Vietnam and Cambodia are identified as Cathay United Bank (CUB)’s next key strategic markets for digital consumer finance, offering distinct growth opportunities within the region. By the end of 2023, Vietnam’s consumer finance market had grown to VND 2.8 quadrillion ($114 billion), reflecting a 17% annual growth. Cambodia’s consumer loans market had also expanded by 12% annually to reach nearly $15 billion.

In Vietnam, a population of nearly 100 million is embracing mobile first solutions and digital payments, driven mainly by its tech-savvy youths. Cambodia, with 17 million people, is similarly poised for growth, supported by high mobile penetration and a favourable regulatory environment. Notably, 26% of Vietnam’s population and 24.4% of Cambodia’s fall between the ages of 18 and 35. With smartphone penetration rates exceeding 70% in Vietnam and 65% in Cambodia, the growing connectivity in these markets, presents CUB with significant expansion potential.

Ming-ch'iao Liang, Vice President of International Consumer Finance Development at CUB, emphasised the importance of Southeast Asia’s economic growth, particularly Vietnam's rapid digital adoption and Cambodia's expanding mobile-driven economy. These factors present strategic opportunities for CUB to increase its digital consumer finance footprint through targeted platforms and partnerships.

Strategic advantage of Southeast Asia

The digital consumer finance market in Southeast Asia is thriving, propelled by a youthful population with growing access to smartphone-based services. In markets like Vietnam and Cambodia, rising demand for convenience and the influence of fintech players, such as Grab, are driving the adoption of digital financial solutions.

For CUB, Southeast Asia offers a significant opportunity. Taiwan has an advanced and mature technological and digital financial environment with a highly developed financial infrastructure, and digital financial services have become widespread. But this has also led to a saturated market, with fierce competition and high customer acquisition costs hindering further growth. CUB hopes to provide the leading spirit and digitalisation experience of Taiwan's digital finance to Southeast Asian countries and expand its own service scope to provide users with a simpler, smoother, and more personalised financial experience. In contrast, Southeast Asia, with a population of over 683 million, a growing middle class and rapid urbanisation presents a fertile environment for growth in consumer finance.

Recognising the contrast between Taiwan’s mature market and Southeast Asia’s emerging opportunities, CUB has shifted its focus to digital consumer finance. In response, CUB has strengthened its digital capabilities and made significant infrastructure investments to address the growing demand for digital financial services. CUB has long been optimistic about the growth potential of Southeast Asia and launched its operations in Vietnam in 2005 and Cambodia in 2015. CUB has been deeply involved in this area for many years and has achieved significant results through strategic partnerships and upgraded mobile platforms.

CUB’s Vietnam strategy

In 2023, CUB launched the fully digital ‘CUB Vietnam App’, becoming the first Taiwanese bank to launch a digital credit service platform in Vietnam. The app simplifies the loan application process, enabling customers to apply with minimal documentation and receive approval in as little as 30 minutes - a significant improvement over traditional consumer finance methods in Vietnam, where loan approval could take days or even weeks. By focusing on consumer finance, CUB meets the growing demand for quick, accessible credit solutions, particularly among individuals seeking loans for personal expenses, purchases, or small investments.

This efficiency is driven by CUB’s investment in artificial intelligence (AI) and cloud-native technologies, which enhance both risk management and security. These innovations allow for faster loan processing while ensuring rigorous risk assessments, enabling CUB to offer quick approvals without sacrificing security.

CUB’s Cambodia strategy

In Cambodia, CUB Cambodia (CUBC) has advanced in the digital consumer finance sector. A key driver of this growth is CUBC’s partnership with True Money, a leading Southeast Asian fintech specialising in digital payments and remittance services. This collaboration expanded CUBC’s service points from 15 to 15,000, enabling the bank to provide cash deposit and withdrawal services to a much wider customer base across urban and rural regions.

Cambodia’s financial infrastructure is still developing, and many customers currently prefer offline over digital services. CUBC’s digital initiatives are designed to bridge gap by simplifying financial transactions and minimising the need for in-person banking. In 2023, CUBC became the first Taiwan-owned bank to connect to the Bakong payment system, established by Cambodia’s central bank. While Cambodia’s digital transformation is still underway, CUBC’s investments in platforms like mBanking and partnerships with local fintech players will facilitate and accelerate this shift.

Future goals and strategic priorities

CUB's emphasis on digital consumer finance in Southeast Asia underscores its ambition to become the benchmark for Taiwanese banks in the region. Through strategic partnerships and investment in technology, CUB is well positioned for sustainable growth in this competitive market.

By 2025, CUB's primary goal is to convert its Cambodian sub-bank customers into digital users, aiming for 100% digital penetration. In addition, CUB is focused on helping its corporate clients expand globally, diversify risks, and enhance its cross-border and supply-chain financial services.