How Can Vietnam’s Banks Achieve Compliance With Upcoming Biometric Authentication Requirements?

March 11, 2024
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In July 2024, regulation on biometric authentication will come into effect and transform how Vietnamese banks approve payments. Our solution is fully equipped to seamlessly help you make the shift to secure authentication.

In recent years, there has been a concerning uptick in online fraud cases in Vietnam. According to data from 2021, victims collectively incurred substantial losses amounting to approximately €345 million — put another way, this figure breaks down to an average of €3,900 per individual case.

This year, the country is getting serious about putting a stop to these alarming levels of digital threats: The State Bank of Vietnam (SBV), has been working on legislation related to biometric authentication requirements, and this summer, it comes into effect. In preparation for the regulation’s upcoming effective date, it’s important that financial institutions understand what this shift means for them and their customers.

Here’s what you need to know about Vietnam’s upcoming regulation as well as the country’s related initiatives that support its secure digital transformation efforts.

A Snapshot of Vietnam’s Current Banking Landscape

Multi-factor authentication is already widely embraced in Vietnam. Today, the country’s use of multi-factor authentication is most commonly implemented through the use of SMS OTP. However, more secure biometric verification methods, including fingerprint scanning and facial recognition technology, have been steadily growing in popularity. 

A National Population Database Fostering Digital Transformation

Vietnam has seen steady progress in its digital transformation, namely through the growing adoption of the country’s digital ID. Since early 2021, personal ID documents with biometric data have come into circulation. These chip-based ID cards contain an individual's photograph, a QR code linked to identifying data, and a digital signature of the issuing agency.

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The Vietnamese government is now working to integrate the country’s identification system into a digital population database that’s connected to agencies, localities, and state businesses. This initiative is aimed at supporting administrative procedures and the provision of online public services, and it’s designed to contribute to the country’s socio-economic expansion as well as the development of digital citizens.

Additional details about individuals — including iris scans and voice samples — will be among the biometric information contained in the national database. With such sensitive information being shared on the digital database, it’s crucial that security remains at the forefront of this initiative. To support its secure use, all financial transactions that utilize the population database are required to implement facial authentication by April 2024.

Details About The State Bank of Vietnam’s New Regulation

In December 2023, the SBV issued Decision No. 2345/QSS-NHNN, an important regulation that lays the groundwork for implementing secure authentication requirements in Vietnam’s banking sector. The SBV expects the widespread use of biometric authentication to help deter digital threats, such as unauthorized access to bank accounts and digital wallet transactions.

On July 1, 2024, Decision No. 2345/QSS-NHNN’s requirements will come into effect. The regulation has two main stipulations related to biometric authentication, both of which affect financial institutions and banking customers:

  • The first transaction in mobile banking: Biometric authentication will be required for first-time mobile banking transactions, including transactions on new or different devices.
  • Operations exceeding a certain amount: Biometric authentication will also be mandatory for bank transfers exceeding VND 10 million (approximately €375) or daily transactions exceeding VND 20 million (approximately €750).

Decision No. 2345/QSS-NHNN approves of biometric authentication methods including facial recognition, fingerprint scans, and iris scans. Whenever a customer uses one of these methods, their biometric data must match the biometric data that’s stored in the QR code located on their personal ID card. Alternatively, biometric data can be verified by authenticating the customer's digital identity account on the digital population database.

How Wultra Can Support Vietnam’s Banks

Implementing support for app-based biometric authentication via mobile app is just as easy as implementing legacy verification via SMS OTP. And with Vietnam’s new regulation just around the corner, there’s never been a better time to make the shift to embrace fully secure authentication.

For banks and fintech companies looking to comply with Vietnam’s upcoming regulation, Wultra offers a solution for comprehensive, modern authentication. Our solution is specifically designed to meet regulatory requirements, and we can help you achieve full compliance with Vietnam’s upcoming Decision No. 2345/QSS-NHNN.

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