Mobile transactions in Vietnam expected to increase by 400 per cent by 2025

15:44 | 12/05/2020
Mobile transactions are expected to experience 400 per cent growth in the next five years, according to the Fintech and Digital Banking 2025 report by Backbase and IDC.
mobile transactions in vietnam expected to increase by 400 per cent by 2025
Mobile transactions will be a super-high-growth field in Vietnam in the next five years

The report points out that the top eight banks have all set core banking and payment system modernisation as their top two priorities and expect 50 per cent growth in new accounts as a result of intelligent automation in account origination. Meanwhile, 25 per cent of banks in Vietnam will "actively pursue modern digital core platforms".

Riddhi Dutta, regional head for ASEAN and India of Backbase, said that the Vietnamese banking industry has developed a very specific action plan to implement the Banking Industry Development Strategy by 2025. These goals are to promote cashless payments and develop appropriate services for the population in under-served areas with little or no access to traditional banking.

"As the recovery from 2020’s challenges unfolds, the market’s digital evolution will be evident in the semi-private bank segment. These banks will make proportionately higher IT investments, particularly in mobile channels and mobile experience, branch digitalisation, and optimisation to support increasingly digital consumers. These are the digital-first banks to watch,” he said.

According to the Fintech and Digital Banking 2025 report, digital banking in the Asia-Pacific is set to be widely adopted by over three in five customers (63 per cent) willing to make the switch to neobanks (new digital challengers) and challenger banks in the next five years.

The unprecedented pandemic has also brought into question the industry's readiness towards digital banking, as a significant majority (70 per cent) of Asia-Pacific banking customers continue to view banking processes as tedious. As a result of incumbent banks’ extreme focus on legacy systems and disregarding digital-first integration, only 30 per cent of the banking customer base in the Asia-Pacific are active on digital banking channels.

On the other hand, more than 35 “neobanks” across the Asia-Pacific are built on agile, innovative best practices – way ahead of incumbents in terms of flexibility, self-service capabilities, customer needs, and personalisation. Consequently, with the emergence of new players and further digital disruption in the industry, 38 per cent of traditional banks’ revenues are at risk by 2025.

The key focus will be on digitalisation and implementation of AI. By 2025, 44 per cent of the top 250 banks across the Asia-Pacific will complete their “connected core” transformation – working on platform-based and componentised modernisation, and API-enablement. 48 per cent of banks in the Asia-Pacific are also expected to leverage AI or machine learning technologies for data-driven decisions.

Backbase’s digital-first banking platform powers seamless customer experiences, unifying data and functionality from core banking systems and innovative fintech partners. More than 100 large financials around the world have benefitted from Backbase’s omni-channel, digital-first banking platform, including Bank United, BNP Paribas, Central1 Credit Union, and Citibank, among others.

By Thanh Van

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