Vietnam’s finance sector faces digitalisation challenges despite eased regulation

Industry experts discuss how to navigate Vietnam’s challenging digital landscape at the Asia Banking and Finance and Insurance Summit.

Vietnam’s financial services industry players boast how the country’s easing regulatory environment has taken some pressure off for most institutions, but digitalisation still lags for many.

“What gets me most excited right now is the most relaxed regulations from regulators. So it used to be that you know the financial service partner is a very tightly controlled and tightly regulated sector,” Andy Nguyen Tran, CFO of Zalopay, told the 140 attendees of the 2025 Asia Banking and Finance and Insurance Summit in Ho Chi Minh City, Vietnam.

Khanh Ngo, CEO of Liobank by OCB, also echoed this sentiment. But Ngo also said, despite Vietnam’s recent “sandbox regulations” not directly affecting them, it’s still a valuable step in the finance industry.

The region is the fastest-growing economy in Southeast Asia,  Alexandra Smith, the British Consul-General and Trade Director for Vietnam, said.

Fellow market players also called for quicker and more efficient ways toward digitalisation, as Vietnam ranks behind its peers.

Il-Dong Kwon, managing director & partner at Boston Consulting Group, shared how over half of Gen Zs trust neobanks more than traditional banks, mirroring Vietnam’s snail-paced digitalisation progress.

Vietnam’s financial services sector is an integral part of the economy, contributing to approximately 4.9% of the country’s GDP, Smith said. 

However, for Vietnam to continue its growth trajectory, Smith pointed out, "financial services have to play a significant role" in driving forward economic development.

As digital banking continues to shape the global financial landscape, Vietnam is no exception. With 32 million active e-wallets in the country, digital banking is becoming an essential tool for increasing financial inclusion. 

Yet, experts warned of Vietnam’s underbanked segment, which was estimated at 60% to 70% of the population.

“I would say it's probably more underbanked at this point. Which means that there's a whole posse of population that has very fresh or very low credit history. And how do you give those people access to grants?” Ngo said.

Santhosh Mahendiran, Chief Data and Analytics officer at Techcombank, shared how the bank's ambitious approach to digital transformation emphasises its focus on innovation, technology, and talent.

He said at the summit, "If you want to go down the pyramid and reach a broader customer base, you must invest in digital, data, and talent,”

Mahendiran shared that the bank is working toward hyper-personalised services, moving from simple automation to intelligent, AI-driven engagement. "The whole idea is to move from being a digital bank to an intelligent bank," he said. 

Through its AI and data initiatives, Techcombank has generated nearly $40m in incremental revenue in 2024 alone. 

Moreover, over 97% of retail transactions are now processed digitally, with more than 500,000 qualified leads and a 20% improvement in underwriting quality.

Furthermore, Nguyen Tuan Hong Phuc, partner at KPMG Vietnam and Cambodia, said consumers have become increasingly price-sensitive due to the economic pressures of inflation, and brands that offer transparent pricing and easy interactions are praised. 

Phuc emphasised that many financial institutions have invested in digital platforms to streamline customer service, but the complexity of onboarding processes remains a significant barrier. 

"AI needs to be smooth and without hiccups," Phuc, pointing out that consumers still value human interaction for complex financial decisions. 

Last year, banks spent a total of $31.3b on gen AI alone, with expectations for this figure to reach $40b in 2025, and exceed $81b by 2028.

Lien Nguyen, CMO, director of CX & AI Training at VinBigdata, shared the company’s “4 C’s” value proposition of Gen AI in BFSI: concision, content generation, customer engagement, and coding acceleration. 

But Nguyen still forewarns Gen AI’s challenges, which include data security, system integration, fairness and transparency, legal compliance, and cost optimisation.

David Lielacher, senior director at Simon-Kucher, recently addressed a critical development in the banking and financial services industry: AI-powered pricing. 

"AI gives relationship managers the power to price better on a day-to-day basis by utilising the data already collected by banks," Lielacher explained. 

By integrating various data sources such as CRM, transaction data, and call logs, AI can help RMS offer personalised pricing to clients, improving client conversations and ensuring.

On the insurance side, Nguyen Thanh Van, acting director of the Health & Benefits Insurance Division of Baoviet Insurance, shared how the company applies digitalisation in its claims process and how focusing on technology has sped up the turnaround time.

Meanwhile, as cybersecurity breaches become more sophisticated, Parinya Charoensriset, regional manager for Identity and Access Management (IAM) at Thales, emphasised the urgent need for banks and financial institutions (BFIs) to strengthen their identity management frameworks to protect sensitive customer data and financial assets.

