The Potential of Agency Banking in Vietnam


Vietnam is poised to limit its financial exclusion problem through its connectivity and Agency Banking.

According to the World Bank, only 31% of Vietnamese adults have a formal bank account. Low-income people fare worse, with only a mere 18.9% receiving access to the financial services.

But, the country also has one of the highest rates of mobile penetration in the world.

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Vietnam’s opportunity to capitalise on technological infrastructure and connectivity is lucrative: more than half the country accesses the internet at least once a month, and 78% of the country has a mobile phone.

The fact that more than 6.2 million Vietnamese can’t access financial services due to prohibitive documentation requirements and related costs is troubling.

That being said, the country’s economic circumstances and governmental efforts indicate that the country is headed in the right direction.


The Vietnamese population that lives in remote areas suffers the most from regulatory due-diligence requirements. For example, individuals are required to physically present national identity cards in order to access key services.

This is where technology comes in.

Banks can use agent networks to provide these groups with financial services.

Simply put, Agency Banking allows humans to act as ATMs. Agents can deliver financial services using devices such as card readers, POS terminals and mobile phones to process real-time transactions.

Each of the selected retail stores or agents receives a POS device or terminal that is connected online in real time with the financial institution’s back end system. This terminal allows agents to offer basic financial services to customers on behalf of the financial institution, such as:

  • account openings

  • deposits and withdrawals

  • loan and bill payments

  • fund transfers

Financial Institutions

Financial institutions stand to receive a number of benefits from Agency Banking, as they gain the ability to provide their customers with basic financial services in remote areas more cost-effectively than before.

In addition to being a lower-cost alternative to building traditional bank branches and ATMs, Agency Banking creates much more exposure.

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Agency Banks

Agency Banks benefit from this mechanism equally, as they receive additional income from commissions earned for the financial transactions conducted on behalf of the financial institutions.

Moreover, they attract higher numbers of customers to their premises, and generate more sales and revenue to their core businesses.

As a retail banking option, this model is flexible, and can meet local needs.

Financial Inclusion

The Agency Banking model has consistently proved to be an effective vehicle for financial inclusion. Malaysia serves an ideal role model in this respect.

In 2011, only 46% sub-districts in Malaysia had access to financial services.

In 2015, after three years of Agency Banking implementation, 97% of the country’s sub-districts gained access to basic financial services.

As Vietnam’s economy continues to stabilise and grow, the country is uniquely able to implement Agency Banking as a means of fostering financial inclusion, and empowerment.

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