Vietnam’s Fintech startup ecosystem has grown significantly between 2017 and 2020, according to a new report. There were 44 Fintech-related startups in the country in 2017 and now there are at least 123 financial technology firms, Fintech News Singapore confirmed.
The number of Fintechs operating in Vietnam grew over 179% between 2017 and 2020, the report revealed. It added that payments are the largest segment, accounting for more than 30% of all Fintechs in the country.
Vietnam is now home to at least 39 licensed non-bank payment services platforms (as of October 2020). The largest digital wallet providers in the country include Moca, MoMo, Payoo, ViettelPay, ZaloPay and ViettelPay.
The State of Bank of Vietnam (SBV), the nation’s central bank, confirms that there were 4.2 million digital wallet users in the country (as of 2019) that has a population of around 100 million. These numbers indicate that there are still many potential growth opportunities and a large number of individuals and businesses may be looking for affordable digital financial services.
Although Vietnam’s payments companies have been expanding operations and attracting new investors, the most growth was reportedly seen in peer to peer (P2P) lending platforms and the nascent crypto and blockchain sector. These two high-growth segments witnessed the number of companies grow from only around 5 back in 2017 to over 15 startups this year (which is still not significant compared to international standards).
During the last 3 years, Vietnam has also seen the rise of Insurtech services, several digital banking platforms and many different SME financing solutions. These are notably three key segments that did not even exist in 2017, according to the Vietnam Fintech Report 2020.
While Vietnam’s Fintech sector has made substantial progress, it’s still relatively small when compared to the Singapore market. Several important segments in Vietnam such as data, credit scoring management, and crowdfunding are still quite underdeveloped.
The Fintech industry in Vietnam mainly includes platforms and service providers that operate under the business-to-consumer (B2C) model, which means that the business-to-business (B2B) market could be an area with many potential growth opportunities.
With the emergence of many Fintech competitors, traditional Vietnamese banks are now more motivated than ever before (especially after COVID) to accelerate their digital transformation strategies. There are a growing number of incumbents in the country that have been adopting a partnership approach to support rapid innovation. This offers B2B companies many new opportunities to begin working with incumbents as they update their legacy systems.