VIETNAM INDUSTRY 4.

0 SUMMIT 2023

Cloud as the Key Enabler of

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 • Mr. Nguyễn Duy Hưng, Vice Chairman of the Party’s Central
Economic Commission,
• Representatives from Ministry of Information and
Communications, Ministry of Finance, the State Bank of Vietnam
• Distinguished guests, ladies and gentlemen:

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 Good morning and warm greetings. My special thank you to the Party’s Central
Economic Commission for this opportunity to share this important topic of
“Cloud as the Key Enabler of Green Digital Transformation in the Financial
Services”.

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 Vietnam continues to emerge as one of the fastest growing economies in
Asia (8.02% Y/Y in 2022), and the fastest digital economy in Southeast Asia at
28% Y/Y. Vietnam’s Digital Transformation Plan Through 2025 with a vision
towards 2030 will accelerate digital transformation and benefit Vietnam, in
which finance-banking services is called out as one of the top eight priorities.
I am encouraged to see policies that the Vietnamese Finance and Banking
regulators have adopted to bring the National Strategy to life. For example,
setting the target for 60% of Vietnamese banks to use cloud services by 2025,
and 100% by 2030. And coupled with cloud-friendly regulations such as
Circular 09 of 2020 and Decision 810 of 2021 by the State Bank of Vietnam.

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 Beyond Vietnam, financial services are adopting cloud computing at
pace adopting to innovate and grow. IDC’s Worldwide Public Cloud
Services Spending Guide estimates that public cloud spent of financial
institutions in APAC (exclude Japan) will grow to $18.1B in 2024. Also,
Financial Institutions no longer look at cloud computing just to solve
their infrastructure needs, but to innovate, improve their time-to-
market and expand globally in a reliable and secure manner to better
acquire and serve their existing customers.

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 Many of you will remember how norms can be easily disrupted, such as the
recent pandemic. I recalled how many firms had to shut-down, and IT teams
could not return to their DC. Also, consumer’s expectations & perceptions has
changed since. Innovation has become inevitable, cloud computing has
played a critical role in driving this digital transition. Innovation is not only
helping financial services, but has positively impacted socio-economic
development goals. Service Providers is able to focus on building products
and services that matters for their customers, and move away from non-core
tasks such as managing their data centers. Importantly, cloud has allowed
financial institutions to rapidly test and experiment their new ideas.

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 In Vietnam, we worked with customers of all sizes and industries. For
example, in financial services with banks such as Techcombank, VP Bank,
HDBank, VIB, MBBank, and Fintechs such as TNEX, Timo, SmartPay, and
consumer financing companies such as MCredit, FECredit, and startups
such as Infina. We see many innovations using solutions born in the cloud
— ranging from biometric authentication, virtual assistants, predictive
loan offers, virtual reality trading, AI-enabled claims processing, ML-
enabled fraud detection. The possibilities for innovation are endless on
the cloud.

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 We have seen regulators acting swiftly and adapting to embrace digital
transformation. It’s no surprise that regulated industries – like Financial
Services – has traditionally had a more drawn-out path for adopting new
technologies. We are also seeing new reporting and security requirements
for financial institutions to keep pace with new developments. Cloud
Providers like AWS will play a crucial role in helping financial institutions
meet these requirements. As I observed in other countries, it is important as
regulators consider how to enable financial institutions to innovate securely,
they should consider empowering financial institutions to manage their risk,
no matter what technology they use. It is a fundamental mindset shift - to
"move fast AND stay secure" has become the new normal. Cloud fluency
across financial services companies is critical that will break down internal
silos, and allow companies to embrace new way of doing things.

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 Countries like Thailand have invested in reforming their policies to
catalyze cloud adoption in financial services are now starting to reap the
benefits. These policy reforms have been most effective when regulators
themselves become champions of the cloud, collaborating with financial
institutions and cloud services providers to create an environment that is
conducive and clear any misconceptions. This partnership and
endorsement of financial services will ultimately increased industry’s
comfort and accelerate digitalization.

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 Relating to today’s topic “Cloud as the key Enabler of Green Digital
Transformation in the Financial Services”, Amazon is committed to
investing and innovating in sustainability across our businesses to create a
more sustainable future. It is a growing concern for business leaders – and
for government regulators, investors, and standard bodies. The critical
thing to understand about ESG (environmental and social governance) is
that it is a strategic concern of businesses, not just a nice-to-have activity.
According to a Fortune 500 company board member, “companies are
recognizing that taking care of broader stakeholders in the business over
the mid-to-long-term is a good thing for the long-term sustainability of the
business.

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 Many of you will know that Amazon is committed to reaching
net-zero carbon emissions by 2040 as part of The Climate
Pledge – 10 years ahead of the Paris Agreement. We are also
on a path to power our operations with 100% renewable
energy by 2025, five years ahead of the initial 2030 target. And
is making progress to meeting our commitment to be water
positive by 2030, focusing on efficiency across all aspects of
our infrastructure, and reducing waste.

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 ESG and Sustainability can be broad with overlapping topics and many
use cases. We developed a mental model by thinking this through two
domains. One, Business needs of ESG and Sustainability (referred to
as Sustainability through the Cloud), and two, IT needs of ESG and
sustainability (also referred to as Sustainability of the Cloud).

Let’s talk a bit about Sustainability of the Cloud - the role that AWS
plays in reducing customers’ energy usage and carbon footprint,
particularly in comparison to on-premises data centers.

