FinTech (financial technology) refers to software, mobile application, and other technologies which enhance and automate traditional forms of finance for businesses and consumers. It is driven by the increasing adoption of digital channels and the need for more efficient and costeffective financial services. The fintech industry has been a rapidly growing field that is disrupting traditional financial services. In this qualitative study, the research group examined how Fintech has affected Traditional Banking in Vietnam. Although the Fintech industry has brought positive impacts on financial products and services as well as the Vietnamese financial market, there are also challenges facing the Fintech industry in general and the Vietnamese traditional banking in specific. As the industry continues to grow, it will be important for companies and regulators to work together to address these challenges and ensure that the benefits of fintech are realized for all. This study can serve as the foundation for business decisionmakers to make wellinformed choices regarding technology platforms in the international financial market.
FOREIGN TRADE UNIVERSITY ECONOMIC FACULTY *** INTERNATIONAL FINANCE REPORT THE IMPACT OF FINTECH INDUSTRY ON TRADITIONAL BANKING IN VIET NAM Class: TCHE414 Lecturer: Assoc Prof Dr Mai Thu Hien Group: Ha Noi, June 2023 TABLE OF CONTENT ABSTRACT INTRODUCTION .3 I An overview of the Fintech industry in Vietnam, An overview of the Fintech industry An overview of the fintech industry in Vietnam II Traditional Banking .8 An Overview of traditional banking in Vietnam: 1.1 What is traditional banking? 1.2 The traditional banking sector in Vietnam: Key players in the traditional banking sectors in Vietnam: .10 2.1 National key players: 10 2.2 International key players: 11 Benefits and disadvantages of traditional banking in Vietnam: 11 3.1 Benefits: .11 3.2 Disadvantages: 12 III Impact of Fintech on Traditional Banking in Vietnam 12 Positive .12 1.1 Improved Customer Experience 12 1.2 Increased Efficiency and Productivity .13 1.3 Access to New Markets .15 1.4 Collaboration and Partnership Opportunities .15 1.5 Conclusion 16 Challenges 17 2.1 New competitive landscape for traditional banks 17 2.1.1 Solutions for customers with poor credit scores .17 2.1.2 Peer-to-peer (P2P) lending platform 18 2.1.3 Personal wealth management tools 19 2.1.4 Implications 21 2.2 Traditional banks’ partnerships with fintech firms expose banks to a unforeseen set of risks 21 2.2.1 Strategic risks 21 2.2.2 Operational risks .22 2.2.3 Cyber risks 23 2.2.4 Compliance risk 24 CONCLUSION 25 REFERENCE .27 ABSTRACT FinTech (financial technology) refers to software, mobile application, and other technologies which enhance and automate traditional forms of finance for businesses and consumers It is driven by the increasing adoption of digital channels and the need for more efficient and costeffective financial services The fintech industry has been a rapidly growing field that is disrupting traditional financial services In this qualitative study, the research group examined how Fintech has affected Traditional Banking in Vietnam Although the Fintech industry has brought positive impacts on financial products and services as well as the Vietnamese financial market, there are also challenges facing the Fintech industry in general and the Vietnamese traditional banking in specific As the industry continues to grow, it will be important for companies and regulators to work together to address these challenges and ensure that the benefits of fintech are realized for all This study can serve as the foundation for business decision-makers to make well-informed choices regarding technology platforms in the international financial market INTRODUCTION This paper aims at reviewing the Fintech industry and key players in traditional banking sectors of Vietnam The study will also provide the different cases with realistic statistics to illustrate the impacts of Fintech on the market and provide insights into how it affects traditional banking in Vietnam For this purpose, the data of the Fintech market was collected from several sources and critically analyzed from 2011 to 2022 By dissecting each year, this paper can observe that Through this paper, we can also gain a broader understanding of the opportunities and challenges of Fintech’s effects on traditional banking Thus, we made some recommendations to conventional banks and businesses with the aim to boost the quantity and value of transactions, and to further secure the financial technology’s position as one of the leading trends in the market Necessity of the report Firstly, the necessity of studying the impact of the Fintech industry on traditional banking in Vietnam arises from the increasing prominence of digital technologies in the financial landscape In recent years, especially after the long periods of lockdown and social distancing caused by Covid-19 pandemic, the financial technology (Fintech) industry has experienced remarkable growth and has revolutionized the way financial services are delivered and consumed worldwide Fintech startups, armed with innovative digital solutions, are rapidly gaining traction in the market, challenging the traditional banking sector's established norms As a result, it is crucial to examine the consequences of this disruption and understand how it affects the functioning, competitiveness, and sustainability of traditional banks in Vietnam Secondly, this topic holds scientific importance as it bridges the gap between technology and finance, two