Mobile Banking in Vietnam: Drivers, Status, and Future Trends

1. Introduction
1.1. Definition of Mobile Banking
Mobile banking, also known as m-banking or mobile financial services (MFS), is an
electronic banking service that allows customers to access and manage their bank
accounts from a mobile device, such as a smartphone or tablet.
Nowadays, the mobile banking services typically offers a variety of services, such as:
 Money transfer service
 Online saving account opening/ closing service
 Bill payment service (electricity and utility bills, phone charges….)
 Account information querying service: checking account balances and transactions
history, notifications of account balance fluctuates, receiving bank information
(interest rates, exchange rates, transactions points, ATMs…)
 Online services buying (airline tickets, insurance…)
 E-wallet service

1.2 Benefits
For Customers
 Convenience: Mobile banking allows customers to access their accounts and manage
their finances from anywhere, at any time. They can check balances, transfer funds,
pay bills, and more all from their smartphones or tablets.
 Accessibility: It is available to a wide range of customers, including those in
underserved areas. Consequently, it eliminates the need to visit physical branches,
which can be inconvenient and time-consuming.
 Security: The apps typically use strong encryption and authentication methods to
protect customer information. These measures make mobile banking just as secure, if
not more secure, than traditional banking methods.
 Cost savings: It can help customers save money by reducing the need for physical
branch visits and ATM transactions. Many banks even offer fee-free mobile banking
services.
 Real-time financial management: Mobile banking apps provide customers with real-
time access to their account information. This allows them to track their spending,
monitor their balances, and make informed financial decisions.

For Banks
 Reduced costs: Mobile banking can help banks reduce their operating costs by
reducing the need for physical branches and customer service staff.
 Increased customer engagement: It can help banks increase customer engagement by
providing a convenient and user-friendly way to access banking services. This can
lead to increased customer satisfaction and loyalty.
 Enhanced data collection: The apps can collect valuable data about customer
behaviour and preferences. This data can be used to improve products and services,
personalise marketing campaigns, and detect fraud.
 Expanded reach: It can help banks reach new customers, particularly those in
underserved areas.
 Competitive advantage: It can give banks a competitive advantage in the
marketplace.

2. Mobile Banking in Vietnam

Current status of Mobile Banking in Vietnam
Penetration rate
The mobile banking penetration rate in Vietnam has grown rapidly in recent years,
reaching 69% in 2022, according to data from the State Bank of Vietnam (SBV). This is
one of the highest mobile banking penetration rates in Southeast Asia.
Number of customers participating in payment transactions via mobile phones (average
growth of 87%/ year in transaction volume and 140%/ year in transaction value in the
2015 – 2021 period) and the Internet (average growth 44%/year in transaction volume
and 41%/year in transaction value in the 2015 – 2021 period) is increasing rapidly.

Nu
mber of domestic transactions via internet and mobile banking in Vietnam in the third
quarter of 2022 (in millions) – Statista.com

Mobile Banking Apps

Most Vietnamese banks have their own mobile banking apps. These apps are typically
available in both Vietnamese and English. They are also user-friendly and feature-rich,
and they offer a wide range of services and functionalities. In fact, the number of
downloads of mobile banking apps on iOS operating system are Techcombank Mobile,
MB Bank, MyVIB2.0… The “Big 4” ranked 4th to 7th (VCB Digital, Vietinbank Ipay,
BIDV SmartBanking and Agribank E-Mobile Banking). Other non-bank financial
applications are also making changes on the iOS app store with Momo app ranked 3rd
and Viettel Money ranked 6th in the chart. In contrast, with CH Play, the Android
operating system’s app store rankings have changed again. The top three positions belong
to MB Bank, VCB Digibank and Agribank E-Mobile Banking. Applications from
Vietinbank and Techcombank ranked next.

