Recently, fintech companies in Vietnam have been rising in number. According to the statistics of the State Bank of Vietnam and the Vietnam Fintech Market Report 2021, the number of fintech companies in Vietnam has grown fourfold. The number has gone from 39 companies at the end of 2015 to 154 companies at the end of 2021.
Notably, 2021 has witnessed great leaps and bounds in the Vietnamese fintech market as the internet economy reaches a value of 21 billion USD, ranking 14 out of 50 countries in Asia and 70th on the global ranking.
Mr. Hoang Quang Phong, Vice President of VCCI, said that fintech in Vietnam has significantly grown thanks to the expansion of digital payment methods, the increasing adoption of digital transactions, and the development of the e-commerce market.
Sharing the same opinion, Mr. Nguyen Quoc Hung - General Secretary of VNBA, shared that digital transformation activities in Vietnam’s financial – banking sector in recent years are entering a boom period.
The digital payment and digital ecosystem established by connecting digital banking services with many other services in the economy has brought many experiences and benefits to users in the digital space. Many banking operations, such as opening payment accounts, money transfer payments, and savings deposits, have been fully digitized, allowing customers to perform them entirely on digital channels.
According to statistics, in the first 6 months of 2022, non-cash payments increased by 77.2% in quantity and 29.8% in value, and 68% of Vietnamese adults have bank accounts. Many Vietnamese banks have achieved over 90% of customer transactions through digital channels with an optimal cost-to-income ratio.
According to Mr. Hung, Vietnam's fintech sector has made great strides in recent years thanks to the strong application of digital protocols in business, and the determination of the Government to promote digital payments. This trend will continue when according to the forecast of the State Bank of Vietnam, the value of mobile payments in Vietnam is expected to increase 4 times, from 16 billion USD in 2016 to 70.9 billion USD in 2025.
However, experts also assessed that the above development speed was not commensurate with the potential. Digital transformation activities in Vietnam's financial - banking sector still face many barriers regarding digital infrastructure, human resources, and the legal corridor.
Regarding the difficulties concerning human resources for fintech and digital banking in Vietnam, Mr. Tran Minh Tuan, Director of the Department of Digital Economy and Digital Society (under the Ministry of Information and Communications), said that currently, the percentage of universities with technical training majors is 160 out of 240, with an annual number of 50,000 students graduating from universities majoring in information technology. Meanwhile, information technology human resources only account for 1.1% of the total number of workers in the economy.
On behalf of the commercial bank, Ms. Nguyen Thi Nga of PVcomBank also raised the challenges of digital transformation in the commercial banking system in Vietnam.
According to Ms. Nga, in the digital transformation process at banks, almost the entire system and implementation methods have changed. Staff need time to update, process, and get used to these changes. Sometimes there can be transaction delays or system failures. The next problem is that the database, analysis, forecast of the business environment, etc., are still lacking and weak, leading to many difficulties and confusion for banks in planning long-term strategies.
Some other challenges, such as the requirements for operational risk management in the regulations of banks and according to international standards (Basel II/III), require a high level of readership and application. Some rather abstract terms can cause confusion and mistakes and affect commercial banks that have not been implemented yet.
In giving recommendations to banks in the digital transformation process, experts emphasized the need to promote the process of reviewing and verifying information about third parties before signing contracts. It is necessary because the implementation of digital banking will involve many third-party providers participating in the supply and support process.
Since the banking and financial sector is highly sensitive and requires utmost security, banks should soon standardize service supply contracts, clearly define the roles and responsibilities of the parties, and regularly monitor their capacity. Periodic assessment.
In addition, the first and most difficult task in the prevention of financial crimes is to identify the customer when opening an online account. Banks can reduce the risk of identifying customers right from the stage of selecting a qualified solution provider to deploy. Also, look for data-binding solutions to identify customers.
Compiled by VietnamCredit