical categories.

- Information always appears in the complex relationship of matter, in the relationship between possibility and reality, between the definite and the unknown, between the computable and the uncomputable.

- Information only exists and appears in a certain process.

Information is a common feature of matter.

When information technology has not yet developed strongly, the concept of information is simply the result of data processing, but up to now, the concept of information is associated with information technology, along with the rapid development as The storm of information technology has turned information into electronic information. Therefore, the current bank credit center is also an electronic credit center, bearing all the characteristics and characteristics of electronic information.

Today, the role of information is very important, knowledge (ie processed information becomes human knowledge) has become the leading factor of economic growth, surpassing traditional factors. capital, labor and resources. Therefore, in the globalized economy, whoever has the most information will win, whoever is backward in information will fall into a passive position, and in the future, social discrimination will no longer be a part of the world. materialistic rich and poor as today, but rich or poor in knowledge. Today's information is reflected concentratedly on the "information superhighway." The construction of the "information superhighway" makes it possible for people to make maximum use of information, knowledge, and science and technology. become the first productive force In the information superhighway there are many contents, but the important content is financial information, History of TTTD

The development of the world economy over the past three centuries shows that banking activities have always played an important role in the economic development of each country and of the entire world economy. Besides the bank's activities, there is always the active support of the credit center. Indeed, the history of credit operations proves that, in the early decades of American history, when most businessmen were in the same locality, they understood each other quite well, so the Banks also understand their customers quite well, so

have a need for TTD. But when the level and scale of business activities expands in a larger economy, many people do business, in different locations, entrepreneurs cannot fully understand each other and are forced to have information about the different businesses. partners, banks are required to have verifiable information about their customers. First, are letters of recommendation from former business people, suppliers and friends, or attorneys to identify a particular client. But by the 1830s, due to the strong development of the railway industry in the US, a series of economic groups were formed in the fields of transportation, mechanics, mining, construction, insurance... The level and scope of business increased dramatically, leading to the appearance of the "credit reporting" organization. The history of one of the first credit institutions dates back to 1841, when Lewis Tappan founded the Mercantile Agency, which collected information through a network of agents and sold that information to subscribers. Content information about the business position and creditworthiness of customers across the United States. The Mercantile Agency became RGDun & Company (Dun) in 1859. Subscribers to Dun's information included salespeople, importers, banks and insurance companies. Archives increased from 7,000 in 1870 to Content information about the business position and creditworthiness of customers across the United States. The Mercantile Agency became RGDun & Company (Dun) in 1859. Subscribers to Dun's information included salespeople, importers, banks and insurance companies. Archives increased from 7,000 in 1870 to Content information about the business position and creditworthiness of customers across the United States. The Mercantile Agency became RGDun & Company (Dun) in 1859. Subscribers to Dun's information included salespeople, importers, banks and insurance companies. Archives increased from 7,000 in 1870 to

40,000 in 1880 and by 1900 there were more than a million customer records.

also, in 1849, John Bradstreet of Cincinnati founded the Bradstreet Information Company. In 1857, the Bradstreet Company published the first commercial grade book in the world. In 1933 the Dun Company and Bradstreet Company merged to form Dun & Bradstreet (D&B). D&B is currently the fourth largest credit information company in the world. In 1962 Dun & Bradstreet acquired Moody's, a bond rating company established in 1906. Thus, the close relationship between corporate rating and credit report was consolidated into a credit center. The concept of the Bank's credit center

Credit information activities have a history of hundreds of years, parallel with the credit activities of commercial banks. It usually gets more attention when the economy is volatile. Therefore, after the economic crisis of 1929-1933, the oil crisis of 1970, the Asian economic crisis of 1997, the credit market became a pressing issue. According to the World Bank, there are currently more than 140 countries and economies with credit information activities. In the world, credit information operations have many different names such as credit information, credit register, credit report, and hedging information. Although there are many different ways of calling it, the nature of this business globally is relatively similar, which is the cooperation in sharing information between commercial banks to limit credit risks. To be consistent with the WB's calling, we will use the term Credit Center for this service.

So what is TTTD? One difficulty in the research process is that so far in the world there is no official document giving a complete definition of credit information. According to the State Bank of Vietnam (Decision No. 1117) [09] has introduced the concept that “Credit information is information about legal records, financial information, outstanding loans, loan security and operation status of related customers. Credit; economic information, domestic and foreign markets related to banking activities”.

This concept has brought out the true content conveyed by credit media, but has not yet stated the nature of the problem of information sharing. Therefore, as far as I can understand, credit information is information about borrowers and economic information, domestic and foreign markets related to credit activities of commercial banks, collected and processed by credit information agencies. , shared among lenders in order to limit risks in credit activities of commercial banks, contributing to ensuring the safety of the banking system. Bank credit information is a type of banking information with its own function, mainly serving the credit business of commercial banks.

1.2. Bank credit information system

1.2.1. Bank credit information system concept Overview of information systems

A system is a collection of interrelated elements. A purpose system is one that seeks to achieve a set of interrelated goals. In general, the systems are open systems, interrelated with the surrounding environment. An information system is an open, purposeful and operating system that follows the information collection - processing - provisioning cycle.

Information cannot be understood in isolation, but information must belong to a system, must come from a system. Nowadays, the concept of information system is closely linked between information and computer technology. An information system can be understood as a collection of people, hardware devices, data, computer software... that collect, store, process and distribute information within constraints. called the environment.

Information system inputs are taken from sources and processed by the system, along with pre-stored data. After processing, the information is stored, updated in the data warehouse (Storage) and transferred to (Outputs) to the user [24].

