EY Vietnam announced the results of the ASEAN FinTech Census 2018 in Hanoi on April 12.

The survey was carried out on more than 250 fintech (technology used to support banking or financial services) companies in more than 10 countries, providing insights from regional fintech experts.

"With a population of young smartphone users, high consumer growth and low unemployment, Vietnam is becoming a promising market for fintech developers," he said.

"Foreign investors are also more interested in buying some fintech companies due to the huge market potential," said Mittal.

The number of incubators and accelerators and innovation labs in Vietnam is estimated at 24, the second most among ASEAN region, following Singapore.

However, another EY report showed that up to 90 percent of payments in the country were made in cash.

Therefore, Vietnamese fintech companies are focusing on the field of payment with 47 percent of Vietnamese companies working on payment services, the highest rate in the region.

The country has also launched a fintech club, which allows businesses to improve knowledge, support and share experiences. The most important thing though is to develop a legal framework for this service.

According to Nguyen Thuy Duong, EY Vietnam deputy director and vice chairwoman of the Vietnam Financial Technology Club, said that fintech companies are currently small scale and policies for these companies are lacking.

In addition, many banks are still cautious about work with fintech companies as they do not realise that fintech can help them tap into the huge market of people who do not have bank accounts, but do have smartphones. “Fintech is the bridge that can help bring banking services closer to people," said Duong.

Apart from financial issues, shortages in staffs and governmental regulations are two major challenges that Vietnamese and regional fintech companies face.

According to EY experts, policy support from authorities will form the foundation for a fintech ecosystem that encourages creativity and healthy competition.

Talking about co-operation between banks and fintech companies, EY experts also said many banks want to hire fintech to provide digital banking services, instead of developing solutions themselves. This way will benefit both sides and help save costs.-VNA