20 June 2023
Vietnam solidifies its position in the global IT outsourcing industry, attracting Australian financial institutions with its favorable socio-economic factors, robust tech infrastructure, skilled IT talents, and competitive labor costs.
Vietnam has solidified its position as a powerhouse in the global IT outsourcing industry, captivating companies with its favorable socio-economic factors, robust tech infrastructure, abundant talent pool, and competitive labor costs. In an era where digital transformation is paramount, Vietnam’s growing reputation has lured tech-incentive finance companies to entrust their IT operations to the country.
The IT outsourcing sector in Vietnam has experienced a remarkable surge, boasting an impressive annual growth rate of 13.31%. Analysts predict that by 2027, the sector will reach a staggering value of $881.90 million. In Kearny’s Global Service Location Index, Vietnam has secured its position among the top 6 best locations for IT outsourcing. The index highlights Vietnam’s favorable business environment, strong technology ecosystem, availability of highly skilled IT professionals, and cost efficiency. As a result, global enterprises, including Australian entrepreneurs, are increasingly turning to Vietnam to establish digital hubs for software development, data analytics, and digital testing.
Vietnam’s high-octane economy, with a strong focus on fintech, has invested a significant $639 million in digital transformation initiatives. This investment has yielded a remarkable 40% growth rate in digital banking and an extraordinary 249% increase in foreign funding by 2022.
The country’s rapid progress in the technology ecosystem is evident in its climb of 7 positions in the government’s AI readiness index for 2023. Vietnam now ranks 6th among ASEAN nations and 55th globally. To further bolster its commitment to technological breakthroughs, the government has established the National Innovation Center (NIC).
Vietnam’s tech infrastructure thrives on its abundant and highly skilled labor supply. The country ranks 22nd globally in the Global Skills Index 2020, boasting an impressive 480,000 IT engineers. Vietnam’s tech talent is known for their solid programming skills nurtured through early STEM education, proficiency in English, adaptability, and eagerness to learn. As a result, Vietnam’s tech workforce is highly sought after by companies seeking to fuel innovation.
Moreover, Vietnam’s tech workforce offers a significant advantage in terms of competitive labor costs compared to other offshoring destinations. This allows businesses to leverage Vietnam’s talent pool to fulfill immediate and long-term strategic initiatives while maintaining cost-efficiency.
Vietnam’s potential has attracted numerous financial institutions, including ANZ Bank, HSBC, Deutsche Bank, and NAB, to establish digital hubs in the country. Notably, NAB, Australia’s largest business bank, launched the NAB Innovation Centre Vietnam (NICV) in 2019 to enhance technology and customer experience. Over the years, the NICV has rapidly expanded, with three offices across Ho Chi Minh City and Hanoi, employing hundreds of skilled professionals in various tech roles.
Successful IT outsourcing in the financial services sector necessitates collaboration with competent IT providers that possess extensive technical BFSI domain skills, robust governance, delivery processes, and a proven track record. KMS Solutions, a trusted IT vendor with vast experience in helping financial institutions build digital hubs, stands out as a prominent example. The company specializes in assisting enterprises in expanding their development capabilities, improving software quality, optimizing business processes, and more.
As fintech continues to disrupt traditional banking models, Vietnam emerges as the prime destination for Australian financial institutions to establish digital hubs and drive strategic growth. With supportive government policies, a well-built tech ecosystem, skilled IT talents, and competitive labor costs, Vietnam offers an exceptional environment for these endeavors.