Vietnam’s Banking Sector Prepares for New Biometric Authentication Regulations
In an effort to combat the growing concern of online fraud cases, Vietnam has introduced new biometric authentication requirements for its banking sector. The State Bank of Vietnam (SBV) has issued Decision No. 2345/QSS-NHNN, which will take effect on July 1, 2024, mandating financial institutions to implement secure authentication methods.
The Impact of Online Fraud
According to data from 2021, online fraud victims in Vietnam collectively incurred losses amounting to approximately VND 8.3 trillion (around €345 million), with an average loss per individual case of around VND 39 million (approximately €3,900). The new regulation aims to prevent such losses by introducing biometric authentication methods.
Current Authentication Methods
Currently, multi-factor authentication is widely used in Vietnam, primarily through SMS one-time passwords (OTPs). However, the use of more secure biometric verification methods, including fingerprint scanning and facial recognition technology, has been increasing steadily.
Digital Transformation Efforts
The Vietnamese government has made significant progress in its digital transformation efforts. The country’s national population database, which integrates identification data with biometric information, is now being developed. This initiative aims to support administrative procedures and the provision of online public services, contributing to the country’s socio-economic development.
Secure Use of Biometric Authentication
To ensure the secure use of this database, all financial transactions utilizing it will require facial authentication by April 2024. The SBV has also emphasized the importance of security in its new regulation, requiring biometric authentication for certain banking transactions, including mobile banking and transactions exceeding a certain amount.
Key Stipulations
The regulation has two main stipulations related to biometric authentication:
- First-time mobile banking transactions
- Operations exceeding a certain amount
Biometric authentication methods approved by Decision No. 2345/QSS-NHNN include facial recognition, fingerprint scans, and iris scans.
Compliance Solution for Financial Institutions
For banks and fintech companies looking to comply with the new regulation, Wultra offers a comprehensive solution for modern authentication that meets regulatory requirements. With Vietnam’s banking sector set to undergo significant changes in the coming months, it is essential for financial institutions to prioritize security and compliance.