Investment banking fintech in Vietnam - Why and why not?

Investment banking fintech in Vietnam - Why and why not?

Fintech Vietnam has been growing flash in recent years. Many venture capitals, angel investors and funds want to join this hunt and have a big profit in this market.

However, parallel with the development, fintech now still has some difficulties, that need enterprises to overcome on the road to success, especially in the banking field.

So, in this essay, FinFan discusses this topic to find out Why and why not to have investment banking fintech.

Banking fintech – what is that?

We have many fields in the fintech market such as insurance, investing – anything that relates to finance. Banking is one of these fields, which has the main goal of developing a technology of banking system.

In banking fintech, we have some business models like peer-to-peer lending, buy now pay later (BNPL), NEOBanks and digital banks, etc. Especially in Vietnam, e-wallet is the most developed field of banking fintech. Up to now, we have had 3 unicorns of this business model.

Investment banking fintech

Like the above information, many investors want to take a footstep in this market and make a big profit. Some of these are successful with their investments.

  • Goldman Sachs and Standard Chartered invested in MoMo and have made this company become the unicorn of Vietnam in banking fintech.
  • Phoenix Holdings invested in Timo – the first digital bank in Vietnam. Up to now, Timo has had more than 500.000 downloads on Google Play and the company won a US$20 million funding round in 2022.
  • Phoenix Holdings also cooperate with Kredivo to bring the Buy Now Pay Later service to the Vietnam fintech market.

On the other hand, many investors not only have losses but also can be entangled in labor because of some illegal things in the business model of their invested companies.

  • Some F88 facilities were searched by the police when there was a gangster-style debt collection.
  • App e-wallet MyAladdinz scammed investors into large sums of money when they created a virtual not recognized coin named GEM to exchange with fiat US dollars as a cover for their multilevel Ponzi model.

Why and why not invest in banking fintech in Vietnam?

Banking fintech is a lucrative market, but it also gives many traps for investors too. To avoid falling prey to hunters, investors need to be equipped with the necessary knowledge for investment banking fintech in Vietnam.

The first knowledge that needs to be learned is about legal.

That isn’t all areas of banking fintech are licensed. The development of law always follows the development of technology. So, some business models can run well in other countries, but can’t establish or grow in the Vietnam fintech market.

The second knowledge that needs to be acquired is about customer behaviors.

Why MoMo and Timo are so successful models in Vietnam, is because they understand their customers. In the story that FinFan tells you about MoMo, they started with small activities like turning small grocery stores into transaction points and collecting many users from this activity.

When you want to invest in one banking fintech company, the first question you need to ask the owner or founder is “How will your solution help or be received by consumers?”

The last one is the future profitability of the project.

If you want to invest in one project, you’ll think about its profitability in the future of it first. The more profit you get, the more successful your investment deal.

However, don’t believe too much in projects that promise too high-interest rates without any development roadmap and break-even point. That’s maybe the trap of some multilevel Ponzi project.