Why Finhay is not just your ordinary fintech anymore

Huy: Running a security firm in Vietnam is like running a public company because you have to disclose a lot of things. Financial reports also have to be disclosed, even though it’s a private company. So with those requirements and compliance, it feels like we are running our own public company or a listed company in the market.

Paulo: So it’s almost like training, eventually for the future.

You’ve grown and you’ve raised a couple of rounds from Insignia and then I think also from TVS and Jeffrey from Acorns.

Huy: Acquiring our own license has always been part of our plan. When TVS invested in us, they already had their own license, and we were very fortunate to leverage their license, but obviously one day we needed our own.

So that was the time that we decided to find a target company and acquire them so that we can have our own licenses.

The acquisition journey

Huy: A lot of real estate companies wanted to buy security firms because they want to have the means to IPO for that. Real estate companies back then, they were very powerful. They had cash, and were ready to buy. We had to compete with those giants. In 2021, fortunately again, we found a very good target company.

They were a group of Korean investors and we talked to them. They were willing to transfer the company to us because they wanted to build something similar. But obviously Vietnam is a different market than Korea. And they cannot allocate resources in Korea and Vietnam at the same time. Toss has been quite successful in Korea, and Toss was in Vietnam back then as well.

Toss actually talked to them, so that’s why they thought Finhay would be a good fit for the licenses compared to the other buyers. Finally they decided to sell the company to us. It took us a few months to complete the deal and everything got approved. The name of the company that we bought was Vina Security, correct? In short, V-N-S-C?

Now you can see VNSC by Finhay is the main financial service provider to provide to the end users.

Minh Huong: My first project [when I joined Finhay] was focused on the VNSC acquisition.

I remember Huy showed strong leadership by aligning VNSC’s opportunity with Finhay’s strengths. We introduced a flywheel model starting from fixed income investment and moving to [more] options to look for asset growth.

The post-acquisition journey

Huy: It took us almost 18 months to restructure everything from the system to compliance that you’re sitting here right now. The system software and everything had to be integrated with our own system. Lots of discussion amongst team members. Lots of explanation, lots of cases that we need to cover.

It was a very challenging time for us to do all of that work, even though we still have other [things] to do like grow and [do] a lot more compliance. We have to spend time communicating effectively with regulators as well. We have to spend time explaining what we do and try to convince them with the new ideas.

Huy: We also have to study, so we have to send team members to study to get the certificate brokerage custody and all of that. So it’s just a lot of things happening at the same time.

Huong: We face a lot of challenges. The first challenge was customer segmentation. Identifying the target customer was very critical at that term. VNSC customers have specific problems and needs. 

The second challenge is about the complexity of securities regulation. For example, I remember the time we were transitioning the users of Finhay to the VNSC platform. We had to design the onboarding process and make opening an account easy for the user and structure it well to help them understand about the regulations.

Huy: Even though it’s challenging, I think it’s needed. The whole idea is to protect investors, to improve the quality of the services, and also to bring more trust from our company to the market.

And in June 2023, finally we got everything sorted.

Paulo: And now you have VNSC.

Impact of the acquisition and the future of VNSC by Finhay

Huong: Thanks to his efforts and guidance, VNSC has now achieved its clear business direction.

Huy: We want to be a digital investment institution where audiences can get access to all-in-one investment options or financial services. At Finhay, we set the high bar for other FinTech players. Security trading is only 24, 25 years old, which is very young.

Technically we start to see more clients onboarding in the market in 2020 after the pandemic. Believe it or not, mutual fund investment or ETF investment is still very early in the market. People still wonder what a mutual fund is. 

So in the next five and 10 years, we want to be a top of mind service provider among the Vietnamese, especially the youth.

We’re still a startup, but with more compliance in place, more serious business practices in place, it helped improve myself and also it helped to improve the team members as well. Obviously at the end of the day, the clients inherit benefits because they see the proper professional services that are provided to them.