Financial Crime Data Analytics in Vietnam: A Growing Need for Enhanced Technology

Introduction

Hanoi, Vietnam - Financial crime remains a pressing issue in Vietnam, with the country’s growing economy and increasing digitization creating new opportunities for illicit activities. As a result, financial institutions are under pressure to enhance their use of technology to identify and mitigate financial crime risks.

The Global Impact of Financial Crime

• According to a recent report, financial crime is a trillion-dollar issue globally.
• It is one of the key risks faced by both the financial services industry (FSI) and society today.
• Despite significant investment in detection, prevention, and deterrence capabilities, firms are struggling to keep pace with the evolving threat landscape.

Addressing Financial Crime Risks through Technology

Vietnamese financial institutions can deploy technology solutions that enhance efficiency and effectiveness in identifying and mitigating financial crime risks. A portfolio of RegTech solutions can help firms “supercharge” their financial crime management processes, reaping significant benefits.

Some key considerations when implementing technology solutions include:

• Data quality and readiness: Ensuring the accuracy and completeness of data is crucial for effective financial crime risk management.
• System infrastructure: Investing in robust system infrastructure can support the deployment of advanced analytics and machine learning capabilities.
• Compliance through design: Implementing compliance controls into the design of technology solutions can help reduce regulatory risks.
• Governance framework: Establishing a clear governance framework can ensure that financial crime risk management is aligned with organizational goals and objectives.
• Stakeholder buy-in: Securing stakeholder support is critical for successful implementation and adoption of technology solutions.
• Diverse cross-functional teams: Assembling teams with diverse skills and expertise can help drive innovation and effectiveness in financial crime risk management.
• Thorough third-party vendor scrutiny: Carefully evaluating the capabilities and risks associated with third-party vendors is essential to ensuring the security and integrity of financial data.

Emerging Trends in Financial Crime Risk Management

Looking to the future, emerging trends such as global partnerships, cross-organizational collaboration, proactive financial crime prevention in the new digital era, and focus on the customer lifecycle will help Vietnamese firms better understand and manage risk.

Regulators and international bodies have a role to play in facilitating and enabling information sharing while carefully managing risks, regulations, and rules around data privacy. Proactive prevention is becoming increasingly viable through advanced AI predictive analytics techniques such as scenario analysis and threat modeling.

Implementing Financial Crime Risk Management Solutions

By focusing on the customer lifecycle, from onboarding to transaction monitoring, investigations, and reporting, Vietnamese financial institutions can close potential vulnerabilities for criminal activity while ensuring a seamless customer experience.

As Lisa Dobbin, Financial Crime Lead Partner for Australia and Asia-Pacific, notes:

“Technological developments have the greatest potential for financial crime risk management, and clients are solving problems relating to financial crime risk using technology. However, when using technology to transform how they manage financial crime risk, clients should consider data quality and readiness, system infrastructure, compliance through design, governance framework, stakeholder buy-in, diverse cross-functional teams, thorough third-party vendor scrutiny, and arming the organization with knowledge.”

Conclusion

Vietnamese financial institutions can benefit from embracing technology solutions holistically across the entire customer lifecycle to improve the quality of outcomes while increasing efficiency and reducing costs in the long-term. By doing so, they can effectively combat financial crime risks and maintain a competitive edge in an increasingly complex and rapidly evolving threat landscape.