Competition in Fintech Vietnam Heats Up Intensely

Diep Nguyen

10:38 18/06/2019

BizLIVE -

Competition in the fintech is getting intensely high. This rise in competition comes amid concerted efforts by the government to increase the use of digital payments in Vietnam, which lags behind its neighbors.

Competition in Fintech Vietnam Heats Up Intensely
Recently, in the talked named “Digital Banking and the Specific Ecosystem”, one digital banking director from one big commercial bank revealed that the growth rate of non cash channels in his bank recorded growth rate of more than 1,000 times over the past several years. 
There are more and more customers registering for the non cash payment services like credit cards, payment apps because of high appreciation for service quality and convenience.
All those things pave the way for the development of fintech in Vietnam. As from the data of Nikkei, earlier this year, the country's most popular e-payment service, MoMo, reportedly landed $100 million from U.S. private equity firm Warburg Pincus, an investment that followed previous multimillion dollar injections from Standard Chartered and Goldman Sachs.
At the same time, many other banks also invested a lot in fintech to compete. In this category, state owned banks lag behind private commercial banks in terms of investing in fintech. This can be seen in the fact that most customers prefer the non cash payment services much more than the state owned banks’ ones.
More broadly, the trend of investing in fintech in Asia Pacific started to go upscale from 2015. However, fintech in Asia Pacific mainly focuses on retail; medium and small sized companies. 
As reported by Nikkei, in March 16th 2017, State Bank of Vietnam’s Governer signed the directive on the fintech committee in Vietnam. This committee is responsible for consulting with the Governor about the solutions for completing the eco-system and fulfilling the legal framework so that the fintech companies in Vietnam can develop in line with the guidance of the Government. 
Competition in the fintech is getting intensely high. This rise in competition comes amid concerted efforts by the government to increase the use of digital payments in Vietnam, which lags behind its neighbors. A World Bank survey showed the number of non-cash transactions in Vietnam is 4.9 per capita compared to 59.7 in Thailand, 89 in Malaysia and 26.1 in China.
Economist Can Van Luc said that the definition digital banking is often misunderstood as digital activity in the traditional banking system. 
According to Luc, the understanding that digital banking means banks will digitalize all activities is correct but not sufficient. Luc pointed out that digital banking is the new business model, new approach with new values, not just digitalizing what already exist.
The digital banking contents, in the opinion of Luc, are the followings: the integrity of distribution channels, diversifying the channels so that consumers can get easy access to banking services. In which, all channels should have the connectivity so that to ensure the customers’ experience.

DIEP NGUYEN

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