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 We’re working to make cloud the cleanest and most energy-efficient way
across all aspects of our infrastructure. This involves from the design of
our data centers and hardware to modeling the performance of our
operations for continually enhanced efficiency. For example, with the
increasing need for compute power, and as Machine Learning becomes
mainstream, innovation at the chip level will be crucial to sustainability.
One of the most visible ways AWS is using innovation to improve power
efficiency is our investment in AWS processors and chips. Our third-
generation processor (AWS Graviton3) is more energy efficient than x86
processors, and Graviton3-based EC2 instances use up to 60% less energy
for the same performance than comparable Amazon EC2 instances.

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 As AWS continues to invest in sustainability across our infrastructure,
many of our customers have asked us to help measure the carbon
footprint of their AWS workloads – both to understand how moving to
AWS reduces their carbon footprint and also to report their overall
carbon footprint. Our new customer carbon footprint tool uses simple
visualization to show customers their historical carbon emissions,
estimate emissions based on their current use. The forecast shows how
customers’ footprints will change as Amazon stays on path to powering
our operations with 100% renewable energy by 2025, five years earlier
than the original target of 2030, and drives toward net-zero by 2040.

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 Another example is the Sustainability Pillar of the AWS Well-Architected
Framework, which is designed to help organizations develop a better
understanding of the impact of their workloads, measure progress toward their
IT sustainability targets, and model where they cannot directly measure. In fact,
studies by 451 Research (a division of S&P Global Market Intelligence) covering
over 500 enterprises and public sector companies across APAC, titled “The
Carbon Reduction Opportunity of Moving to the Cloud for Asia Pacific” found
that cloud data centers perform at nearly five times the energy efficiency of the
average surveyed APAC enterprises and public sector organization. This means
that AWS can lower customers’ workload carbon footprints by 80% compared
to surveyed enterprise data centers, and up to 96% once AWS is powered 100%
renewable energy -- a target we’re on path to meet by 2025.

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 Let’s now move to Sustainability through the Cloud – the role cloud plays
in transforming using ESG data. Banks, like many other companies, are
under pressure (typically by investors, customers, employees and other
stakeholders) to achieve net zero greenhouse gas emissions (GHG)
targets. Many banks such as Barclays, HSBC have announced net zero
targets over the last year or so. Aside from striving to achieve net zero
operational carbon emissions (for example, from a bank’s office buildings
or IT infrastructure), banks are striving to achieve net zero financed
emissions (which make up a Bank’s Scope 3 emissions).

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 Put simply, for banks this means that they have to link emissions data with
financial data (e.g. loan value) and quantify the impact their customers have
on climate change. However, gathering, manipulating, and actually using ESG
data requires significant manual effort due to a lack of standards in ESG
scoring data, as well as the lack of transparency into the algorithms used to
develop risk models. At the same time, both the quantity of data and the
dimensions to risk models have increased exponentially. Leaders in public and
private sectors are working hard to increase their access to granular ESG data,
filter these data in more effective ways, and build solutions that can scale to
meet the complexity of climate modeling.

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 Cloud will enable organizations to address the challenges of ESG
reporting and climate risk-modeling, and in turn increase financial
resiliency and stability. To quantify climate related physical and
transition risks, both businesses and governments now have to contrast
a large number of scenarios and build highly complex climate risk-
models. With the cloud, organizations can achieve the scalability and
agility needed to power through climate risk management and
innovation journey.

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 Today, we have helped many financial institutions to:

One, access and share analysis-ready data. Through our AWS Data
Exchange and ASDI public datasets, we provide ready-to-analyze
datasets that help businesses identify climate finance risks and
investments. Companies can access high quality datasets such as the
Legal Entity Identifier (LEI), available at no cost for anyone to access in
the cloud. We also deliver these datasets through partnerships with
organizations such as Global Legal Entity Identifier Foundation (GLEIF)
and OS-Climate (an initiative led by technology and financial services
companies).

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 Two, build custom ESG scoring models and datasets. S&P worked
with AWS and our partner Databricks to create innovative ESG
datasets that help companies achieve sustainability goals. For
example, with Databricks platform on AWS, S&P uses AI to parse
unstructured ESG data, evaluate numerous factors, and compare
how companies are operating against them.

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 Lastly, get a single view of financial risks associated with climate
change. For example, Four Twenty Seven, Inc. (a California-based data
research, analysis and advisory firm) was able to democratizes
international climate data and help communities understand their
exposure to climate hazards and risk by using AWS Open Data Program.
This approach enables Four Twenty Seven to continuously integrate the
latest datasets and develop new climate risk metrics as climate science
advances.

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 Distinguished guests, indeed making sustainability a strategic
priority goes beyond adopting greener technologies. Embracing ESG
challenges and opportunities is about leveraging the most
innovative technologies to develop solutions that will
accelerate audacious ESG roadmaps. It is about anchoring a data-
centric game plan with digital transformation, and prepare your
organization for the growing demand for new types of increasingly
granular data and insights—starting with data capture and analytics.

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 It is also about leveraging the cloud computing benefits such as “pay-
as-you-go” approach to experiment fast and cost-effectively to meet
the rapidly evolving needs of the business.

ESG goes beyond a policy challenge. It is an Innovation Challenge. The

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 I am excited to see how cloud has enabled digital transformation in
Vietnam and globally, but we are just starting. It is crucial we continue to
have such close dialogs between the regulators, the services sector, and
cloud providers to build a conducive environment for cloud to be the real-
enabler of Green Digital Transformation in the financial services of
Vietnam.

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 As always, AWS stands ready to work with all of you -- the
government of Vietnam, regulators and services companies just
like we have done elsewhere. I believe this will help the country
to achieve an accelerated and sustainable growth or “green”
growth if you will, for the overall benefit of the country.

I wish the Summit every success and all of you the best of
health! Thank you.

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Thank you!

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