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Will digital banking regulations increase or decrease in 2020?

Author: Innotech Vietnam Coporation
Date: 20/03/2020

Will digital banking regulations increase or decrease in 2020? Let’s take a look at some of the digital banking regulations today.


Digital banking regulations


The market is changing rapidly and advances in technology are unimaginable. The wave of transformation which has been sweeping through the banking sector. New technologies are fundamentally reshaping the ways customers engage with banks, with ultimate objectives of improved efficiency, reduced costs, and better customer experience.

Recent research suggests that digital transformation is giving banks the opportunity to deliver their services at lower costs. Automating manually intensive processes like client onboarding, for example, leads to better speed and lower error frequency. Besides exploring the new opportunities, banks have to face risk – and risk requires regulations.

Digital banking regulations are essential to protect consumers and banks. Regulatory compliance is not only critical to avoid fines and legal punishment but also to secure the good reputation of your brand. There are many issues that banks must consider today. From new consumer laws to cyber attacks and safeguarding sensitive data, it’s essential that banks understand new issues and comply with digital banking regulations.




The real ownership of an account and the source of funds can be hidden from the bank. False identification documents and shell corporations are frequently used to open bank accounts for illicit transactions.

When banks fail to file suspicious activity reports and fail to take appropriate actions to stop money laundering, they are subject to severe prosecution and enormous fines. This is why banks are spending billions of dollars to try to stay in compliance with anti-money-laundering regulations. 

Ongoing KYC and AML screening should be ensured to continuously monitor the customer and business accounts with new verification strategies and reduce financial crimes. Ongoing KYC and AML screening should be ensured to continuously monitor


When opening an account in a traditional bank, customers go to a physical branch where they are registered by a consultant. Face-to-face interaction gives a bank ability to establish the customer’s true identity. Digital banking needs to make more efforts and comply with more regulations because this process is occurring online and customers have more opportunities to lie about their identities.

Cross-Border Issues


Banks typically have many cross-border issues. Digital banks that provide services and products from their home jurisdiction into other countries must comply with the rules of the host country. The legal and reputational risks involved in cross-border financial services have risen noticeably in recent years, as several high-profile cases have shown. 

Banks need to check for licensing regimes (which services may be offered?), distribution rules (requirements with regards to specific investment instruments) as well as client suitability rules (are services and instruments in line with client risk profiles?) to define a compliant client offering.

Unlike a regular banking license, those with e-money issuer licenses have restrictions on what they can do with the depositors’ funds. These restrictions are also seen as anti-competitive and counter-productive to the development of the emerging digital banking sector.

Customer Data


One digital banking regulation must be aware of today is their responsibility to safeguard sensitive data. Digital banking is responsible for a lot of financial and personally identifiable information that requires special handling.

Frameworks like PCI-DSS, SOX, and GDPR set digital banking regulations that call for specific processing, storage, and security practices to safeguard the sensitive data financial institutions and banks keep on their customers. Regulatory in digital banking services is designed around data privacy and security to keep customer data safe. Regulatory compliance helps safeguard consumer data and ensure that data doesn’t fall into the wrong hands.


GDPR updates privacy law to account for more recent technical developments



Digital banks hold a lot of valuable data making their institution’s prime targets for cyber attacks. New regulations look to cut down on these attacks by introducing regulatory standards, technologies, and guidance. Digital banking regulation compliance begins with comprehensive risk assessment planning and strategies that protect digital assets, improve responsiveness to cyber attacks, detect fraud and reduce the risk of data breaches.


A host of new and evolving cybersecurity threats has the information security industry on high alert

 Cybersecurity has remained a hot topic in technology for the global market


Innotech Vietnam always strives to meet the needs of customers with the highest quality products and services. So we have received the trust from big companies such as ACB, Tyme Bank, Unifimoney, Manulife, Commonwealth Bank, … to use products created by Innotech Vietnam.

If you are looking for a Fintech Outsourcing company to provide solutions for your company. Contact experts at Innotech Vietnam for any questions about Fintech software Outsourcing!

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