Vietnam: Potential for Growth in Finance and Banking Industry

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The primary industry priorities in Vietnam are textiles, shoes and leather, plastics, food and beverage, paper, oil and gas, chemicals, and mining. The finance sector is not as developed in Vietnam. As evidence of this, of Vietnams’ population of 90 million people (as of October 2013), only 20 percent have bank accounts. The banking penetration rate in Vietnam reached 21 percent in 2011, which was a remarkable increase over the six percent penetration rate in 2004. This indicates that Vietnam is an untapped market for banking and has great potential for growth.

Vietnam, however, still has low banking penetration rates compared with the remainder of the Asia Pacific region, which has a banking penetration rate of 55 percent. Additionally, while there are 128.1 million mobile subscribers in Vietnam, a very small proportion are mobile banking users and many citizens are not aware of banking payment methods as cash is still the dominate method of payment.

Vietnam is experiencing economic transformation, and it is at a transitional point. The agricultural labor force has declined from more than 60 percent in 1993 to 45 percent in 2010, and the share of the workforce in manufacturing has risen by 50 percent during the same period.

The proportion of 19- to 21-year-olds in postsecondary education has greatly increased, especially in urban areas, reaching a total of sixty percent enrollment in college, basic vocational training, non-vocational college, and university in 2010, which is more than double that of 1998 numbers for urban areas. Despite this, total enrollments in tertiary education remain below those of neighboring countries, further suggesting that the development of tertiary programs needs to grow within Vietnam, possibly as a result of the changing economic environment.

Overall, Vietnam does suffer from many skill gaps as a result of its shifting economy. Interestingly, however, the finance sector is not one of them, and there will be fewer job openings in this sector in the future, a June 2014 report notes. This is due to restructuring of the banking industry in Vietnam which has led to many layoffs. Finance and banking will continue to see a drop in recruitment for the rest of the year.

Accounting and auditing employment has also seen a downward trend. However, demand for other professionals continues to exist, including a need for 150,000 employees in sales, services, electronics-IT, textiles, tourism-hospitality, engineering, construction and communications.

Despite these downward trends, students continue to enroll in the potentially lucrative finance sector. In fact, more than 25 percent of 13,930 surveyed high school students chose economy and finance as a major. This is second to only engineering technology. Additionally, universities teaching banking, finance, and business administration see more than 30 percent of students enrolled in their field.