III. MACRO BUSINESS ENVIRONMENT: THE KEY FACTORS FROM WIDER CONTEXT

Vietnam economic status in the first half year of 2021

According to Asia Development Bank 2021, Vietnam's GDP growth is forecast to reach 6.7% in 2021 and 7% in 2022. GDP growth per capita is expected to reach 5.4% in 2021 and 5.6% in 2022. Vietnam is predicted to have the highest GDP growth rate in 2021 among countries in Southeast Asia. In general, Vietnam's economy has recovered quickly under COVID-19, compared to other countries in the region in 2021.

However, investment loads of the government and other public sectors in cybersecurity may slow down because of prioritizing funding sources for COVID-19 relief and economic.

Vietnam's political and social situation as of the first half of 2021

In the first six months of 2021, there was a major political event - The 15th National Assembly Election for the term of 2021-2026. As of May 23, 2021, the whole country has 99.57% of voters turn out to vote. Based on the record summarizing the national election, the National Election Council would announce the election results and the list of elected National Assembly deputies no later than June 12, 2021 (or June 12, 2021), Twenty days after election day). The National Assembly election is a momentous event that affects the situation of investment plans and resource allocation of provinces in the first half of 2021 without many projects open for bids.

At the Resolution of the Government's regular meeting in May 2021, the Government agreed with the proposal of the Ministry of Finance in Document No. 103/TTR-BTC dated June 2, 2021, on Cutting at least 50% of funding conferences, domestic and foreign affairs of the ministries, central agencies and localities (except for essential and urgent activities and serving the epidemic prevention and control work of the ministries: The Ministry of National Defense, the Ministry of Industry and Trade. Security, Ministry of Health, funding for other national diplomatic activities of the Ministry of Foreign Affairs) and save another 10% of recurrent expenditure in 2021 to supplement the source of COVID-19 prevention and control, increase investment in development and necessary security and defense tasks.

Report to the National Assembly to allow the recovery of regular funds that have been assigned to ministries, central agencies, and localities but have not been allocated by June 30, 2021, or have been allocated but not yet implemented (the approval of estimates and bidding had not yet been through) and regular fees are not necessary to supplement the reserve sources of the central budget and local budgets for COVID-19 epidemic prevention, control, recovery, and vaccine campaign.

The COVID-19 situation until mid-2021 remains highly complicated, affecting spending and investment plans of ministries, departments, sectors, and localities.

Vietnam legal situation as of the first half of 2021

Updates on Laws related to Information Security in Vietnam (2015 – 2021)

The crucial legal news before 2020 affecting information security in Vietnam such as:

In 2020 and 2021, the legal situation has some highlights, such as Official Letter No. 1552/BTTTT-CATTT V/v Urging the organization to implement information security for the information system according to the "4-layer" model.

In particular, it is recommended that ministries, ministerial-level agencies, government agencies, and People's Committees of provinces and cities under the Central Government complete the implementation of ensuring information security for the information system according to the "4-layer" model before September 30, 2020.

On June 15, 2021, the Ministry of Information and Communications issued Official Letter No. 2085/BTTTT-CATTT to encourage Make in Vietnam cybersecurity products and solutions. Accordingly, the Ministry of Information and Communications has selected typical network safety and security products manufactured by Vietnamese enterprises to recommend organizations and businesses to use. The list includes:

1.     End-point protection:

-         Viettel Endpoint Detection & Response

-         Viettel Anomaly and Kill-chain Detection (VCS – KIAN)

-         CMC Malware Detection and Defence

-         Antivirus Bkav Endpoint AI

-         Cyradar – EDR

-         FPT.EagleEye MDR

2.     Network security monitoring

-        RealTech UTM Firewall

-        Viettel Network Access Control

-        Viettel Anti-DDoS

-        Viettel Security Information & Event Management

-        Viettel Network Security Monitoring

-        FPT.EagleEye malBOT

-        Bkav – IPS Firewall

-        Bkav Total NAC

-        CyRadar – SIEM

-        FPT.EagleEye mGuard

3.     Application protection

-        Viettel Web Application Firewall/ Viettel Smart Web Protection

-        Viettel Email Security Gateway

-        Advanced Threads Detection System

-        RealTech WAF

-        RealTech Antispam mail

4.     Others

-        Viettel Threat Intelligence

-        Viettel Security Orchestration Automation & Response

-        VNPT MSS

-        VNCS CyberScan

Circular 09/2020/TT-NHNN

Some of the latest updates on legislation related to cybersecurity in 2021 highlight the following information: The State Bank of Vietnam issued Circular No. 09/2020/TT-NHNN effective from January 1, 2021.

