eKYC for Banks in Vietnam – All in One

According to the Banking Plus, after the pilot period, Credit institutions (CIs) officially apply online identification (eKYC) to open remote accounts for customers from March 15, 2021.

What is eKYC?

eKYC (electronic Know Your Customer) – Online customer identification. It be used to widely deploy an open service “highway” to develop digital banking, regulatory agencies and financial institutions, for which they had time to prepare.

Use eKYC for the banking

Since 2018, the SBV has issued Decision No. 2617 / QD-NHNN promulgating the Action Plan of the banking sector to implement Directive No. 16 / CT-TTg of the Prime Minister on strengthening access capacity to the fourth industrial revolution to 2020 and orientations to 2025.

One of the SBV’s goals is that at least 20% of processes should be automated by 2020, increasing to 35% by 2025. One of the SBV’s targets is that at least 20% of processes must be automated by 2020, increasing to 35% by 2025. In addition, eKYC technology must be implemented in most credit institutions. Since the beginning of July 2020, the SBV has allowed about 10 commercial banks to pilot eKYC application. On December 3, 2020, the SBV issued Circular 16/2020 / TT-NHNN, amending and supplementing some point of articles of Circular No. 23/2014 / TT-NHNN dated August 19, 2018 on guidelines for opening and using a payment account at a payment service supplier, in which Article 14a is added to regulations on opening an individual’s payment account using eKYC method. Circular 16 officially has effect from March 5, 2021.

Risk assessment conditions and transaction limit

According to the Circular 16, banks and branches of foreign bank must base on technological conditions to assess risks, determine the scope of use and decide to apply transaction limits via payment accounts of open customers. By electronic method, but must ensure that the total transaction value limit (debit) through the customer’s payment accounts does not exceed VND 100 million / month / customer. In some special cases, the unit is allowed to apply a transaction limit of more than 100 million VND / month / customer, but must implement additional measures to prevent risks such as making video call, collect, check and verify customer identification information; check, compare biometric characteristics of customers with biometric data of citizens through the Citizen Identification Database …

According to Circular 16, banks and foreign bank branches based on technological conditions to assess risks, determine the scope of use and decide to apply transaction limits via customers’ checking accounts, which is opened electronically. However, the bank must ensure that the total transaction value limit (debit) through the customer’s payment accounts does not exceed VND 100 millions/month /customer. In some special cases, the bank decided to apply a transaction limit of more than 100 million VND/month /customer, but must implement additional risk prevention measures such as: making video calls to collect, check and verify customer identification information; check, compare biometric characteristics of customers with biometric data of citizens through the Citizen Identification Database …

Benefits of eKYC

The bank has deployed eKYC said that their business activities have recorded impressive results, new customers more than before, transactions via electronic such as mobile banking and internet banking have also increased significantly. According to the SBC’s announcement: in 2020, the number of payment transactions via mobile banking increases by nearly 124% in volume and 126% in value compared to 2019; The number of payment transactions via the Internet increased by nearly 9% in volume and 26% in value of transactions compared to 2019.

Some notes of eKYC

According to the experts and the bank, who is deploying eKYC said that to implement eKYC is not easy and will not massively need more conditions for technology infrastructure, information, teamwork, experts… To deploy eKYC, the bank must build the big data system, which can share, connect with together bank, relevant ministries and agencies to be able to authenticate online immediately to ensure the most accurate information possible.