Digital banking is having a chance to boom when the State Bank of Vietnam (SBV) has officially allowed the opening of the first door.
In order to provide digital services, banks must initially have digital customers. However, for Vietnamese banks, despite providing online credit card opening for customers, when customers register online, bank staff still need to meet customers in person to get their signatures to complete the profile.
The reason is that according to regulations to prevent money laundering, customers who want to set up an account must go directly to verify their identity, and then can use online services, because the SBV does not allow the use of electronic know-your customer (eKYC).
For many years, banks have proposed the SBV to allow eKYC, because it is difficult for banks to expand customers and provide digital banking services if customers need to come to customer for identity verification.
Recently, the government has issued Decree 87/2019/ND-CP amending and supplementing a number of articles of Decree 116/2013/ND-CP guiding the Law on Prevention and Control of Laundering. Accordingly, banks are allowed not to meet face-to-face with customers when establishing the relationship for the first time, but must ensure that there are solutions and technologies to identify and verify customers.
Nguyen Hung, general director of Tien Phong Commercial Joint Stock Bank (TPBank) affirmed that this Decree has removed one of the biggest obstacles of banks in digital banking. It is the premise for banks to approach customers more easily, said Hung.
According to bank leaders, customers’ information security and risk prevention are vital factors of banks. Banks would not propose eKYC if they cannot control risks. Currently, technologies have developed and it is entirely possible to apply eKYC safely.
Deputy general director of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) said that “if eKYC is carried out seriously, it is even safer than direct authentication.
The first bank for digital banking has been opened and banks’ number of customers will sharply rise and their digital products and services will boom in the future.
Digital transformation is a strategic move of banks, if they do not want to be left behind. However, along with digital transformation, banks will face an increasing risk of being attacked. Banks take advantage of technologies to develop, but hackers also take advantage of technologies to attack.
Robert Trong Tran, Head of Ernst & Young Vietnam’s Head of Cyber Security Advisory Service Department affirmed that the more developed the digital transformation, the more attack points for hackers. E&Y survey of 100 large fintechs in the world showed that up to 98 fintechs have security holes. More and more banks are shaking hands with fintechs, which means that the risk of being hacked also increases.
Pham Tung Duong, director of Cyber Security centre of FPT shared that in the last three years, FPT has handled many targeted attacks which were not only single ones but also concentrated ones. FPT’s experience in dealing with this situation is to regularly self-create attacks on the system to know the level of the security hole, keeping the system in a state of defence.