The banking sector is considered to have a relatively high maturity in     information security in Vietnam. Regarding growth in 2020, the industry is still growing by 3% under COVID-19, forecast to increase by 15% in 2021 (SSI Banking Market Report, 2020). Credit growth slowed in 2020, expected to recover in 2021 (11-12%).

The dynamic banking brands (ACB, MBB, TCB, VPB, VIB, TPB) have a higher credit growth rate, recorded positive growth, and less pressure on output interest rates.

Large banks (AGR, VCB, BIDV, Viettin) are under pressure to reduce output     interest rates but have not fully recovered in 2021 (Vietcombank Security     Report, 2020).

The banking sector's information security budget is about 10-15% of its total IT budget. Cybersecurity attacks accompanied the tense COVID-19 situation in the first six months of 2021 on the Vietnamese banking system. It created the momentum for accelerating digital transformation and cybersecurity in the information system.

Information technology development strategy of the banking industry to 2025,     orientation to 2030 with the goal of successfully implementing digital     transformation. Accordingly, it emphasizes the importance of information     security in the sustainable development of the banking information system.

Banking and Fintech: The leading clients of Cybersecurity solutions

Specific targets such as At least 50% of operations will be performed in the digital environment by 2025 and 70% by 2030. The target number of customer transactions on digital channels will reach at least 70% by 2025 and 80% by 2030. Spending on the ratio of disbursement and lending decisions of commercial banks and financial companies for small loans, consumer loans of individual customers will be digitalized: by 2025, at least 50% and at least 70% by 2030.

The State Bank of Vietnam promulgates Circular No. 09/2020/TT-NHNN stipulating information system safety in banking operations. The Circular stipulates  the minimum requirements for ensuring information system security, in which the classification of information confidentiality is classified.

The activities of banks and financial institutions  are increasingly strictly regulated in terms of information security. Especially requires the use of third-party products and services that meet international standards. This leads to fiercer competition between domestic and foreign firms in this industry.


Stock and Insurrance – Growing industry for Cybersecurity demands

Although the COVID-19 situation has caused significant economic damage to some industries, especially tourism and aviation, however, 2020 and the first half of 2021 recorded strong securities, credit, and insurance growth.

The growth of the insurance industry far exceeds the forecasts of previous experts. VN-Index closed the last session of 2020 at 1,103.87 points, at the beginning of 2021 recorded a new peak of 1,308.58 points within 20 years despite little pressure from the "Sell in May" effect.

Assessing the trend at the end of 2021, experts predict that the market will still increase, but not as strong as the previous phase, indicating that it can reach 1,400 points in 2021.

The number of new accounts opened increased rapidly due to low bank interest rates. January 2021 recorded 113,191 newly opened accounts, April 2021 recorded 109,998 freshly opened accounts.

The large trading volume of over 23,000 billion VND caused the HOSE to fall into a congested situation constantly.

This leads to a very high risk of cybersecurity attacks for securities companies.

According to a report of the Ministry of Finance, by the end of April 2021, the total assets of insurance enterprises reached VND 608,324 billion, an increase of 22.72% over the same period in 2020. Insurance premium revenue reached VND 61,208 billion, an increase of 19,12 % over the same period in 2020.

Vietnam's insurance market has 72 enterprises, of which 31 non-life insurers, 18 life insurers, two reinsurance companies, 20 insurance brokers, and one foreign non-life insurance. In which 50-60% market share of the insurance market belongs to the top 5 insurance companies: Bao Viet is the only one Vietnamese company, the rest are mainly foreign companies such as Prudential, Manulife, Dai-Ichi, etc. In addition, there are also insurance companies of the bank such as Vietin Metlife, MB Ageas Life, etc.

Cybersecurity risks, loss of customer information, and a labor shortage are the most serious difficulties in the InsurTech process of insurance companies.

Large enterprises – Security investment prospects in 2021

The VNR500 ranking in 2020 continues to record the growth of service and industrial enterprises, accounting for more than 97.3% of revenue. The agricultural sector accounted for only 2.7%.

The industries that outperformed the average of the entire business sector, including mechanical engineering, construction - materials, real estate, finance, transportation - logistics, telecommunications, and information technology.

Top enterprises still maintain their positions, such as Samsung Electronics Thai Nguyen Co., Ltd., Vietnam Electricity, Vietnam Oil and Gas Group, Vietnam Industry and Telecommunications Group, and Vietnam National Petroleum Group. , Vingroup – Joint Stock Company, Vietnam Coal & Minerals Group, Mobile World Investment Joint Stock Company.

