As digital transformation becomes an inexorable trend, digital and cashless payments have continued to post growth in Vietnam, with transaction numbers growing 55 per cent in the first half of 2023.
Transactions via the internet in the first half increased 75 per cent in number and 1.79 per cent in value. Those via mobile channels rose 65 per cent and 77 per cent, respectively. Notably, transactions via QR code surged 152 per cent and 301 per cent, while those via ATMs fell 4 per cent and 6 per cent.
Speaking at a seminar entitled “Finovate Innovation Day: When Innovation Meets Sustainability”, hosted by JobHopin and the Vietnam National Innovation Center (NIC) on July 22 in Hanoi, Mr. Nguyen Quoc Hung, Vice President and General Secretary of the Vietnam Banks Association (VNBA), said that, to date, 96 banks and credit institutions in Vietnam have digital transformation strategies. About 92 per cent of the total number of banks nationwide have developed application services on the internet and mobiles. Some pioneering banks in digital transformation have entered into a new phase of digital creation.
These numbers reflect a strong shift towards electronic payments, Mr. Hung noted. Banks and payment intermediaries are interconnected, with transaction times counted in the seconds. On average, more than 8 million transactions with a value of up to VND900 trillion ($40 billion), are recorded each day in Vietnam.
In addition, over 70 per cent of adults in the country have a bank account. Thanks to digital transformation, the cost of revenue ratio at banks has also declined, by about 30 per cent, contributing to a significant cost reduction in banking operations.
The level of digital transformation at each bank varies depending on its financial capacity and resources. However, most commercial banks in Vietnam have launched digital banking applications and are trying to make a difference with their own digital products.
Mr. Vo Xuan Hoai, Deputy Director of the NIC, affirmed that in the context of global economic fluctuations, Vietnam’s banking and finance sector is overcoming the challenges and making positive changes thanks to a combination of new digital technologies and green growth.
Research from DBS, a leading financial services group in Asia, on digital transformation found that Vietnam is among the top 10 markets in Southeast Asia in the endeavor and ranks second after Singapore among the 22 markets surveyed.
The number of Vietnamese consumers using financial technology (fintech) products and services is on the rise. According to Nikkei, Vietnam is one of the most competitive fintech markets in Asia, especially the competition between domestic fintech companies and potential startups.
According to the Nextrans’ Vietnam Startup Industry Report 2022, the funding value of disclosed fintech deals in Vietnam reached $137 million, accounting for 2 per cent of deal value in the region. In terms of deal count, Vietnam’s fintech startups received 14 investments, accounting for 6 per cent of Southeast Asia’s fintech deals. The investment value in 2022 was significantly less than the peak in 2021 ($562 million) and 2019 ($426 million), but still higher than in 2020 ($0 million).
Among the listed fintech companies operating in Vietnam, digital payments is still the most concentrated fintech activity and accounts for the highest proportion both in number of startups and investments, accelerated by the fast-growing e-commerce market and high smartphone penetration rates.
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