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Fintechs causing big changes in financial market

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Vietnam’s small and medium enterprises (SMEs) are expected to be the key clients and biggest beneficiaries from financial apps provided by fintechs.

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SMEs are expected to be the key clients of fintechs

 

Imagine the scenario in which banks can take 10 seconds to approve loans for SMEs, ATMs are replaced by online banking, and all transactions are carried out through clients’ fingerprint. This is being done now at many banks in Vietnam.

Steven Landman, CEO of KIU, a fintech startup, and his co-workers, built a technology which allows banks to easily collect data about SMEs through figures about inventories and sales. 

KIU has created a credit rating system using AI with which banks can ‘give marks’ to SMEs in less than 10 seconds.

KIU is running a cooperation program with Vietnam’s VIB Bank. KIU is just one of many technology platforms used in the financial sector in Vietnam.

Most recently, Weezi Digital said it had the ambition of replacing traditional banks with e-banks, using biotechology to identify faces, and fingerprints to carry out transactions with clients.

As for Wecash, the solution targets clients who have monthly income of around $200. These people cannot access bank loans because they don’t have a financial history. Wecash gives credit ratings to clients through a system analysing data such as GPS, ID, social networks, e-commerce activities and more than 4,000 variables on their mobile phones. 

A report shows that there are 78 fintechs in Vietnam, a modest figure compared with Singapore, where there are 490 fintechs, Indonesia (262) and Malaysia (196).

The majority of Vietnam’s fintechs (47 percent) operate in the field of payments, the highest proportion in South East Asia. However, experts note that there is a shift from payments to other fields that bring higher added value.

Analysts say that the strong development of fintechs has been anticipated. However,  non-bank institutions, which provide P2P lending, big data analysis and personal information management on the digital technology platform, are not welcomed by traditional banks.

Some international experts call fintechs the ‘disruptors’ in the banking system. A report released in April by McKinsey & Company showed that more clients are willing to use the services of digital banks, and that digital banks are competing fiercely with traditional ones.

Pham Tien Dung, director of the State Bank’s Payment Department, admitted that the legal framework still has not caught up with the development of technology. 

Dung said state management agencies need to create an ecosystem for fintechs, in which the legal framework would be the most important factor.

 

Source: VietNamNet

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