Fintech is a financial concept that allows funds transfer, loans, transactions and fund raising via digital platforms. Its establishment has substantially increased financial service accessibility to customers.
One of Fintech's greatest features is it saves customers from numerous transaction fees from Vietnamese banks. Moreover, users can apply for loans of up to 10,000 USD and get approval within hours through a simple procedure. The high demand from the public has paved the way for the rise of Fintech.
“Fintech is an unstoppable new wave. It has been expanding and will continue to do so at a rapid rate. All the tasks that could only be done by mid-level financial agents can now be achieved directly by customers through Fintech”, said Vu Viet Ngoan, Chairman of the National Financial Supervisory Commission.
Statistics have shown that only 30% of the Vietnamese population are regularly engaged in banking activities. Meanwhile, the other 70% still consider banking to be complicated and prefer to deal with professional bankers face to face. This 70% is Fintech's target market. So what are some of the risks that Fintech presents?
“The problem with Fintech is that non-banking institutions are not fully equipped with security and their financial policies are not as strict as traditional banks”, said Jan Bellens, Asia-Pacific Leader for Banking & Capital Markets Practice.
Bank representatives have revealed that over 20 Fintech ventures in Vietnam are limited to transaction support and operate on small scales. In order to maximise customers' convenience, banking and Fintech sectors must cooperate instead of compete.
“Banks know their jobs very well and understand the legal obligations they need to follow to ensure financial security. The Fintech team, on the other hand, is very smart, creative and active. If we could combine these two, then we could provide the best service for customers”, said Tran Cong Quynh Lan, Deputy Director of Vietcombank.
The emergence of Fintech has also become motivation for traditional banks to modernise and enhance their services. However, stricter regulations need to be implemented to make Fintech a useful extension for banks. This is to guarantee the safety and rights of users.
