Obstacles persist in fintech and digital banking

The formation of a controlled testing mechanism for financial technology (fintech) activities in Vietnam’s banking sector has become urgent and imperative and is in line with guiding principles from the Party and State on “digital government and economy”, analysts told a recent forum.

Addressing the “Risk management and ensuring financial safety, promoting fintech and e-banking activities in Vietnam” forum organized by the Vietnam Chamber of Commerce and Industry (VCCI) on December 8, analysts expressed concern that although they now play a key role in Vietnam’s digital economic development, fintech and digital banking activities are still grappling with a host of difficulties.

VCCI Vice President Hoang Quang Phong said Vietnam witnessed major leaps forward in its fintech market in 2021, with the country’s internet economy reaching a value of $21 billion, ranking it 14th out of 50 countries and territories in Asia and 70th globally.

Many banks have digitized all activities, he added, such as account openings, and some 68 per cent of Vietnamese adults now have bank accounts.

The Vietnam Fintech Report 2021 shows that the number of companies joining the fintech field increased from 39 in 2015 to 154 in 2021, of which about 70 per cent are startups.

However, analysts believe such growth falls short of actual potential. Digital transformation in Vietnam’s finance and banking sector still encounters obstacles, from human resources to legal framework.