(PLO)- Fintech is revolutionizing financial services from revenue and expenditure balance support to investment decisions.
Fintech is helping to make personal financial management more efficient and secure. Simultaneously optimize income sources, control spending and choose suitable investment channels for users.
Difficulty managing personal finances
Ms. Hoang Phuong (23 years old, office worker) is often upset because she cannot save money as planned. The reason is that she often spends according to her emotions.
“Following trends and hobbies makes me withdraw money before I can consider it, so I often run into deficits. I can only stop bluffing when I use a fintech application that helps me manage spending, budget for payments, and properly allocate money to save,” Phuong said.
The spending style of Gen Z generation like Phuong is not unique. A latest survey from Deloitte shows that only about a quarter of Gen Z and 21% of Millennials (24-38 years old) say they are comfortable and in control of their monthly expenses. Meanwhile, nearly half of those surveyed said they regularly spend all of their salary. This affects the ability to save and explains why up to 30% of people feel financially insecure.
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| The government strongly encourages people to transact without cash, and nearly 60% of the population is already exposed to digital payments. Photo: PHUONG MINH |
Bryan Carroll, CEO of TNEX – a fintech company providing personal investment and spending management services, said fintech uses a simple technology approach, thereby helping users build and Effective personal financial management.
Fintech is present in many financial products, from end-user products such as e-wallets, cryptocurrencies, fundraising tools to products that support the operations of the company. financial institutions such as smart technology services, blockchain.
Financial expert Tran Dinh Phuong said that effective personal financial management will maintain safety and spend more effectively, helping to save, promoting personal wealth accumulation, thereby increasing total social savings. as well as expanding investment capital for economic development.
Keep money with technology
Many fintech applications currently on the market easily connect with financial institutions to help individuals plan their financial budget. Using real-time data from an individual’s bank, the app gives them a clear picture of their spending habits to make more informed decisions when it comes to allocating financial resources.
In addition, fintech allows for the automation of savings in various ways. For example, the Digit app will analyze an individual’s income and spending patterns, and then determine how much can be effectively saved. Or individuals go shopping for a commodity that costs 98 dong, the Acorns application will automatically round the number to 100 and take those 2 dong to invest in a portfolio swap fund, helping you make money from stocks with this source of cash.
Even a person going to pay a loan, find investment opportunities or do banking transactions, fintech is all about minimizing financial mistakes with the help of artificial intelligence. Or apps that allow individuals to detect unusual spending actions to correct.
“Overall, fintech is the latest wave in personal finance management. If individuals know how to take advantage of these technologies, financial management is no longer a challenge,” said Phuong.
Three proposals to pave the way for fintech
During a conference held in Vietnam (VN), Mr. Shehzad Bhanji, Global Customer Service Director of QNB Bank Indonesia, said that one of the biggest contributions of fintech is promoting financial inclusion. For example, by providing micro or short-term loans at a fraction of the cost of traditional bank loans.
He gave an example of a micro-lending product in Indonesia, which was jointly developed by QNB Bank Indonesia and Telecommunications Company Indosat Ooredoo Hutchison. Eligible borrowers are confirmed through a “digital profile”, small loans are transferred as quickly as 3 minutes.
Pham Nguyen Anh Huy, RMIT University Vietnam, said the explosion of fintech in Vietnam has been attracting great attention from financial institutions, startups, technology companies as well as the Government.
VN has also allowed mobile money operators to set foot in the fintech market with the goal of universalizing cashless payments, especially in rural and remote areas. However, despite being quite active, the fintech market is lacking a suitable legal framework and needs support to promote development.
Firstly, the State Bank has proposed an initiative to establish a legal framework and a controlled trial management mechanism (sandbox) for the fintech sector since 2017 but so far this plan has not been realized.
Therefore, the current urgent task for the Government is to quickly enact a regulatory mechanism for fintech testing. This mechanism needs to clearly guide fintech activities in Vietnam as well as encourage businesses to do business and operate it. Without this mechanism soon, Vietnam may miss the opportunity to become a leading fintech-blockchain center in the context that other countries are stepping up competition.
Second, the government needs to ensure that Vietnam has the right information and communication technology infrastructure to meet the growing demand from the fintech industry.
Ultimately, education in technology and finance will play an important role in raising public awareness, providing knowledge to avoid scams or other threats that may occur in the fintech space- blockchain as well as the digital economy. Investment is therefore needed to ensure adequate equipment, training materials and essential human resources, not only for schools and universities but also for the general public over the next decade.
TS HO CHI MINH CITY, University of Bristol senior lecturer:
Enable pilot mechanism
In Vietnam, although there have been advances in taking advantage of fintech, many issues related to the legal corridor for the fintech market still need to be improved.
Therefore, the authorities should develop a regulatory framework that allows the sandbox for enterprises and technology startups to have an environment for conducting live service trials.
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TS HO CHI MINH CITY |
The sandbox perspective should provide a general rule and when people operating within that framework are allowed to do whatever they can think of, only then will fintech thrive. At the same time, regulators will have an environment to observe the impact of innovation and make regulatory adjustments accordingly.
TS PHAM NGUYEN ANH HUY, RMIT University VN:
59% of the population exposed to digital payments
According to Statista, the number of fintech companies in Vietnam has increased nearly five times, from 39 companies in 2015 to 188 companies in September 2021. However, Vietnamese fintech is still in its infancy. Vietnam has not caught up with countries like Malaysia, the Philippines or Thailand and is still a long way from Singapore or Indonesia.
E-wallets and digital payments are currently the leading segments, accounting for about one-third of Vietnam’s fintech market. Vietnam also ranks third in the ASEAN-6 in terms of the number of digital payment users with about 59% of the Vietnamese population exposed to this service.
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| TS PHAM NGUYEN ANH HUY |
However, the total transaction value of this sector in Vietnam is only higher than that of Malaysia, far behind the Philippines and Thailand. Although nearly 60% of Vietnam’s population is already exposed to digital payments, the transaction value of this field is still relatively low, which means that the average transaction value per user is also low. Similar trends are occurring in other areas such as digital assets, digital investments, neobanking and alternative finance.
PHUONG MINH