Survey Finds AI, Tech Popular in Financial Services in Vietnam
Finastra has released its Financial Services State of the Nation Survey 2023. This survey covers several key economies in Asia including Vietnam. In this article, we run through the key findings of the survey.
The application of artificial intelligence (AI) and other new technology is playing an increasingly essential role in the long-term development of the financial industry in Vietnam. Not only does it generate a multitude of opportunities for product development, but it also shortens the time it takes to solve many complex problems and can create exceptional economic growth.
With this in mind, firms have been eager to monitor the proliferation of new technology and AI in Vietnam. Finastra, for example, released the results of its Financial Services State of the Nation Survey 2023 late last year whereby it revealed a number of key findings with respect to new technologies in use in Vietnam’s financial services sector. These findings may help to shed light on exactly where key decision-makers see new technology taking Vietnam moving forward.
With this in mind, we break down these results and what they might mean in the Vietnam context.
AI in financial services
According to Finastra, 94 percent of financial institutions in Vietnam are excited about the opportunities AI presents for the industry. But it’s not just clear from the survey responses. It’s also visible in the broad deployment of AI in e-banking applications and e-wallets in Vietnam.
TPBank, for example, has implemented facial recognition technology into its LiveBank automated banking channel, increasing client security and convenience. Its AI program has the ability to analyze 128 criteria to reliably identify a person among millions of consumers without the need for identification documents.
Furthermore, FaceID identification kiosks are used by VietinBank to identify consumers. This new technology saves the bank 30 percent of the time it takes to process transactions.
And they are not alone. Many of Vietnam’s biggest banks, including VPBank, Techcombank, VIB, and ACB, have embraced AI for a variety of purposes, including asset management, security, and fraud protection, as well as using chatbots to assist their customers.
Also, because AI has the ability to analyze massive amounts of data and connect that data with new sources of information, it is capable of recognizing unusual transactions, assisting in the detection of fraudulent actors faster and with more accuracy, while also causing less of an inconvenience for customers.
BaaS in the financial sector in Vietnam
Banking-as-a-Service (BaaS) is an important component of the banking models of many banks in Vietnam. This is essentially the integration of core banking services with the products of non-bank businesses. This innovation helps financial services businesses to develop new products and increase ease of use.
According to Finastra’s survey, institutions surveyed had deployed or improved their BaaS capabilities to the tune of 55 percent of respondents. This is 7 percent higher than the average of the rest of the world. This reflects a high level of interest in emerging banking models among executives at Vietnam’s financial institutions. A further 89 percent believe these models are key tools for generating business growth and income, ranking Vietnam second after only Hong Kong (95 percent).
This is in line with a preference among Vietnamese consumers for smart payment products. In fact, the value of transactions made through mobile payments is currently billions of dollars a day. A further 90 percent of Vietnamese consumers are interested in digital banking and intend to use it in the future, according to a survey by Visa.
NLP in the financial sector in Vietnam
Natural language processing (NLP) is a subfield of artificial intelligence. This technology enables computers to analyze human language as text or speech and respond accordingly.
NLP is popular with financial institutions in Vietnam who have taken to this technology to improve customer service. In fact, 41 percent of financial institutions take advantage of NLP to personalize marketing for their clientele.
The increased deployment of AI Chatbots is explained by its usefulness to the financial industry. AI Chatbots that use NLP technology can not only analyze a consumer’s language and provide relevant responses, but they can also provide service to customers at any time, from any location, using multi-context scenarios and natural conversations.
Focusing on improving customer service with AI is a major objective for 45 percent of Finastra’s Vietnam-based survey respondents.
In an era when financial institutions are continually innovating and digitally transforming to obtain a competitive advantage, customer satisfaction through good-quality customer service can be a critical advantage.
Technology, financial services, and ESG
In Vietnam, 90 percent of decision-makers surveyed by Finastra agree it is important for financial services and the banking sector broadly to support ESG initiatives
For Vietnam to achieve net zero carbon emissions by 2050, the application of Environmental, Social, and Governance standards (ESG) is considered a necessity for financial institutions and banks. Not to mention, the value these institutions stand to create from meeting ESG demands head-on.
According to a PwC Vietnam report, financial institutions could earn up to US$1.7 billion by issuing green bonds, social bonds, and sustainable bonds for ESG initiatives. Furthermore, financial institutions may be able to realize capital investment opportunities for Vietnam’s energy transition from 2016 to 2030 worth US$753 billion.
The application of AI and new technology has become an essential part of the long-term development of the financial services industry in Vietnam. Not only does it create opportunities for companies to improve their services but it may also result in greater revenues and higher profits.
For more information on Vietnam’s financial services sectors and the myriad opportunities available for foreign investors, contact the business advisory experts at Dezan Shira and Associates.
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Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at email@example.com or visit us at www.dezshira.com
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