Vietnam to Finalize a Draft Decree for Fintech Activities to Prevent E-wallet Fraud

The SBV (State Bank of Vietnam) has said it is rushing to finalise a draft decree to enable a sandbox testing mechanism for fintech activities in the wake of increasing fraud incidents involving e-wallets. 

The decree is expected to create a regulatory framework for activities including P2P lending, customer identification, open APIs, and other innovative technology applications involving blockchain.

In September 2021, Vietnam's government approved a resolution paving the way for the SBV to create the fintech sandbox to allow firms to directly test innovative products and services in a closely controlled environment.

In a new notice, the SBV has warned of attempts by cybercriminals to take over e-wallets fraudulently convincing users to redirect their phone numbers to other devices, or pretending to be employees of telecommunications companies.

The SBV said it is concerned that there is no regulation directly governing the information security obligations of fintech companies, and no guidelines on the use of open APIs, which allow fintech applications to access banking services and data to make money transfers and payments.

Currently, there are more than 150 fintech companies in Vietnam, mainly operating as payment intermediaries and providing e-wallet products, many in partnership with banks.

Vietnam's Ministry of Public Security is meanwhile also developing a decree on personal data protection – covering the handling of personal data, data protection measures that should be in place, mechanisms for handling breaches, and responsibilities for protecting personal data.

Until the new decree is issued, the SBV says credit institutions need to actively monitor and educate fintech companies on the correct use of banking information, and ensure they have appropriate internal security policies in place.

Source: Regulation Asia