Security
The widespread adoption of mobile banking has raised concerns about the security of
mobile banking transactions, particularly in light of the increasing sophistication of cyber
threats. However, Vietnamese banks and financial institutions have taken significant
steps to safeguard mobile banking transactions. They employ a range of advanced
security measures to both protect customer data and prevent unauthorised access.
Since the end of 2019, VPbank, TPbank and HDbank have applied many technology
solutions to improve the quality of Mobile Banking services. It is the eKYC solution –
online customer identification and insider. With these breakthrough technologies, banks
have introduced a mobile service application version that allows customers to both open
online payment accounts and make transactions immediately without waiting.

Multi-factor authentication
One of the most critical security measures implemented by Vietnamese banks is multi-
factor authentication (MFA). MFA requires users to provide multiple layers of
verification beyond their traditional username and password. For example, they could be
a one-time passcode (OTP) sent to their registered phone number or a biometric
authentication method such as fingerprint or facial recognition. This additional layer of
security significantly reduces the risk of unauthorised access, even if a user’s login
credentials are compromised.

Device fingerprinting
Device fingerprinting technology is another important security measure employed by
Vietnamese banks. This technology collects information about a user’s device, such as
the operating system, browser type, and IP address, to create a unique digital fingerprint.
This fingerprint is then associated with the user’s account, and any subsequent login
attempts from a different device will trigger an alert, prompting the bank to take
additional verification measures or block the transaction altogether.

Data encryption
Data encryption plays a crucial role in protecting mobile banking transactions from
eavesdropping and data breaches. Vietnamese banks encrypt all sensitive data transmitted
between the user’s device and the bank’s servers. Consequently, this ensures that only
authorised parties can access and decrypt the information. This encryption process
safeguards account details, transaction history, and other sensitive personal data.
3. Future Trends of Mobile Banking in Vietnam
Mobile banking adoption in Vietnam is poised for continued growth in the coming years.
Here are some key factors that will shape the future of mobile banking in Vietnam:

Emerging Technologies
The integration of emerging technologies, such as artificial intelligence (AI), blockchain,
and augmented reality (AR), will revolutionise the mobile banking landscape. AI will
personalise banking services, enhance fraud detection, and enable chatbots for customer
support. Blockchain will secure transactions, facilitate cross-border payments, and
promote financial inclusion. AR will provide immersive banking experiences and virtual
interactions with bank representatives.

Mobile Banking Super Apps

Mobile banking apps will evolve into super apps, offering a wide range of services
beyond traditional banking transactions. These services may include e-commerce
platforms, bill payment options, investment tools, insurance solutions, and lifestyle
features. This convergence will create a seamless and integrated user experience.

Fintech Partnerships and Open Banking

Collaborations between banks and fintech companies will accelerate innovation and
expand the reach of mobile banking services. Open banking initiatives will promote data
sharing and enable third-party providers to develop innovative financial products and
services.

Rural Connectivity and Digital Infrastructure

Expanding network coverage and improving internet infrastructure in rural areas will be
crucial for extending mobile banking services to underserved communities. Thus, it will
require investments in telecommunications infrastructure and partnerships with local
providers.
Cybersecurity and Regulatory Oversight
Banks and regulatory authorities will continue to enhance cybersecurity measures to
safeguard mobile banking transactions and protect user data. This includes implementing
robust authentication mechanisms, data encryption, and vulnerability assessments.

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Exercise A. Decide if these statements are True or False. Include where you can find
the information for your answers from.
1. Mobile banking enables customers to manage their accounts solely from physical bank
branches. F (Mobile banking, also known as m-banking or mobile financial services
(MFS), is an electronic banking service that allows customers to access and manage their
bank accounts from a mobile device, such as a smartphone or tablet.)
2. Number of domestic transactions via internet and mobile banking in Vietnam has
experienced a significant surge. T
3. Security measures in mobile banking transactions are strongly given precedence by
Vietnamese banks. T (However, Vietnamese banks and financial institutions have taken
significant steps to safeguard mobile banking transactions.)
4. Multi-factor authentication (MFA) involves providing multiple layers of traditional
ways for validation. T (MFA requires users to provide multiple layers of verification
beyond their traditional username and password.)
5. The incorporation of emerging technologies is set to transform the mobile banking
environment substantially. T (The integration of emerging technologies, such as artificial
intelligence (AI), blockchain, and augmented reality (AR), will revolutionise the mobile
banking landscape)
6. Mobile banking apps are anticipated to remain focused on traditional banking
transactions in the future. F (Mobile banking apps will evolve into super apps, offering a
wide range of services beyond traditional banking transactions)
7. The significance of enhancing rural connectivity and digital infrastructure for the
future expansion of mobile banking services in Vietnam is underestimated. F (Expanding
network coverage and improving internet infrastructure in rural areas will be crucial for
extending mobile banking services to underserved communities. Thus, it will require
investments in telecommunications infrastructure and partnerships with local providers.)

