In Vietnam, rising demand for digital monetary options, supportive insurance policies and authorities initiatives to nurture fintech innovation are offering great alternatives which Swiss fintech gamers ought to faucet into, a brand new Vietnam Fintech report by Switzerland International Enterprise (S-GE) says.

The report, titled Enterprise Alternatives in Fintech in Vietnam, supplies an summary of the nation’s fintech sector, outlining key verticals and highlighting rising traits arising available in the market for Swiss fintech corporations to capitalize on.

Based on the report, 5 main alternatives at present exist available in the market. First, banks within the nation are actively teaming up with fintech corporations and tech suppliers to ramp up their digital banking propositions, embracing APIs, cloud know-how and embedded fintech to ship comfort, selection and pace to Vietnam’s younger, digital-first shoppers. This presents alternatives for Swiss monetary know-how suppliers to enter the nation and companion with native banking incumbents, the report says.

A 2021 survey by the State Financial institution of Vietnam (SBV) revealed that almost all (95%) Vietnamese lenders had both applied digital transformation methods or had been within the strategy of formulating them. These initiatives give attention to both serving to them digitize their programs, or enhance service high quality and buyer expertise, the research discovered.

The second alternative outlined within the report pertains to funds. The sector is at present the main vertical within the home fintech sector, recording the very best variety of gamers and attracting a lot of fintech funding exercise.

The rise of the fee sector comes on the again of hovering cashless fee utilization in Vietnam. In 2022, digital funds reported an 85.6% improve in quantity and a 31.4% improve in worth in contrast with the earlier yr, information from the SBV’s Fee Division present.

The momentum is carrying on this yr, with non-cash fee transactions growing by 50.1% within the first two months of 2023 YoY. QR code transactions posted the strongest surge of 142% in amount and 50% in worth.

Nearly two-thirds of Vietnam’s inhabitants, or round 57.62 million folks, had been making digital funds by January 2023, representing an 11.3% year-on-year (YoY) improve, in line with Switzerland’s export and funding promotion company.

The estimated annual worth of digitally-enabled shopper funds amounted to US$20.54 billion, leading to a mean transaction worth per person of US$357.

Fintech Report Vietnam: Digital funds in Vietnam, 2023, Supply: Enterprise Alternatives in Fintech in Vietnam, Switzerland International Enterprise, Could 2023

Peer-to-peer (P2P) lending is one other phase that’s rising steadily and the second largest fintech vertical in Vietnam for the time being. The sector is providing a number of alternatives for Swiss fintech startups to not solely tackle the lending hole but in addition present modern options for native P2P lenders, resembling credit score scoring know-how and information analytics, the report says.

The SBV is at present engaged on a brand new regulatory sandbox, a regime that might enable monetary companies suppliers to check new services. A draft decree was launched final yr, outlining key enterprise fashions and applied sciences that might be allowed into the sandbox together with credit score scoring, APIs, P2P lending and blockchain know-how.

The fourth alternative outlined by the S-GE report pertains to private finance and funding, a vertical that’s benefited from the inflow of latest traders. Rising inventory buying and selling exercise is introducing alternatives for fintech corporations to develop options that educate prospects and help them in managing their funds.

Within the first half of 2021, Vietnamese traders opened over 620,000 new securities accounts, as in contrast with the mixed whole of 393,659 accounts opened throughout the 2019-2020 interval, information from the Securities Depository present. At its peak, some 450,000 accounts had been opened on month-to-month foundation.

New inventory buying and selling accounts in Vietnam, Supply: Securities Depository, June 2023

Lastly, blockchain and cryptocurrency is one other fintech sector that’s recorded robust traction and which is predicted to develop additional. This progress will probably be supported by the nation’s data and communications know-how (ICT) workforce which is raring to embrace blockchain know-how and discover its functions, the S-GE report says.

The rise of the blockchain sector in Vietnam comes amid fast adoption of cryptocurrencies within the nation. For 2 consecutive years, Vietnam has been ranked as the most important adopter of crypto by blockchain analytics agency Chainalysis. In 2022, the nation was the second largest crypto in ASEAN, recording an annual transaction worth surpassing US$100 million.

The 2022 International Crypto Adoption Index, Chainalysis

In accordance to the Statista International Shopper Survey, roughly 27% of Vietnamese respondents claimed to have used or owned cryptocurrencies in 2022.

The Vietnamese authorities has shared plans to work with the SBV to develop a pilot program for the implementation of a central financial institution digital foreign money (CBDC).

Featured picture credit score: edited from freepik