There is no need for fintech companies and banks to be in competition in Vietnam, a recent forum heard, as working together would expand the market to the benefit of both.



While fintech are taking away markets from banks in many developed countries, in Vietnam, where banking and finance is still a developing sector, many experts believe a larger market can be created if the two stand together.

“When fintech companies and banks participate in financial markets, the market will widen, as larger numbers of customers can access financial services,” said Mr. Doan Thanh Hai, Deputy Director of the Information Department at the State Bank of Vietnam (SBV) told the Vietnam E-payment Forum held on November 24.

The two are already competitors and partners in certain products. But if they were to work together they can use the advantages the other holds to grow the market, he added. “When the cake is bigger, banks also benefit,” he said.

“Sixty-nine per cent of Vietnam’s population do not have bank accounts, while 60 per cent of the population owns a smartphone,” according to Mr. Tran Huu Duc, Director of FPT Venture. “Fintech companies and banks are therefore able to work together.”

There are relatively high numbers of fintech companies working in payment systems and they are receiving investment. Most, though, simply take international models and apply them in Vietnam, said Mr. Duc. “Only a few fintech companies have a major influence on the market as there is no clear legal framework for them to follow, so there needs to be greater focus from the government.”

“In Vietnam, most fintech companies work in the payments sector, where people remain cautious about security,” according to Mr. Phan Thanh Son, Deputy CEO of Techcombank.

Banks will always hold a central role in connecting various economic sectors as they provide banking services and financial solutions (deposits, loans, payments) to individuals and businesses and are also a channel for the government to manage monetary policies.

Banks with strong platforms from large customer bases and extensive branch networks hold a competitive advantage over their competitors, as the use of cash remains the preference of Vietnamese people, according to Mr. Son. “Instead of competing, fintech companies and banks in Vietnam should cooperate,” he believes.

“Fintech companies are creative and innovative but can’t compete with banks in customer numbers, finances, and risk management,” Mr. Tran Cong Quynh Lan, Deputy CEO of Vietinbank, told the forum. If fintech companies and banks could “shake hands”, he went on, banking and finance services would be improved.

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