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Bright prospects for retail banking in Vietnam

Bright prospects for retail banking in Vietnam

Tuesday 29, 03 2022
The increasing popularity of e-commerce in Vietnam is a base for the development of retail banking. With a large percentage of people who have not yet accessed banking products and services, the potential for this segment in Vietnam remains abundant.

Retail banking with huge chances

Nearly 50% of Vietnam's population uses e-commerce, especially the young generation with new consumer behavior. With a large percentage of people who have not yet accessed banking products and services, the potential for retail banking in Vietnam is abundant.


That was the statement of Nguyen Quoc Hung - general secretary of the Vietnam Bankers Association - at the Vietnam Retail Banking Forum, organized by the Vietnam Banks Association (VNBA) and the International Data Group in Vietnam (IDG Vietnam) held on March 25.

Mr. Hung also said that in the past time, banks had many policies and solutions to develop retail banking services, diversify modern banking products and services, and diversify new distribution channels. Help customers easily access, easy to use, limit contact.

According to Mr. Le Anh Dung - Deputy Director of Payment Department, State Bank, non-cash payment activities achieved a high growth rate. Payment via Internet channel increased by 48.8% in quantity and 32.6% in value, via mobile phone channel increased by 76.2% and 87.5% respectively, via QRcode up to 200% compared to 2020.

Payment via e-wallet has an average growth rate from 2017 to 2021 of 80.43% in quantity and 71.86% in value. Notably, the proportion of cash withdrawals via ATM out of total transactions processed through NAPAS's system dropped sharply from 26% in 2020 to 12%.

In recent years, Vietnamese banks have had a positive transformation, notably the digital transformation race, applying advanced technologies such as AI and big data. Banks also shifted their income structure from the traditional credit segment to products that bring non-interest income, such as cards and insurance sales through banking channels.

Vietnam's retail banking segment is increasingly focused on because it is in its infancy stage, with plenty of room for growth. On the other hand, the shift to retail will also improve profit margins and bring a more stable source of income for the bank.


The balance of individual consumer debt to GDP in Vietnam is about 30%, much lower than that of Malaysia, Thailand, and China. In addition, the spread rate of products for individual customers in Vietnam, such as home loans, credit cards, or life insurance through banking channels is also not high. Therefore, the retail banking segment still has great room for growth.

In need of adequate policies

According to experts, the Law on Electronic Transactions 2005 has revealed inadequacies after nearly 15 years of implementation. Many contents are no longer suitable with the reality of development, cannot meet the needs of the Fourth Industrial Revolution, the digital transformation, and the building of Vietnam's digital economy in the coming years.

Cybersecurity problems and financial crimes have been increasing rapidly in the last few years. This trend requires banks to strengthen security and safety measures to create peace of mind for users. In addition, the digital transformation race is going strong, but the law enforcement system has not caught up.

With the retail baking forecast to boom in the coming years, adequate policies must be implemented to recognize and prevent such risks in the field.

non-cash payment

In addition, with non-cash payment being an important factor to further promote retail banking, five main groups of solutions have been suggested to enhance non-cash payment:

  • Completing the legal framework, amending and supplementing several laws and decrees related to banking activities, and building and promulgating a mechanism for controlled testing fintech activities in the field of banking.

  • Developing modern payment services, applying 4.0 technology revolution achievements, developing a variety of products and services on a digitized platform, promoting mobile payment products. At the same time, encourage cooperation between banks and fintech.

  • Develop infrastructure, upgrade the Interbank Electronic Payment System, continue to improve and develop the Automate Clearing House (ACH). Enhance integration, infrastructure connection, application Using the banking industry with other industries and service areas to expand the digital ecosystem.

  • Increase security, build tools, improve monitoring efficiency to detect and prevent arising risks and risks.

  • Changing awareness, promoting information and propaganda about non-cash payment, implementing financial education programs, raising awareness about non-cash payment.


Compiled by VietnamCredit

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