The Rise of the Digital Economy in Vietnam

Vietnam is showing significant progress in its journey towards a digital economy. Active support from the Government, the explosive growth of a supporting ecosystem with 70,000 technology companies, 18,000 software companies and rapid changes in people's awareness are favorable factors for Vietnam to become a leading country in digital economic development in Southeast Asia.

Along with the digital economy, cashless payments have also shown a constant growth rate, especially after the Government's Decision No. 1813/QD-TTg was issued since October 2021. Government initiatives, combined with cooperation from the banking industry and key partners, have contributed to creating a favorable environment for digital payment methods to be widely applied. More and more people are adopting digital payments, reducing their dependence on cash, while increasing financial inclusion regardless of region.

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Digital payments are increasingly being applied widely in Vietnam. Photo: Mastercard

However, digital payments in Vietnam still have a huge untapped potential. This area motivates Mastercard - as a global payment partner - to continuously innovate to promote the digital future in Vietnam. By working closely with local banks, Fintech companies and stakeholders, Mastercard has successfully introduced advanced technologies that are suitable for the unique needs of the Vietnamese market.

In addition to its technological strengths, security is another important area where Mastercard is making a profound impact. Advanced security solutions such as tokenization and multi-factor authentication from Mastercard ensure transactions are processed smoothly and securely, minimizing fraud as well as protecting sensitive user data.

Leading innovation to pioneer the digital future

Not only providing payment solutions and new security technologies, Mastercard also continuously affirms its long-term commitment to accompany Vietnam in promoting the digital economy in a safe and secure manner through strategic partnerships with financial institutions and regulatory agencies. One of the outstanding strategic partnerships, emphasizing this long-term commitment, is Mastercard's participation for 3 consecutive years in the Smart Banking Conference - an annual event series that provides in-depth insights into the latest technologies, contributing to finding breakthrough strategies to build a safe and sustainable digital future for the banking industry.

Accordingly, Mastercard believes that open banking and artificial intelligence (AI) are reshaping the financial industry and becoming the mainstream trend in the future. Providing equal development opportunities in the digital economy, this model not only revolutionizes the way consumers manage their finances, supports businesses in optimizing costs, but also improves the customer experience with modern financial services.

More than just a trend, open banking is also an important step forward for the rapidly transforming financial services industry in Vietnam. Speaking at the plenary session of Smart Banking 2024, Mastercard representative also pointed out three fundamental factors to move towards open banking and further open finance and open economy.

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Mastercard representative shares three fundamental elements to move towards Open Banking. Photo: Mastercard

First, each open banking platform must have detailed terms, regulations and data standards, helping participants develop appropriate strategies for implementation. Next, the nature of open banking is to empower users, and users need to understand how they are empowered. Finally, the strategy of the participants. Banks can choose to participate passively by complying with open banking regulations, or actively participate in building and see it as a strategy to create new surplus values ​​for the business.

Not only open banking, AI is also widely applied by banks and financial institutions in Vietnam and globally. Globally, Mastercard has been leveraging the power of AI for more than a decade to protect customers from fraudulent activities, without affecting the user experience. Mastercard has been applying AI technology to protect more than 143 billion transactions each year, detect financial fraud activities and prevent cybercriminals from stealing billions of dollars. Last September, Mastercard also invested 2.6 billion USD to expand its cybersecurity services through the acquisition of Recorded Future, a global company in the field of Threat Intelligence.

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Mastercard representative shares about AI at the workshop "Improving security and safety in the era of digital banking transformation". Photo: Mastercard

Beyond cybersecurity, Mastercard’s AI-powered technological advancements are also providing solutions to new payment problems. These solutions empower consumers through advanced digital tools that support the AI ​​customer journey, including personalization, digital identity, next-generation retail experiences and intelligent, self-learning multi-modal payment networks.

Mastercard is committed to providing solutions that help promote the development of the open banking ecosystem in the Vietnamese market. With the expertise of a world-leading payment technology company and strong partnerships in more than 210 countries and territories, Mastercard is able to connect open banking with a global network of cards and bank accounts, while ensuring simple, smart, secure and seamless payments for Vietnamese users.

Doan Phong