Information system has 4 main parts: input data collection; handling parts; data warehouse and information supply department. The input source of the system can be data from other sources or information output of other systems, conversely, the output information of one system can be used immediately or as input to the information system. other. Bank credit information system concept

Banking credit information system is an information system including a collection of people, hardware devices, databases and computer software, performing the collection, storage, processing and provision of credit information. serving banking activities to limit credit risks, contributing to ensuring the safety of the banking system

banking system. The banking credit information system is an open system, in addition to 4 parts as of a common information system, it also links with many other departments, units or information systems in collecting input information as well as information. information processing and distribution.

especially in the trend of economic globalization and information integration, it is not possible to have a separate independent economic information system but must have a connection with domestic and international information systems to exploit information resources, distribute information quickly and effectively.

Thus, in terms of logic, to say "system" is to talk about a basic system of an organization that performs credit information operations. Meanwhile, each country may have many organizations performing credit information such as: public credit institutions, private credit institutions, credit rating agencies (businesses) ... to meet the requirements. information of different subjects in the market, such as serving banking activities, securities investment, insurance, enterprises and the public. In most countries, organizations implementing credit information often link to form credit information systems such as: credit information system serving the banking industry, also known as banking credit information system, credit information system serving the stock market. …

However, the boundary banking system is not only in the banking industry because there are also non-banking financial institutions such as insurance companies, pension funds, pension funds, investment funds, development assistance funds, etc. development, import-export support fund, etc. can all participate in information sharing. In order for the banking credit information system to work effectively, it is required that it be linked with all organizations performing banking credit information to collect information centrally to form a common bank credit information warehouse, for centralized processing, create diverse products ready to serve the information requirements of users. This is one of the most important features of the banking system. The binding linkage on reporting and exploitation of credit information between credit institutions in the system

Bank credit centers shall comply with the laws of each country. However, each organization in that system still has its own independence, owns and is entitled to provide credit information services within specified limits.

The banking system of each country can be called the main system of sharing and providing credit information between banks in that country. From there, it is possible to introduce the concept that the Vietnamese banking credit information system is a system of organizations participating in credit information activities, sharing and providing credit information mainly between banks operating in the territory of Vietnam.

In fact, in Vietnam today, the banking credit information system is operated by the Credit Center as the focal point to link information with credit institutions at commercial banks and branches of the State Bank to share and provide information with the main objective of Limiting risks in credit activities, contributing to ensuring the safety of the Vietnamese banking system.

1.2.2. Structure, operation and relationships in the system of small credit centers Structure of the banking system

a) Structure according to the cycle of collecting, processing and providing information

Like the information system, the structure of the banking credit information system according to the cycle of information collection, processing and provision includes 4 main parts: information collection department, information processing department, and information processing department. storage and output department. These parts will be mentioned in detail in the operating cycle of the banking credit information system.

b) Structure in terms of ownership, including public and private ownership

• Public credit institutions

Regarding the name , the public credit information agency is often called the Credit Information Center or the Public Credit Register. Often used abbreviated as PCR, state-owned, established by the central bank or banking inspection committee.

Regarding operational objectives : PCR works first of all for the sake of safety and stability of the financial system of each country, PCR is not for business, not for profit. Nature: the law requires credit institutions to report information on loans for PCR periodically, if any credit institution does not report or does not report seriously, it will be fined and not be able to exploit the information. . Participating in reporting and information extraction with PCR is both mandatory, an obligation and a right of credit institutions, first of all for their own interests and for the sake of stability and development of the banking system. In terms of scale: PCR is medium-sized, only works within each country, not valid to operate outside the country. User information:The central bank uses information for inspection and supervision tasks and credit institutions use information to prevent risks. Information fees are often symbolic in nature, with very low prices.

Up to now, according to the World Bank's statistics, PCR has been established in 57 countries, usually only one PCR per country. especially in Europe, seven of the top 15 EU countries, Austria, Belgium, France, Germany, Italy, Spain and Turkey, already have public credit registries. In Asia, there are also many countries with public credit institutions such as China, Malaysia, Bangladesh, and Vietnam.

• Privately owned credit card companies

Regarding the name , the private credit institution has a long history of establishment, and due to the customs and traditions of each country, there are many different ways of naming it. The most popular is the private credit bureau (Private Credit Bureau); credit agency. About ownership: private ownership, joint venture, or stock.

In terms of operational objectives: a private credit institution is formed on the basis of market supply and demand, from the actual requirements of credit activities, with the goal of trading information for its own profit and for the benefit of others. participants share and use information. Nature: organizations participating in information sharing with private credit institutions are first and foremost completely voluntary for the mutual benefit of both.

side, but the private credit institutions themselves must be recognized by law and given the right to collect, process and provide information to system participants. Due to this nature, private credit institutions usually only develop and operate well in countries with relatively complete laws and high credit culture. Information users are member organizations participating in information sharing and organizations and individuals that have a need to use information. The provision, use and settlement of disputes in accordance with the law. Information fees are completely market-based, determined by market supply and demand. In terms of scale,Private credit institutions are very diverse in scale, most of which are small companies operating within a locality or a country. But there are also many multinational companies, very large scale, that are very important to the world economy such as Moody's, Standard&poor, D&B...

Some comparisons of public and private credit institutions are provided in Appendix 12.13.

c) Structure by type of service

If we arrange customers of commercial banks by size and by quantity, we can divide them into 4 groups of customers as shown in diagram 1.02.

Enterprise Credit Management Company Enterprise Credit Information Company

Consumer credit information company



Average enterprise

Small and medium enterprises Individual customers

Diagram 1.02. Limited service TTTD

In which, each type of credit information company mainly provides services to certain groups of customers, but this division is only relative. Thus, in terms of types of services, they are divided into the following categories:

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