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Home » Opportunities Lie Ahead for Swiss Fintech Startups in Vietnam

Opportunities Lie Ahead for Swiss Fintech Startups in Vietnam

by Leilani Sengtavisouk
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In Vietnam, rising demand for digital financial solutions, supportive policies and government initiatives to nurture fintech innovation are providing tremendous opportunities which Swiss fintech players should tap into, a new Vietnam Fintech report by Switzerland Global Enterprise (S-GE) says.

The report, titled Business Opportunities in Fintech in Vietnam, provides an overview of the country’s fintech sector, outlining key verticals and highlighting emerging trends arising in the market for Swiss fintech companies to capitalize on.

According to the report, five major opportunities currently exist in the market. First, banks in the country are actively teaming up with fintech companies and tech providers to ramp up their digital banking propositions, embracing APIs, cloud technology and embedded fintech to deliver convenience, choice and speed to Vietnam’s young, digital-first consumers. This presents opportunities for Swiss financial technology providers to enter the country and partner with local banking incumbents, the report says.

A 2021 survey by the State Bank of Vietnam (SBV) revealed that nearly all (95%) Vietnamese lenders had either implemented digital transformation strategies or were in the process of formulating them. These initiatives focus on either helping them digitize their systems, or improve service quality and customer experience, the study found.

The second opportunity outlined in the report relates to payments. The sector is currently the leading vertical in the domestic fintech sector, recording the highest number of players and attracting much of fintech funding activity.

The rise of the payment sector comes on the back of soaring cashless payment usage in Vietnam. In 2022, digital payments reported an 85.6% increase in volume and a 31.4% increase in value compared with the previous year, data from the SBV’s Payment Department show.

The momentum is carrying on this year, with non-cash payment transactions increasing by 50.1% in the first two months of 2023 YoY. QR code transactions posted the strongest surge of 142% in quantity and 50% in value.

Almost two-thirds of Vietnam’s population, or around 57.62 million people, were making digital payments by January 2023, representing an 11.3% year-on-year (YoY) increase, according to Switzerland’s export and investment promotion agency.

The estimated annual value of digitally-enabled consumer payments amounted to US$20.54 billion, resulting in an average transaction value per user of US$357.

Fintech Report Vietnam: Digital payments in Vietnam, 2023, Source: Business Opportunities in Fintech in Vietnam, Switzerland Global Enterprise, May 2023

Fintech Report Vietnam: Digital payments in Vietnam, 2023, Source: Business Opportunities in Fintech in Vietnam, Switzerland Global Enterprise, May 2023

Peer-to-peer (P2P) lending is another segment that’s growing steadily and the second largest fintech vertical in Vietnam at the moment. The sector is offering several opportunities for Swiss fintech startups to not only address the lending gap but also provide innovative solutions for local P2P lenders, such as credit scoring technology and data analytics, the report says.

The SBV is currently working on a new regulatory sandbox, a regime that would allow financial services providers to test new products and services. A draft decree was released last year, outlining key business models and technologies that would be allowed into the sandbox including credit scoring, APIs, P2P lending and blockchain technology.

The fourth opportunity outlined by the S-GE report relates to personal finance and investment, a vertical that’s benefited from the influx of new investors. Rising stock trading activity is introducing opportunities for fintech firms to develop solutions that educate customers and assist them in managing their finances.

In the first half of 2021, Vietnamese investors opened over 620,000 new securities accounts, as compared with the combined total of 393,659 accounts opened during the 2019-2020 period, data from the Securities Depository show. At its peak, some 450,000 accounts were opened on monthly basis.

New stock trading accounts in Vietnam, Source: Securities Depository, June 2023

New stock trading accounts in Vietnam, Source: Securities Depository, June 2023

Finally, blockchain and cryptocurrency is another fintech sector that’s recorded strong traction and which is expected to grow further. This growth will be supported by the country’s information and communications technology (ICT) workforce which is eager to embrace blockchain technology and explore its applications, the S-GE report says.

The rise of the blockchain sector in Vietnam comes amid rapid adoption of cryptocurrencies in the country. For two consecutive years, Vietnam has been ranked as the biggest adopter of crypto by blockchain analytics firm Chainalysis. In 2022, the country was the second largest crypto in ASEAN, recording an annual transaction value surpassing US$100 million.

The 2022 Global Crypto Adoption Index, Chainalysis

The 2022 Global Crypto Adoption Index, Chainalysis

According to the Statista Global Consumer Survey, approximately 27% of Vietnamese respondents claimed to have used or owned cryptocurrencies in 2022.

The Vietnamese government has shared plans to work with the SBV to develop a pilot program for the implementation of a central bank digital currency (CBDC).

Source : Fintech

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