<article>IFC-backed Vietnamese lender VPBank has entered into the fintech arena by launching its own digital banking service, YOLO, to target the vast unbanked population in the country.  </article>

IFC-backed Vietnamese lender VPBank has entered into the fintech arena by launching its own digital banking service, YOLO, to target the vast unbanked population in the country.  
The YOLO platform enables users to digitalise their daily activities, from basic banking transactions like savings and money transfer, to online payments for services including bills, restaurants and booking. It also has partners to offer entertainment on the app, as well as taxi hailing and reward programmes.
Instead of only developing a digital front end, banks should build something more agile, said Shameek Bhargava, VPBank’s head of digital banking.
Even as 70 per cent of the population is unbanked, about half of the 95 million Vietnamese people are Internet citizens with smartphones. Bhargava said, if an app was to engage people on the phone long enough, it must be relevant, and that was the driver for VPBank to launch YOLO.
“Banks, which had their advantage in the old days, are realizing that they need to focus on the daily transactions that customers do, and collaborate with the ecosystem,” he said. “Instead of focusing on the market share of deposits, banks should focus on the market share of transactions.”
A spate of banks in the region have chosen to establish their own venture capital funds to invest in fintech startups as a way to stay relevant in the face of industry-wide disruption. Thailand’s <a style="color: #000080;" href="https://www.dealstreetasia.com/tag/kasikorn-bank/">Kasikorn Bank</a> announced a $29 million vehicle called Beacon last year, while Indonesia-based Bank Central Asia joined the play with a $15 million fund. Bank Mandiri also has its $37-million corporate VC arm.
“The new model in the digital age is changing very fast. If you look at some more mature digital markets, fintech is getting closer to banking, and banks are evolving to get closer to what fintech does,” said Bhargava, explaining the rationale behind the creation of YOLO.
VPBank has been known for sponsoring Timo, which claims to be Vietnam’s first digital bank providing online banking transactions. VPBank also hosts two co-working spaces within its offices.
“We are mentoring startups in the co-working spaces, and in certain cases, we will tie up with them and invest in them,” said Bhargava.
The International Finance Corporation (IFC) invested in VPBank with a $57 million convertible loan package. While IFC is not financially investing in YOLO, the World Bank Group’s financial lending arm is participating in growing the platform.
IFC and the Monetary Authority of Singapore established the ASEAN Financial Innovation Network to facilitate broader adoption of fintech innovation and development within the region, and YOLO is an active partner in the initiative.
Fintech in Vietnam is increasingly gaining attention from investors. The space had a record high of $129 million funding in 2016. Though investment value halved in 2017, the momentum looks promising as VC funds are shifting their focus on the sector, including the recently launched $100-million <a style="color: #000080;" href="https://www.dealstreetasia.com/tag/vinacapital-ventures/">VinaCapital Ventures</a>.
The increasing participation from the banking industry will drive the fintech market to reach $7.8 billion by 2020 from $4.4 billion in 2017, according to corporate services firm Ernst &amp; Young.
Also read:
<a href="https://www.dealstreetasia.com/stories/thai-lender-kbank-launches-29m-beacon-vc-fund-invest-fintech-74619/">Thai lender KBank launches $29m Beacon VC fund to invest in fintech</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/fintech-singapore-dbs-97820/">Fintech battle pits Singapore’s DBS against Chinese titans</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/future-fintech-southeast-asia-peer-to-bank-c88-107428/">The future of SEA fintech is peer-to-bank (P2B), says C88’s John Patrick Ellis</a>

IFC-backed Vietnamese lender VPBank has entered into the fintech arena by launching its own digital banking service, YOLO, to target the vast unbanked population in the country.  

IFC-backed Vietnamese lender VPBank launches digital banking service YOLO

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IFC-backed Vietnamese lender VPBank launches digital banking service YOLO

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