According to the latest report released by The Asian Banker on February 20, Southeast Asia, including Vietnam, has a large population that often lacks access to formal financial services. Platforms such as Grab, MoMo, and Cake by VPBank are expanding rapidly to meet the needs of an increasingly digitally savvy population. Grab has expanded from a ride-hailing service to a comprehensive platform across eight Southeast Asian countries, forming strategic partnerships with banks to enhance its financial services.

MoMo serves one-third of Vietnam’s population, with over 50,000 business partnerships and collaborations with more than 70 banks and financial institutions. Meanwhile, Cake by VPBank experienced strong customer acquisition, with growth surpassing 50 per cent in 2023 and reaching five million users in 2024.

To step up its game, leading homegrown players like MoMo, VNPay, ZaloPay, and Cake by VPBank are at the forefront of adopting AI strategies to expand their customer base, and enhance product offerings. The trend towards multiproduct ecosystems, powered by AI-driven insights, has enabled digital banks to enhance customer engagement while maintaining operational efficiency, making them competitors to traditional institutions.

Cake CEO Nguyen Huu Quang said, “Digital banks can tap into segments that are underserved by traditional banks, such as ride-hailing drivers, gig workers, and online sellers. Traditional lenders often exclude these customer groups due to the lack of credit history, insufficient collateral, and cumbersome procedures. Digital banks, on the other hand, have a comprehensive technology stack that includes AI-driven solutions to address such challenges more efficiently and with fewer overhead costs.”

According to Fitch Ratings’ analysts, digital banks in emerging markets such as Vietnam have a larger pool of untapped customers, as these markets typically have lower credit and banking penetration than customers in developed markets. This creates less competition from traditional banks, which opens up opportunities for digital players to become profitable.

However, there remain challenges for digital banks to achieve profitability amid fierce competition, high-risk lending, and regulatory uncertainties. Around seven digital-only banks are operational in Vietnam today, and they are required to be under the sponsorship of traditional banks taken from a pool of nearly 50 registered lenders in the country.

Bui Hai An, a senior adviser and former deputy chief executive at Timo, the first digital bank in Vietnam, said, “Most digital banks in Vietnam, while pushing for innovation, still want to position themselves to perform faster and even better than traditional banks in adhering to compliance standards. This is because they want to be perceived as legitimate banks in case licences become available in the coming years.”

“If a digital bank in Vietnam truly attains profitability through proper accounting practices, I believe it can make even more profits once it is allowed to operate separately from incumbent banks, given its lower cost structure.”

As reported by The Business Times, Cake has become the first Vietnamese digital native player to reach profitability in its 2024 earnings before interest, taxes, depreciation, and amortisation. Cake has also integrated AI-enhanced financial services into its digital ecosystem that provide users with a more convenient and comprehensive digital banking experience.

Thanks to these efforts, Cake has secured the 87th spot in the World’s Top 100 Digital Banks 2025 ranking and is recognised as 'Best Digital Bank in Vietnam' by The Asian Banker. Cake is also the only Vietnamese representative to make it to the ranking this year and achieves the highest score ever recorded among Vietnamese counterparts. The digital bank is evaluated across five key dimensions such as customers, market or product coverage, profitability, asset and deposit growth, and funding.

The competition for digital banks is expected to become fiercer as more players jump on the bandwagon. Three out of four banks under special control are simultaneously transformed to digital banks.

DongA Bank has changed its name to Vikki Digital Bank following the mandatory transfer to HDBank. OceanBank is renamed to Modern Bank of Vietnam (MBV) following the transfer to MB, while CBBank is rebranded as VCBNeo after being transferred to Vietcombank.

The ongoing expansion of digital banking players will drive innovation and financial inclusion. This trend will further expedite the shift towards a more interconnected, AI-powered and digitally-driven financial landscape in Vietnam.