The importance of artificial intelligence (AI) and advanced technologies in driving sustainable development within Vietnam’s financial sector is on the rise. This trend not only creates numerous opportunities for product innovation but also facilitates the resolution of intricate issues, thereby contributing to significant economic advancement.
Businesses are closely observing the evolution of AI and emerging technologies in Vietnam. Finastra, for instance, recently disclosed the findings of its Financial Services State of the Nation Survey 2023, offering insights into the substantial role of new technologies in Vietnam’s financial landscape. These revelations provide valuable clarity regarding the adoption of innovative technology among key decision-makers in Vietnam.
AI Integration in Economic Services
According to Finastra’s report, 94% of financial institutions in Vietnam exhibit optimism regarding the transformative potential of AI within the sector. This optimism is palpable in Vietnam’s extensive incorporation of AI in e-wallets and financial software.
For example, TPBank has integrated facial recognition technology into its LiveBank automated banking platform, enhancing both customer convenience and security. By utilizing AI algorithms that scrutinize 128 parameters, the bank can effectively authenticate customers without the necessity of traditional identification documents.
Similarly, VietinBank has implemented FaceID recognition kiosks for customer authentication, resulting in a 30% reduction in transaction processing time. Several prominent banks in Vietnam, including VPBank, Techcombank, VIB, and ACB, have embraced AI for various applications such as asset management, security, fraud prevention, and customer support through chatbots.
Moreover, AI plays a crucial role in promptly identifying suspicious transactions, leading to more accurate fraud detection while minimizing disruptions for customers. Its capacity to analyze extensive datasets and correlate information from diverse sources enhances the efficiency of fraud detection mechanisms.
Banking as a Service (BaaS) in Vietnam’s Financial Arena
Banking as a service (BaaS) has emerged as a fundamental element of many banks’ business models in Vietnam. This concept entails integrating core banking services with offerings from non-banking entities, thereby fostering the development of new products and improving accessibility.
As per Finastra’s survey, 55% of respondents have reported enhancements or implementations of Bring Your Own Device (BYOD) features, surpassing the global average by 7%. This trend underscores the keen interest of financial industry leaders in Vietnam in innovative financial frameworks. Additionally, 89% of respondents, ranking Vietnam second only to Hong Kong (95%), believe that these models are indispensable tools for driving business growth and revenue.
This trend aligns with the increasing preference for digital payment solutions among Asian consumers, with daily mobile payment transactions amounting to billions of dollars. A study by Visa reveals that 90% of Asian consumers favor online banking and intend to utilize these services in the future.
Applications of Natural Language Processing (NLP) in Vietnam’s Financial Sector
Natural Language Processing (NLP) emerges as a prominent application of AI in Vietnam’s financial landscape. Financial institutions in Vietnam have embraced NLP to enhance customer service, with 41% leveraging this technology for personalized customer marketing.
The growing adoption of AI Chatbots in the financial sector underscores the expanding integration of NLP. These AI-powered chatbots utilize language technology to engage in contextual conversations and offer round-the-clock customer support, thereby enhancing the quality of customer service. Improving customer service through AI remains a top priority for 45% of Finastra’s survey respondents in Vietnam.
In the dynamic financial landscape of today, where institutions continuously innovate and leverage technology to gain a competitive edge, ensuring customer satisfaction through superior service can provide a strategic advantage.
Financial Services, Systems, and ESG
In Vietnam, 90% of surveyed decision-makers recognize the significance of financial institutions and the banking industry in supporting Environmental, Social, and Governance (ESG) initiatives.
Financial institutions and banks view the adoption of ESG standards as crucial for Vietnam to achieve its target of net zero carbon emissions by 2050. Embracing ESG practices not only aligns with regulatory requirements but also positions organizations to directly benefit from addressing ESG demands.
According to a PwC Vietnam report, financial institutions have the potential to generate up to US\(1.7 billion in revenue from issuing sustainable bonds for ESG projects. Additionally, these institutions could attract investments worth US\)753 billion for Vietnam’s energy transition from 2016 to 2030.
Future Prospects
The integration of AI and innovative technologies has become a cornerstone of the long-term development of Vietnam’s financial services sector. Beyond enhancing service offerings, these technologies have the potential to drive revenue growth and profitability for businesses.
For deeper insights into Vietnam’s financial solutions industry and the myriad opportunities available to international investors, consider consulting the experts at Dezan Shira and Associates.
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Dezan Shira & Associates provides business intelligence, due diligence, legal, tax, and consulting services in Vietnam and the Asian region. With offices in Hanoi, Ho Chi Minh City, China, Southeast Asia, India, and Russia, they offer comprehensive support for investments in Vietnam. Reach out to them at [email protected] or visit their website at dezshira.com for assistance.
