5 major opportunities for the startup fintech companies in Vietnam can be capitalized on by investors
Recently, a report by Switzerland Global Enterprise about the opportunities for Swiss startups when participating in Vietnam called Business Opportunities in Fintech in Vietnam.
Is this an opportunity for fintech startups in Vietnam to develop those strengths so that they can receive investments from large funds, or the big tech giants will jump into this lucrative piece of cake to be able to dominate the market? Let's find out together with FinFan
5 major opportunities for startup fintech companies are summed up in that report
The first major opportunity is the teaming up between traditional banks and fintech companies to ramp up digital banking propositions by embedding Application Programming Interface (APIs).
Moreover, banks can use some technologies like cloud base for increasing the data storage capacity and loading speed of the banking website or app so that they can bring a faster, more convenient and more personalized experience to their customers.
The second opportunity according to a report from Switzerland is the payments sector. This is the greatest number of participating competitors, which is attracted by much of the fintech funding in the domestic market.
The attraction of many investment funds in this field comes from the following these positive numbers in the data from Vietnamese SBV’s Payment Department:
- In 2022, domestic digital payments reported an 85.6% increase in volume and a 31.4% increase in value compared with the previous year.
- Non-cash payment transactions increased by 50.1% in the first two months of 2023 YoY.
- QR code transactions posted the strongest surge of 142% in quantity and 50% in value.
In addition, the data of Switzerland’s export and investment promotion agency shows us that almost two-thirds of Vietnam’s population, or around 57.62 million people, were making digital payments by January 2023, representing an 11.3% year-on-year (YoY) increase.
The third one in Switzerland Global Enterprise’s report is peer-to-peer lending (P2P lending), which is considered as a potential second piece of cake in the market, but causes a lot of serious trouble for the fintech industry in Vietnam.
What the Vietnamese government is always worried about whether to apply for this type of loan or not is how to ensure that debtors do not steal money from creditors.
If with the traditional form of lending, banks or financial companies can rely on the credit scoring system to approve the loan. However, with such a P2P model, it is difficult for lenders to control their debtors without the combination of advanced technologies such as eKYC or credit score assessment from Switzerland.
Wealth tech is also the remarkable major that the report targets. According to the data from the Securities Depository, in the first half of 2021, Vietnamese investors opened over 620,000 new securities accounts, as compared with the combined total of 393,659 accounts opened during the 2019-2020 period. Fintech startups in Vietnam can create applications that help users invest with low capital in any industry such as stocks, bonds, investment funds, real estate, etc.
However, these companies should also have terms of service sites in advance with some disclaimers for customers’ investment amounts and activities must be approved by the State Securities Commission or the local Department of Construction if your startup business is related to real estate investment.
The last major opportunity that this report announces is blockchain and cryptocurrency. This is not surprising given that Vietnam is a country with the highest cryptocurrency adoption rate in the world according to the most recent Statista report.
Most recently, a representative of the Economic Department, Office of the National Assembly has made the latest recommendations on amending several legal corridors on the approval of forms of digital assets and creating favorable conditions. for promoting startups in the field of Blockchain.
This proves that the government is increasingly interested in digital assets and has appropriate moves to promote them (maybe to develop 1 CBDC for the Vietnamese government).
Conclusion about 5 major opportunities for the startup fintech companies
In FinFan's opinion, in the above 5 key opportunities, there are only 2 forms that are fintech startups in Vietnam that need the support of fintech companies from Switzerland: P2P lending and blockchain along with cryptocurrency by 2 models. This model requires an appropriate legal and evaluation system in Switzerland.
In the remaining forms such as digitalized banking industry, payment system and wealth tech, Vietnamese startups can completely develop and can succeed in those fields.
Even some projects on the blockchain market and cryptocurrency exchanges in Vietnam are highly appreciated and become the world's unicorns such as Coin98 exchange or NFT Axe Infinity game.
However, the common feature of these projects is that they were not originally developed in Vietnam but had to be implemented in another country.