eKYC (electronic Know-your-customer) is now a top buzzword among the banking industry. This trend has been going upward, especially since May 2020 when the State Bank of Vietnam officially allowed banks to digitally onboard customers for account opening and cashless payments.
In this article, let’s analyze all the challenges Vietnam’s banks face when adopting eKYC solution.
This is a prevalent problem. The methods of opening digital accounts from overseas banks that have been adopted are referred to as an eKYC solution. However, it is difficult for technology or product managers at such institutions to understand how to incorporate those technologies into their existing banking systems with the least amount of risk and the best level of security.
Furthermore, eKYC is used not just for the onboarding process, but also for the registration of subsequent product and service packages with the bank. So, how can we make the financial system's processes and structures run smoothly and automatically? When banks have a staff that is educated in both business and technology, they can address the problem.
If the company does not have a tech-savvy workforce to handle the eKYC application, it will be put under extra strain. It results in a waste of resources in the creation of the solution, as well as significant losses. Bad customer service, in particular, tarnishes the brand's image.
Because the demand for banks to create digital payment accounts for consumers was just recently increased in May 2020, only a few Vietnamese banks have implemented eKYC in their institutions. As a result, if banks take advantage of the market pioneer, they will face not only an opportunity but also a difficulty. Due to a lack of knowledge, it is difficult to predict operational risks in the Vietnam market.
In Vietnam, banks select partners based on the following criteria:
Banks will have to restructure and upgrade their workforce when transitioning from a manual to a completely automated procedure. This conversion process has the potential to drastically alter an organization's culture, necessitating the company's ability to adapt quickly and thoroughly. Let's get ready for these shifts.
The banking business, in particular, is always concerned about the confidentiality of clients' information, as well as system security to keep hackers and financial crooks out. If banks wish to convert numbers, they must invest in a database of client information and data with a big number of users. The cost of infrastructure investments, on the other hand, is relatively high.
It is undeniable that a digital bank account is required. However, the State Bank of Vietnam lacks precise requirements on digital identity verification via EKYC, particularly the regulation on E-signatures, leaving banks in a position where "every tub must stand on its own bottom" when it comes to building an eKYC solution. The danger is that banks have begun programming in the eKYC process that will have to be "restarted" in order to comply with State Bank requirements.
Understanding the issues that banks will experience when implementing eKYC will enable managers to properly research and plan for the implementation of digital transformation solutions.
KMS Solutions is the ideal partner for your eKYC needs, offering a credible and trustworthy solution for your financial institution. Here's why:
To explore the full potential of KMS Solutions' eKYC solution and see how it can fits into your digital banking application, get a consultation with our team of experts today! Please note that our eKYC solution is currently available for businesses within the Vietnam market only.