As fintech is growing at a breakneck pace in Vietnam, laws are playing catch up with the technology. The regulatory gaps put investors at risk and expose the need for legal revision to mitigate the risks.
HANOI: Financial technology (fintech) is rapidly transforming the financial sector in Vietnam, but regulatory gaps still exist because laws have not kept up with the advances in technology.
Duong Quoc Anh, deputy head of the Institute of Digital Economy Development Strategy, revealed that Vietnam’s fintech sector has about 40 heavyweights.
Around 72% of firms in the sector partner with banks to improve their services, whereas 28% either compete with banks or operate independently.
As fintech is growing at a breakneck pace in the country, laws are playing catch up with the technology. The regulatory gaps put investors at risk and expose the need for legal revision to mitigate the risks.
Le Duy Binh, director of Vietnam Economica, said free trade agreements had given fresh impetus to peer-to-peer (P2P) transactions between foreign buyers and Vietnamese sellers.
However, laws in the country have not kept pace with the development of technology, leading to a situation in which various types of fintech transactions fall through the cracks. Some countries have developed regulatory sandboxes to enable the testing of P2P lending in the real-life environment, but there is no such sandbox in Vietnam to date.
The director called for regulatory reforms to fix the legal gaps, laying a solid groundwork for the development of fintech in the country.
Nguyen Quang Dong, head of the Institute for Policy Studies and Media Development, said the legal framework in Vietnam had been slow in adapting to the fast-growing fintech sector. — Viet Nam News/ANN
