The competition among digital banking services is heating up in Vietnam, with the participation of not only traditional banks but also technology corporations.

Vietnam is one of the countries with the highest growth rates in digital banking though it is still a developing economy, according to international organizations.

Vietnam is among the world’s best performers in digital banking, with around 15 trillion VND in total poured into digital transformation, said Le Anh Dung, Deputy Director of the State Bank of Vietnam’s Payment Department.

The current global digitalised economy will give rise to new business models that will compete, support, or even cause traditional business models to completely shut down.

By 2025, Vietnam will have a generation of "digital customers". This generation has higher expectations about digital financial products and services.

One major “side effect” of the COVID-19 pandemic, amidst the unprecedented toll that it has exacted, is that it has catalysed digital transformation across all sectors, particularly in financial services.

According to Techinasia, Vietnam-based bank Timo has raised $20 million in an investment round led by Square Peg. 

Around 85 percent of Vietnamese banking consumers are more likely to use online and digital banking services compared to 18 months ago, according to a new report from SaaS cloud banking platform Mambu.

Vietnamese consumers expect a seamless banking experience when it comes to opening an account via a mobile app or website, with two in five expecting to answer 10 questions or less or they will abandon the process.

Vietnam is among the regional countries that are seeing new digital bank models, experts have said.

The Vietnamese government will support boosting the application of new payment methods to achieve the digital transformation goals of the banking industry.

Under the impact of the Covid-19 epidemic, the interest in new payment technologies is growing in the Asia-Pacific region.

Vietnamese tend to be more open to digital banking services than people in other countries in the Asia-Pacific region such as Singapore, Malaysia, New Zealand or Australia, according to a recent survey by FICO.

The Covid-19 pandemic has severely affected almost all business and economic activities in Vietnam, and valuable and qualified human resource has taken a serious toll with several employees being laid off or having to accept large pay cuts.

Mobile transactions in Vietnam are forecast to increase by 400 percent by 2025 in the Fintech and Digital Banking 2025 - Asia Pacific Report released by Backbase on May 11.

Allowing the "embedding" of fintech solutions into the ebanking app, banks may join the race to become "all-in-one" apps.

The banking sector is waiting for the State Bank of Viet Nam to allow the use of electronic know your customer/client (e-KYC).

It's clear that digitalization is a prerequisite for local banks to survive and develop in the new era.

Much is being done to take Vietnam's banking and finance sector into the digital age, according to industry insiders.