Young adults, 21 to 29 years old, will play a large role in shaping Vietnam’s small but growing retail-banking market. These young consumers are less wary of borrowing, likelier to use remote channels, and more open to foreign banks than are their elders. And on most banking-related issues, the generation gap in preferences and attitudes is larger in Vietnam than in the 11 other Asian markets we examined as part of a study involving about 13,000 urban banking consumers across the continent.¹

Despite strong growth in recent years, retail banking in Vietnam remains small. Banking assets, for example, amounted to about $75 billion (some 123 percent of GDP) at the end of 2006, compared with $226 billion (110 percent) in Thailand and $302 billion (195 percent) in Malaysia. What’s more, less than 10 percent of Vietnamese have a banking relationship. But like the rest of the country’s economy, the banking sector is likely to continue its rapid expansion. Our analysis suggests that retail-banking revenues could grow by more than 25 percent annually over the next five to ten years—one of the highest rates of increase in Asia—thanks to a vibrant economy with growth approaching that of India and China,...