Vietnam's International Financial Centre ambition can unlock a new wave of innovation

The experience of global IFCs shows us that financial centres can act as catalysts for innovation. They provide safe testing grounds for new technologies, attract investment, and connect talent across industries. But success does not happen automatically. It requires clear regulatory foundations, predictable long-term policies, and an ecosystem where the public and private sectors work hand in hand.

From the lessons of other markets, three principles stand out: clarity, consistency, and collaboration.

Clarity: Building confidence through clear rules

The UK provides one of the strongest examples of clarity in action. In 2016, the Financial Conduct Authority (FCA) launched the world’s first regulatory sandbox. This gave FinTechs a safe space to test innovative products with real customers under the regulator’s supervision.

The benefits were immediate. Start-ups understood the rules, regulators gained insight into new technologies, and investors had more confidence in backing untested ideas. Over 1,000 firms have since participated. Research from the European Finance Association shows sandbox participants were 50% more likely to raise funding and, on average, attracted 15% more investment than peers. The UK’s model has now been replicated worldwide, showing that innovation accelerates when the rules of the participation are clear.

For Vietnam, adopting a similar sandbox approach could send a powerful signal to innovators and investors alike: that experimentation is encouraged, but always within a safe and predictable framework.

Consistency: Building trust over time

While clarity gives innovators confidence to start, consistency ensures they can scale. Singapore demonstrates this through Project Guardian, launched in 2022 by the Monetary Authority of Singapore (MAS). The initiative explores tokenisation in capital markets through a series of controlled pilots.

What makes Project Guardian important is that it is not a one-off. Each year, MAS sustains and expands pilots, refining standards in areas such as settlement, custody, and digital assets. This steady, multi-phase approach builds trust: innovators know that their efforts will not disappear after one experiment, and investors see that new markets can develop in a controlled and reliable manner.

Vietnam can learn from this by embedding predictability into its IFC roadmap. Consistency in regulation and policy will be key to ensuring that innovation is not just a spark, but a sustainable driver of growth.

Collaboration: Building ecosystems, not silos

Finally, innovation thrives in ecosystems. Hong Kong has shown the impact of this through its Cyberport and Science and Technology Parks, which bring together start-ups, global technology firms, investors, and banks in shared spaces. These hubs offer funding, mentorship, and incubation programmes, allowing ideas to move quickly from concept to scale.

The lesson is clear: innovation does not happen in isolation. It requires collaboration across regulators, industry, and education. Vietnam has a unique opportunity to create similar clusters that bring together FinTechs, banks, investors, telecom providers, and universities. By doing so, it can create a pipeline of ideas, talent, and investment that will power its IFC for decades.

Balancing innovation with stability

The challenge, of course, is to strike the right balance. A financial centre that is “high-innovation, low-stability” risks speculative bubbles, weak oversight, and loss of investor trust. By contrast, a “high-innovation, high-stability” environment offers clear guide rails, trusted pilots, and strong safeguards on issues like data privacy and cybersecurity.

This is the balance Vietnam must aim for: an IFC that encourages experimentation but enforces robust standards. The right legal structures with clear participation rules, simple and flexible regulations, and adherence to international standards will create an environment where investors know where they stand, and innovators know how to grow.

Why international standards matter

Aligning with international standards is particularly important. It signals to global investors that Vietnam’s IFC is grounded in best practice, while also allowing cross-border compatibility in areas such as payments, capital markets, and digital assets. International standards also make it easier to attract global talent, as professionals and institutions can operate under familiar rules.

For Vietnam, adopting globally recognised frameworks in areas like anti-money laundering, cybersecurity, and data protection will be essential. It will also help attract multinational firms and investors who seek stability and trust.

HSBC’s experience: innovation with trust

As a global bank, HSBC has seen how clarity, consistency, and collaboration drive innovation. In 2023, HSBC launched the world’s first retail gold token in Hong Kong, making a traditional safe-haven asset accessible through tokenisation. HSBC’s Orion digital bond platform now powers multi-billion-dollar issuances, including the Hong Kong government’s green bonds and the European Investment Bank’s digital bonds.

HSBC are also investing in the future: testing quantum-safe cryptography to protect financial systems from the risks of quantum computing, embedding AI-driven models for portfolio advice and fraud detection, and supporting sustainable finance by combining distributed ledger technology with ESG standards.

In each of these areas, partnership has been critical. Through initiatives like Project Guardian in Singapore, HSBC work alongside regulators, peers, and technology companies to shape global standards. Innovation at scale only works when trust is built into the system.

Building the foundations for talent and growth

An IFC cannot thrive without talent. Vietnam will need to invest in education, training, and professional development to build skills in areas such as data analytics, cybersecurity, risk management, and financial engineering. Partnerships with universities, professional bodies, and incubators will help develop the next generation of fintech leaders.

At the same time, attracting global expertise will be important. IFCs such as Dubai have successfully introduced new visa categories to attract skilled workers, ranking highly in global talent competitiveness indices as a result. Vietnam can consider similar steps to ensure that its IFC becomes not just a financial hub, but also a magnet for international talent.

A vision within reach

Vietnam stands at an inflection point. By embedding clarity, consistency, and collaboration into the foundations of its IFC, it can create not just another financial centre, but a hub for innovation that connects Asia to the world. The benefits go far beyond capital inflows: a vibrant IFC can create jobs, nurture start-ups, attract talent, and position Vietnam at the cutting edge of global finance.

The journey will require vision, patience, and strong public-private partnerships. But the prize is within reach: a high-innovation, high-stability environment that delivers prosperity, resilience, and global relevance for Vietnam’s economy in the decades to come.