interconnected fields that drive economic progress Investigating the impact of Fintech on traditional banking in Vietnam enables researchers to explore the dynamics of a rapidly evolving financial ecosystem and understand the underlying mechanisms that shape the relationship between technology adoption, customer behavior, and financial services This scientific exploration not only contributes to the existing body of knowledge but also provides valuable insights for policymakers, regulators, and industry stakeholders to make informed decisions and design effective strategies to navigate the evolving landscape Thirdly, Vietnam's unique socio-economic context makes it an interesting case study for examining the impact of Fintech on traditional banking With a young and tech-savvy population, rising smartphone penetration, and a growing middle class, Vietnam represents a fertile ground for Fintech innovation Exploring how traditional banks in Vietnam respond to the emergence of Fintech and adapt to changing customer preferences can shed light on potential strategies and best practices for banks in other developing economies facing similar challenges In conclusion, the impact of the Fintech industry on traditional banking in Vietnam is a topic of utmost necessity and scientific relevance Understanding the implications of this disruption not only helps traditional banks survive and thrive in the digital age but also paves the way for an inclusive and technologically advanced financial sector that fosters economic growth and financial well-being By delving into this subject, we can contribute to the ongoing discourse on the transformative power of technology in shaping the future of financial services Objectives (1) Provide an overview of fintech and traditional banks to clarify their similarities and differences in purposes, business models and activities (2) Identify positive impacts that the emergence of fintech industry have on the operations of Vietnamese traditional banks and benefits incumbent banks can gain in collaboration with fintech firms (3) Discover the challenges faced by traditional banks due to the activities of the fintech industry and potential risks during the collaboration between the financial service providers Scope The research focuses specifically on the impact of the Fintech industry on traditional banking in Vietnam It examines the Vietnamese financial ecosystem, including both Fintech startups and traditional banks operating within the country Regarding the time frame, the research primarily considers the recent developments and trends in the Fintech industry and its impact on traditional banking in Vietnam It may refer to historical context when necessary but primarily focuses on the present and near future Methodology (1) Data collection Secondary data collection: This involves gathering existing data from sources such as academic journals, industry reports, government publications, and regulatory frameworks Secondary data can provide a comprehensive understanding of the Fintech landscape, market trends, regulatory environment, and financial inclusion efforts in Vietnam (2) Qualitative analysis This involves analyzing qualitative information from secondary sources It can include techniques such as thematic analysis to identify patterns, recurring themes, and key insights related to the impact of Fintech on traditional banking (3) Case studies Case studies are used to gain deeper insights into specific Fintech companies and their impact on traditional banking in Vietnam These case studies can involve analyzing the business models, strategies, and customer value propositions of selected Fintech startups and how they have disrupted or collaborated with traditional banks I An overview of the Fintech industry in Vietnam, An overview of the Fintech industry A wide range of definitions of the term "fintech" have appeared in academic practice as well as business journals "Financial technology" or "FinTech" refers to technology-enabled financial solutions FinTech describes a business that aims to provide financial services by making use of software and modern technology (Fintech Weekly, 2016) The term FinTech is not confined to specific sectors (e.g., financing) or business models (e.g., peer-to-peer (P2P) lending), but instead covers the entire scope of services and products traditionally provided by the financial services industry (Arner, DW; Barberis, JN; Buckley, RP) Fintech refers to the integration of technology into offerings by financial services companies to improve their use and delivery to consumers (Investopedia 2016) Regardless of the variances, fintech is generally used to describe a variety of innovative business models and emerging technologies that have the potential to transform the financial services industry Fintech is profoundly altering finance, impacting everything from capital raising to investment management In each of these domains, fintech innovation has reduced barriers to entry, widened access to financial services, and upended conventional beliefs about how finance functions Digitization can reduce friction in each step along the financial service lifecycle, from opening an account to conducting customer due diligence, authenticating transactions, and automating other, product-specific processes, such as assessing creditworthiness Fintech is therefore characterized by low marginal costs per account or transaction and scale efficiencies Fintech can also enhance transparency and reduce information asymmetries since digital processes generate a data trail, which