Hanoi (VNS/VNA) - Theregulatory sandbox for financial technology (fintech) which is expected to becreated this year, coupled with efforts to promote the use of digitalfinancial services, are expected to accelerate the development of fintech in Vietnam.

Governor of the State Bank of VietnamNguyen Thi Hong recently said that the central bank would focus on creatingfavourable conditions for fintech development this year in a bidto boost the digital economy.

Vietnam saw strong fintechdevelopment in 2020, partly fuelled by the COVID-19 pandemic which forcedpeople to shift to cashless payments.

According to the recentVietnam Fintech Report 2020 by Fintech News Singapore, the strongdevelopment of fintech in Vietnam was driven by the rapid growth of e-commerceplatforms and the Government’s efforts to accelerate digitaltransformation and cashless payments to cope with the impacts of the COVID-19 pandemic.

Statistics showed that electronicpayments in Vietnam increased by 76 percent with the total transaction valueincreasing by 124 percent in the first quarter of 2020 compared to the sameperiod of 2019.

The visits to e-commerce appsreached 12.7 million in the second quarter of 2020 when social distancing wasimposed, representing a rise of 43 percent.

The report also pointed out that thenumber of fintech start-up firms in Vietnam increased nearly three times, from44 in 2017 to 120 in 2020.

About 31 percent of them operated inpayments, 17 percent in peer-to-peer lending and 13 percent inblockchain/crypto while the rest were in wealth management, comparison,data/credit/scoring management, crowdfunding, insurtech, digital banking andSMEs financing.

The report said that internationalinvestors were optimistic about the potential of Vietnam’s fintech market andhad poured millions of dollars into domestic fintech start-ups. However, theinvestment was mostly disbursed in 2019.

Major deals were VNPay raising 300million USD from Softbank’s Vision Fund and Singapore’s GIC fund and Momoraising 100 million USD in its Series funding C round from Warburg Pincus.

Key players in the e-wallet marketwere MoMo, Payoo, Moca, Zalo Pay and Viettel Pay while three outstandingcompanies in B3B were VNPay, Trusting Social and Kilimo Finance.

The central bank was focusing onpromoting digital transformation in the banking sector and developing the legalframework for fintech, including regulations about eKYC, mobile money andcross-border money transfers.

A regulatory sandbox for fintech wasalso expected to be submitted to the Government this year.

Tran Viet Vinh, founder of FiinFinancial Technology Innovation Joint Stock Company, said that the regulatorysandbox when issued would create an impetus for the development of new fintechservices, which would bring more convenience to users.

Vinh said that fintech companiesshould prepare for participation in the sandbox while diversifyingtheir products and services.

According to Nguyen Ba Diep, deputychairman of e-wallet Momo, the cooperation between banks and fintech companieswas of significant importance to create benefits and value for users, addingthat this was also an important factor for fintech development in 2021./.