Vietnam’s economic development in the last 30 years is nothing short of astounding. As reported by the World Bank “between 2002 and 2018, GDP per capita increased by 2.7 times, reaching over US$2,700 in 2019, and more than 45 million people were lifted out of poverty”.
Vietnam’s population is growing rapidly and it is expected to reach 120 million people by 2050. The World Bank reported that “Vietnam’s emerging middle class, currently accounting for 13 percent of the population, is expected to reach 26 percent by 2026” [source].
This population and wealth growth has been remarkable but it has come at a price. A large chunk of Vietnam’s population has not been able to keep up with the pace of development and it is estimated that approximately 69% of the adult population is unbanked [source]. It is therefore no surprise that helping Vietnamese people access financial services has become a government priority. In February 2020, it was reported that the Vietnamese Prime Minister approved a national financial inclusion strategy targeting at least 80 per cent of adults in the country to have bank accounts by 2025 [source].
Financial inclusion has a strong social component, as highlighted in senior government officials’ statements. In a recent article in Vietnam Insider, the State Bank of Vietnam’s Deputy Governor Nguyen Kim Anh, was quoted as saying: “the inclusive finance system needs to specify vulnerable groups, helping them access the financial system in a favorable manner.” It is precisely this need to help all people access financial services that we at Credify recognize as a crucial part of our mission.
Credify’s vision is to assist emerging economies into the digital age through secure, user-centric technological innovations that elevate trust in online finance and commerce. Credify’s idX technology allows companies active in digital commerce and finance to offer their users a portable digital identity passport, which allows users to fully control their data and access digital services through an efficient and seamless experience.
Furthermore, Credify is actively working with industry partners to enrich users’ digital profiles with services that can help them access financial services, such as bank accounts, loans and credit lines.
Specifically, Credify and its partners are working to address two critical services that can help users get access to financial services: Know-Your-Client (“KYC”) and Credit Scoring. KYC is a lengthy and costly check on their clients’ identity that financial institutions are required to carry out prior to offering services, the so-called “onboarding” of clients. The time, resources and money expenses associated with KYC processes are often a primary source for financial institutions to focus on their middle to higher income customer base, thus failing to support financial inclusion of the less well off part of the population. In particular, electronic KYC (or eKYC) is a very powerful tool that Credify has integrated in its idX solution, which drastically reduces the time, cost and complexity of a traditional, manual KYC process.
However, an identity-focused onboarding process is not the only solution that Credify addresses head on. Another area of great potential is Credify’s collaboration with leading providers of alternative credit scoring. Credit scoring refers to the process where financial institutions analyze a customer’s ability to repay their loan or credit card based on several metrics, such as their employment history, previous borrowings and so forth. However, only customers with an already established financial history (such as holding a bank account, a credit card, and so forth) are usually given a credit score by a financial institution, creating a catch-22 situation for new customers. Alternative credit scores help customers without previous financial history to obtain an estimate of their credit worthiness based on several new metrics, such as their mobile phone usage, their social media interaction and digital transactions on e-commerce websites. Obtaining an alternative credit score could help first-time financial service users to obtain services previously unavailable to them, This new, technology-driven credit scoring methodology is rapidly gaining traction in several countries and Credify is proud to be introducing this solution to its clients in Vietnam.