can be used to better understand consumers, improve products, manage risks, and promote regulatory compliance Fintech covers a wide range of use cases across business-to-business (B2B), business-toconsumer (B2C), and peer-to-peer (P2P) markets Banking The main focus of many financial technology startups is mobile banking Consumers now expect to have quick access to their bank accounts, especially on a mobile device The majority of big banks now provide some sort of mobile banking functionality, especially with the rise of neo-banks A neobank is a digital-first financial company that offers banking services, like checking accounts and debit cards without having a physical site Neobanks deliver financial services in a customer-focused, digital-only style to streamline the banking process The top three neo banks by users include Chime, Varo, and Revolut Investing In recent years, the number of investing and saving apps has exploded due to fintech While these applications take different approaches, they all introduce users to the markets by combining savings with automatic small-dollar investing techniques, such as immediate round-up contributions on purchases The barriers to investing are being broken down by businesses like Robinhood, Sofi, Wealthfront, and Acorns Payment One of the most popular services provided by fintech is payment services Consumers can send money to friends and family through digital payments, use contactless payment methods to shop, and pay their bills Some examples include Venmo, Cash App, Zelle, PayPal, and Stripe Lending Fintechs in lending simplify the loan application procedure for both lenders and borrowers In addition to offering customers early payday loans or flexible payment plans, they may grant lenders access to information about potential borrowers to make lending decisions Within the fintech lending space, some companies worth noting include Plaid, Affirm, and Klarna Cryptocurrency Cryptocurrency and blockchain intersect with fintech in a variety of ways For starters, several cryptocurrency trading platforms have appeared in recent years that enable users to trade various cryptocurrencies and benefit from decentralized exchanges Additionally, a variety of cryptocurrency wallets have appeared to protect people's digital currency Additionally, several fintech businesses use blockchain technology for secure digital identity management, money transfers, and payment processing An overview of the fintech industry in Vietnam In recent years, Asia has emerged as one of the world's top fintech markets, recording the largest fintech revenue worldwide Vietnam is one of the developing fintech markets in this region Additionally, the Vietnam market has a young and rapidly expanding population with more than 100 million tech-savvy consumers, which accelerates the rapid transformation of banking and financial systems Hence, Vietnam is regarded as one of Southeast Asia's most competitive FinTech markets In 2017, fintech began a significant expansion in Vietnam The State Bank of Vietnam (SBV) proposed that the government introduce a sandbox, which would serve as a test-run legislative framework for fintech in the nation In March of that year, a Steering Committee on Financial Technology was established by the State Bank of Vietnam to develop a legal framework for the growth of the fintech ecosystem and open doors for regional fintech businesses The authorities then discussed proposals for crafting a fresh decree through the start of 2020 The approval of that agreement a year later signaled a dedication to fintech in Vietnam For technology firms that enable digital banking, digital payments, blockchains, and encryption, the rapidly expanding FinTech business in Vietnam offers significant market opportunity Vietnam is currently home to more than 130 FinTech startups that cater to numerous clients and cover a broad range of services such as digital payments, alternative finance, wealth management, and blockchain, among others Vietnamese fintech firms provide services for a variety of industries, but digital payments, peer-to-peer (P2P) lending, cryptocurrencies and blockchain, investment technology, and point of sale make up the major sub-sectors, accounting for 76% of the overall market share The COVID-19 epidemic also caused a change in the purchasing patterns of Vietnamese consumers With lockdowns and social isolation, the market is growing both numerically and qualitatively, spurring demand for digital transactions and e-commerce E-wallet and Digital Payment In recent years, investors in Vietnam have focused their money and attention mostly on the fintech industry of digital payments The e-wallet market is still expanding at a phenomenal rate, and this has had a significant impact on the development of digital payments in Vietnam Due to the COVID-19 pandemic, using digital payment systems, especially e-wallets, has become the "new normal" for many highly connected customers According to a recent Visa survey, 85% of respondents use at least one e-wallet or payment app, and 71% of respondents use these applications at least once each week The Vietnamese market has become fairly crowded in recent years with more than 40 ewallet companies The top e-wallets, Momo, Moca, and Zalo Pay, hold 90% of the market share, leaving little to no room for other suppliers MoMo is consistently ranked as the leading mobile wallet brand among all available payment methods, holding more than 50% of the market as of 2020 MoMo is an electronic wallet that enables users to perform peer-to-peer (P2P) transfers and make payments online, owned by the M_Service company As of October 2018, MoMo had approximately 10 million users as of October 2018 across iOS and Android Goldman Sachs, Standard Chartered, and the US private equity firm Warburg Pincus all have investments in MoMo GrabPay by Moca is Grab's e-wallet This wallet was created in collaboration between Grab and Moca using their e-payment service platform Moca has a network of 11 local banks as partners and was granted a license by the State Bank of Vietnam (SBV) for payment services in 2016 Grab Vietnam purchased shares from Access Venture SPV, a Hong Kong investment fund, in 2018, and as a result, became a shareholder in Moca Zalo Pay, owned by ZION company, is an e-wallet that offers payment services and is connected with Zalo, the most widely used messaging app in Vietnam Users can attach their credit cards to make P2P payments, NFC payments, and QR code payments, as well as online purchases of goods and services P2P lending Peer-to-peer lending (P2P) is a business strategy that links lenders with borrowers by use of Internet platforms Global markets are noticing a strong rise in this tendency This type of financing has also been observed in Vietnam for a while According to Vietnamese P2P lending specialist Mr Nguyen Tri Hieu, there are four main approaches The company first acts as a go-between, using technology to connect potential investors with parties looking for money Second, businesses assess people in need of cash and pair them up with lenders Third, businesses evaluate the conditions and procedures for repaying debt Finally, businesses that mobilize capital and offer funds while also acting as a bank and making connections With more than 20 businesses, P2P lending is the second-largest Fintech market in Vietnam Time is a platform for peer-to-peer lending and a consumer finance startup This business claims to have given 2.8 million borrowers loans totaling roughly 1.7 billion USD, and it has inked cooperation agreements with financial institutions like Vietinbank and Dong A Bank It also claims to have more than 30,000 lenders on its platform Vay Muon - Vay Muon Joint Stock Company was first launched at the end of 2017 Currently, "VayMuon.vn" is one of the top platforms for peer-to-peer lending in Vietnam, linking over million users with close to 400,000 investors while expanding by more than 20% each month Blockchain Blockchain technology is the backend technology solution that facilitates the digitalization of databases and processes Through Blockchain Financial Records, it first creates a transparent transaction environment for the entire system of banks and financial institutions Second, automating the transaction procedure will hasten payment, and cut down on intermediary time and expense Finally, blockchain technology has the potential to quickly identify security flaws, prohibit access to consumer data, and prevent the altering of transaction data As one of the top five blockchain-producing nations, Vietnam is home to roughly ten cutting-edge start-ups with a combined valuation of more than USD 100 million According to a decree made by the Ministry of Home Affairs, the Vietnam Blockchain Union was founded It was created to advance Vietnam's digital economy and elevate the country as a leading contender in the field of emerging technologies It links global blockchain organizations and communities and allows users to exchange knowledge and resources for studying, experimenting with, implementing, and trading blockchain technology Vietnam can compete in the global market and develop into a technology hub with a rise in blockchain technology applications and a quick, widespread digital transformation II Traditional Banking An Overview of traditional banking in Vietnam: 1.1 What is traditional banking? Banking has, for a very long time, been an old-fashioned industry This is logical, seeing as banks have been around for hundreds of years at this point Traditional banking refers to banks with a physical presence with a domestic banking license A traditional bank typically has Physical presence; Regional headquarters in each country where they are active; Own-branded ATMs; A large number of employees; Face-to-face or one-to-one customer service and Dedicated account managers Traditional banking includes management strategy, banking operations, information technology (IT) center, marketing, call center, back office, accounting, and legal services management, business director, and other support services The central department sets out the workflow, designs and brings products to market, and manages the banking network's operations The banking network includes branches, agents, affiliated transaction counters, automatic teller machines (ATMs), and points of sale (POS - Point of Sale) 1.2 The traditional banking sector in Vietnam: The traditional banking sector in Vietnam has undergone significant changes in recent years Historically, the banking sector was dominated by state-owned banks, Vietnam's banks suffer from low public confidence, regulatory and managerial weakness, high levels of nonperforming loans (NPL), non-compliance with the Basel capital standards, and the absence of international auditing The foreign investment limit into the national banks of Vietnam is currently set at 30 percent But since the introduction of economic reforms in the 1980s, Vietnam has made efforts to liberalize its banking industry and introduce modern financial practices Since 1992 Vietnam's banking system has consisted of a combination of state-owned, joint-stock, joint-venture, and foreign banks, but the state-owned commercial banks predominate, and they suffer from high levels of NPL, most of them to state-owned enterprises Consequently, in September 2005 Vietnam decided to equitize all five state-owned banks—a change from previous plans to equitize only two of them In addition, Vietnam plans to boost the transparency of its financial system by establishing a credit-rating agency and performance standards for jointstock banks The four major top state-owned banks include the Bank for Investment and Development of Vietnam (BIDV), Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank), Vietnam Bank for Agriculture and Rural Development (Agribank), and Joint Stock Commercial Bank For Foreign Trade Of Vietnam (Vietcombank) In the past few years, the government has encouraged the entry of foreign banks into the Vietnamese market Large foreign banks are balancing their strong interest in serving multinationals in Vietnam and their frustration with continuing restrictions on their activities Some of the largest foreign banks operating in Vietnam are HSBC, Standard Chartered, ANZ, and Citigroup The sector has also seen significant growth in recent years in terms of the number of branches and ATMs Although Vietnam is a cash-based society, there were 12,811 automated teller machines (ATMs) as of January 2012, and 40 million ATM Cards in circulation This expansion of services, combined with growing consumer demand, has led to an increase in physical bank Fintech companies in Vietnam are leveraging technology to automate manual processes, which has reduced operational costs and accelerated transaction times As a result, traditional banks can focus on their core competencies and invest in innovation Moreover, Fintech companies in Vietnam are using technology to reach underserved populations who have limited or no access to traditional banking services This has the potential to improve financial inclusion and empower these populations to participate in the economy There are some general statistics on the growth of fintech in Vietnam and its potential impact on traditional banking According to a report by Solidiance, the fintech market in Vietnam was valued at $4.4 billion in 2017 and is expected to reach $7.8 billion by 2020 Fintech's impact on the banking industry has been significant, and failing to keep up with this trend can put banks at risk of falling behind global development trends, which can significantly impact their long-term development Recognizing this, the State Bank of Vietnam established a Fintech Steering Committee in March 2017 to support the completion of the legal framework and facilitate the development of fintech companies In addition, many commercial banks in Vietnam are actively collaborating with fintech companies to leverage their technological advantages The survey results of Ernst & Young indicate that 85% of banks consider the conversion to digital banking as their most crucial goal By collaborating with fintech companies, banks can take advantage of new technological innovations, improving service quality, reducing costs, and increasing productivity This strategy can also help banks stay competitive and provide more efficient services to customers Overall, Fintech has been instrumental in improving the efficiency and productivity of traditional banks in Vietnam, enabling faster, more convenient, and more accessible banking services for customers By automating manual processes, Fintech has enabled traditional banks to focus on innovation and their core competencies Additionally, Fintech has the potential to improve financial inclusion, which can have significant positive impacts on the economy 14 1.3 Access to New Markets Fintech has played a crucial role in opening up new markets for traditional banks in Vietnam By leveraging Fintech services, traditional banks can reach new customer segments that were previously underserved or unbanked, creating new opportunities to expand their customer base and revenue streams Fintech firms often cater to underserved or unbanked populations, which traditional banks may have overlooked By partnering with Fintech firms or integrating Fintech services into their operations, traditional banks can expand their customer base and reach new markets This can lead to increased profitability and growth, as well as improved financial inclusion for underserved populations Moreover, Fintech has enabled traditional banks in Vietnam to offer innovative products and services to their customers, such as digital wallets and mobile payments These services have become increasingly popular due to their convenience and accessibility, and traditional banks can leverage these services to attract new customers and retain existing ones The fintech industry has disrupted traditional banking systems globally, and Vietnam has not been an exception Fintech companies in Vietnam are gaining popularity, particularly among younger generations who prefer digital banking services that provide convenience, affordability, and better user experience This has forced traditional banks to adapt and compete by developing their digital offerings or partnering with fintech firms The Vietnamese government has recognized the potential of fintech to drive financial inclusion and economic growth and has been encouraging the development of the fintech industry One example is the State Bank of Vietnam's decision to allow non-bank organizations to provide intermediary payment services, creating more opportunities for fintech firms to enter the market In essence, Fintech has opened up new markets for traditional banks in Vietnam by enabling them to reach underserved or unbanked populations and offer innovative products and services By partnering with Fintech firms or integrating their services, traditional banks can expand their customer base, increase revenue streams, and improve financial inclusion 1.4 Collaboration and Partnership Opportunities Fintech has created significant opportunities for collaboration and partnership between traditional banks and fintech companies in Vietnam By leveraging fintech's expertise and technology, traditional banks can offer new products and services to their customers, which has allowed them to stay competitive in the market and retain their existing customer base Partnering with fintech companies provides traditional banks with access to innovative technologies and solutions that they may not have otherwise had This collaboration allows traditional banks to stay ahead of the curve and respond to changing market and customer demands By leveraging fintech's agility and innovation, traditional banks can remain competitive in a rapidly evolving financial landscape Furthermore, partnering with fintech companies can also help traditional banks reduce operational costs and enhance customer experience For instance, by outsourcing certain 15 functions to fintech firms, traditional banks can focus on their core competencies and reduce overhead costs Additionally, fintech companies often specialize in providing personalized and user-friendly services, which can help traditional banks enhance their customer experience The rise of digital banking in Vietnam presents significant opportunities for traditional banks to collaborate with fintech companies and expand their services to a broader online market According to a report by Bain & Company, more than 70% of Vietnamese people are "banked," indicating a large potential customer base for digital banking services Fintech firms in Vietnam are experiencing rapid growth, attracting significant investment As per DealStreetAsia, in 2020, the total funding for Vietnamese fintech companies reached $1.1 billion, almost triple the previous year's figure This indicates promising opportunities for traditional banks to collaborate with fintech companies to develop new financial products and services and expand their offerings In Vietnam, collaboration and partnerships between fintech and traditional banks are already taking place VP Bank and FPT Software, for example, recently collaborated to develop new digital banking solutions and services, according to Viet Nam News This partnership aims to provide personalized and seamless online banking experiences for customers, illustrating the potential for collaboration between traditional banks and fintech companies to create innovative solutions that meet evolving customer needs To sum up, Fintech has created significant opportunities for collaboration and partnership between traditional banks and fintech companies in Vietnam This partnership can help traditional banks stay competitive in the market, retain their existing customer base, and respond to changing market and customer demands By leveraging fintech's expertise and technology, traditional banks can reduce operational costs, enhance customer experience, and remain ahead of the curve in a rapidly evolving financial landscape 1.5 Conclusion In conclusion, while fintech has disrupted traditional banking in Vietnam, it has also brought about many positive impacts and opportunities for the industry The adoption of fintech solutions has significantly improved the customer experience, increased efficiency, and productivity, opened up new markets, and created new partnership opportunities As Vietnam's fintech industry continues to grow, traditional banks will need to embrace these changes and collaborate with fintech companies to stay competitive This collaboration can help traditional banks leverage fintech's expertise and innovation to offer new products and services, enhance customer experience, and reduce operational costs Furthermore, traditional banks can learn from fintech companies and adopt their innovative solutions and technologies to improve their operations, meet changing market demands, and remain ahead of the curve By embracing these changes and collaborating with fintech companies, traditional banks can stay competitive, improve their services, and better serve their customers in a rapidly evolving financial landscape 16 Challenges 2.1 New competitive landscape for traditional banks Despite being new entrants to the banking and financial sector, through the use of technology to provide non-intermediated financial services directly to customers, fintech companies are presenting a new competitive landscape for conventional banks More importantly, the real challenge that the fintech industry poses to conventional banks is the impact it has on customer expectations towards banking services By observing and often experiencing first-hand what banks offer – or not offer – Fintech companies have been able to identify specific gaps in the market, where traditional banks have been unable to meet the needs of certain customer segments effectively By developing narrowly defined, but highly effective solutions, they have managed to step into and take over segments neglected by traditional banks in terms of offerings Three underserved niche markets that help fintechs win market share and customer spending from traditional banks are (1) lowcredit-score lending service, (2) Peer-to-peer lending (P2P), (3) Personal finance management tools 2.1.1 Solutions for customers with poor credit scores Traditional banks often rely on traditional credit assessment methods, which can make it difficult for customers with no credit history or poor credit scores to access loans or other financial services Fintech companies have leveraged alternative data sources and advanced algorithms to assess creditworthiness and provide loans to customers who may have been rejected by traditional banks These solutions are enabling financial inclusion by expanding access to credit for underserved individuals and small businesses Such digital solutions favor unbanked communities and individuals who could not qualify for a typical bank loan as well by streamlining the adoption process and potentially bringing thousands more to participate in the digital economy Expanding financial inclusion is one of fintech’ biggest contributions to the financial landscape that has gained firms operating in this field increasing popularity among Vietnam’s population Case study: Trustingsocial and the mission of financial access for all 17 Pic Trustingsocial is the largest provider of credit risk profiles in Asia, covering more than billion consumers across India, Indonesia, Vietnam and the Philippines Trusting Social is a Vietnam-based AI-powered credit scoring platform specializing in providing alternative credit scoring solutions for emerging markets The company was founded in June 2013 in the United States, with a specific focus on targeting the "invisible customers" who are often deemed unscorable by traditional credit systems due to their lack of credit history and thus cannot be qualified for formal credit The company's primary goal is to extend credit access to the one billion unbanked customers by leveraging telecom data and various other data sources such as social media and web platforms Trusting Social's credit scoring engine is designed to analyze vast amounts of data from social networks like Facebook, LinkedIn, Twitter, and Weibo This data is combined with their comprehensive global database on individuals and businesses, enabling Trusting Social to gain insights into consumers' social and professional lives By utilizing Big Data technology and incorporating social, web, and mobile data, Trusting Social has developed a credit scoring system that can evaluate creditworthiness even for individuals with limited or no credit history Trusting Social has gained recognition in the fintech industry, winning the Future of Money and Technology Startup Competition in 2014 Additionally, they were among the top 10 fintech startups in the Americas presenting at the Innotribe Startup Showcase in New York in the same year The company's headquarters are located in New York City, and they also have offices in Ho Chi Minh City and Singapore 2.1.2 Peer-to-peer (P2P) lending platform Fintech companies have disrupted the lending space by establishing P2P lending platforms These platforms connect borrowers directly with individual lenders, bypassing the need for traditional intermediaries like banks P2P lending provides an alternative source of financing for individuals or small businesses who may struggle to secure loans from traditional sources It offers greater transparency, efficiency, and potentially lower interest rates for borrowers while providing new investment opportunities for lenders 18 Case study: Tima, a consumer financial marketplace and peer-to-peer (P2P) lending platform Pic Launched in 2015, lending platform Tima has mobilized VND2.5 trillion, equivalent to US$115.5 million, from its lending partners Established in 2015, Tima is a consumer financial marketplace and peer-to-peer (P2P) lending platform The company has forged partnerships with prominent financial institutions, such as VietinBank and Nam A Bank It boasts disbursing approximately US$1.7 billion in loans to a substantial customer base of 2.8 million borrowers and over 30,000 lenders utilizing its platform Tima has successfully secured a Series B funding round, raising an impressive US$3 million in October, valuing the company at nearly US$20 million Recently, the company has been actively pursuing a Series C investment round after enlisting the expertise of John Donovan, former COO of LendingClub, as a member of its board of directors Tima collaborates with a wide range of lending entities, including 967 lenders encompassing financial institutions, investors, and credit institutions With this extensive network, Tima has facilitated over two million transactions on its platform This substantial transaction volume underscores the platform's popularity and effectiveness in connecting borrowers with lenders, providing a significant avenue for financial activities Since its establishment in 2015, Tima, through its extensive network of lending partners, Tima has effectively mobilized VND 2.5 trillion, which roughly amounts to US$115.5 million This substantial capital infusion highlights Tima's strong financial position and its ability to attract investment within the lending industry 2.1.3 Personal wealth management tools Fintech companies have developed user-friendly mobile apps and digital platforms that empower individuals to manage their personal finances effectively These tools provide features such as budgeting, expense tracking, automated savings, and investment management By offering intuitive and accessible interfaces, fintech companies are enabling customers to take control of their financial lives, something that traditional banks have been slow to address With 19