Thursday,  Sep 20, 2018,08:32 (GMT+7) 0 0
Local banks still lukewarm to FinTech
Thuy Dung
Monday,  Apr 16, 2018,22:02 (GMT+7)

Local banks still lukewarm to FinTech

Thuy Dung

HANOI – Many local banks are still reluctant to team up with financial technology (FinTech) companies without realizing that FinTech serves as a bridge between banks and their potential customers.

The viewpoint was delivered at a seminar entitled “EY ASEAN FinTech Census 2018 – Where stands FinTech Vietnam” organized in Hanoi City last week.

Behind Singapore, Vietnam has the second largest number of incubator and accelerator programs in the Association of Southeast Asian Nations (ASEAN) region. This is a positive sign for growth of local FinTech companies.

Besides, Vietnam has a young population who are more tech-savvy. According to Ernst & Young (EY) Vietnam, cash still accounts for a whopping 90% of consumer transactions, which explains why as high as 47% of local FinTech enterprises focus on the payment services sector – the highest rate in the region.

The country has also launched a FinTech club which allows businesses to improve knowledge, support each other and share experiences. The most important thing is to develop a legal framework for this sector.

Local FinTech companies are still of a small scale while policies and regulations for them are lacking. Furthermore, many banks are still cautious about cooperation with them, said Nguyen Thuy Duong, EY financial services leader for Vietnam.

She stressed many residents do not have banking accounts, whereas the number of smartphone users is rising, which are fertile ground for the development of FinTech companies to serve as a bridge for banks to offer services to many local people.

Local FinTech companies are also faced with a shortage of manpower and the Government’s regulations. According to EY experts, the legal support from competent State agencies plays a crucial role in the establishment of a FinTech ecosystem which encourages creativity and healthy competition.

EY ASEAN FinTech Census 2018 is the latest report on Fintech firms in the ASEAN region, including Vietnam. The report resulting from a survey of more than 250 enterprises analyzes the regional ecosystem and provides a platform for FinTechs to express their views on a range of matters.

The report examines in-depth how governments across ASEAN have and can further facilitate thriving FinTech hubs. It also provides views from industry and domain experts on the ecosystem.

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