Cake by VPBank and the journey of building a digital bank with a comprehensive financial orientation

Digital Banking - Expanding Financial Connections

Nowadays, financial platforms used on smartphones have almost become an independent banking transaction channel, replacing traditional transaction counters.

Opening an account takes just a few minutes through electronic identification (eKYC) and transactions such as payments, money transfers, savings deposits, and consumer loans are all done quickly and safely right on mobile phones. People not only save time and money, but also participate more deeply in the digital economy .

As geographical barriers are gradually eliminated and transaction costs are reduced for all parties, digital banks have emerged as agents to help expand financial connectivity.

Cake Digital Bank currently serves 6 million customers, providing a comprehensive range of products online, helping customers fully access their financial needs wherever they are,

Among them, Cake by VPBank , listed in the Top 100 fastest growing digital banks in the world by TAB Insights, is one of the few pure digital banks to record profits after only 3.5 years of operation.

Cake's user base has grown rapidly since its launch in 2021, reaching 5 million by 2024. Cake processes 700,000 loan and credit card applications per month, an impressive number compared to the traditional banking model.

One of the factors that led to the impressive growth is Cake’s strategic choice. That is to penetrate every small link in the economy – where there are technology drivers, small traders, students, new employees, freelancers, and residents in remote areas. Most of these are people who have never had full access to traditional banking services, or are limited by a lack of credit history.

Cake offers a comprehensive range of products at low cost, many of which are completely free. Anyone with an Internet-connected smartphone and a valid ID can easily access Cake's diverse product ecosystem and distribution channels.

According to statistics, Cake's customer retention rate for basic financial services is 95%.

With its own ecosystem and a wide network of partners providing practical services, Cake has the conditions to increase customer loyalty. In the world , lessons from successful models show that ecosystem is an important condition.

For example, Seabank Indonesia, the leading digital bank in Indonesia, through its partnership with e-commerce platform Shopee, will significantly increase its user base to 10 million customers by the end of fiscal year 2023.

Another example is Singapore-based Gigacover, which partners with delivery platforms to offer tailored insurance to tech drivers. Survey results show that 80% of drivers are willing to pay for such insurance products.

Cake also aims to provide flexible financial services to underserved groups, such as freelancers without credit records. For example, Cake has rolled out a quick loan feature that allows users to receive instant disbursements, helping them avoid having to resort to black credit while improving their financial health.

In addition, Cake strengthens its offline presence by cooperating with partners with large physical store systems such as Mobile World and Dien May Xanh, where customers can easily borrow cash to spend on essential consumer goods, or by having an online presence on large-scale user platforms such as Viettel Money, ZaloPay, VNPay, FPT.

These expansion steps in many directions have helped millions of people have easier access to traditional financial services, timely capital to develop small businesses or meet other people's needs such as investment or insurance.

Mr. Truong Hong Hoang, Director of Business Development of Mobile World's service industry and Mr. Nguyen Huu Quang, CEO of Cake Digital Bank announced the launch of MWG Paylater postpaid service.

Digital banks like Cake play a key role in the consolidation of cashless payments - which has been promoted by regulators over the past six years - increasing financial inclusion and contributing to building a sustainable digital economy.

Targeting special groups is one of the highlights of the National Financial Inclusion Strategy. Accordingly, people have the right to access basic financial services and “no one is left behind”.

Financial inclusion has four important pillars, including legal corridor, innovation in financial service delivery model, financial awareness education and digital technology application.

Opportunities are still wide open for digital-only banks thanks to the advantages of low operating costs and flexible access. This is also a suitable tool to shorten the financial access gap in Vietnam.

In fact, many digital banks are serving millions, tens of millions of low-income people or first-time users of banking services, with positive results.

Mastering technology, leading innovation

To develop a sustainable digital banking model, the prerequisite is to understand and master technology. Technology will help analyze user behavior to provide more suitable and personalized products and respond promptly to very small changes in consumer behavior.

Cake chose a challenging path: developing its own technology, rather than relying on international platforms.

Currently, Cake has mastered many different technologies such as eKYC, open banking (open banking service - helps integrate more financial services from other parties), core-card on the cloud (helps optimize costs, flexible customization, quickly respond to customer needs) and applying artificial intelligence (AI) in the entire operation process (from registration, approval to service implementation).

In the context of AI being the growth driver in many industries, Cake aims to become the “Next Gen AI Bank”, focusing on three criteria: safety - simplicity - intelligence. By mid-2025, Cake owns an AI ecosystem with hundreds of separate models, especially successfully developing the bank’s first Vietnamese large language model (LLM).

A dynamic and creative Vietnamese workforce is one of the strengths that helps Cake master advanced new technologies.

Not only applying technology to product innovation, security is also a top priority for Cake. In addition to achieving many of the highest and latest international security standards, Cake proactively uses machine learning algorithms to scan transactions and detect unusual behavior, protecting customers from fraud risks without interrupting the experience.

According to Mr. Nguyen Huu Quang, CEO of Cake by VPBank, digital banks need to focus on applying advanced technology to create flexible and accessible financial products, especially for customer groups that have not been served by traditional banking services.

These strategies not only help digital banks build trust with users, but also promote the development of the banking industry across the region.

At the end of 2024, the Politburo issued Resolution 57 on breakthroughs in science, technology, innovation and digital transformation, opening up space for digital transformation and innovation, promoting Fintech units and pure digital banks to boldly expand.

But the key to implementing Resolution 57 lies in the ability to master technology, otherwise digital banks are just a digital shell for the old model.

The positive point today is that with the rapid change of technology and efforts to approach and apply new technological advances, digital banks in Vietnam are approaching the region in terms of technology, not inferior in terms of system development capacity.

According to experts, the current competition is not only between banks, but also between Fintech and Bigtech. However, the opportunity is still huge, because Vietnam still has millions of people who do not have full access to financial services. Technology will be a factor that needs to be further exploited to meet this gap in demand.

Expectations are placed on digital-only banks like Cake, with the ability to continuously innovate and launch new technology-based products and services. From there, they can flexibly respond to rapid market changes, as well as help users access services more easily.

Overall, the digital banking model is becoming an important driving force in expanding connectivity and realizing the national financial inclusion goal, as well as promoting scientific progress and innovation.

By mastering technology and pursuing sustainable development orientation, Cake has affirmed its pioneering role, contributing to realizing the goal of comprehensive finance in the picture of Vietnam's digital economic development.

Source: https://baodautu.vn/cake-by-vpbank-va-hanh-trinh-xay-dung-ngan-hang-so-theo-dinh-huong-tai-chinh-toan-dien-d327919.html