• User base is 4.2 million strong
• 40+ in-house AI models power fast, efficient banking services
• Aims for profitability by end 2024 through tech-first approach

Cake Vietnam has emerged as a trailblazer in Vietnam, leveraging advanced artificial intelligence (AI) technology to transform digital banking services. Cake is a joint venture between VP Bank and Be Financial. The bank, launched in January 2021, has quickly gained traction among Gen Z and millennial customers, growing its user base from nearly three million to 4.2 million between 2022 and 2023.

Vietnam’s financial ecosystem has undergone significant digital transformation, with more than 60% of the population now owning formal bank accounts or digital wallets in 2023, up from 56% in 2022, 40% in 2019, and 31% in 2017.

E-wallet adoption has skyrocketed from nine million in 2018 to more than 40 million by 2023. According to the State Bank of Vietnam, the number of digital payment transactions has risen from 21 billion in 2019 to 24 billion in 2023.

Digital-native DNA

What distinguishes Cake in this competitive landscape is its status as a standalone digital bank, built from the ground up on a foundation of technology and AI. Unlike many competitors that act as digital extensions of traditional banks, Cake has created a comprehensive suite of proprietary AI technologies that power everything from customer onboarding to credit decisioning.

Cake’s CEO, Quang Nguyen, emphasises the bank’s distinct approach. This strategy has enabled the bank to integrate AI throughout its entire business, including front, middle, and back-office operations.

The bank’s commitment to AI-driven innovation is demonstrated by the deployment of more than 40 AI models across various functions. Seven models focus on electronic know-your-customer (eKYC) and biometric verification, 11 improve credit scoring and fraud prevention, and five optimise marketing and customer interactions.

Cake has also integrated four generative AI models to power customer service chatbots and video KYC processes, resulting in significant improvements in operational efficiency and customer experience.

The bank’s streamlined account opening process takes at most 18 clicks and approximately two minutes to complete, the fastest among digital-only banks in Vietnam right now. Its ability to provide instant credit approvals and comprehensive digital lending services distinguishes it from competitors in the Vietnamese market.

Cake’s market reach extends far beyond its immediate ecosystem, with 95% of its customers coming from outside the parent company’s user base. To broaden its reach, the bank has formed strategic alliances with influential figures and businesses in Vietnam. In 2023, the bank collaborated with top Vietnamese singers for exclusive ticket sales, and partnered with prominent firms such as Be Group, VinFast, and Viettel Money to provide innovative financial solutions.

These efforts have not only broadened Cake’s appeal, but also resulted in highly efficient customer acquisition. The bank’s AI-driven processes have reduced customer acquisition costs, demonstrating the effectiveness of its technology-first strategy.

Agility, a competitive advantage

Cake aims to be profitable, and Nguyen believes they can reach the goal of being one of the 5% profitable digital-only banks in the world by the end of 2024. The bank intends to expand its use of AI in fraud detection, credit scoring, and customer verification processes. According to Nguyen, the bank’s ability to rapidly customise and deploy AI solutions enables it to respond quickly to market demands and regulatory changes, providing it with a competitive advantage in Vietnam’s changing financial landscape.

While Vietnam’s current regulatory environment lacks specific guidelines for AI use in banking, this has given Cake more leeway in deploying advanced technologies directly to customers.

This bank demonstrates how AI-driven digital banking can transform financial services in emerging markets. Cake is not only reshaping the banking experience for millions of Vietnamese consumers using AI-powered processes, streamlining operations, and focusing on customer satisfaction, but it is also charting a clear course to profitability.