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Financial Wellness & Digital Money Management Apps are Key to Igniting Vietnam’s Digital Banking Boom

●67% of Vietnamese consumers feel ‘stressed’ about their financial situation. Only 26% and 45% of Vietnamese consumers feel ‘comfortable’ and ‘informed’ about their finances respectively, ranking the lowest in ten APAC countries listed in the report. 

●Vietnamese consumers are the least likely to find financial information on banks’ websites or mobile apps (only 54%). 

●74% of Vietnamese banks are unsure how to partner with fintech companies. However, 50% of Vietnamese banks say that offering financial literacy tools is critical to drive business outcomes, helping their customers with financial wellness and thus, gaining the early movers’ advantage. 

New data published this week in a Backbase commissioned study, conducted by Forrester Consulting, reveals a potential future spark for igniting Vietnam’s race for digital dominance in the retail banking sector. Like other areas of the world, smartphones and digital-only services have changed how people live in Vietnam. However, compared with other developing countries, the uptake of digital banking has been slower.

One reason for this, as highlighted in the research, was a lower level of confidence in digital-only banks, with only 16% of consumers saying they currently trust them. However, looking at other more mature markets in the research, it’s proven that the implementation of free financial wellness and digital money management tools – full of features and benefits – greatly improves this sentiment.

Talking about the results of the research and how empowerment and knowledge improve trust in the banking system, Regional Vice President for the Asia Pacific region, Iman Ghodosi, said: “Vietnamese banks and their customers are only at the start of their digitization journey. The more information and control we can put in the hands of Vietnamese to make their own informed financial choices, the more they will trust the organizations providing them with this opportunity. Technology now enables us to do this. This is happening around the world, and our research shows it will work here in Vietnam too. This could be the catalyst for Vietnam’s digital banking to really take off.”

“Now more than ever, it is important to own the relationship with your customer. We’ve entered the Engagement Banking Era, an evolution that stresses a one unified platform approach for banking. The number one priority in this new era is to completely re-architect the bank around the customer, moving away from siloed technology investments,” Mr. Ghodosi added.

Financial wellness and digital money management apps

Through advancements in A.I, behavioural analytics from the spending habits of users, better user experience, and mobile-first technology such apps can provide customers with a huge range of financial literacy tools such as: spending analysis, creating savings goals, transaction categorization, personalized recommendations, and the scheduling of bill payments, to name a few. “One can see how this level of insight and assistance would empower and build trust for users,” Mr. Ghodosi adds.

The research shows that 50% of Vietnamese are not achieving their financial goals, 62% feel overwhelmed by debt and 71% don't know where to go for reliable financial advice. “Through digital money management tools, banks can address all of this and more. They could make a big difference to the financial lives of their customers”, Mr Iman Ghodosi emphasized.

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