The framework will help minimize risks for clients and relevant sides, SBV officials said during the Vietnam Fintech Forum 2018 held recently to seek ways to boost the development of fintech businesses in the country.
Vietnam’s fintech market is expected to reach $7.8 billion in 2020
|
Since 2008, the SBV has permitted many companies to provide payment services on a trial basis to meet market demand. After setting up a relatively clear legal framework, it has officially licensed 27 intermediary payment service providers.
A steering committee on fintech was also established by the SBV in March 2017 to devise solutions to facilitate the development of fintech enterprises in Vietnam, he noted, adding that many banks have cooperated with fintech companies to provide relevant services, which has been a growing cooperation trend in recent years.
The committee has completed a review of the fintech ecosystem in Vietnam, suggested key verticals within the fintech landscape, and established direct dialogue channels with fintech companies, which are expected to create a close connection between state management agencies and fintech companies.
The development of fintech and cooperation between fintech firms and banks are considered prerequisites for promoting Vietnamese users’ access to financial and banking services.
Addressing the forum, Dominic Mellor, senior economist of the Asian Development Bank (ADB), said that Vietnam owns special advantages, especially in the IT sector, which can be a basis for the development of fintech towards financial inclusion.
The ADB is always ready to assist the SBV in both encouraging fintech development and perfecting legal framework in the field, he said.
Vietnam’s fintech market is forecast to increase from US$4.4 billion in 2017 to $7.8 billion in 2020, driven by rising bank penetration, surging internet and smartphone penetration, burgeoning e-commerce sector, an increasingly supportive regulatory environment, and improvements in telecom infrastructure, according to a Solidiance’s report on Vietnam’s fintech growth potential released recently.
The APAC-focused consulting firm’s report showed though bank penetration in Vietnam is consistently growing, it still trails other Southeast Asian nations in the region. Vietnam’s ratio of banked citizens only reached 59 percent in 2017 while Thailand and Malaysia accounted for 86 percent and 92 percent respectively in the same year. As Vietnam catches up with other neighboring countries, increasing internet and smartphone penetration, improvements in telecommunication infrastructure (3G & 4G), and growing income levels from the middle-class have significantly given rise to opportunities in Vietnam’s fintech space.
Among the three different fintech product segments - digital payment, personal finance, and corporate finance - digital payment solution leads the fintech service market share at 89 percent. However, personal & corporate finance is expected to grow at a faster rate through 2025.
Vietnam’s burgeoning e-commerce sector with growing order value has further promoted intermediary payment platforms and digital payment services. Currently, there are some 35.4 million online shopping users and it is expected to accelerate to some 42 million, accounting for 42.5 percent of the projected population by 2021. The average spending of $62 online will grow to $96 by 2021 and Cash on Delivery - the major means of payment - is expected to be replaced by digital payments and other modern payment methods, signifying ample opportunity for fintech firms to tap into.
