From my perspective after 15 years on the ground, Vietnam's banking sector is undergoing a period of remarkable expansion, making it a focal point for global financial institutions from Southeast Asia and beyond. Reflecting the Vietnamese market's potential, the updated figures from the State Bank of Vietnam (March 30, 2025) show that the country's current […]
The wake of the Covid-19 pandemic and the swift change in the behaviors of consumers have pushed the banking sector in Vietnam towards digital transformation. The post-Covid “new” normal has presented Vietnamese banks with challenges. To survive, they have to catch up with the digital trends; however, new opportunities are open to them and investors in this sector when digital banking seems promising to grow.
Market potential
In Southeast Asia (SEA), digital sectors have experienced substantial growth, reaching 100 billion USD in 2020, expecting to surpass 300 billion USD in 2025. In the region, Vietnam currently ranks 3rd in attracting investment in companies operating on online platforms, including digital services and fintech. Besides, by 2025, Vietnam's digital economy will account for about one-fifth of GDP, which will increase by 7 - 16% by 2030, equivalent to about 28 - 62 billion USD, signaling the golden time to promote digital business.
Customer behavior
In a recent survey by KPMG, in Asia–Pacific emerging markets, the share of consumers actively using digital banking increased sharply, rising 33 percentage points from 54% to 88% in a period of 5 years (2017- 2021). In contrast, the level of digital adoption among consumers in developed Asia–Pacific markets has remained stable at approximately 90%. The increase in active digital bank users is arguably higher in Vietnam compared with APAC - emerging and some APAC - developed markets, with the numbers rising by 41 percentage points to 82% in 2021 (KPMG, 2021).
The population of Vietnam is currently more than 98 million people (General Statistics Office, 2021), of which 70% are in the adult age, and 72% own at least a smartphone which is equivalent to approximately 70 million people. This number of Vietnamese smartphone users ranks second in SEA, only behind Indonesia. Likewise, 67% of Gen Y users choose mobile as a common payment method, and 61% of them prefer opening an account online rather than going to the banks (MB Bank, 2021 quarterly report). Concurrently, 80% of Gen Z use digital banking on smartphones, becoming the generation that sets the pace for the future development of digital banking. Furthermore, as the population of Vietnam largely comprises the young generation, with the ability to quickly adapt to new technology and being tech-savvy, an increasing number of people have adopted digital financial services, which has presented a potential pool of customers for the growth of digital banking in Vietnam. The number of banking application users in Vietnam recorded a growth of 73% in the first 9 months of 2020, the highest rate in the entire region. However, digital banking penetration is still moderate, and Vietnam's digital financial services have a lot of room for development in the coming years.
In 2021, Vietnam record 8 million new digital users of which 97% are using online services, and 99% intend to keep doing so. Also in the report “Year in search” of Google, the search interest in “ ngân hàng online (online banking)” and “mở thẻ online (open card online)” increase by over 58% and 76% respectively. Rising searches in 2021 paint a picture of how the many newcomers have not only dipped their toes into the online world but also taken the plunge to integrate digital into their lifestyles. In the next five years, eight in 10 merchants anticipate more than half of their sales to come from online sources, 81% of them likely to increase their usage of digital payments in the next one to two years.
This is a watershed moment for the bank to think about digital ways to be readier to respond to future changes that may lie ahead, while still keeping the customer at the center of what you do.
Collaborations with Fintech
The survey on Fintech activities of financial companies globally in 2017 by KPMG shows that 81% of banks oriented cooperation models. According to the Global Fintech Report 2017 of Capgemini Information Technology Group (France), 77% of bank managers surveyed considered Fintech as a future cooperation partner.
In Vietnam, current fintech transactions are also based on collaboration with bank accounts. Therefore, the development of digital banking will have several advantages when integrating its products and services with Fintechs. In this way, fintech firms will help banks expand the reach of their digital financial products and services. In addition, capital resources are a challenge for all fintech companies. Especially when it comes to raising capital for credit activities and increasing transaction volume and consumer lending, only banks have the ability to perform as Fintechs are currently limited to low-volume transactions. Accordingly, banks can help fintech companies scale up the volume of their transactions substantially.
Conclusion
Ample opportunities are waiting for those who take risks. Yet, the investors should consider the legal framework in the digital banking sector. If you are interested in investing in the Vietnam digital banking sector, don't hesitate to contact our Vietonkin consultant team via email or contact page. Our professionals, who are insightful of the Vietnam market and legislation, can provide detailed advice on penetrating this potential market.
