Is Vietnam late to Southeast Asia’s digital banking party?

“Start your neobanking romance now.”

That’s the call to action on the website of the Philippines’ Tonik Digital Bank.

The company, which has raised US$175 million to date, became the first digital-only entity to have secured a digital bank license from the Philippines’ central bank last year.

A high-rise building in Ho Chi Minh City / Photo credit: 123rf

Its initial success has reverberated even beyond the Philippines, inspiring a group of entrepreneurs in Vietnam to achieve a similar feat.

Marcin Miller, CEO and co-founder of Ho Chi Minh City-based Galaxy FinX, says the company is developing the “first pure-play fintech platform” in the country.

Tonik co-founder Pawan Bahuguna has been listed as one of Galaxy FinX’s deputy CEOs. “We can create a unique model that no one has really done yet in the Vietnamese market,” says Miller, a former associate partner at McKinsey & Company.

In 2020, Tech in Asia did a deep dive into Vietnam’s e-wallet war, which saw nearly 40 players battling for dominance. But the competition has gone far beyond digital payments. A host of digital banks are also racing to diversify their financial services offerings for the general population.

Underserved or tech-savvy?

Without a separate licensing regime, Vietnamese digital banks have to either partner with incumbent licensed banks or function as a unit under them.

Founded in 2015, Timo, whose CEO is influential Vietnamese-American entrepreneur Henry Nguyen, is considered a pioneer in this space. It originally partnered with VPBank (before inking a deal with VietCapital Bank) to offer a hassle-free digital banking experience.

Timo, which is a combination of the words “time” and “money,” technically doesn’t have any physical branches, but it does operate cafe-style customer service centers called HangOuts.

Timo has been know for appealing to young urban customers / Photo credit: Timo

In an interview with Tech in Asia, Jonas Eichhorst, Timo’s chief financial officer, says the company has doubled down on helping people manage their finances better. “Banks haven’t been very strong in providing this kind of insight and information to users,” he adds. “Most banks don’t do this because they can’t charge fees for it.”

Ties with incumbents

Path to profitability