Vietnam potential market for fintech companies

Vietnam is a promising market for fintech companies thanks to its young demographic, strong e-commerce growth, and increasing smartphone and internet users, heard a conference in Ho Chi Minh City on October 31.
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Vietnam is a promising market for fintech companies thanks to its young demographic, strong e-commerce growth, and increasing smartphone and internet users, heard a conference in Ho Chi Minh City on October 31.

Pham Xuan Hoe, Deputy DirectorGeneral of the Banking Strategy Institute at the State Bank of Vietnam, told the Vietnam ICT Outlook Conference titled ‘Shaping the future of VietnamFintech’, that financial technology (fintech) has great potential to develop inVietnam as about 66 percent of the country’s population uses the internet, 64percent uses social networks, and 60 percent uses smartphones.

“Out of 143 million phone subscriptions, 45 percent are for 3G and 4Gservices.”

The country has four public banks, 28 private banks, 1,183 people's creditfunds and numerous other credit and financial institutions, with which fintechfirms could tie-up for mutual benefit, he said.

Lam Nguyen Hai Long, Chairman of the HCM City Computer Association (HCA),said according to the Institute for Development and Research on BankingTechnology, the country has 154 enterprises operating in the fintech sector and70 percent of them are start-ups.

“The number is modest compared to other countries in Southeast Asia, especiallySingapore, a great fintech power from whom we need to learn.”

Fintech companies

havean advantage over banks by having more convenient and diverse products andservices and low operating costs, he said.

The Government has madesignificant efforts to tailor regulations to increase banking penetration to 70percent from 59 percent in 2017 and to create a non-cash economy where the cashto total liquidity is less than 10 percent by 2020.

This should spur the development of fintech solutions, he said.

The fintech sector has developed strongly in Vietnam in recent years, but facesconsiderable challenges, he said.

One of them is the lack of Government policies and regulations that couldsupport the development of an eco-system, he said.

He wanted the Governmentto quickly develop a legal framework and offer incentives to attract investmentfrom big tech companies in developing fintech platforms.

Nguyen Dinh Thang, Chairmanof LienVietPostBank, said: “Digital banking is an inevitable trend.”

He too called on the Government to create a legal framework and adopt policiesto support and promote communications to boost non-cash payment and develop thedigital economy.

Tran Dinh Cuong, Deputy Directorof the State Bank of Vietnam’s HCM City branch, said fintech has become one ofthe fields the banking industry has paid special attention to recently.

The central bank has established a Steering Committee on Financial Technologyto develop strategy and a legal framework to promote the sector.

Phan Tam, deputyminister of Information and Communications, said the financial sector is abackbone of the economy, and the successful adoption of digital technologies todevelop new products and services and new business models in the sector wouldexponentially increase the efficiency of the entire economy.

At the conference, Dr Lillian Koh Noi Keng, CEO of Fintech Academy Singapore,shared experiences in fintech application in Singapore.

Delegates also discussedcybersecurity challenges for fintech; fintech and the workforce; machinelearning and AI in the fintech marketplace; fintech and innovative start-upsand other topics./. VNA