Digital Banking Sees Prosperous Future in Vietnamby Fintechnews Vietnam August 13, 2018
Like the rest of emerging countries in Asia, digital banking penetration in Vietnam is on the rise. According to a survey by IDG Vietnam, 81% of respondents said they used digital banking solutions in 2017 compared to 21% in 2015.
Digital banking solutions are appreciated for their convenience and time savings and while the growth is real and strong there is still plenty of opportunities. A survey by McKinsey found that approximately 60% of customer in Vietnam would consider opening an account with a branchless digital-only bank.
Most of the banks in Vietnam are already providing Internet banking and digital payments services. Banks including Vietinbank, Vietcombank, BIDV, Agribank, Techcombank, and OCB are all allowing customers to make payments using QR code on their respective mobile banking app.
Agribank was one of the first banks to apply QR code payment through its Agribank E-mobile Banking. Trinh Ngoc Khanh, chairman of the bank’s board of members, said that one of the important tasks for the bank in the near future was to offer services based on high-tech platforms such as QR Pay, Samsung Pay and Autobank while improving services quality.
Going further, Techcombank and VIB even allow clients to remit money via social networks such as Facebook and Zalo, and withdraw cash from ATMs without cards. Meanwhile, VP Bank is utilizing IBM’s data analyzing technology to synchronize data and support customers’ behavior analysis and is providing a full digital banking experience through Timo, a platform developed by local startup Lifestyle Project Management Vietnam Ltd.
Foreign banks too are looking to tap into the Vietnam’s digital banking opportunity. Singapore’s UOB announced last week a digital banking strategy for five markets in ASEAN: Singapore, Indonesia, Malaysia, Thailand and Vietnam. UOB plans to digitize the entire banking process for its upcoming ASEAN digital bank from the onboarding to serving everyday payment needs.
Wee Ee Cheong, deputy chairman and CEO of UOB said that Vietnam represented a strategic market for the bank due to its status as one of the fastest growing economies in Southeast Asia.
“Across countries we see two trends: regulators are increasingly embracing digital, for instance, leveraging technology for know-your-customer requirements, and promotion of innovation via sandbox for fintechs, allowing them to operate within the sandbox requirements,” McKinsey said.
Vietnam strives for 95% of banks offering Internet banking and mobile banking services, and 30% implementing digital banking. The government has expressed on several occasions its ambition to facilitate and boost fintech innovation, announcing in early 2017 a major initiative to become cashless by 2020.
Since then, non-cash and contactless payments in the country have risen. Statistics from the State Bank of Vietnam showed that financial transactions through mobile phones in 2017 rose by 81% while those made online also increased by 67% from the previous year.
For Dr. Nguyen Thi Thanh Van from the Banking Academy’s International Business Faculty, orienting the development of digital technology in the sector is essential as technology can facilitate the use and accessibility of financial services.
There are currently about 78 fintech companies in Vietnam. While the majority of them (47%) operate in the field of payments, several other fintechs have emerged in recent years to help banks offer more efficient and convenient digital services.
For instance, KIU Global has built a cross-border B2B e-commerce platform with integrated enterprise resource planning, logistics, and lending aimed at serving SMEs across Southeast Asia. The company has created a credit rating system using AI which allows banks to “give marks” to SMEs in less than 10 seconds. KIU Global is running a partnership program with Vietnam’s VIB Bank.
Another startup called Weezi Digital offers biometric solutions to help financial institutions take on mobility and digitalization. As for Wecash, the company leverages mobile technology, big data and machine learning to prevent fraud and determine consumer credit worthiness.
Featured image: Ho Chi Minh City, Vietnam, Pixabay.