One of the countries to recently digitize both their national and financial transaction systems is Vietnam. A major reason for this urgent change might be the fact that in the year 2021, the total estimated financial loss to fraud and similar activities was about €345 Million. Fraud numbers in Vietnam are quite high compared to many other countries.
Subsequently, the country has started to take financial security quite seriously. Vietnam biometric authentication technology has advanced to now become highly comparable to many of its neighboring nations.
So here’s a relatively quick explainer of the scope of biometric authentication tech in the country of Vietnam.
Biometric Verification
Biometric verification and authentication is a set of advanced identification mechanisms used to ensure a high level of security in different, mostly financial systems and applications. These methods use different biological characteristics of the individual to identify them, usually either their face or fingerprint.
Older methods of accessing accounts and verifying individuals, passwords, and pins especially, were highly prone to being stolen or hacked. Passwords depend on the creativity and technical knowledge of the individual to a large extent to be complex enough to be resistant to being guessed or hacked.
Biometric authentication systems in banking offer a comparatively much higher level of security and are safe from being stolen as they are intrinsically linked to the physical presence of the account owners themselves. Replicating them is extremely difficult for the average hacker at the very least, and in most cases impossible.
The majority of banking systems across the world now employ either one or both fingerprint and facial recognition as a method of authentication for most major and in some cases even minor transactions.
Digital Banking in Vietnam
The Vietnam digital banking world has already adopted fundamental security mechanisms like two-factor authentication for the majority of transactions. The way this is implemented is through one-time-passwords (OTPs) via SMS messages to users. This type of authentication is now common for the overwhelming majority of financial activity through banks that happen in the country.
The Adoption of Biometrics
Vietnam has steadily been increasing the use of biometrics in its identification and security systems for the last few years. The country first adopted widespread biometrics with the issuance of personal ID cards with biometric identification data including fingerprints and a photograph of the individual, plus a digital signature of the issuing agency, embedded into the card via a chip.
The public themselves are also widely aware of biometric verification mechanisms. According to a survey by the 2022 Mastercard Index, close to 75% of individuals say that they think that biometric verification is better than other forms of identity verification.
Passenger processing at airports in the country has been greatly streamlined and quicked by the use of these biometric identification technologies. Check-in times have reduced and overall public order has improved immensely. It should also reduce the possibility of illegal travel, smuggling, and other illegal activities at airports.
Digital Population Database
The government of Vietnam is actively working on integrating the existing identification system into a ‘digital population database’, which will be connected with all agencies, localities, and the different state businesses.
This initiative is meant to help streamline administrative tasks and procedures across organizations and to promote the provision of public services on online platforms rather than physical offices as much as possible.
Decision No. 2345/QD-NHNN
While the financial sector already has implementations of biometric verification requirements for the financial sector, the State Bank of Vietnam has now finalized plans to implement a nationwide requirement for online biometric authentication for online money transfers and deposits that exceed a certain value.
This regulation works on two major stipulations to enforce financial security through biometric authentication mechanisms:
- First Transaction: Biometric Authentication will be required for all first-time transactions on digital platforms, either from new accounts or from an existing account that is logged in on a new, not previously added device.
- Large Transactions: Biometric Authentication will also be required for all digital bank transfers or deposits into accounts that exceed a value of 10 million VND. Authentication will also be required when daily transactions cross/exceed an amount of VND 20 million.
This new regulation will come into effect nationwide on the 1st of July, 2024. The system approves of facial recognition, fingerprint scans, and iris scans as possible methods of biometric verification. When a customer provides their biometric data for verification, it must match the data stored in the database or the chip in their ID card.
Conclusion
Because of the large amount of money lost to financial fraud in the country, Vietnam has revamped and updated its financial security and individual identification system. New systems including online biometric authentication are being added to make transactions more secure and digital systems more reliable for daily use.
Suggested Read: Vietnam Mandates Biometric ID for All First-Time Mobile BankingTransactions
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Source: Vietnam Insider