06:00 | 27/11/2021 Science - Technology
(VEN) - Vietnam ranked third in the Association of Southeast Asian Nations (ASEAN) in terms of attracting financial technology (fintech) funding. Most investors are displaying an interest in late-stage fintech firms, indicating a shift in their strategy across several ASEAN markets as they take a more cautious and risk-averse approach.
|Vietnam ranks third in attracting ASEAN fintech funding this year|
Record high of US$3.5 billion for 167 deals
Janet Young, director of the UOB’s Group Channels and Digitalization, said funding for fintech firms in ASEAN hit a record high of US$3.5 billion. The opportunity to establish mutually advantageous partnerships between banks, fintech firms and ecosystem platform players will remain instrumental in promoting sustainable growth of ASEAN’s fintech firms.
Singaporean fintech firms continued to attract the strongest funding in ASEAN, accounting for nearly 49 percent of total deals, including six mega-rounds worth US$972 million. Indonesia retained its second position this year, attracting US$904 million in funding (26 percent), followed by Vietnam with US$388 million. Two major deals in Vietnam consist of a US$250-million investment in VNPay and a US$100-million investment in MoMo.
Funding for investment technology companies and cryptocurrency firms in ASEAN saw the strongest growth this year. Compared to 2020, funding for investment technology companies increased by six times to US$457 million this year. According to a survey conducted by the UOB, PwC and SFA, six out of 10 ASEAN consumers have used digital tools, such as robot-advisers and online brokerage platforms for their investment needs.
Funding for cryptocurrency firms in ASEAN ranked third, after payments and investments in tech firms, with US$356 million. As nine out of 10 ASEAN consumers have started or plan to use cryptocurrencies and central bank digital currencies, the share of cryptocurrency firms in the region is expected to increase.
Payments remained the most funded fintech category in ASEAN this year with US$1.9 billion and continued to account for the majority of fintech firms in most ASEAN countries. Funding for these firms will accelerate the usage of e-wallets, debit and credit cards and mobile banking apps.
Promised land for investors
There are more than 100 operating fintech firms in Vietnam, mainly in payments and personal finance. Intermediary payments in Vietnam are considered to have great potential, becoming attractive to many foreign investors.
The participation of foreign investors will provide Vietnam’s intermediary payments with additional financial resources and opportunities to learn management skills and integrate modern technologies, but will create pressure for domestic intermediary payment service providers.
Nguyen Quoc Hung, secretary-general of the Vietnam Banks Association, said that in addition to great development potential, intermediary payments still confront inadequacies, such as lack of a legal framework and difficulties in implementing customer identification measures. In addition, a regulation on linking bank accounts to e-wallets is posing difficulties for customers in rural and remote areas.
|Wanyi Wong, fintech leader of PwC Singapore, said that with trust, transparency and responsibility, Vietnamese fintech firms have been catching up with new business opportunities and seeking leading positions in the ASEAN region.|