Thanks to the favorable business situation and growth rate in 2021, large enterprises are assessed the potential and prospects for investment in information security in the following years. Potential industry groups such as: Real Estate, Electricity, Telecommunications, Information Technology, Oil, Retail, Coal & Minerals.

Vietnam continues to be affected by the COVID-19 epidemic; the economy and activities are impossible to return to normal at this time. The forecasted security trends in 2021 include:

Trend #1:

Internet of Things (IoT) trends is predicted to have a substantial impact on security. It is predicted that by 2025, there will be about 30 billion IoT connections, about 4 IoT devices per person. IoT trends have a significant influence on information security globally and regionally.

Trend #2:

According to Flexera's report on using cloud computing, investment costs in 2021 will increase by 47% and deploy in all areas. Large enterprises in Vietnam, such as One Mount, VP Bank began to move to Cloud infrastructure, potentially posing high cybersecurity attacks and data breaches risks. Cloud-based security continues to be a concern for businesses to prevent and ensure safety in the cloud.

Trend #3:

The increased demand for remote work during COVID-19 entails many cybersecurity risks. New trends such as Zero Trust instead of media VPN solutions are interested in many companies and businesses. Zero Trust was first introduced in 2010 by John Kinderrvag, Forrester Research analyst, with the principle of “Never trust, always verify.” COVID-19 in 2020 - 2021 has accelerated the application of Zero Trust in ATTT security. Zero Trust Network Access, Secure Access Service Edge (SASE) solutions are attracting global interest.

Trend #4:

According to Webroot's "Do AI and Machine Learning make a difference in cybersecurity" report 2020, 96% of participants are currently using Cybersecurity products with AI Cybersecurity and Machine Learning.

AI & Machine Learning applications help in earlier detecting abnormal behaviors and APT are being applied by cybersecurity companies to enhance security solutions such as UEBA, SIEM.

Trend #5:

In 2020, according to Gartner's CISO Effectiveness survey, 78% of CISOs had 16 or more cybersecurity tools. The use of multiple security firms leads to complex operations and high labor costs. Hence, consolidation and integration of security products seem of great interest to many firms. This comes from the need to optimize time & cost efficiency while minimizing risks.

List of references

Asian Development Bank, 2021, Asian Developmet Outlook Report – Vietnam,  https://www.adb.org/vi/countries/viet-nam/economy

Flexera, 2021, State of Cloud Report, https://info.flexera.com/CM-REPORT-State-of-the-Cloud

Forrester, 2021, New Tech: Zero Trust Network Access, https://stgsvcs.forrester.com/report/New+Tech+Zero+Trust+Network+Access+Q2+2021/-/E-RES161768

Gartner, 2020, CISO Effectiveness: A Report on the Behaviors and Mindsets That Impact CISO Effectiveness, https://www.gartner.com/en/newsroom/press-releases/2020-09-17-gartner-survey-reveals-only-12-percent-of-cisos-are-considered-highly-effective

Gartner, 2021, Top security and risk trends, https://www.gartner.com/smarterwithgartner/gartner-top-security-and-risk-trends-for-2021/

Gartner, 2021, Forecast Worldwide security and risk management,  https://www.gartner.com/en/newsroom/press-releases/2021-05-17-gartner-forecasts-worldwide-security-and-risk-managem

Ken Research, 2020, Vietnam Cybersecurity Outlook to 2020 – Gauging the opportunies for forgein investment in the Cybersecurity industry

Mordor Intelligence, 2021, Asia Pacific Cyber Security market, https://www.mordorintelligence.com/industry-reports/asia-pacific-cyber-security-market

Sản phẩm dịch vụ tiêu biểu SOC kèm giá sơ bộ do Cục Tin học hoá – Bộ TT&TT niêm yết:

https://cps.mic.gov.vn/#/web/mic/san_pham?_page=1&NhomSanPham._source.PhanLoaiSanPham._source.MaMuc=dichvutieubieu&NhomSanPham._source.MaMuc=trungtamdieuhanhantoananninhmangsoc&_id=5f7ad49b21bc2b000808688f

Statista, 2020, Global IoT Market Size 2017 – 2025,  https://www.statista.com/statistics/976313/global-iot-market-size/

SSI, 2020, Báo cáo ngành ngân hàng, tài chính và bảo hiểm, http://www.ssi.com.vn/khach-hang-ca-nhan/bao-cao-nganh

VNR500, 2020, Bảng xếp hạng top 500 Doanh nghiệp lớn nhất Việt Nam, https://www.vnr500.com.vn/