Consumer habits changed rapidly because Covid-19 was an opportunity to help banks accelerate the digitisation and increase their competitiveness. To seize this golden opportunity, banks hoped soon to have specific regulations on electronic authentication (eKYC).
Online transactions saved many banks
According to Nguyen Hung, general director of Tien Phong Commercial Joint Stock Bank (TPBank), during the recent epidemic situation and social gap, the bank saw a 20 percent increase in transactions on T’PBank’s online channels, a 20 percent decrease in counters and a 40 percent decrease in file records. Obviously, in the context of the disease, banks that were not ready to operate on online channels would have a great impact. This showed that eKYC was becoming very urgent.
Not only in TPBank, but transactions on online channels of many banks also soared in Q1/2020, helping to offset a significant decline in customers at the counter.
Vietnam International Commercial Joint Stock Bank (VIB) representative said that in Q1, the number of new VIB credit cards increased by more than 40 percent over the same period in 2019, the number of transactions via credit cards increased by over 60%. VIB recorded an impressive growth of over 140 percent in terms of the number and value of transactions via Internet Banking and MyVIB applications.
At Vietnam Prosperity Joint-Stock Commercial Bank (VPBank), according to Nguyen Duc Vinh, general director, at the end of Q1/2020, the value of transactions via digital channels had increased by 25 percent and the number of transactions increased by 50 percent over the same period. VPBank’s subsidiary FE Credit also strongly shifted to the digital channel, helping customers to borrow money online without having direct contact with sales staff.
Meanwhile, according to data from the National Payment Corporation of Vietnam (Napas), from Tet Holiday to mid-March 2020, the total number of non-cash payment transactions via Napas increased by 76%. The entire transaction value grew by 124 percent compared to the same period in 2019.
Online transactions were becoming the savior sales channel for many banks in the context of the disease. However, in order to promote this channel, banks needed to develop new customers. According to current regulations, to had a bank account, people still had to bring documents directly to the bank to perform authentication (Know Your Customer) without allowing electronic authentication (eKYC).
Leaders of many banks said that it was impossible to have digital banks without digital customers. However, direct verification regulations made it difficult for banks to develop new customers.
The eKYC became an urgent need
It was known that the key to opening the door of digital banks was available in 2019 when the government issued Decree No. 87/2019/ND-CP amending and supplementing some articles of Decree 116/2013/ND-CP guiding the Law on Prevention of Money Laundering. Accordingly, banks were allowed to authenticate electronically if appropriate measures and technologies were applied.
According to the plan released by the State Bank of Vietnam (SBV) earlier this year, the Circular on the application of electronic authentication (eKYC) would be issued before September 2020. But due to the disease, leaders of many commercial banks expected the Circular would soon be published.
Currently, among banks in Vietnam, only TPBank had been allowed to pilot eKYC, but many commercial banks said that they were ready, only needed the SBV’s permission to deploy immediately. Technologies such as facial recognition, fingerprints, voice, video call, helped the bank to authenticate customers from afar while ensuring safety.
At the request of commercial banks, SBV Governor Le Minh Hung requested the Payment Department (SBV) to issue a circular guiding this issue promptly.
In fact, with the development of current technology, eKYC could completely deploy widely, creating favourable conditions for both banks and customers. Many countries around the world had also accepted the form of customer identification electronically.
