Digital disruption is already a fact of life around the world. In just two years—between 2017 and 2019—the number of e-wallet users globally exploded from 500 million to 2.1 billion. Both the e-wallet providers that are disrupting Southeast Asia’s payments market and the region’s incumbent traditional banks face significant challenges as digital payments graduate from a niche business to large-scale financial services. To embrace challenges, CIMB Bank Vietnam collaborates with SmartPay to enable in-app banking solution on SmartPay application, creating a mobile financial service platform to accommodate the needs of consumers.
Unlocking the potential for E-wallets
E-wallets in Vietnam are currently used primarily by customers who already use traditional banking services, such as Momo, ZaloPay or ViettelPay. And while they are often described as a means to improve financial inclusion, the leading e-wallets target primarily affluent, urban populations. From a survey by Boston Consulting Group’s Center for Customer Insight (CCI) in 2019, in Vietnam, e-wallet use is 42% among the banked and 17% among the unbanked. Meanwhile, there is a way for other e-wallets, such as SmartPay, to find their own market.
With its 193,000 merchants and nearly 1,8 mil customers on their platform, SmartPay believes that there is a vastly underserved market in rural areas. SmartPay offers digital wallet service for merchants and consumers. It ensures a better payment and finance management experience for retail customers by offering them digital payments, loans, savings, loyalty programs, bill payments, money transfers and data-driven services – all on mobile. The unbanked population especially benefits from easier access to financial services. For merchants – both SMEs and individual sellers – the wallet enables acceptance of QR-code payments without additional investments in POS infrastructure.
Mr. Ta Xuan Thinh, SmartPay’s E-wallet Personal Consumer Division Director said “We project that the e-wallet penetration rate among the underbanked will triple across the region’s urban areas, reaching 78% by 2025, while adoption by the unbanked will surge from 17% to 58% over the same period.”
To comply with Circular 23/2019/TT-NHNN from SBV, all e-wallet users will have to link their e-wallet with a bank account, CIMB Bank Vietnam and SmartPay shakehands to launch online account registration service on SmartPay app. Users will be able to register a bank account right on SmartPay app with eKYC solution by CIMB and enjoy their daily payment services on ONE platform only. The integration of different utilities on the same platform creates high convenience for users. Personal details such as photo ID card/citizenship identification and a selfie are required but the process is secure and data is protected as per the bank’s GDPR regulations.
Taking a leading role in shaping industry platforms for underbanked and underserved merchants and customers
With over 33 million millennials and tech-savvy young people, while only 40% of the population have bank account, CIMB Bank saw the need to give this generation of consumers an easier way to manage their finances. Banks and other financial services companies have watched nervously as more and more FinTechs have brought significant innovations to the market. Consolidation in the industry is inevitable. “Digital footprint” will be the way forward for all banks. CIMB Bank is one of the first banks that have begun to engage with FinTechs through partnerships, incubator programs and co-create products.
“Most banks find it difficult to meet the needs from underbanked section because of the high economic cost of servicing these demands. However, a little out-of-the box thinking in devising products that are simple and accessible can help ensure inclusive growth. Our view is that banks should review their multi-channel strategy, particularly for the product areas and high-value segments most impacted by FinTech, in order to deliver a better online experience to customers. Through this partnership, CIMB and SmartPay being able to access exciting landscape emerging in the banking arena – undersevered and underbanked segments — leads to sustained growth and relevancy in a crowded, competitive ecosystem”, Mr. Thomson Fam Siew Kat, CEO of CIMB Bank Vietnam said.
Being one of Asia’s leading banks with extensive experience and expertise in the region, innovative partnership strategy is a bold step, which helps CIMB Bank Vietnam to be recognized as the Best New Digital Bank Vietnam 2020 by Global Banking and Finance Review.
The teaming up between CIMB Bank Vietnam and SmartPay is a significant step of CIMB to complete their banking ecosystem, integrating more features to optimize applications and diversify services for CIMB customers in the near future.