The report surveyed more than 1,400 Vietnamese consumers (across Gen X, Y and Z) in the fourth quarter of 2024 and found that the penetration rate of leading digital wallets, such as MoMo and Zalo, has seen a significant reduction. Meanwhile, usage of bank-owned digital financial platforms has continued to grow, demonstrating their resilience in the new digital landscape. Interestingly enough, in the previous quarter, MoMo and Zalo each saw an increase in penetration rates to 69% and 44% respectively, before each seeing it plummet down 8 percentage points to 61% and 36%. On the other hand, the penetration rate for banking apps continued to hold steady at 34%, even after the jump in usage in the previous quarter.
When it comes to consumer preferences, bank-owned apps are also performing better compared to independent digital finance apps. Consumer preference for MoMo stayed at 40% year-on-year, while preference for Zalo fell by 7 percentage points to 9%. In comparison, consumer preference for bank-owned apps increased by 9 percentage points year-on-year to 26%. When segmenting respondents by generation, bank-owned apps have seen consistent growth across the board, whereas MoMo saw a sharp decline in preference from Gen X and Zalo also saw its preference among Gen Y consumers fall.
One possible explanation could be that the brand identity of traditional banks still has a strong “share of mind” across consumers of all generations, and many still associate these banks with important qualities such as security and safety. Thus, when the banks started to enhance their digital capabilities, consumers showed no hesitation to switch back to bank-owned apps. In addition, the rise in the occurrence of online frauds and scams likely played a part in driving older consumers away from independent fintech platforms which tend to feature third-party services, discounts and offers where fraudsters may be lying in wait.
These developments show that Vietnamese banks have recognized the importance of digital transformation and have taken action to address the situation in the present and made plans for the longer term. For example, Vietcombank has developed multiple iterations of its digital banking solution, VCB Digibank, which has seen various enhancements including a revamped interface and user experience flow catering to specific customer segments. Similarly, Military Commercial Joint Stock Bank (MB Bank) recently told the media that the bank is investing US$50 million annually to address three main areas of building technology infrastructure, training human resources, and implementing automation projects.