Embedded finance is a model that integrates financial services, such as payments, credit, or insurance, into non-financial platforms. These platforms range from e-commerce and accounting software to sales management systems and specialized applications. Instead of approaching a bank as a separate entity, businesses can access financial solutions directly within the systems they use daily.

Vietnam leads globally in embedded finance and banking-as-a-service (BaaS) implementation, according to a 2023 Finastra survey. The survey revealed that 58% of financial institutions in Vietnam have implemented or improved embedded finance solutions within the last twelve months, exceeding the global average. Vietnam's embedded finance market still holds significant growth potential, especially given that small and medium-sized enterprises (SMEs) account for more than 90% of all businesses but often face challenges accessing capital.

Mr. Le Hai Doan, Director of 3T-Smartkey Joint Stock Company, and Mr. Chu Minh Tuan, Director of Digital Business and Partner Development Center, VPBankSME Division, participated in the "Cham Thinh Vuong" talkshow. Photo: VPBank

Many small and medium-sized enterprises miss business opportunities due to financial delays, including slow disbursement, complex procedures, and difficulty demonstrating traditional financial capacity. This was highlighted by Mr. Le Hai Doan, Director of 3T-Smartkey Joint Stock Company, at a talkshow titled "The Synergy between Banks, Fintech, and SMEs to Create a Smart Financial Ecosystem".

"Newly established SMEs incur many costs, but without an established reputation, suppliers do not offer credit, and inventory purchases require upfront payment," Mr. Doan stated. "Without bank support, SMEs can easily face capital shortages."

Mr. Chu Minh Tuan, Director of Digital Business and Partner Development Center, VPBankSME Division, echoed this sentiment. He emphasized that for SMEs, the issue extends beyond just a loan; it involves receiving timely financial solutions aligned with their business cycles.

"Embedded finance allows banks to be present directly within a company's operational systems," Mr. Tuan explained. "This reduces delays in financial decision-making and helps businesses seize growth opportunities."

VPBankSME approaches embedded finance not merely as a technology product but as a solution to the practical needs of small and medium-sized businesses: requiring fast, timely, and business-cycle-appropriate capital. Leveraging technology and real-time data, credit approval processes that once took weeks can now be completed in a few minutes. Businesses can access unsecured loans, overdraft limits, business credit cards, or payment solutions without interrupting their operations.

Mr. Chu Minh Tuan discussed VPBankSME's embedded finance strategy. Photo: VPBank

VPBankSME's embedded finance strategy is implemented through collaborations with various digital platforms across different sectors.

In enterprise management software, VPBankSME partners with 3T-Smartkey to integrate financial services into their accounting software platform. This allows businesses to access banking services directly within the system while managing cash flow or transactions.

Within the healthcare sector, VPBankSME collaborates with Medcomm to embed banking financial services into pharmacy and clinic ecosystems. Solutions such as eKYC account opening, QR payment, microcredit, and overdraft limits are expected to be seamlessly integrated into platforms like Medcomm POS and the Ytebox medical e-commerce marketplace, addressing daily operational capital and payment needs.

VPBank also partners with Hi1, an F2C (factory-to-customer) e-commerce platform for Vietnamese businesses, providing a new approach to finance within the production-distribution value chain. Manufacturing businesses can access enterprise solutions including: account opening, QR VAN collection, and the ability for customers to register loan demands directly on the business platform.

Additionally, VPBankSME collaborates with Viettel Telecom to develop embedded financial solutions for businesses using S-Invoice e-invoicing. Integrating directly with Viettel's digital platform digitizes the entire funding process, from registration and appraisal to disbursement. This enables businesses to access capital faster without altering their existing accounting systems.

Through a business-centric approach and long-term partnerships with technology providers, VPBankSME aims to become a leading capital provider. The bank seeks to establish robust financial infrastructure, supporting SMEs in their journey towards sustainable growth and digital transformation.

(Source: VPBank)

The "Cham Thinh Vuong" talkshow series by VPBankSME provides timely market insights, helping businesses better understand the bank's financial products and adapt to changes in domestic and international economic policies.

Through the "Cham Thinh Vuong" message, VPBankSME aims to be the most comprehensive bank supporting SMEs across four key touchpoints: Finance, Digitalization, Knowledge, and Trade.