5-Minute loan approval: How is AI changing the way banks make credit decisions?

As most financial transactions have moved into digital environments, competitive advantage in banking no longer depends on whether a bank uses AI, but on how AI is embedded into its system architecture. In a recent discussion, representatives from Cathay United Bank, part of Cathay Financial Group, shared their approach to the Vietnamese market through a strategy that treats AI as an operational infrastructure layer rather than an add-on tool.

When the market is ready for AI, the question is no longer whether to use it

Over the past few years, Vietnam has emerged as one of the fastest-growing fintech markets in the region. Digital payments, mobile banking, and eKYC are no longer new concepts, but have become mainstream consumer behavior. In this environment, the key question for banks is no longer whether AI should be implemented, but how AI can be deployed in ways that create meaningful value.

At a recent event, Cathay representatives noted that one of Vietnam’s greatest advantages is the diversity of its customer base, ranging from digitally native younger users to more traditional customers gradually shifting toward digital channels. This diversity creates a rich volume of behavioral data, while also requiring technology systems flexible enough to support multiple user scenarios.

Using Cathay United Bank as an example, the bank explained that rather than developing AI as a standalone solution, it has chosen to position AI as a core component of its broader digital banking ecosystem. In practice, this means AI is integrated directly into key operational workflows, from customer onboarding and internal operations to risk management and credit assessment.

At the architectural level, Cathay United Bank has deployed its digital banking services in Vietnam on a unified platform specifically designed for local market conditions. The platform leverages technology infrastructure from global partners, while the application layer and user experience are customized to align with Vietnam’s regulatory requirements, user behaviors, and financial habits.

Since 2024, Cathay United Bank’s digital platforms have officially entered operation in Vietnam and continue to evolve. This process represents not only a technology upgrade, but also a continuous cycle of learning from the market, gathering customer feedback, and refining the system to ensure AI performs effectively in real-world conditions rather than simply functioning correctly from a technical standpoint.

AI cannot be separated from data, and data must be governed before it is utilized

One of the greatest challenges in deploying AI within financial services lies in the handling of personal data. Data cannot be collected arbitrarily, nor can it be directly fed into AI systems without appropriate governance, control, and approval mechanisms.

All AI development and deployment activities in Vietnam are designed to comply strictly with legal frameworks related to personal data protection, including relevant laws and regulations such as Law/Decree No. 60/2024. Representatives stated that Cathay United Bank views legal compliance as a prerequisite for innovation rather than a barrier to technological advancement.

Mr. VJ Lu, General Manager of Cathay United Bank Ho Chi Minh City Branch, also revealed that since 2021, Cathay has established and implemented a comprehensive global framework of AI principles and standards. The framework aims to build trustworthy, transparent, and controllable AI systems regardless of whether they are deployed in Vietnam, Taiwan, or the United States. A consistent principle throughout the strategy is that AI must support business operations without compromising legal compliance or customer privacy.

This philosophy is also reflected in the “open framework” model Cathay is developing for partners. While the framework allows customization for individual brands, the AI models are not designed for end users or external parties to directly manipulate the core algorithms. Instead, AI operates through internal servers and enterprise applications that already have established workflows and governance mechanisms.

From a strategic perspective, this reflects a deliberate choice to prioritize system security, operational consistency, and regulatory compliance over complete openness and flexibility. In this model, AI is viewed as an internal operational capability rather than an open product subject to unrestricted modification.

Optimized speed in lending comes from system integration, not reduced controls

Lending remains one of the areas under the greatest pressure to balance two seemingly conflicting demands: rapid decision-making and strict risk management. In Vietnam, Cathay United Bank shared that its five-minute loan approval feature has already been implemented through the CUBE Vietnam App, despite ongoing market challenges related to personal identity verification and data validation.

What stands out is that the speed of approval does not come from simplifying the process, but from integrating multiple layers of processing into a fully digitalized system. The approval workflow includes customer identity verification through eKYC, data cross-checking, internal review and assessment procedures, as well as credit information verification

Based on this data foundation, the system conducts analysis using Cathay United Bank’s internal operational experience and proprietary credit assessment criteria. AI accelerates the processing and decision-making process, but does not replace the risk management standards already established by the bank.

This approach reflects a clear philosophy: AI is not designed to eliminate controls, but to make controls faster, more consistent, and more scalable. At a time when customers increasingly expect near-instant experiences while financial systems cannot afford operational errors, positioning AI appropriately within the operational architecture becomes a defining factor.

Ultimately, as AI gradually becomes a standard capability across the banking industry, competitive advantage will no longer belong to the institutions that speak the most about AI, but to those capable of designing sufficiently deep platforms where AI becomes a natural part of operations. Cathay’s approach in Vietnam demonstrates a strategy centered on infrastructure, data, and governance, where speed, customer experience, and compliance are integrated into the same system rather than treated as trade-offs.