Vietnam can leverage advantages to develop a financial centre

Vietnam can leverage advantages to develop a financial centre

Techcombank CEO Jens Lottner shared valuable insights at a Ho Chi Minh City conference on building a financial centre on March 28.

The event, organised by the Ministry of Finance in collaboration with Ho Chi Minh City People’s Committee, gathered over 400 domestic and international financial leaders and experts to discuss how the city can develop an international financial centre (IFC), learning from other international models while retaining the city’s own unique identity.

Drawing on more than 30 years of experience in strategy consulting and leadership in the financial services industry in Asia, including five years as CEO of Techcombank, Lottner was able to provide high-value insights and practical suggestions to guide the development of Vietnam’s first IFC.

Lottner highlighted three areas where Vietnam could excel. The first is green finance, as Vietnam is one of the few industrialised countries with the potential to meet all its national energy needs from renewable sources. To achieve this ambitious goal, Vietnam will need to significantly increase in investment in green infrastructure and expand its deployment of green finance.

The second strength, according to Lottner, is digital financial services. In Vietnam, one in three people owns digital assets or cryptocurrencies.

He emphasised Vietnam’s vast potential to develop digital financial products, including real digital assets, asset tokenisation, and digital currencies. Businesses are increasingly adopting these technologies, and their practical needs will drive innovation in the digital finance sector.

The third area is trade finance. Lottner stated that this is a rapidly growing field that could be entirely reimagined through technology. Vietnam is poised to become a smart manufacturing hub, with significant investments in AI from major corporations like Foxconn.

“We can easily envision a world where every product, such as an iPad, can be tracked from the assembly line to delivery using blockchain technology. This would integrate all related financial information seamlessly into the supply chain without additional procedures,” Lottner noted.

These three areas currently lack dominant financial centres and Lottner believes Vietnam has the right conditions - practical demand, a talented workforce, and intellectual potential - to develop capabilities in these sectors as part of an IFC.

At the conference, local and foreign experts acknowledged the critical role of financial institutions and banks in operating an IFC in Vietnam.

During the third discussion session on positioning Vietnam’s financial centre, Lottner shared his perspectives on the opportunities and challenges for domestic banks in the process of building a successful IFC in Vietnam.

He highlighted that establishing an IFC in Vietnam presents significant opportunities for domestic banks like Techcombank.

"Beyond specific legal frameworks regulated by the State Bank of Vietnam and relevant authorities, domestic banks would need to upgrade their standards and integrate international payment transactions to meet new requirements like Basel III and IRF9," Lottner said. "These enhancements would require increased investment in building internal capabilities aligned with international standards, a strategy that Techcombank has embarked on over the last four years."

Lottner also noted that the formation of an IFC in Vietnam could enable domestic banks and businesses to secure foreign syndicated loans locally instead of abroad. This would open doors for domestic banks to mobilise large resources of capital to fund business operations and growth, he added.

He also highlighted opportunities to apply blockchain in unified financial management, as Techcom Securities - Techcombank’s brokerage subsidiary - is already carrying out.

The use of latest technologies, like blockchain, would serve to enhance the operation of a new IFC. Lottner added that the lender is pursuing a wealthtech strategy, pioneering the use of blockchain and smart contracts in bond issuance, transaction management, and corporate bond ownership for Vietnamese clients. These efforts will contribute to shaping IFC products and services, he said.

VIR