Vietnamese Consumers Exhibit Greater Financial Optimism Compared to Regional Peers

This notable development emerges from the "ASEAN Consumer Sentiment Study (ACSS) 2023" report recently unveiled by UOB Bank. Amidst apprehensions about an impending economic downturn, the buoyant sentiment of Vietnamese consumers instills confidence and anticipation of rejuvenated consumption, financial recovery and growth, as well as the evolution of financial services in the foreseeable future.

Mr. Paul Kim, Director of Personal Financial Services at UOB Vietnam Bank, addresses the launch ceremony of the ASEAN Consumer Sentiment Study (ACSS) 2023

Emphasis on financial security

During the report's launch, a representative from Boston Consulting Group, a global management consulting firm collaborating with UOB to conduct ACSS 2023, highlighted Vietnam's consistent and positive economic growth, even during challenging times like the COVID-19 pandemic. Vietnam, along with China, stood out as one of the rare countries to maintain positive economic growth in 2022, possibly making it the sole economy in the region to achieve this feat.

In concurrence, Mr. Paul Kim, Director of Personal Financial Services at UOB Vietnam Bank, commented that Vietnam's robust economic performance has led to an increased sense of financial optimism among domestic consumers in comparison to their counterparts in other regional nations, despite concerns about an impending economic recession. UOB's research indicates that 76% of respondents in Vietnam anticipate an improved financial outlook by June 2024, whereas these figures stand at 74% in Indonesia and 68% in Thailand.

Despite their optimism, Vietnamese consumers still grapple with various financial concerns, with these anxieties showing an overall uptick from the previous year across all age and income groups of survey participants. ACSS reveals that a significant eight out of 10 consumers in Vietnam express apprehension regarding their financial well-being. The top three concerns pertain to the ability to save money (32%), the capacity to maintain their current lifestyle (32%), and the ability to cater to their parents' financial and healthcare needs (30%).

Notably, the higher the level of concern regarding finances, the more conservative consumers become in terms of their spending and investments. They consistently prioritize financial security, with 65% closely monitoring their expenditures and finances through online banking platforms and 60% conducting more extensive research on products offering incentives, rewards, or savings to optimize their financial situation.

Due to this heightened focus on financial security, consumer financial preferences have shifted towards allocating more funds into low-risk instruments, such as bank deposits (32%) and insurance plans (28%). Specifically, 25% of Vietnamese respondents are allocating more money to insurance compared to the previous year, marking a 4% increase over the regional average. This trend is especially prominent among affluent consumers (36%). Seizing this opportunity, UOB has introduced a comprehensive array of solutions and products encompassing savings, investment and hedging options. These offerings aim to provide customers with flexible, low-risk, and resilient financial plans capable of weathering economic cycles.

Speakers at the launch ceremony of the ASEAN Consumer Sentiment Study (ACSS) 2023

Dominance of digital payments and digital banking

The shift in financial preferences, coupled with the increasing affinity for digitalization, indicates that Vietnamese consumers possess a high level of tech-savviness and a readiness to embrace cutting-edge technology. Consequently, the usage of mobile banking applications has surged, with 54% of respondents reporting increased utilization of this channel over the past year. Notably, more than 50% of respondents favor online tools for activities such as transferring money internationally and checking rewards status. For more intricate transactions, including high-value transfers, loan applications, loan restructuring, and insurance purchases, consumers still value traditional physical methods or a combination of both online and offline banking channels. This approach aligns seamlessly with UOB's omnichannel strategy, which offers a seamless online-to-offline engagement model for consumers.

In terms of payment methods, e-wallets, mobile wallet applications for card payments, and e-commerce payment platforms are the most widely adopted, with 67%, 58%, and 55% of respondents using them, respectively. Furthermore, four out of five consumers in Vietnam use e-wallets at least once a week, and an equal proportion are inclined to recommend e-wallets to others. Momo stands as the most favored e-wallet, followed by ZaloPay and VNPay.

Paul Kim pointed out that despite concerns about rising living costs and inflation, consumers consistently embrace the new era of digitalization. As a financial institution, the insights gleaned from ACSS regarding consumer priorities, savings habits, financial behaviors, and digital preferences are invaluable. These insights enable UOB, as well as the banking industry at large, to effectively align their services with consumer sentiments, aspirations and needs. In light of the rapid expansion of digital payments and digital banking, UOB remains committed to supporting its customers in capitalizing on opportunities and pursuing their financial goals. The bank is dedicated to ensuring that customers' financial and lifestyle requirements are seamlessly met in a secure manner while staying at the forefront of this exciting digital era, as emphasized by the UOB Bank Vietnam representative.

Source: Vietnam Business Forum