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Fintech startups in Vietnam now have the opportunity to execute their ideas considering the ready investments and progressively exciting environment in the country. Even though the country may not have enough startups yet, many investors are quite prepared to provide the capital, in addition to the support of global organizations.

The UK government has shown a lot of interest in Vietnam’s fintech industry and has provided significant support. For example, it was behind the initiative of launching the Vietnam FinTech Club.

This year’s Asian Banker Summit was also held in Vietnam, with the main focus being on the digitalization of the financial industry.

Asian Banker’s statement said, “With an aggregate growth that is one of the fastest in the world, a young and increasingly technological exposed population and becoming more middle-class and urbanized, ASEAN is a formidable market for the expansion of financial services. The potential of the region is nowhere better represented than one of its rising stars, Vietnam.”

 

Fintech Investors Seek Vietnam as a Leading Global Fintech Hub

Saigon, Vietnam

 

In March, MoMo, a Vietnamese fintech app received a capital investment of $28 million from Goldman Sachs and Standard Chartered Private Equity.

Mergers and acquisitions have also started taking place in Vietnam’s fintech market. In April, SoftPay Mobile International acquired a majority stake in Vietnam MPOS Technology JSC. The Asian Development Bank is also committed to enhance financial inclusion via innovative policies.

According to Christian Konig, fintech expert and organizer of Fintech Vietnam Meetup, all these show how different players, from both the public and private sectors, are interested in the Vietnamese fintech market. Konig said, “This is a big message. I would definitely go for fintech in Vietnam because I would be sure that I’d get one of these funds to invest in my startups.”

However, Vietnam may not benefit from these opportunities due to the lack of sturdy, well-founded fintech startups. Entrepreneurs have to analyze market needs and trends, as well as develop efficient and affordable solutions. The young generation’s growing use of mobile phones for various purposes will make money transfer likely the next big thing.

 

Fintech Investors Seek Vietnam as a Leading Global Fintech Hub

Danang, Vietnam

 

According to a report by the World Bank, Vietnam’s total inbound remittances in 2015 were about $12.3 billion, putting it at 11th place among the biggest global remittance recipients. Nevertheless, there are still no local startups offering remittance transfer of products or services that can stand up to the conventional players, such as Western Union and MoneyGram.

The emergence of companies such as BankGo, a Vietnamese loans comparison site, and Timo, a Vietnamese digital-only bank, shows that some people have successfully started to develop fintech businesses.

There is one very important factor that must be addressed –  the struggle between old and new. Traditional banks should realize that fintech startups (i.e., the new players) are prepared for the competition, and are capable of standing in the face of changing times. This is because they know how to develop products based on customer needs. Therefore banks should not fear startups, but, rather, collaborate with them to better understand the new mindset and keep up with the dynamic trends. Instead of startups and local banks fearing each other, they should be wary of the thorny technologies created by multinational companies, such as AlibabaPay, Google, and Facebook, among others. These players understand how to attract customers, in addition to having the necessary resources to provide cheaper services.

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