Vietnam currently lags behind other Southeast Asian countries when it comes to financial inclusion. Can foreign players and fintech solutions fill the gap?
In Vietnam financial technology is increasing bank penetration, promoting financial services and offering the large unbanked population access to payment solutions. With a population of almost 93 million and a surging middle class, foreign banks are also keen to penetrate the market.
Asia-Pacific focused consulting firm Solidiance, in its recently published report, «Unlocking Vietnam’s Fintech Growth Potential,» credits the growth of financial services in the country to several factors.
Among the main drivers are high rates of internet and smartphone penetration, the increasing adoption of e-wallets and a fast growing liking for e-commerce. All of which are underpinned by swiftly rising salaries and a burgeoning consumer sector.
More traditional banking services are growing in the country too with banks from more mature North Asian markets deepening their penetration. Korean institutions have been particularly aggressive in developing onshore business in Vietnam.
Shinhan Bank, which acquired ANZ Bank Vietnam’s retail division in April 2017 as finews.asia reported, opened four more branches recently, bulking up its network to 30 branches. Fellow Korean lender Woori Bank will also open six more branches this year.
With a limited population and an over-banked domestic market, Singaporean banks see Vietnam as a new banking hinterland. Singapore’s United Overseas Bank received its in-principle foreign-owned subsidiary bank licence in Vietnam in 2017.
The foreign banks entering Vietnam bring with them advanced systems and growing expertise in financial technology. They are also exporting their softer skills in training and advising on the development of regulatory infrastructure.