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Vietnam may not be one of the countries you think of when you hear the words “economic powerhouse”, but this Asia Pacific nation packs a financial punch that belies its size.

Vietnam, while still considered an emerging economy by the rest of the world, is taking a leadership position in Southeast Asia’s digital charge, with its young and digitally-savvy population eagerly adopting innovative digital financial solutions like e-wallets and QR code payments. And with the country’s digital economy projected to top US$43 billion by 2025, and the number of fintech startups operating in the country tripling between 2017 and 2020, Vietnam is at the forefront of the digital banking revolution in the Asia Pacific region.

A crucial component in Vietnam’s success to date in the digital banking space is the progressive attitude of its government and regulator towards innovation, with Vietnamese government agencies like the National Technology Innovation Fund and the Fintech Steering Committee proactively encouraging innovation and welcoming players from other markets.

An example of this progressive attitude is the recently approved draft of a decree on controlled testing mechanisms for fintechs in the banking sector (sandbox for fintechs), with organisations in the payments, peer-to-peer lending, client identity support and other banking services expected to participate. This sandbox will enable fintechs to create and market innovative financial products without the need to fully comply with existing regulations.

Another focus area for the Vietnamese government is improving financial inclusion in the country, with a strategy introduced in 2020 which aims to have 80% of the adult population formally ‘banked’ by 2025. Digital banking technology is seen as a key driver of financial inclusion in the region, enabling banks and financial institutions to reach customers in areas where physical access to a bank branch is not possible. To this end, Vietnam is currently trialling a Mobile Money service, which will see the development of services using mobile phone credit to pay for small-value goods and services. This program is expected to have a positive impact on financial inclusion, with 125 million mobile phone subscribers in the country.

A key factor in Vietnam’s red hot digital banking scene is the willingness of banks and fintechs to work together to create new and innovative digital financial solutions. Where once these two camps may have been seen as fierce competitors, in the digital age collaboration and strategic partnerships are the key to success.

The recently launched Cake digital bank is an exciting example of a strategic partnership in action, with the new bank a collaboration between beFinancial (a part of Be Group) and one of Vietnam’s leading banks, VPBank. Cake’s digital financial solutions are integrated with the very popular ‘Be’ ride-hailing app, providing instant and on-the-go access to banking services for millions of Vietnamese consumers. The beauty of this collaboration is that – being linked to a well established ride-hailing app – Cake is able to tap into an already very loyal customer base of around 10 million drivers and riders.

Another Vietnamese success story is TNEX, which launched in 2020 as a digital-only arm of MSB (Maritime Bank), another well-established, conventional Vietnamese bank. TNEX’s vision was to tap into the country’s young and digitally-savvy population with an agile and customer-centric, end-to-end digital banking offering. TNEX styled itself as a technology company from the very beginning – rather than a bank – and MSB invested heavily in culture and tech, hiring psychologists and data scientists rather than bankers. Powered by Mambu, TNEX’s offering combines gametech, messaging, socials, and a full-merchant ecosystem with a complete payments network.

The third example in our trifecta of Vietnamese fintech innovators is Timo, which launched in 2015 as Vietnam’s first digital bank. Since launch, Timo has evolved into a tech-focused company committed to helping consumers stay on top of their finances and leveraging technology to better understand and serve its customers. In an innovative twist, Timo has partnered with high-profile retail brands in Vietnam including 7-Eleven and McDonald’s, setting up kiosks – known as ‘hangouts’ – in high traffic stores to enable new customers to sign up to become a Timo customer in a matter of minutes.

These three Mambu customers have demonstrated how investing in a cloud-native platform, incorporating cutting-edge technology, data analytics, and putting the customer first can result in outstanding business success, even in an emerging economy like Vietnam’s.

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Minh Pham
Pham Quang Minh is an accomplished digital bank and fintech executive who specialises in business management and technology consulting. Prior to Mambu, Minh was Executive Director at TMRW, the Asian digital-only bank powered by UOB Group. He brings a wealth of expertise with particular strengths in areas such as digital transformation, strategic planning, growth hacking and talent development.
Minh Pham