Workshop on eKYC – Based Payment Account Opening Regulation and Adoption

The Workshop was organized by the SBV in collaboration with the Asian Development Bank (ADB) and the Australian Agency for International Development (AusAID) with a view to facilitating the effective implementation of Circular No. 16/2020/TT-NHNN (Circular 16) amending and supplementing a number of articles of Circular No. 23/2014/TT-NHNN (Circular 23) guiding the opening and use of payment accounts at the payment service providers, which supplements regulations and instructions on opening payment accounts via electronic means to ensure high efficiency and consistency in the implementation process.

In his opening remarks, Deputy Governor Nguyen Kim Anh emphasized that in the context of the Fourth Industrial Revolution (Industry 4.0), the banking industry is facing both great opportunities and big challenges, requiring the industry to transform towards automatic digitalization, providing innovative products and services; the customer-centered approach can help banks to develop sustainably and create a competitive advantage. In the process of digital banking transformation, the implementation of eKYC in establishing first relationships with customers is considered as the "gateway" to develop digital banking models. In particular, identifying and verifying customer information upon opening a payment account plays an important role, helping customers to access and utilize banking services, and also allowing banks to expand their clientele and provide safe, convenient and efficient banking services.

Mr. Pham Tien Dzung - Director General of SBV Payment Department - speaks at the Workshop

In recent years, the Party and Government have issued many policies and guidelines to facilitate the organizations and enterprises to promote the application of digital technology and encourage innovations in the banking sector. Implementing the above-mentioned guidelines and orientations, the SBV has been accelerating the development and completion of the necessary mechanisms, policies and legal frameworks to support and facilitate the banks in digital transformation and digital banking development. In addition, to facilitate the banks’ eKYC implementation, the SBV has advised and submitted to the Government for promulgation Decree No. 87/2019/ND-CP amending the provisions of Decree No. 116/2013/ND-CP, thereby allowing banks to decide whether to have physical meetings or not with their customers when the relationship is first established. Based on these principles and orientations, the SBV has studied, developed, consulted with the credit institutions and then issued Circular 16 amending and supplementing a number of articles of Circular 23, which supplements a number of regulations and instructions on opening payment accounts via electronic means.

“The new regulations on opening payment accounts via electronic means in Circular 16 were developed on the basis of compliance with the current laws on counter-money laundering, and in line with the trend of technology application in the banking operations in the world and in Vietnam. Additionally, it also meets the urgent requirements of the credit institutions in the digital transformation process, increasing access to new customers in a more convenient manner at lower costs, contributing to the implementation of the objectives of Vietnam National Financial Inclusion Strategy”, added the SBV Deputy Governor on the objectives and significance of Circular 16.

Mr. Le Anh Dzung, Deputy Director General of the SBV Payment Department, the focal point for the formulation of Circular 16, presented specific information on some new provisions of the Circular, and how to implement the regulations on opening payment accounts via electronic means in order for banks to achieve high efficiency, ensure security, safety and confidentiality. Specifically, Circular 16, which amends Article 12 of Circular 23 on the required documents for opening a new payment account, now allows that the documents in the application for opening a payment account can be electronic copies; and also allows the banks to negotiate with their customers about whether or not these documents are required to be translated into English... In addition, there is another important new regulation in Article 13 on the application form for opening an account, which no longer requires a customer to register their signature sample in the Application for opening a payment account, but the signature sample will be later required upon the customer’s use of the account. This additional modification is aimed to meet the new regulation allowing opening personal payment accounts via electrical means. Beside the above-mentioned new regulations, the SBV has also made a number of important requirements to ensure the safety and efficiency in the opening and the use of payment accounts via electronic means.

The panelists provide their inputs at the Workshop

The banks still have to meet a number of minimum requirements such as having a technology solution to verify and check their customer identification information; compare biometric data with the information. The banks are also required to introduce and implement a process of control and risk assessment for these operations. During the implementation process, the banks have to enhance their human resources and measures to review, verify, check and evaluate the eKYC technology solutions, ensuring the transmission quality, etc.

At the Workshop, representatives from a number of commercial banks and foreign banks’ branches also presented about some issues of the application of technology solutions in eKYC; possible technological measures and solutions to control the risks in opening payment accounts via electronic means; the practice of the experimental implementation at some commercial banks so far. During the panel discussion, representatives of the SBV and the commercial banks discussed, exchanged, shared, and clarified more about how to implement the new eKYC regulations in opening payment accounts to ensure security, safety and efficiency, as well as pointed out some possible issues and challenges that may be encountered. Based on that information, several appropriate policy recommendations were made.

With the efforts, determination and unanimity among the regulators, the banks and the related units, the participants in the Workshop expressed hopes that Circular 16 would be successfully implemented, creating an impressive step forward, continuing to show that policies to promote digital transformation of the banking sector in Vietnam have really come to life.

VA