In a groundbreaking move set to transform Vietnam's banking sector, the State Bank of Vietnam has declared that biometric authentication will become mandatory for specific online transactions beginning July 1, 2024. This significant shift in banking security protocols comes as a response to the rapidly growing prevalence of cashless payments in the country and the increasing sophistication of cyber threats.
The new regulations stipulate that any single online transaction exceeding $393 or daily transactions surpassing VND20 million will require biometric verification. This move represents a departure from traditional password-based systems and one-time passwords, which have been increasingly vulnerable to cyberattacks. The SBV's decision underscores a commitment to adopting more robust security measures in the face of evolving digital threats.
The implementation of biometric authentication is not merely a technological upgrade but a strategic move to fortify the entire banking ecosystem. By matching biometric data with information stored in the national ID database, the new system aims to enhance the security of bank accounts and create a formidable barrier against financial fraud. This integration of banking and national identification systems marks a significant step towards a more secure and interconnected financial infrastructure.
The widespread adoption of personal payment accounts in Vietnam has set the stage for this transition. Pham Anh Tuan, Director General of the SBV's Payment Department, noted that over 87% of adults in Vietnam own at least one account, highlighting the country's rapid embrace of digital financial services. The recent surge in the use of QR codes for payments further illustrates the Vietnamese public's readiness for advanced financial technologies.
Experts in the field have lauded the move, pointing out that the new biometric requirements will not only enhance security but also improve the management of accounts and transactions. Vu Ngoc Son from the National Cybersecurity Association emphasized that biometric authentication could limit the use of virtual bank accounts, providing law enforcement with better tools to combat cybercrime. This added layer of security comes at a crucial time, as Vietnam grapples with significant financial losses due to online scams.
The implementation of this new system is not without its challenges. Domestic banks are already in the process of preparing for the new regulations, actively notifying and reminding customers to update their biometric registration. This transition period will be crucial in ensuring a smooth adoption of the new system and minimizing disruptions to banking services.
The urgency of these measures is underscored by the staggering financial losses incurred due to online scams in Vietnam. In 2023 alone, the total loss was estimated to be around VND8-10 trillion, with an overwhelming 91% of these frauds linked to financial schemes. In light of these statistics, Major General Nguyen Van Giang, Deputy Director of the Department of Cyber Security and High-Tech Crime Prevention (A05) under the Ministry of Public Security, has emphasized the importance of public vigilance and the use of multi-factor authentication to protect financial information.
