Fintech is certainly a word that is no stranger to those who have been closely monitoring the financial industry in recent years. It stands for financial technology (technology in finance), Fintech is common to all companies that use the internet, mobile phones, cloud computing technologies and open source software for the purpose of improving the efficiency of banking and investment activities.
Why is Fintech so hot? Fintech can reshape the financial industry, having a strong impact on the most important components of this industry. Currently, P2P lending companies (which connect borrowers directly to lenders on the Internet) have been operating quite effectively, helping to shorten the approval time for loans from several weeks in traditional banks to only a few hours. In the field of investment management, giants like BlackRock and Vanguard have a “robot advisory” service (robo adviser) that uses algorithms to adjust portfolio corresponding to the client’s level of risk tolerance. Some hedge funds are testing (and succeeding on many different levels) using artificial intelligence so robots can learn algorithms on their own.
From the beginning, it was just a small scale field with many potential applications, so far, Fintech has been attracting the attention of many technology experts, finance experts and investors around the world. Total investment in financial technology in the first half of 2018 reached USD 31.7 billion with approximately 450 successful investments, an increase of nearly 3 times in value compared to the same period in 2017 ( KPMG). The above figures have shown Fintech’s strong and comprehensive development in recent years, making this field be a part of the financial sector, promising to contribute to changing the face of the financial industry in the world. .
Not outside the development path of global Fintech, Vietnam in recent years has also witnessed the strong and extensive development of Fintech field. The number of Fintech companies participating in providing services in Vietnam market has more than doubled from approximately 40 by the end of 2016 to nearly 100 companies at the present time, spread across many different fields. In which, the payment sector plays a key role with 26 companies that have been licensed by the SBV to provide intermediary payment services. Next is the peer-to-peer lending sector with the presence of about 10 companies in the market. The remaining companies provide solutions to support the bank’s operations without directly providing services to end-users such as security, e-KYC, asset management, etc.
Fintech field in Vietnam has been attracting special attention of large technology companies and enterprises such as FPT, Viettel, VNPT to participate in the market … through both direct and indirect forms such as: investing in forming Fintech companies, establishing investment funds, supporting Fintech startups … Solidiance Consulting Company recently made a prediction that the trading value of Fintech market with the speed of the current level of development will likely increase to USD 7.8 billion by 2020 compared to USD 4.4 billion achieved in 2018.
Although Vietnam is considered a promising land, according to experts, there are still many obstacles for Fintech. Sharing the same opinion, Mr. Nguyen Van Minh – Vice Chairman of Sunshine Tech (Sunshine Technology’s development brand) said that Fintech is growing fast but not commensurate with Vietnam’s potential. Since 2015, Fintech startups (financial technology) have started to grow stronger in Vietnam. If in 2016, we only had 40 Fintech companies, now, this number is nearly 100 companies. But compared with other countries in the region, this figure is still quite modest when Singapore has 490 companies, Indonesia has 262 companies, Malaysia has 196 companies …
According to Mr. Minh, at present, Fintech companies in Vietnam are still not rich in services: “Among nearly 100 companies operating in Fintech field in Vietnam, most of them are operating in the intermediary payment field. Therefore, when thinking about Fintech, most people think that these are companies that provide payment intermediaries or e-wallets. But in fact, Fintech also covers a number of other segments such as peer-to-peer lending, blockchain / cryptocurrency, asset management, digital banking, point of sale (POS), and financial connectivity for small and medium enterprises, insurance technology, investment channels for investors … “.
Sunshine’s representative of technology also asserted: “The future of the world is in Fintech’s hands, if we do not catch up we are easily left behind. In Vietnam, not only banks, enterprises in the field of information technology but also some real estate giants with good vision and strategic orientation have begun to change the direction of Fintech application in management and sales and even provide services to residents ”.