"Leverage" for financial enterprise integration

Free trade agreements (FTAs) are proving to be a crucial leverage point for financial businesses to expand, develop their operations, and integrate internationally.

Free trade agreements (FTAs) are considered a "lever" for financial businesses to integrate into the global market; however, the business community in this sector is also facing numerous challenges in taking advantage of the opportunities offered by FTAs. Therefore, improving capacity and training a high-quality workforce to enhance competitiveness with international financial institutions is crucial for businesses, especially small and medium-sized enterprises (SMEs), in the financial sector.

Mr. Le Anh Van, Director of the Center for Legal Support and Human Resource Development, Vietnam Association of Small and Medium Enterprises, shared his views on this issue with the Industry and Trade Newspaper.

Free trade agreements (FTAs) present many opportunities but also pose significant challenges for businesses in the financial sector. (Illustrative image)

What is your assessment of the impact of FTAs ​​on the business operations of small and medium-sized enterprises in the financial sector over the past period?

Currently, most small and medium-sized enterprises (SMEs) operating in the financial sector primarily play a consulting, support, and intermediary role, encompassing areas such as: tax consulting, financial advisory services, accounting and auditing services, credit support, insurance consulting, and human resource training and development.

According to our observations, businesses in this sector have developed relatively rapidly in recent times. This indicates that the market for financial advisory services is growing, especially in the context of Vietnam's participation in and signing of numerous Free Trade Agreements (FTAs).

Free Trade Agreements (FTAs) play an increasingly important role in promoting trade and investment liberalization; in particular, FTAs ​​are a crucial leverage point for small and medium-sized enterprises in the tax consulting, finance, and banking sectors to expand their businesses, enhance their competitiveness, and build international relationships.

However, alongside opportunities, challenges always come. First and foremost, it must be acknowledged that financial businesses are facing numerous difficulties in leveraging FTAs. This reality stems from both the internal workings of the businesses themselves and the stringent requirements of the commitments outlined in the FTAs.

Notably, this includes limitations in knowledge, internationalization capabilities, financial resources, and technology within businesses. Furthermore, the competitive pressure from larger companies is fierce. For example, businesses lack the capacity to analyze exchange rate or interest rate fluctuations in the region to advise clients on optimizing profits. Another challenge stems from complex legal barriers and international standards, as international businesses consistently require financial audits according to IFRS (International Financial Reporting Standards).

Mr. Le Anh Van – Director of the Center for Legal Support and Human Resource Development, Vietnam Association of Small and Medium Enterprises. Photo: Quoc Chuyen

In your opinion, are limitations in financial capacity, labor resources, and personnel the bottlenecks preventing businesses in the financial sector from effectively utilizing FTA commitments?

As the challenges outlined above, the biggest obstacle for small and medium-sized enterprises (SMEs) operating in the financial sector in implementing FTAs ​​so far is the lack of internal capacity to meet international requirements for competing with large enterprises.

In particular, businesses, especially small and medium-sized enterprises (SMEs) in the financial sector, lack personnel with in-depth knowledge of FTAs, as well as a thorough understanding of international standards and experience working with international markets. This makes it difficult for SMEs to compete and take advantage of opportunities from FTAs. This reality has led to problems such as: failure to meet international standards, loss of customers to larger businesses, inability to take advantage of preferential tariffs and market opportunities...

In the context of today's strong integration, could you outline some key solutions to remove bottlenecks and help businesses in the financial sector effectively utilize FTAs?

To help small and medium-sized enterprises (SMEs) in financial services such as tax consulting, credit support, and auditing services enhance their capabilities, specific solutions are needed from both the business and government perspectives.

Accordingly, from a business perspective, it is necessary to invest in improving internal capabilities, focusing on training personnel to meet international standards, especially in standards such as IFRS (accounting and auditing), ESG (sustainable finance), and international legal regulations. Support employees in participating in professional certification programs such as ACCA, CFA, or short courses on international tax and financial consulting.

Furthermore, businesses need to improve internal governance. Specifically, they need to standardize work processes and reporting according to international standards to meet the requirements of large or cross-border clients; apply modern technology through investment in digitalization and digital transformation in management, such as using financial management software, tax analysis, and automated auditing to increase efficiency and accuracy. They should also leverage big data and artificial intelligence (AI) tools to predict risks, analyze markets, and optimize services.

Simultaneously, businesses need to strengthen their efforts to seek cooperation opportunities with large companies or international organizations to learn and enhance their reputation. They should build relationships with international partners through economic forums, seminars, or exchange programs. They should also collaborate with other businesses in the industry to share experiences, technology, and customers. In particular, they should focus on niche markets, developing specialized consulting and support services such as tax consulting under FTAs, ESG auditing, or credit support in specific sectors like agriculture or technology.

From the association's perspective, it is necessary to strengthen support for enhancing professional capacity through in-depth training courses on international standards such as IFRS (accounting and auditing), ESG (sustainable finance), and AML (anti-money laundering) for businesses. International experts or major organizations should be invited to share their experiences and update knowledge on the requirements of FTAs. Documents, research reports, and guidance on legal regulations and technical standards related to FTAs ​​should also be provided.

At the same time, strengthen the role of a bridge between small and medium enterprises and the market to help enterprises access preferential capital sources, new technology, or foreign partners; organize or sponsor enterprises to participate in international fairs, economic forums, and business exchange events; provide information on international markets and support enterprises to approach potential customers.

In addition, the Association can seek funding from international organizations or establish a support fund for small and medium-sized enterprises in the industry. It can provide financial support programs or preferential loans to help businesses invest in technology, personnel training, and improve internal capabilities.

Thank you, sir!

Source: https://congthuong.vn/hiep-dinh-thuong-mai-tu-do-fta-don-bay-cho-doanh-nghiep-tai-chinh-hoi-nhap-362108.html