Vietnam: Mandatory biometric authentication leads to big drop in bank account fraud

Vietnam is seeing the positive impacts of implementing biometric authentication when it comes to combating fraud across the banking sector, as the country’s digital transformation journey continues to take shape. According to recent reports, the introduction of biometric verification has resulted in a 72 percent decrease in fraudulent accounts.

During a press conference held to announce the Vietnam Card Day 2024 event, Pham Anh Tuan, director of the payment department at the State Bank of Vietnam, revealed that as of mid-September 2024, biometric data had been collected for approximately 38 million bank accounts, including nearly 4 million e-wallets.

The reduction in fraudulent accounts follow government-led efforts to boost digital security and combat identity-related crimes, which have been on the rise in the region.

Biometric authentication was launched to address growing concerns over fraud, particularly in financial institutions. The State Bank of Vietnam has mandated banks to adopt these verification methods as part of a wider effort to secure online banking transactions.

After two months of implementation, the average number of transactions is about over 25 million transactions per day. Compared to the average number of transactions before July 1, 2024, the number of transactions is almost unchanged, according to Tuan.

Broader biometric integration

In July this year, over 13 million citizens enrolled into the biometric system in two days after the government passed the digital identity law, which took effect on July 1, 2024, mandating the use of biometrics in digital transactions.

The biometric authentication process is now compulsory for activities such as opening bank accounts, receiving government benefits, and registering for mobile services. Starting January 1, 2025, individual customers whose biometric information has not been collected by credit institutions and payment intermediaries will only be able to make money transfers in person at the bank’s transaction counters.

The Vietnamese government is also working to extend its identity card program to cover children and individuals under the age of 14.

Article Topics

banking  |  biometric authentication  |  biometrics  |  fraud prevention  |  Vietnam