Fintech is no longer strange to Vietnamese people just like in the essay “What are the differences between fintech and banks?”. However, is Vietnam a good market to open and grow a fintech company? This will be explained in this article.
Fintech is growing largely thanks to the development of technology and the legal is always following many years. For example, cryptocurrency is the most popular topic when almost all users on social media in Vietnam, but this field still hasn’t had recognition by the government.
Sometimes relying on this delay and legal loophole, some objects have illegally profited from this field and have made many people fall into bankruptcy.
Technology is the most important factor for establishing a fintech company. However, many of these technology components need much time and money to complete and that depends on the cooperation between many sides.
For example, when you want to create an e-wallet aggregator just like FinFan, you must connect with many sides and have the acceptance of them to embed the code into these e-wallets and may be under the influence of international law when we want to connect with wallets from other countries. That takes a long time and cost to finish this connection.
Another example comes from the fintech solution, that use blockchain and AI technology to develop such as eKYC for the digital banking system, protecting the information of peer-to-peer lending or buy now pay later solution, etc.
According to the statistics of the Economic Survey 2022-23 conducted by the Government of India, the global average by 23%. That shows us the conclusion that for each 100 fintech companies opened, 87 will fail.
That conclusion depends on the customers’ application of the solutions that fintech companies bring to the market.
Moreover, when one business model is successful, many companies will copy the idea and open the same one, this makes the competition between companies fiercer while the number of service users remains unchanged.
For example, in Vietnam, when MoMo was successful with its e-wallet model, many big companies will want to enter this market. That is the reason why we have more than 40 e-wallets in the market, but we still have the 3 biggest e-wallets, that can be recognized by users.
Vietnam is one of the nations of Southeast Asia, which is rated a lucrative market to develop fintech companies.
Moreover, Vietnam is the third market to invest in Southeast Asia. That’s why we become the dynamic of the fintech market, where many fintech companies have tried to open and develop. According to an article on asiaone.com of Singapore, Vietnam’s fintech market is forecast to reach a staggering US$18 billion mark by 2024.
*Housing close to 200 fintech organizations, now 66 percent of adults have payment accounts as listed by the Ministry of Planning and Investment. The perfect medley of 91.3 million smartphone subscribers and an internet penetration rate of 73.2 percent have made the situation more conducive to the industry's growth.
The success of these promising fintech organizations has been linked to their close ties with the banking sector which has created invaluable synergies.*
However, to stay in the market, the fintech companies in Vietnam must overcome the factors above. In short, Vietnam is a neither hard nor easy market for fintech companies, if they can demonstrate their abilities, they will have acceptance in the market and become a unicorn in the near future.