Vietnam's capital market has entered a period of institutional leap. As an upgrade from a "frontier" to an "emerging" market becomes visible against the backdrop of a domestic market of 100 million people, expectations are growing for inflows of global funds. On top of the real-economy base laid by more than 10,000 Korean corporations, Korean financial firms are now securing first-mover advantages in local financial infrastructure and creating synergies.
Lee Jaemyeon, financial and economic officer at the Embassy of Vietnam, said in an interview with ChosunBiz, "We are building a tight government-level support system so that our financial firms can settle locally and fully enjoy the benefits of asset expansion."
Lee is a career economic bureaucrat who served in the Ministry of Economy and Finance's Tax and Customs Office and as director of the Corporate Tax Division and the Tax Policy Division, and has been serving as a bridge for economic exchanges between the two countries on the ground since Aug. 2024. Lee said, "Vietnam is a community of shared destiny inseparable from our corporations, to the extent that Samsung Electronics alone accounts for about 20% of total exports," adding, "It is an urgent task to transfer overwhelming influence in the real economy into competitiveness in the financial industry."
Currently in Vietnam, six Korean securities firms and eight asset managers have entered the market as local subsidiaries or offices. Lee cited as strengths of the Vietnamese market: ▲ high economic growth ▲ a dynamic young demographic structure ▲ a solid Korean FDI (foreign direct investment) base ▲ cultural similarities.
However, the barriers in the local market are not low. Korean securities firms currently have low market shares in terms of capital size and share, lagging behind local securities firms affiliated with commercial banks. In particular, because the revenue structure of Vietnam's securities industry is concentrated in stock-collateral loan interest and fees, capital strength directly translates into sales power.
As local securities firms widen the gap with aggressive capital increases, some say Korean financial firms should seek differentiated strategies in high value-added areas beyond simple brokerage, such as investment banking (IB) and wealth management (WM).
Even so, Korean securities and asset management firms show strengths in "qualitative competitiveness." Lee said, "Korean financial firms are very strong in digital systems and risk management capabilities," emphasizing, "Vietnam's market, which has a bank-centered funding structure, is expanding the share of stocks and bonds and upgrading financial products, so opportunities will open for Korean local subsidiaries."
In particular, Lee noted that the embassy's economic team, the Financial Supervisory Service's Hanoi office, and the local financial institutions council have built a "One Team Korea" system and are actively resolving the difficulties of financial firms entering the market.
Lee said, "By building a tight joint response system, we are conveying the requests of financial firms operating locally to the authorities without omission," adding, "We are actively continuing cooperation, including high-level talks, mutual personnel exchanges, and the export of Korean-style financial systems."
Tangible results are also becoming visible. In May last year, the Vietnam Stock Exchange launched a rapid adoption of the Korea Exchange (KRX) system to modernize infrastructure, and in Aug. of the same year, the Financial Supervisory Service and the State Securities Commission of Vietnam (SSC) signed a memorandum of understanding (MOU) to strengthen supervision and improve systems. The SSC sees foreign securities firms as key partners in growing the market together with major foreign direct investment (FDI) corporations and is showing a friendly attitude.
Lee said, "Korean financial firms are not just foreign institutions but are recognized as partners in the advancement of Vietnam's financial market," adding, "In particular, with strict internal controls and accounting capabilities that meet international standards, they have earned high trust from the local authorities."
However, Lee also noted a limitation: because foreign financial institutions must adhere to strict compliance standards, they are inevitably more sensitive to institutional interpretations than local corporations. Lee pointed out, "In Vietnam, supervision of banks, securities, and insurance is dispersed, so for financial firms accustomed to Korea's integrated supervisory framework, initial adaptation is necessary."
Structural changes are expected in Vietnam's financial market going forward. Signaled by a planned inclusion in FTSE Russell's emerging market (EM) in Sep. this year, the Vietnamese government is aiming for inclusion in the Morgan Stanley Capital International (MSCI) emerging markets index and acquisition of an investment-grade rating (BBB-) from international credit rating agencies.
Lee projected, "If these results become visible, global passive funds that track market indexes will flow into Vietnam, and the bond market will grow dramatically," adding, "Korean securities and asset management firms, which possess advanced financial know-how and sophisticated systems, will secure a differentiated competitive edge over local corporations by innovating retail and corporate finance (IB) products."
Lee also emphasized the importance of "people" for sustainable growth. Lee said, "For sustainable growth, corporations must develop in-house experts and systematically cultivate local professionals."