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Financial Habits of Vietnam's Young Adults

General Report December 4, 2024
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TABLE OF CONTENTS

  1. Summary
  2. Current Financial Landscape for Young Adults in Vietnam
  3. Common Financial Planning Services Available
  4. Approaches of Younger Generations to Financial Planning
  5. Challenges in Financial Planning for Young Adults
  6. Conclusion

1. Summary

  • Amid Vietnam's fast-paced economic growth, young adults are increasingly prioritizing financial planning, leveraging both traditional and digital tools to enhance their financial literacy. While budgeting, saving, and investing are on the rise, propelled by technological advancements and modern financial services like MarsConnect and BE HAPPY Co., Ltd., challenges such as high living costs and limited financial literacy still hinder effective financial management. The report investigates these trends, highlighting digital finance's role, emerging financial services, and providing a clear picture of the financial planning journey of this demographic.

2. Current Financial Landscape for Young Adults in Vietnam

  • 2-1. Economic development and its impact on financial literacy

  • The economic development in Vietnam has significantly influenced the financial literacy of young adults. According to the 2022 Financial Supervisory Service's 'National Financial Literacy Survey,' young adults demonstrated low financial literacy scores, with 66.8 points for those in their 20s and 68.5 points for those in their 30s. This suggests that while there is an increasing awareness of financial planning, many young adults still lack the necessary skills to effectively manage their finances.

  • 2-2. The role of technology in financial management

  • Technology plays a vital role in the financial management habits of young adults in Vietnam. As of March 2023, approximately 3.71 million mobile money accounts had been established, primarily in rural and disadvantaged areas. Digital finance platforms are seeing substantial use, with common functions including bill payments, money transfers, and exercise tracking, which caters to the expenses associated with modern financial responsibilities. Furthermore, a variety of digital financial services have emerged focused on enhancing convenience and accessibility.

  • 2-3. The importance of budgeting and saving practices

  • Budgeting and saving are increasingly recognized as crucial financial practices among young adults. With improving financial literacy and the accessibility offered by AI-based financial planning solutions, there exists a shift towards more disciplined financial habits. However, despite this shift, challenges remain. High living costs and the complexities surrounding financial management continue to create barriers for effective budgeting and saving, highlighting the necessity for ongoing education and support.

3. Common Financial Planning Services Available

  • 3-1. Overview of AI-driven financial services like MarsConnect and BE HAPPY

  • MarsConnect is strategically positioned to influence Vietnam's financial landscape by providing tailored support to a diverse range of users, including young professionals and families. The service focuses on localizing financial products and advice to fit Vietnam's unique economic environment, establishing partnerships with leading local warranty providers, and promoting financial inclusion for a broad audience. MarsConnect aligns with Vietnam's national digital transformation strategy to foster inclusive economic growth. Additionally, Behappy offers an innovative AI-powered personal finance management service that is particularly poised for success among the Gen Z demographic (ages 20-39) in Vietnam, as current market solutions often lack sophistication. Both services highlight the growing importance and potential of AI in personal finance management.

  • 3-2. Emerging trends in digital finance and non-cash payments

  • The Vietnamese financial services market is experiencing a notable shift towards digital finance and non-cash payments. This trend is propelled by increased public awareness of the necessity of financial planning, heightened adoption of digital platforms among younger generations, and government initiatives supporting insurance and investment uptake. The demand for sophisticated digital financial services is indicative of consumers seeking more effective tools for budgeting, saving, and investing, resulting in a favorable environment for services like MarsConnect and Behappy.

  • 3-3. Access to financial planning services and their implications

  • Access to modern financial planning services in Vietnam is becoming more prevalent, particularly among younger adults. This accessibility is significant for empowering users to make informed financial decisions. Both MarsConnect and Behappy aim to provide tailored solutions that cater to the unique needs of this demographic. Nevertheless, the landscape is challenged by various factors, including high living costs and varying levels of financial literacy, which can impede effective utilization of these services. The implications of improved access underscore the necessity for ongoing education and support to help users fully leverage available financial planning resources.

4. Approaches of Younger Generations to Financial Planning

  • 4-1. Increased financial awareness and education among young adults

  • Current data indicate that young adults in Vietnam are experiencing increased financial awareness and education. This shift is influenced by various resources, including digital platforms and financial literacy programs aimed at enhancing understanding of personal finance.

  • 4-2. Utilization of digital tools and applications for financial management

  • Young adults are actively utilizing digital tools and applications for financial management. The integration of technology has made it easier for this demographic to track their expenses, budget effectively, and manage their savings, aiding in better financial decision-making.

  • 4-3. Investment trends and the popularity of diverse financial products

  • There has been a notable trend among young Vietnamese adults towards investing, with a growing interest in various financial products such as mutual funds, stocks, and other investment vehicles. This trend is attributed to a combination of improved financial literacy and the accessibility of investment platforms.

5. Challenges in Financial Planning for Young Adults

  • 5-1. High living costs and their impact on saving and investing

  • The challenge of high living costs significantly impacts the saving and investing capabilities of young adults in Vietnam. This includes the rising expenses associated with daily living, which diminish the disposable income available for savings and investment. The combination of increasing prices and various economic pressures contributes to a situation where many young adults find it increasingly difficult to allocate funds towards effective financial planning.

  • 5-2. Issues related to student debt and job market competition

  • Many young adults face burdensome student debt while simultaneously competing for limited job opportunities in a saturated job market. This financial strain often results in a focus on immediate expenses rather than long-term financial planning and investment strategies. The current competitive job landscape makes it challenging for graduates to find secure positions that offer financial stability, further complicating their financial management.

  • 5-3. The gap in financial literacy and access to quality financial education

  • A significant gap exists in financial literacy among young adults in Vietnam, exacerbated by limited access to quality financial education. According to the 2022 Financial Supervisory Service 'National Financial Literacy Survey,' young adults demonstrated low financial literacy scores, particularly in areas such as setting financial goals and actual long-term financial planning. This lack of education creates obstacles in utilizing available financial planning services effectively and in establishing sound financial habits.

Conclusion

  • The findings indicate a positive shift in financial planning practices among young adults in Vietnam, attributed largely to enhanced access to digital financial services and tools. MarsConnect, with its AI-driven financial solutions, and BE HAPPY Co., Ltd., offering personalized financial management, are leading this transformation, providing accessible and tailored solutions. However, significant obstacles remain, including the pervasive challenge of high living expenses and a glaring gap in financial literacy, as revealed by low scores in the 2022 National Financial Literacy Survey. To truly empower young Vietnamese adults and amplify these positive trends, it is crucial to address these limitations through comprehensive financial education programs and policies that support economic affordability. As financial literacy improves and technology continues to innovate, the potential for sustainable financial practices grows, marking a promising outlook for future financial planning trends in Vietnam.

Glossary

  • MarsConnect [Financial service platform]: MarsConnect is an AI-driven financial planning platform tailored to meet the diverse needs of users in Vietnam. It focuses on localized services, partnerships with financial institutions, and the promotion of financial inclusion, making it a key player in transforming the financial landscape for young adults in Vietnam.
  • BE HAPPY Co., Ltd. [Financial technology company]: BE HAPPY provides an AI-based financial health management service specifically designed for young adults. Its offerings include personalized financial diagnosis and strategy development, addressing the unique financial challenges faced by this demographic.

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