Vietnam is considered a tremendously potential market by Korean fintech enterprises, setting off an avalanche of deals looking to expand business operations and find investment and co-operation opportunities.

There are 40 fintech companies operating in Vietnam at the moment, providing diversified financial services, such as payments, transfer, capital mobilisation, and financial management, to meet the high demand of users.

As the Fourth Industrial Revolution is blossoming, fintech companies around the world are expanding and evolving to rise in an emerging banking-finance services market.

As a result, Korea Internet and Security Agency (KISA) organised a business-to-business (B2B) meeting named “Fintech Company Global Business Meeting 2017” in Hanoi on November 16, 2017, to create a network between Korean and Vietnamese fintech companies. Eight Korean and 13 Vietnamese fintech companies attended the event.

Almost all Vietnamese businesses appreciated new technologies presented by Korean enterprises, such as the robo-advisor, an offline payment platform, biometrics and security solutions (palmprint), as well as a cryptocurrency exchange platform, and looked for opportunities to co-operate with Korean patners.

“Vietnam and Indonesia hold the greatest potential and are the primary destinations of Korean fintech companies when investing overseas,” confirmed Jongil Jeong, senior researcher of KISA.

He assessed that the fintech sector has great future in Vietnam because of the large population and the significant IT human resources. The Vietnamese Government has also promulgated socio-economic development plans and policies, including the promotion of the fintech sector.

“Riding on this trend, along with ample technological capabilities, the fintech sector will evolve drastically in the coming time, even faster than the Korean sector two years ago,” said Jeong.

Talking about co-operation and business orientation, Kim Jong Geuk, managing director of Lotte Card, said that the company is focusing on the consumer credit segment. “Particularly, Lotte Card is submitting all documents to the State Bank of Vietnam to be incorporated, after which it will acquire shares of TechcomFinance,” he said.

TechcomFinance, formerly known as Vietnam Chemical Finance JSC before the 2015 acquisition by Techcombank, carries a chartered capital of VND600 billion ($26.5 million). According to the bank's report, in 2016, TechcomFinance earned VND33 billion ($1.5 million) in revenue and VND28 billion ($1.23 million) in pre-tax profit. 

If this deal is carried out successfully, Lotte Card will join the vivid consumer finance market in Vietnam, which grows at 30 per cent in the past several years.

VIR