With the rise of mobile banking and digital transactions, customers demand seamless, accessible services available anytime, anywhere. Yet, security often comes at the cost of convenience. 

“If the onboarding process is too complicated, customers will abandon the service,” he warned, citing that 74% of customers are likely to move to a competitor if the digital experience is difficult.

Third panel moderator, Steven Vo, principal at Boston Consulting Group, asked how their institutions are presently boosting cyber resilience.

“I just want to quantify the challenge in Vietnam, right? The national cybersecurity association found that there's $744m worth of online fraud impacting Vietnamese consumers last year,” Phil Wright, COO at HSBC Vietnam, told the audience.

Vietcombank's Doan Hong Nhung, head of Retail Banking and Board of Management, emphasised the role of an end-to-end and enterprise-wide effort from organisations to solidify resilience. The bank, for example, is partnering with various firms to tackle fraud detection.

In another panel discussion moderated by Amalia Goux, managing partner at THRIVE Vietnam, three key leaders from the financial services sector shared their insights into how personalisation is shaping the future of customer experience in banking, insurance, and consumer finance. 

The panellists included Michal Skalicky, Chief Customer Officer at Home Credit Vietnam; Nguyen Hong Son, Country President of Chubb Life Vietnam; and To Ba Lam, head of Digital Division at Nam A Bank. 

The discussion centred around the role of data and technology in personalising financial products and services, improving customer loyalty, and navigating regulatory hurdles.

"Our primary responsibility is not just to onboard clients but to educate them about the products," Skalicky explained.

Son spoke about the challenge of building trust in the insurance industry, which often deals with sensitive and personal life experiences. 

"We use technology like blockchain and AI to enhance our data integration whilst maintaining individual privacy," Son said.

To explained how the bank’s VTM network—physical locations where customers can engage with the bank—collects valuable data about customer behaviours. 

"For instance, if a customer buys coffee using our app, we can offer them personalised vouchers based on their previous purchases," To said.

Similarly, Nguyen Lan Phuong, Chief Transformation Officer of MSIG Insurance, pressed on the value of customer trust.

Phuong’s report reads: “Trust is not a ‘nice to have’ in insurance – it’s everything.”

But Phuong explains that trust and digitalisation need to work simultaneously, not autonomously. 

An example of this is how the insurer uses satellite-collected rainfall data for weather index insurance. This, in turn, aids a parametric payout where claims are paid automatically when a threshold is met.

In a panel moderated by Thao Nguyen, partner at Deloitte Vietnam, two experts also discussed how partnerships are essential to elevate digitalisation for financial inclusion.

“Banking inclusion has jumped from around 31% to 70%. And the government is looking at 80% in the next five years,” Gauraw Srivastava, head of Private Banking, Wealth Management and Retail Segments of VPBank, said.

For Sylvester Kinuthia, executive director, head of Transaction Banking at Standard Chartered Bank Vietnam, he believes that banks will not have all capabilities – and that’s okay.

“You cannot build everything in-house,” Kinuthia said. He further tells how flexible partnerships are, as well as building systems in-house. “In partnerships, you're able to leverage each other's strengths: whether it's technology expertise, whether it's capital whether it's network or client base,”

Luu Thu Thuy, Deputy head of the Integrated Risk Management Department at Vietcombank, shared the value of model risk management in digitalisation.

One of the many benefits of implementing a model risk management system for Vietcombank is how it supports the bank to manage inventory, recommendations, automation and effectiveness of individual phases throughout the model lifecycle.

Tamás Erni, Managing Partner at Loxon, a European business software solution provider, recently shed light on how AI-driven platforms are transforming credit management, especially in the consumer finance sector.

One of the most pressing concerns facing banks and lenders in Vietnam—and globally—is the pressure on lending margins. 

Erni pointed out that the uncertainty in global markets, compounded by factors such as trade wars, adds another layer of complexity. 

"Lending margins are heavily under pressure, and in this environment, agility is crucial," he remarked. For financial institutions to remain competitive, they must move beyond reactive credit management and embrace proactive, AI-driven decision-making processes.

Vietnam's growing trade volume also presents significant opportunities for the financial services sector, particularly in trade finance, Smith said earlier. 

She also highlighted that ASEAN, with its rapidly expanding trade relations, faces a critical trade finance gap, estimated at $350b to $400b. Vietnam accounts for a significant portion of this gap, with an estimated $90b shortage in trade finance.