The Hanoitimes - Topica Founder Institute estimates the total investment in Vietnamese fintech startups in 2016 at US$129 million, accounting for 63% of all startup funding value, with Payoo, VNPT E-pay, M_Service (Momo) and F88 leading the tally.
"Vietnam currently has 78 fintech companies, many of which have received investments from foreign and domestic investors," said Jan Bellens, Ernst & Young (EY) 's Global Banking and Capital Markets Emerging Markets Leader spoke to local media at the launch of the "EY Asian Fintech Census 2018 - Where stands Fintech Vietnam" on April 12.
By the end of this year, the amount of fintech companies in Vietnam receiving investments is likely to increase five times."
The tremendous scope for growth in fintech and retail banking sector in Vietnam is primarily driven by the demographics.
The US Department of Commerce's country briefing paper on the Vietnamese banking system estimates that approximately 75% of Vietnam's 93 million people use limited banking services, while the remaining 25% has not taken advantage of banking services at all.
While the opportunities are immense, the sector faces hurdles such as the dominance of cash usage and lack of cooperation between mainstream banks and fintech, according to Nguyen Thuy Duong, Deputy CEO of EY Vietnam.
As one of the pioneers in the fintech startup space in the country, Founder and Chairman of NextTech Nguyen Hoa Binh is all too familiar with the challenges faced by organizations looking to quickly take advantage of technology.
"As a fintech company, we are small. We are a bit more aggressive than the banks," Binh said. "In 2009, when we started out the first online payment system, it took us two years to get the pilot licence. It is too long (a period). This is the problem with the regulatory system. It is limiting innovation. There must be some way to address that. That is our common problem."
"In the long run, I am a big believer in the partnership between fintech and the financial sector," Binh added.
The Asian region has reported 203 fintech deals since the start of 2017 and the average deal size has been increasing as the sector matures, the EY report noted. In ASEAN, the report showed that 61 per cent of fintech startups have revenue growth as an immediate future goal in the coming 12 months while 60% expect their next funding round to be higher than US$1 million. Notably, 60% of fintech startups believe there is a lack of fintech talent in the country they operate in.