Sunday, 07/09/2025
   

Digital banks navigate evolving landscape

Vietnam's digital banking sector continues to gain momentum in 2025, driven by rapid adoption of AI, the race to profitability, and fierce competition.

According to the latest report released by The Asian Banker on February 20, Southeast Asia, including Vietnam, has a large population that often lacks access to formal financial services. Platforms such as Grab, MoMo, and Cake by VPBank are expanding rapidly to meet the needs of an increasingly digitally savvy population. Grab has expanded from a ride-hailing service to a comprehensive platform across eight Southeast Asian countries, forming strategic partnerships with banks to enhance its financial services.

Digital banks navigate evolving landscape

MoMo serves one-third of Vietnam’s population, with over 50,000 business partnerships and collaborations with more than 70 banks and financial institutions. Meanwhile, Cake by VPBank experienced strong customer acquisition, with growth surpassing 50 per cent in 2023 and reaching five million users in 2024.

To step up its game, leading homegrown players like MoMo, VNPay, ZaloPay, and Cake by VPBank are at the forefront of adopting AI strategies to expand their customer base, and enhance product offerings. The trend towards multiproduct ecosystems, powered by AI-driven insights, has enabled digital banks to enhance customer engagement while maintaining operational efficiency, making them competitors to traditional institutions.

Cake CEO Nguyen Huu Quang said, “Digital banks can tap into segments that are underserved by traditional banks, such as ride-hailing drivers, gig workers, and online sellers. Traditional lenders often exclude these customer groups due to the lack of credit history, insufficient collateral, and cumbersome procedures. Digital banks, on the other hand, have a comprehensive technology stack that includes AI-driven solutions to address such challenges more efficiently and with fewer overhead costs.”

According to Fitch Ratings’ analysts, digital banks in emerging markets such as Vietnam have a larger pool of untapped customers, as these markets typically have lower credit and banking penetration than customers in developed markets. This creates less competition from traditional banks, which opens up opportunities for digital players to become profitable.

However, there remain challenges for digital banks to achieve profitability amid fierce competition, high-risk lending, and regulatory uncertainties. Around seven digital-only banks are operational in Vietnam today, and they are required to be under the sponsorship of traditional banks taken from a pool of nearly 50 registered lenders in the country.

Bui Hai An, a senior adviser and former deputy chief executive at Timo, the first digital bank in Vietnam, said, “Most digital banks in Vietnam, while pushing for innovation, still want to position themselves to perform faster and even better than traditional banks in adhering to compliance standards. This is because they want to be perceived as legitimate banks in case licences become available in the coming years.”

“If a digital bank in Vietnam truly attains profitability through proper accounting practices, I believe it can make even more profits once it is allowed to operate separately from incumbent banks, given its lower cost structure.”

As reported by The Business Times, Cake has become the first Vietnamese digital native player to reach profitability in its 2024 earnings before interest, taxes, depreciation, and amortisation. Cake has also integrated AI-enhanced financial services into its digital ecosystem that provide users with a more convenient and comprehensive digital banking experience.

Thanks to these efforts, Cake has secured the 87th spot in the World’s Top 100 Digital Banks 2025 ranking and is recognised as 'Best Digital Bank in Vietnam' by The Asian Banker. Cake is also the only Vietnamese representative to make it to the ranking this year and achieves the highest score ever recorded among Vietnamese counterparts. The digital bank is evaluated across five key dimensions such as customers, market or product coverage, profitability, asset and deposit growth, and funding.

The competition for digital banks is expected to become fiercer as more players jump on the bandwagon. Three out of four banks under special control are simultaneously transformed to digital banks.

DongA Bank has changed its name to Vikki Digital Bank following the mandatory transfer to HDBank. OceanBank is renamed to Modern Bank of Vietnam (MBV) following the transfer to MB, while CBBank is rebranded as VCBNeo after being transferred to Vietcombank.

The ongoing expansion of digital banking players will drive innovation and financial inclusion. This trend will further expedite the shift towards a more interconnected, AI-powered and digitally-driven financial landscape in Vietnam.

Source: VIR

  • Banking on advice to boost financial futures

    Banking on advice to boost financial futures

    Many commercial banks, with extensive customer bases, transparent transaction data and widespread branch networks, have trialled wealth management models offering investment consulting, insurance and financial planning services to VIP clients.

  • Government-backed STEM loans launched by VBSP

    Government-backed STEM loans launched by VBSP

    Vietnam Bank for Social Policies (VBSP) is introducing preferential loans to STEM students as part of efforts to build a stronger science and technology workforce.

  • S&P upgrades ratings of three banks, citing resilient economy

    S&P upgrades ratings of three banks, citing resilient economy

    The agency raised Vietcombank to BB+, Techcombank to BB and Eximbank to BB-, with stable outlooks, while upgrading Việt Nam’s BICRA to group 8 from 9.

  • Interest rate developments applied by credit institutions in July 2025

    Interest rate developments applied by credit institutions in July 2025

    State Bank of Vietnam has just released the interest rate developments of credit institutions in July 2025.

  • SBV's Action Plan on improving social policy credit in the new period

    SBV's Action Plan on improving social policy credit in the new period

    On August 27, 2025, the State Bank of Vietnam (SBV) issued the Action Plan of the Banking sector to implement Decision No. 1560/QD-TTg dated July 18, 2025 of the Prime Minister promulgating the Plan to implement Directive No. 39-CT/TW dated October 30, 2024 of the Central Party Secretariat on improving the effectiveness of social policy credit in the new period (Decision No. 3061/QD-NHNN).

  • Vietnamese banks standing strong although risks remain

    Vietnamese banks standing strong although risks remain

    Vietnam’s banking sector has been a key facilitator as well as beneficiary of the country’s robust economic growth. We forecast total system outstanding loans to double by the end of this year relative to five years ago. This makes Vietnam the second-largest banking system in ASEAN by assets, ahead of other larger and higher-income economies.

  • Vietnamese banks get ready to join crypto asset market

    Vietnamese banks get ready to join crypto asset market

    The newly issued Law on Digital Technology Industry will take effect from January 1 and is considered an important milestone, ending many years of legal ambiguity on issues related to crypto assets.

  • Credit trends set tone for key sectors

    Credit trends set tone for key sectors

    Credit across the banking system has surged at an unusually high pace this year, with a significant share directed towards real estate and securities, raising concerns over the sustainability of growth.

  • New chapter arrives for digital asset firms

    New chapter arrives for digital asset firms

    Opportunities for international collaboration and attractive growth potential have turned the Vietnamese cryptocurrency market into a vibrant playground.

  • Shinhan Bank expresses gratitude to business customers with free Ting Ting speakers

    Shinhan Bank expresses gratitude to business customers with free Ting Ting speakers

    Shinhan Bank Vietnam Ltd. (“Shinhan Bank”) has launched the “Customer Appreciation Day for Business Customers” across all 55 branches and transaction offices nationwide, featuring a free giveaway of Ting Ting Speakers. This initiative is dedicated to expressing gratitude to individual business owners, household businesses, private enterprises, and SMEs that have accompanied the Bank throughout the years.

Calculate deposit interest
VNĐ
%/year
month
Calculate deposit interest

Loan calculation
VNĐ
%/year
month
Loan calculation