HO CHI MINH, Vietnam -- Vietnam is fast emerging as important destination, not only for manufacturers but also financial institutions that are eying overseas markets amid stagnant domestic growth.
Last year, 10 South Korean lenders that have a presence in Vietnam reaped $131 million in revenue. This was more than double the previous year’s $610 million, and also accounts for 13 percent of their total overseas revenue.
Vietnam has become much more viable, according to industry watchers. With a population of 95.5 million and a passion to grow, the demand for financial services in Vietnam also have been on the rise, triggering the need for banks to enter the market.
Shinhan Future’s Lab Vietnam Deputy Director Kim Seon-il
One such bank is Shinhan, which has a big presence in Vietnam. In fact, it’s the largest foreign lender in the country by assets, raking in revenue of $81.8 million in 2018.
Noting the significance of the market, Shinhan also chose Vietnam as its first foreign branch for its startup incubator Shinhan Future’s Lab in 2016.
“As a big financial group, we want to support startups. When they grow, they can help us and it becomes a virtuous circle,” Shinhan Future’s Lab Vietnam Deputy Director Kim Seon-il told The Investor in a recent interview. “By supporting local startups that understand the local market well, we also learn about the market,” Kim added.
Shinhan Future’s Lab Vietnam, which incubates local-based startups only, has so far run two batches, having supported 11 startups ranging from fintech firms to health care companies. It provides free office space in the heart of Ho Chi Minh, along with mentorship programs. Starting from the third batch later this year, it plans to invest in selected startups upon completion of the program.
When choosing startups, the accelerator program has no limits in terms of sectors but it takes into consideration what kind of expertise a financial institution can provide and whether or not it can create synergies.
For instance, Shinhan Bank’s Vietnamese branches are using UpUp App, which is part of Batch 2. UpUp App encourages employee engagement by combining gamification with real-time rewards.
“We’ve received a lot of practical help by providing services to Shinhan branches here and also grown fast thanks to that,” founder and CEO Paul Espinas told The Investor.
Espinas said the biggest advantage Shinhan Future’s Lab Vietnam provides is a global mindset.
UpUp App co-founder and CEO Paul Espinas
“Working with a lot of founders in Vietnam, I realized it is easy to grow domestically, but having a global mindset to make your company notable is hard and it is rare to find an incubation program that offers (a global mind),” Espinas added.
Kim said he is looking forward to fostering more startups in Vietname where the startup ecosystem is growing rapidly. “Vietnamese entrepreneurs are fast to learn and with professional programs that help them turn their ideas into real businesses, the Vietnamese startup industry will grow explosively."
Shinhan launched Future’s Lab in May 2015, the first startup accelerator program by a Korean financial institution. It has so far incubated 100 startups across sectors in Korea.
In addition to the Vietnam unit, the accelerator program is launching another regional program in Indonesia this month.
By Park Ga-young (firstname.lastname@example.org)
This article is the result of collaboration of The Investor and The Korea Press Foundation.