Vietnam Fintech Market Set for Promising Growth: Projected to Grow at a CAGR of 18.0% by 2027
Published | 01 January 2022
Vietnam fintech market is growing at a high CAGR because of the increasing income, especially of the middle-class groups. Additionally, the growing penetration of smartphones, and dependency on internet services, along with favorable government policies to boost digitization in the country also favors the Vietnam fintech market….
A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that the Vietnam fintech market was worth USD 7.23 billion in 2020. According to the study, the market is estimated to grow at a CAGR of 18.0%, earning revenue of around USD 23.2 billion by the end of 2027. The combination of low financial inclusion and high technological advancements in Vietnam make it a lucrative market for fintech companies. The growth of the Vietnam fintech market can also be attributed to the increasing income, especially of the middle-class groups, growing penetration of smartphones, and dependency on internet services, along with favorable government policies to boost digitization in the country. The rise in the disposable income of middle and lower-income groups is proliferating the growth of the digital payment platforms in the country. Nevertheless, the shortage of skilled human resources equipped with the necessary knowledge and skills in the field of fintech may act as an impediment to the growth of the Vietnamese fintech market.
Growing Demand for Digital Payment Apps Propelling the Vietnam Fintech Market
With an increase in tech-savvy population, the explosive growth of smartphones and stronger internet connectivity, Vietnam is witnessing an increase in digital payment apps, which in turn is driving the country’s FinTech Market. Popular platforms, such as MoMO, Nextpay, Zalopay, etc., have already established themselves as fintech giants in the global markets. VNPay and MoMo attracted the largest fintech investment in 2019 with over USD 1 billion and USD 233.8 million deals respectively. Various digital payment startups, such as eMonkey, Interloan, Kilimo Finance, etc., are also emerging with growth potential. Thus, the increasing investment in fintech platforms is projected to drive the market during the forecast period.
Increasing Small and Medium-Sized Businesses Driving the Market Growth
The adoption of fintech is gaining traction among small and medium-sized businesses in Vietnam, which bolsters its market growth. The reason for its growing demand is that fintech applications offer immense growth opportunities as well as various platforms for enhancing customer interaction. In addition, fintech apps make it easier for businesses to obtain loans and other financial aid with shorter processing times. Such benefits for small businesses are propelling the growth of the overall Vietnam fintech market.
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Vietnam Fintech Market - By Deployment
Based on deployment, the Vietnam fintech market is segmented into cloud and on-premise. The cloud segment dominates the Vietnam fintech market, primarily due to its higher level of security in terms of data storage and management. Cloud technology allows fintech companies and banks to establish effective and secure services for lending, payment, and fraud detection. Moreover, the cloud also provides the opportunity for better scalability as it eliminates the need for physical hardware and software setup. Therefore, cloud deployment is getting increasingly popular among small and medium-sized businesses as it proves to be cost-effective.
Impact of COVID-19 on Vietnam Fintech Market
The Vietnam fintech market registered tremendous growth after the COVID-19 pandemic outbreak. The fintech services offered stability and growth opportunities to businesses, especially small and medium-sized enterprises to boost customer interaction and remotely access their services. The rapid digitization in the financial sector also provided growth opportunities to the Vietnam fintech market during the global health crisis posed by the novel coronavirus. There has been a surge in online transactions due to the surge of safe and secure mobile payment applications and the growth in the e-commerce industry due to lockdowns and inaccessibility of products through the offline market.
The leading players in the Vietnam fintech market are MoMo, Nextpay, Zalopay, VayMuon, Kilimo Finance, VNPAY, Coin98, Rikkei Finance, VIU APP, Bizzi, Fundiin, and other prominent players.
The market is still flourishing and therefore, is highly fragmented among many fintech startups and companies. The startups are increasingly making space for themselves in the market with the launch of a wide range of services. They are also relying on advertisement and marketing strategies to create brand awareness among potential consumers. Furthermore, the adoption of competitive strategies, such as partnerships, mergers, acquisitions, collaborations, etc., is also prominent in this market.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the Vietnam fintech market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the Vietnam fintech market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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