Financial Crime World

Fraudulent Activities in Vietnam’s Banking Sector Raise Alarm Bells

The banking sector in Vietnam is facing a critical issue, with a staggering 91% of financial fraud cases reported this year involving exploited banking data. According to the Ministry of Information and Communication, out of the 15,900 reported financial fraud incidents, the vast majority implicated the banking system.

Tactics Used by Criminals

The main tactics used by criminals included:

  • Counterfeiting
  • Account hijacking
  • Other fraudulent methods (24 identified)

These illegal activities have resulted in a critical need for enhanced transaction security among lenders and third-party platforms.

Combating Fraudulent Activities

In an effort to combat these illegal activities, the Authority of Information Security has successfully blocked over 4,000 websites and shielded 3.6 million internet users from such fraudulent activities.

However, the increasing willingness of banks to share customer data with entities like fintech firms and retailers presents new security risks that call for updates to Vietnam’s legal framework to mitigate fraud.

The country’s Deputy Head of Authority of Information Security, Tran Quang Hung, stressed the importance of updating the legal framework to enable fintech firms to innovate further and cater to the growing consumer demand. “Enhancing the legal framework would help fintech firms to innovate more effectively,” he said.

Nguyen Hoang Long, deputy CEO of Vietnam’s payment gateway Napas, echoed Hung’s sentiments, emphasizing the need for establishing a code of conduct for banks amid the shift to digital finance. “It is crucial to establish standards to protect customer rights during digital transactions,” he urged.

Call for Banking System Standards

The call has been made for a set of banking system standards to address these concerns and ensure that customers’ interests are protected in the rapidly evolving fintech landscape.

These standards would help to:

  • Protect customer rights during digital transactions
  • Enhance transaction security among lenders and third-party platforms
  • Mitigate fraud and prevent financial losses

By updating the legal framework and establishing a code of conduct for banks, Vietnam can take a significant step towards ensuring the safety and security of its banking sector.