Legal News 22/05/2021

EKYC SOON TO BE ALLOWED IN VIETNAM

The State Bank of Vietnam (SBV) is seriously pushing for introduction of eKYC in Vietnam. A draft Circular which will revise the Circular 23/2014 on payment account has been published in SVB website and invitations for public and professional comments had been sent out. Among other changes, the Circular shall allow a financial institution or payment service provider to decide on whether it would require a face-to-face KYC or to accept KYC via electronic means of a new customer. eKYC is believed to enhance customer experience and thus to help financial institutions and payment service providers to faster and simpler provide account opening services to customers and thus increase non-cash payment volume in Vietnam. Nevertheless, in the current context of the legal frameworks Vietnam where electronic evidences are not yet regulated, thus difficultly permissible in proceedings under the Civil Procedural Code while there is no clear legal frameworks and standards regarding electronic or digital systems applicable for eKYC financial institutions and payment service providers may still expose to severe risks of frauds, anti-money laundering or anti-terrorist financing. Such exposure seems to be greater when looking into the lack of clean and consistent pools of customer data and  generally poor investments in electronic data processing and online security infrastructures in Vietnam.

The draft has another interesting point showing some change in SBV’s position in banking agency. The new Circular may allow a Vietnamese bank or foreign bank licensed in Vietnam to service an overseas customer the first time to open a bank account via either a corespondent bank or an intermediary appointed by the bank. The draft circular looks very high level addressing this matter. It is not yet clear if there will be certain conditions and requirements applicable to such overseas agents to be qualified to be the agents for such regulated activities under the law of Vietnam.

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