FinTech Start-ups and Banking: Inevitable trend in future
Updated at Monday, 13 Nov 2017, 15:21
The Hanoitimes - The cooperation between FinTech and banks will be the inevitable trend in Vietnam for the future, which plays an essential part in banks’ operating system.
In recent years, with the development of technologies, FinTech (are businesses that leverage new technology to create new and better financial services for both consumers and businesses. It includes companies of all kinds that may operate in personal financial management, insurance, payment, asset management, etc.) companies have been fast developing in Vietnam.
At the annual international conference with theme “Banking & FinTech: Opportunities & Challenges”, the Vice Governor of the State Bank of Vietnam (SBV) Nguyen Kim Anh said, Vietnam currently has 70 FinTech companies. The appearance of FinTech is an inevitable trend in banking system global scale, which brings both opportunities and challenges for banks’ activities.
The cooperation between FinTech and banks will be the inevitable trend in Vietnam for the future.
According to General Director of McKinsey & Company Vietnam – Marco Breu, the development of Vietnam’s economy & technology has opened new doors of development for FinTech. “In average more than 50% people interviewed in our survey are open and willing to use digital payment. In the upcoming 10 – 15 years, the model of traditional banks will not much use left, and is replaced with the the cooperation between banks and FinTech”.
Some opinions at the conference said that banks do not consider FinTech as competitors, but partners with the purpose of better serving customers. According to representative from the Vietnam Prosperity Bank (VPBank), VPBank has cooperated with FinTech in 3 main activities, including payment, and especially is digital payment. Secondly, VPBank is cooperating with the companies providing large database such as retailers and telecommunication companies, and thirdly, to cooperate with related partners creating new experiences for customers in banking activities. In the coming time, banks will facilitate cooperation with some FinTech companies, so that customers will have more information with regard to their financial status and better managing their financial situation.
At present in Vietnam, there are many FinTech start-ups to provide instruments for banks, providing information, evaluating consumption trend, so that banks will have the foundation and reference for credit loan. Besides, FinTech companies also offer digital services in improving the way individual lending and managing money, supporting fund for start-ups.
However, this is a new field and fast developing, meanwhile, the current legal framework in Vietnam to stipulate the operation and orienting the future development of FinTech is still lacking and incompatible with the context of digitalization and industrial revolution 4.0, which is currently only focusing on payment issue.
Chairman of board of FinTech project in Vietnam – Nguyen Quang Huy said, when banks apply technologies in their transactions, it will increase transparent of the money flow, safe and convenient for customers.
At present, there are currently some issues with regard to legal framework, such as the government’s plan of reducing transaction in cash, increasing online payment, but lacking direction on implementing plans into life. Vietnamese start-ups have not efficiently cooperated banks, so that SBV and commercial banks should propose legal corridors ad solutions for Vietnamese start-ups in relation with finance & banking to have environment for development.
SBV has set up objectives of developing and finalizing legal frameworks for FinTech operation, with an aim to be compatible with the context of digitalization.