Industry Insights Session | Growth Of Vietnam’s Fintech Landscape Driven By Consumer Trust

Vietcetera kicked off the Vietnam Innovators Summit with its first Industry Insights Session on Vietnam’s fintech landscape. Industry leaders Winnie Wong (Mastercard), Manisha Shah (Momo), James Vuong (Infina), Huy Nghiem (Finhay), and Duong Le Minh Duc (FPT Smart Cloud) joined Hao Tran for an afternoon of insightful discussions at the Sofitel Saigon Plaza Hotel.

Most Vietnamese pay for goods and services with cash, believing it’s the safest and fastest mode of payment. About three years ago, as much as 90% of the country’s 98 million people preferred cash transactions over technology-based payment modes. The percentage has gone down to 75% during the COVID-19 pandemic — a modest shift, nevertheless a change worth looking into.

Mastercard, a global pioneer in payment innovation, expanded its services to Vietnam about 28 years ago, seeing the “young country” as a potential market. But it was only ten years ago when an office was established here.

“We’ve seen Vietnam’s potential because of its young and dynamic population, high internet penetration, and high smartphone usage. It’s one of the fastest-growing economies in the region, so there’s a lot of room to grow,” said Winnie Wong, Mastercard Country Manager for Vietnam, Cambodia, and Laos.

Winnie further highlighted Vietnamese consumers’ “willingness to adapt” to new technologies, especially financial technologies (fintech), which presents a more secure, quick, and convenient way to purchase and pay.

However, for a traditional market like Vietnam, trusting hard-earned money to a mobile app or a rectangle card can be tricky.

Winnie assured that with Mastercard’s AI-based security features, “in the millisecond of clicking payment on your phone, Mastercard has various checkpoints in its system to secure your money.”

For a “cashless future” to become a reality in Vietnam, Winnie said, “a lot of partnerships have to happen” — from big and small fintech firms to merchants, consumers, and relevant government departments.

It remains to be seen how the Vietnamese market will shift digitally in the next three to five years. Still, the growth of the fintech industry will always be about “providing better customer experience,” said Winnie.

User education is priority

Like Winnie, Manisha Shah has an optimistic outlook for Vietnam’s fintech landscape. The Chief Financial Officer of startup unicorn MoMo said that along with consumer growth, the number of Vietnamese talents in the fintech sector is exemplary.

In fact, a great majority of MoMo’s 2000 employees are Vietnamese. “From the technologies to the products and research, they’re all done by Vietnamese talents,” said Manisha. MoMo trained the “smartest kids coming out of college” and became the backbone of the firm. “Our people are able to grow with the company.”

Having a Vietnamese team helped the e-wallet firm dive deeper into the market — understanding customer pain points and recognizing their needs.

What started as a SIM-card application that allowed people to transfer money and buy mobile top-up and game scratch cards in 2010, MoMo evolved into a smartphone e-wallet that further expanded into a super-app that processes insurance payments, donations and provided an investment marketplace in 2014.

The first years of MoMo were spent on user education, explained Manisha, as the concept of “digital wallets” was unfamiliar to most Vietnamese a decade ago. It was only in 2016 that the app reached one million users.

“We started by solving customer pain points, as they were our main users. Later on, we realized that merchants are also our customers. We focused on this sector and connected with them to know what they need and how we can address those pain points,” said Manisha.

Now with more than 31 million users, MoMo continues to launch new products aimed at educating users about the advantages of e-wallets and online payment transactions (including wealth management) and providing convenience for both consumers and small-and-medium merchants.

Building confidence

Along with the emergence of fintech apps and digital payment and investment platforms in Vietnam is the rise of hacks, scams, and cyber attacks. On average, more than 256 cyber attacks interrupt information systems per week.

These have become a big challenge for online investment platforms like Infina and Finhay, which both rely on consumers’ trust and confidence. These platforms help make investment accessible, easy, and engaging for Vietnam’s middle and lower classes.

“Trust is the most important thing you need to acquire from consumers,” said James Vuong, CEO of Infina. “With the rise of MMO (make money online) and scammers, many consumers are still not well educated about scams.” Infina’s customers are primarily millennials aged 25 to 40 who would save or invest their disposable income in family planning, child education, early retirement, and so on.

For Finhay founder Huy Nghiem, building trust takes time, and there are a lot of things to do to earn it. Huy said it’s essential to be “true and consistent.”

“Investment involves risk; it doesn’t guarantee a future return. So it’s important to be transparent and disclose in advance. As long as the user-investor understands this and they’re happy to use the platform, then you better connect with them,” explained Huy. “That’s what we’ve been doing since the first day.”

Duong Le Minh Duc, Deputy Director at AI Business Center, FPT Smart Cloud, said the behavior and demands of fintech consumers — mostly the young generation — are the foundation of a fintech firm’s strategy. With these consumers wanting instant transactions and support when using an investment platform, it is the firm's responsibility to provide them.

“And fintech in Vietnam has already got the technologies for these. But they need to do more, especially ensuring security. Since they’re already Cloud-based in their DNA, for sure they’ve chosen a trusted provider and have worked on several pain tests, any issues on security can easily be detected and resolved,” said Duc. Cloud has a more secure framework that allows fintech companies to store and analyze data and provide better user experiences.

But more important than data security is giving user-investors the correct information about their investments — where to put their money and where not to.

James said it’s “hard to balance what’s good for the company and what’s good for clients and customers” in the investment landscape. “Even when customers demand products they want to see in Infina, we don’t give it if we don’t see it profitable and sustainable for them. That could mean a slower growth rate for us, but it’s the right thing to do.”

For Huy, working with partners with good assets, being upfront with clients, and disclosing facts is always the best step to maintaining confidence.

“We follow strict guidelines — risk assessment, internal control, government policies, and all supporting papers — to help our clients make good investment decisions.”

Join The Conference on November 18 and the rest of the Industry Insights Sessions in the coming weeks for expert insights on a fast-innovating Vietnam. Check how to buy tickets here.

Here are some photos from the Industry Insight Sessions: Vietnam’s Fintech Landscape: