THE DEVELOPMENT OF FINANCIAL TECHNOLOGY OPPORTUNITIES AND CHALLENGES FOR VIETNAMESE BANKING SYSTEM

“The development of FinTech Opportunities and challenges for Vietnamese banking system” In recent years, FinTech becomes a big phenomenon and an essential player in the banking industry. Its effects have spread widely across the world. As a result, the banking system is heavily influenced by FinTech products and services. This study will research the development of FinTech and its opportunities and challenges for Vietnamese banking system. The thesis uses secondary data from researches, surveys, online newspapers and articles found on the Internet to analyze by qualitative research method. First, the paper reviews FinTech and its stages of development in the banking system in general. The opportunities and challenges of FinTech are also explored. This gives the background knowledge and framework for the study. Next, it explores the FinTech development specifically in Vietnamese banking system in some aspects to find out its strengths and weaknesses. The researcher also points out the opportunities and challenges for FinTech in Vietnamese banking system. After evaluating the status of FinTech in Vietnam, the thesis will recommend some actions to continue developing Vietnamese FinTech environment in the future. It is hoped this study will help Vietnamese FinTech companies and the banking system to continue to take the opportunities brought by FinTech and overcome obstacles. This will contribute to strengthening Vietnamese banking industry.

BANKING ACADEMY FACULTY OF FOREIGN LANGUAGES GRADUATION THESIS TOPIC: THE DEVELOPMENT OF FINANCIAL TECHNOLOGY OPPORTUNITIES AND CHALLENGES FOR VIETNAMESE BANKING SYSTEM Ha Noi, May 2019 BANKING ACADEMY FACULTY OF FOREIGN LANGUAGES GRADUATION THESIS TOPIC: THE DEVELOPMENT OF FINANCIAL TECHNOLOGY OPPORTUNITIES AND CHALLENGES FOR VIETNAMESE BANKING SYSTEM Ha Noi, May 2019 ACKNOWLEDGEMENTS I would first like to thank my thesis advisor Ass.Prof Ph.D To Kim Ngoc for her patience for me and immense knowledge shared to me She was always there to help me whenever I had a question about my research or writing She guided me in the right direction I would also like to acknowledge lecturers in Faculty of Foreign Language at Banking Academy as the second readers of this thesis, and I am gratefully indebted to them for very valuable comments on this thesis I also want to show my thanks to my friends in Faculty of Foreign Language at Banking Academy to help me when I had trouble in writing the thesis They gave me many helpful pieces of advice for my research Finally, I must express my gratitude to my parents for providing me with unfailing support and continuous encouragement throughout my years of study and through the process of researching and writing this thesis This accomplishment would not have been possible without all of them Thank you Author Cao Thi Van Thu STATEMENT OF AUTHORSHIP Student name: Cao Thi Van Thu Class: K18ATCC Student Number: 18A7510164 Declaration I declare that the work attached is entirely my own, and that I have given due acknowledgement as required by Faculty of Foreign Languages I understand that the work submitted may be reproduced and/ or communicated for the purposes of detecting plagiarism Signed Date _ TABLE OF CONTENTS Abbreviation Meaning ACB Bank Asia Commercial Joint Stock Bank Agribank Vietnam Bank for Agriculture and Rural Development AI Artificial Intelligence ASEAN Association of South East Asia Nations ATM Automatic Teller Machine BACS Bankers' Automated Clearing Services BKAV Bach Khoa AntiVirus CEO Chief Executive Officer CHIPS The Clearing House Interbank Payments System EY Ernst & Young FinTech Financial Technology IPS Intrusion Prevention System GDP Gross Domestic Product KPMG Klynveld Peat Marwick Goerdeler ML Machine Learning POS Point Of Sale PwC PricewaterhouseCoopers SBV State Bank of Vietnam SME Small and Medium Enterprise SWIFT The UK Society for Worldwide Telecommunications The United Kingdom Interbank Financial The US The United States of America TPBank Tien Phong Commercial Joint Stock Bank USD United States Dollar Vietcombank Joint Stock Commercial Bank for Foreign Trade of Vietnam VNA Vietnam News Agency VND Vietnam Dong VNISA Vietnam Information Security Association vs Versus LIST OF FIGURES Figure Page Figure 1: FinTech segments Figure 2: FinTech companies found by year in 2008-2017 Figure 3: Funding for FinTech companies by category 2008- 2017 Figure 4: Percentage of incumbents who believe part of their 20 business is at risk Figure 5: Challenges for FinTech companies and incumbents 22 Figure 6: FinTech product segmentation in 2017 and projected 30 trend in 2025 Figure 7: Vietnam’s e-commerce users 30 Figure 8: Internet and smartphone penetration in Vietnam 31 2013-2016 Figure 9: Vietnam’s banking sector penetration (banked vs 34 unbanked) Figure 10: Technological areas of investment 40 Figure 11: Focus on emerging technologies 40 Figure 12: Current and expected partnerships per country 41 LIST OF TABLES Table Page Table 1: FinTech development Table 2: Global Digital Snapshot 2015-2018 14 Table 3: FinTech companies in Vietnam 28 and 29 Table 4: The growth of Internet and smartphone penetration in 31 Vietnam Table 5: Labor force quality among nations in Asia-Pacific 32 ABSTRACT “The development of FinTech - Opportunities and challenges for Vietnamese banking system” In recent years, FinTech becomes a big phenomenon and an essential player in the banking industry Its effects have spread widely across the world As a result, the banking system is heavily influenced by FinTech products and services This study will research the development of FinTech and its opportunities and challenges for Vietnamese banking system The thesis uses secondary data from researches, surveys, online newspapers and articles found on the Internet to analyze by qualitative research method First, the paper reviews FinTech and its stages of development in the banking system in general The opportunities and challenges of FinTech are also explored This gives the background knowledge and framework for the study Next, it explores the FinTech development specifically in Vietnamese banking system in some aspects to find out its strengths and weaknesses The researcher also points out the opportunities and challenges for FinTech in Vietnamese banking system After evaluating the status of FinTech in Vietnam, the thesis will recommend some actions to continue developing Vietnamese FinTech environment in the future It is hoped this study will help Vietnamese FinTech companies and the banking system to continue to take the opportunities brought by FinTech and overcome obstacles This will contribute to strengthening Vietnamese banking industry 10 REFERENCES References in Vietnamese [1] Hoang Anh (2018), Tình hình an ninh mạng, retrieved on May 10th 2019, from [2] BKAV (2018), Tổng kết an ninh mạng năm 2018 dự báo xu hướng 2019, retrieved on 10th May 2019, from [3] Nguyen Thi Thuy Duong, Ngo Minh Hai (2017), Nurturing the Vietnamese Fintech Ecosystem: What Needs to be Improved?, retrieved on April 26th 2019, from [4] EY Vietnam (2017), retrieved on April 26th 2019, from [5] Ha Van Duong Ha, Pham Diem Trang, Nguyen Hoang My Le (2018), FinTech: Hệ sinh thái nước vận dụng Việt Nam, retrieved on April 26th 2019, from [6] Le Hang (2017), SBV Plan of Implementing Scheme on non-cash payment in Vietnam for 2016-2020 period, retrieved on April 26th 2019, [7] Nguyen Thị Hien, Nguyen Thi Minh Ngoc (2018), Xu hướng phát triển Fintech giới, hội, thách thức đặt với ngành ngân hàng thực tiễn Việt Nam, retrieved on April 26th 2019, from [8] Thanh Hoa (2018), An ninh mạng thách thức ngân hàng số, retrieved on May 15th 2019, from [9] Viet Hung (2018), 67 công ty FinTech Việt Nam cạnh tranh thị trường 4,4 tỷ USD, retrieved on April 26th 2019, from [10] Bui Thi Lan Huong (2018), ‘Tác Động Của FinTech Những Vấn Đề Đặt Ra Đối Với Ngành Tài Chính - Ngân Hàng Việt Nam’, Kỷ yếu hội thảo : Nền kinh tế số trước bối cảnh cách mạng công nghiệp 4.0 , IC Publisher, 263-274, Ho Chi Minh City retrieved on May 10th 2019, from [11] Duong Tan Khoa (2017), FinTech lĩnh vực ngân hàng Việt Nam, retrieved on April 26th 2019, from [12] Hoang Khanh Lam (2018), ‘FinTech hội thách thức ngành tài ngân hàng’, Kỷ Yếu Hội Thảo Khoa Học Quốc Gia "Cách mạng Công nghiệp 4.0 Những Đổi Mới Trong Lĩnh Vực Tài Chính - Ngân Hàng", NEU Publishing House, Hanoi, 210-224, retrieved on April 26th 2019, from [13] MH (2017), Government continues boosting non-cash payment, retrieved on April 26th 2019, from [14] MH (2017), SBV establishes Steering Committee on FinTech, retrieved on April 26th 2019, from [15] NEU (2019), Nhu cầu lớn nhân lực ngành Cơng nghệ Tài (FinTech) lĩnh vực Ngân hàng Tài (2019), retrieved on April 26th 2019, from [16]Le Huyen Ngoc (2018), Tác Động Của FinTech Đối Với Hoạt Động Ngân Hàng Một Số Đề Xuất Để Ngân Hàng - FinTech Cùng Phát Triển Tại Việt Nam, retrieved on April 26th 2019, from [17] SBV(2016), Hệ thống tổ chức tín dụng, retrieved on April 26th 2019, from [18] Nguyen Van Tam (2018), ‘Phát triển cơng nghệ tài Việt Nam: Cơ hội thách thức’, Tạp chí tài chính, retrieved on April 26th 2019, from [19] Truong Quang Thong, Pham Khanh Duy, Huynh Luu Duc Toan (2018), FinTech Và Ngân Hàng - 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- Commercial banks + Joint-stock commercial banks + State-owned commercial banks + Foreign-owned banks + Joint-venture Bank Banks for Policies Co-operative Bank of Vietnam 31 2 Non-bank financial institutions - Finance company - Finance Leasing Company 16 10 Micro -finance institutions Branches of Foreign Banks in Vietnam 49 Representative Office of Foreign Banks in Vietnam 52 Source: SBV Appendix 4: Global Digital Snapshot in 2015-2018 Source: Hootsuite and We Are Social Source: Hootsuite and We Are Social Source: Hootsuite and We Are Social Source: Hootsuite and We Are Social SUPERVISOR COMMENTS …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… (Evaluating the student’s attitude, effort, work efficiency, and contact frequency with the supervisor in the process of writing internship report.) Supervisor (Sign & write full name) Cộng hòa xã hội chủ nghĩa Việt Nam Độc lập – Tự – Hạnh phúc NHẬN XÉT VÀ XÁC NHẬN CỦA ĐƠN VỊ THỰC TẬP Sinh viên Cao Thị Vân Thu hoàn thành trình thực tập Phòng Kế tốn thuộc Cơng ty Trách nhiệm hữu hạn Thương mại Công nghệ HCOM từ ngày 22 tháng 02 năm 2019 đến ngày 18 tháng 05 năm 2019 Trong thời gian thực tập, sinh viên Cao Thị Vân Thu thể lực hồn thành cơng việc giao… Xuất sắc Tốt Khá Đáp ứng yêu cầu Không đáp ứng yêu cầu Xác nhận đơn vị thực tập ( Ký ghi rõ họ tên đóng dấu) .. .BANKING ACADEMY FACULTY OF FOREIGN LANGUAGES GRADUATION THESIS TOPIC: THE DEVELOPMENT OF FINANCIAL TECHNOLOGY OPPORTUNITIES AND CHALLENGES FOR VIETNAMESE BANKING SYSTEM Ha Noi,... recommendations For those reasons, the topic The Development of Financial Technology - Opportunities and Challenges for Vietnam” is chosen for the thesis 1.2 GOALS The aims of this research... research are to find out the status of FinTech development in Vietnamese banking system and discover challenges and opportunities of Vietnamese banking system After that, the thesis will design some