Leading Hong Kong-based investment bank GIB Global Investment Digital Bank announced intentions to enter the digital banking space in Vietnam by teaming up with Vimo and local payments providers.
|GIB Global Investment Digital Bank will submit its application for a digital banking license to the SBV within this year |
"GIB Global Investment Digital Bank is excited to announce our intention to apply for a digital banking license in Vietnam through our partnership with Vietnamese telco startup Vimo and e-payments provider GPay by GCG Asia. We are eager and hopeful for our entry into digital banking in the Southeast Asian region," said GIB Global Investment Digital Bank's chief of Digital Global Banking, Norman Wong.
Governments in Southeast Asia from Singapore to Malaysia have been racing to devise regulatory frameworks to liberalise the banking sector for new digital entrants. Singapore is among the first to announce digital banking licenses in the region. Malaysia is expected to announce the award of digital banking licenses next year. GIB Global Investment Digital Bank, has put in application through local partners.
In Vietnam, fintech startups planning to offer digital banking services must be offshoots of legacy banks and financial institutions to effectively hold a digital banking licence. "Vietnam's young, digitally-savvy population is fast-growing and showing huge demand for digital financial and banking services. GIB Global Investment Digital Bank's review of the fintech landscape showed that the use of e-commerce apps accelerated during the pandemic, as well as digital payments which jumped 70 per cent in the first quarter of 2020. This tells us that there is tremendous potential," said Wong.
He further explains that GIB Global Investment Digital Bank is looking at the larger picture of establishing a digital ecosystem anchored by a range of services with a bank, then expanding via offshoots of ancillary services such as insurance, asset management, peer-to-peer exchange lending, credit scoring, and more.
"This is the model pioneered by the Chinese fintech giants Tencent and Alibaba, and is one that makes sense to us as a financial institution in order to expand our reach. It's a challenging one, but as mentioned, we are bullish on prospects," said Wong.
GIB Global Investment Digital Bank is positive about the outcome and partnership with Vimo, even though the sector is still nascent and dominated by large legacy institutions who are rapidly launching their own digitisation initiatives in Vietnam. Though competition may be steep with banks rushing to launch digital products, Wong explained that Vietnam's vast majority are still underserved by the traditional banking sector.
"As a bank, we want to promote financial inclusion for the youth of Southeast Asia and Vietnam is the ideal country for us to do this. We are comfortable playing the position of challenger and disruptors for traditional Vietnamese banks," he said.
Tapping into Vimo and GPay's strong customer base is key for a successful bid. GIB Global Investment Digital Bank's Wong would not divulge who would be the financial institution partner in their consortium but added that it will be revealed very soon. "We are tying up the loose ends and firming up our plans in preparation to unveil our vision for digital banking in Vietnam. Rest assured it will be worth the wait," he noted.