Hanoi (VNA) -Start-ups in Vietnam have invested around 129 million USD in the field of fintech,according to Varun Mittal, Ernst & Young (EY) ASEAN fintech leader.

EY Vietnam announced the results of the ASEAN FinTech Census 2018 in Hanoi on April12.

The survey was carried out on more than 250 fintech (technology used to supportbanking or financial services) companies in more than 10 countries, providinginsights from regional fintech experts.

"With a population of young smartphone users, high consumer growth and lowunemployment, Vietnam is becoming a promising market for fintechdevelopers," he said.

"Foreign investors are also more interested in buying some fintechcompanies due to the huge market potential," said Mittal.

The number of incubators and accelerators and innovation labs in Vietnam isestimated at 24, the second most among ASEAN region, following Singapore.

However, another EY report showed that up to 90 percent of payments in thecountry were made in cash.

Therefore, Vietnamese fintech companies are focusing on the field of paymentwith 47 percent of Vietnamese companies working on payment services, thehighest rate in the region.

The country has also launched a fintech club, which allows businesses toimprove knowledge, support and share experiences. The most important thingthough is to develop a legal framework for this service.

According to Nguyen Thuy Duong, EY Vietnam deputy director and vice chairwomanof the Vietnam Financial Technology Club, said that fintech companies arecurrently small scale and policies for these companies are lacking.

In addition, many banks are still cautious about work with fintech companies asthey do not realise that fintech can help them tap into the huge market ofpeople who do not have bank accounts, but do have smartphones. “Fintech is thebridge that can help bring banking services closer to people," said Duong.

Apart from financial issues, shortages in staffs and governmental regulationsare two major challenges that Vietnamese and regional fintech companies face.

According to EY experts, policy support from authorities will form thefoundation for a fintech ecosystem that encourages creativity and healthycompetition.

Talking about co-operation between banks and fintech companies, EY experts alsosaid many banks want to hire fintech to provide digital banking services,instead of developing solutions themselves. This way will benefit both sidesand help save costs.-VNA