Exercise B. Fill in the blanks in the summary below with ONE WORD OR
NUMBER taken directly from the provided text.
The adoption of mobile banking has seen a remarkable 1. ___grown/surge______ in
Vietnam, propelled by factors such as the increasing penetration of smartphones and
government initiatives. Vietnamese banks prioritize security 2. _____measures_____,
such as multi-factor authentication and data encryption, to ensure the safety of mobile
banking 3. _____transactions_____. Efforts have been made to enhance the quality of
mobile banking services since 4. _____the end of 2019 _____. Emerging 5.
____Technologies______ like blockchain are poised to significantly impact the future of
mobile banking, offering personalized services and bolstering security. Mobile banking
apps are evolving beyond 6. ___traditional banking_______ transactions, providing a
diverse array of services. Additionally, enhancing 7. ___rural_______ connectivity and
digital 8. __infracstructure_______ is vital for extending mobile banking services to
underserved areas.
Three common financial errors caused by human evolution
Exercise 1: Read the text quickly and match the numbered sections (1–3) with the
headings below (a–e). There are two extra headings.
1. E: Avoiding losses
2. A: Overconfidence
3. B: Mental accounting
Exercise 2: Read the text again and find which person the following statements
refer to. Write the words Cordaro, Lo, Odean or Thaler.
1. He won a Nobel Prize. Thaler
2. He is interested in why people buy and sell stocks at the worst possible time.
Thaler
3. He thinks that human behaviour might not be as suitable for the modern world as
it was for the world we evolved in. Lo
4. He thinks that many people will hold on to a stock that is going down in price
because they hope it will go up again. Lo
5. He thinks people often believe they can predict what the market is going to do
next, when they can’t. Cordaro
6. He thinks that some people invest just for fun. Odean
7. He thinks that people see money from their salary differently to money from an
investment gain. Thaler
8. He thinks that if you buy a coffee every day you won’t be aware of the impact it is
having on your personal finances. Cordaro
Exercise 3: Choose the best meaning (a or b) of the words in bold that completes the
sentences (1–4).
1. A: A bias is an opinion about a person or idea which makes you treat them
unfairly.
2. B: A guru is someone who people respect because they know a lot about a
particular subject.
3. A: If people think of money as relative then in their mind its value depends on its
relationship to other things.
4. A: If something is justified, there is a good reason for it.

Exercise 4: Match the words (1–10) with their definitions (a–j).

1. F: Portfolio: a plan that shows how much money you have and how you will
spend it
2. G: Investor: someone who buys stocks in order to get a profit
3. E: Stock: one of the equal parts of a company that you can buy (= share)
4. B: Loss: when you sell for a lower price than you paid
5. A: Gain: when you sell for a higher price than you paid (= profit/return)
6. I: Savings: money that is kept in a bank to be used later, rather than spent
7. C: Retirement: when you stop working because of your age
8. J: Wealth: a large amount of money that a person owns
 9. H: Inheritance: money that you receive from someone who has died
10. D: Budget: a large amount of money that a person owns

Structure of Letter
- Inside Address
- Sender Address
- Date
- Opening
- Body
- Signing off
Function of Each Body Paragraph in Complaint Letter
1. Reason for writing
2. Described Results
3. Action Required - Warning
4. Closing