A New Era of Digital Banking
Banking is changing rapidly. Across the world, financial institutions are moving away from traditional identity checks and adopting digital verification systems involving biometric information, electronic identification and secure identification chips.
Two Asian countries, Japan and Vietnam, offer important examples of this transformation.
Vietnam has introduced biometric verification requirements for banking transactions, while Japan is preparing new identity-verification rules for people opening bank accounts online.
Supporters argue that these developments can reduce financial fraud, prevent identity theft and make banking more secure. However, they also raise important questions about privacy, accessibility and what happens when customers cannot complete the required verification.
Could the future of banking depend increasingly on digital identity?
Vietnam: Biometric Verification Becomes a Banking Requirement
Vietnam has introduced significant changes to its banking system through regulations issued by the State Bank of Vietnam.
Under Circular 17/2024/TT-NHNN and related regulations, individual customers must complete identity and biometric verification to carry out certain electronic banking transactions.
The requirements for individual customers took effect on January 1, 2025, while the relevant requirements for organizational customers took effect on July 1, 2025.
Banks can verify biometric information through approved identity systems, including the chip embedded in Vietnam’s citizen identification cards and the national electronic identification system.
The objective is to reduce fraudulent accounts, prevent impersonation and strengthen security in electronic payments.
However, the system also means that customers who have not completed the required verification can face restrictions on certain electronic banking activities.
For people without access to suitable identification documents, compatible technology or reliable digital services, these requirements can create additional difficulties.
Japan: Banks Move Towards Chip-Based Identity Verification
Japan is also moving towards a more advanced digital identity-verification system.
On October 21, 2026, reports indicated that major Japanese banks were accelerating their transition towards identity verification using IC chips embedded in identification cards.
The move follows a series of data breaches and growing concerns about the security of stored identity-document images.
Under revised regulations scheduled to take effect in April 2027, financial institutions will be required to use information stored on IC-chip-enabled identification cards for certain online identity-verification procedures. The rules will also prohibit certain image-based verification methods.
Major institutions, including Mizuho Bank and MUFG Bank, have already started moving towards chip-based verification.
Japan’s My Number Card system is an important part of this development. Its embedded chip can support secure identity authentication through electronic certificates.
The government says these technologies can improve security, reduce administrative costs and make digital services more convenient.
Nevertheless, the expansion of digital identity systems raises questions about how personal information is collected, protected and used.
What Happens When a Customer Cannot Verify Their Identity?
One of the most important questions surrounding digital banking is accessibility.
Not everyone has the same access to smartphones, modern identification documents, internet connections or biometric technology.
Consider an elderly customer who struggles to use digital services, a person living in a rural area with limited connectivity, or someone whose biometric information cannot be successfully verified.
What happens if that person cannot complete the required checks?
Digital banking systems must provide accessible alternatives and effective procedures for resolving verification failures.
Otherwise, security measures designed to protect customers could unintentionally make essential financial services harder to access.
Financial inclusion should not come at the expense of people who are less comfortable with technology.
Is This Connected to the United Nations’ Agenda 2030?
The United Nations adopted the 2030 Agenda for Sustainable Development in 2015. It contains 17 Sustainable Development Goals designed to address poverty, inequality, economic development and other global challenges.
Several goals are relevant to the expansion of digital financial infrastructure.
SDG 8 – Decent Work and Economic Growth: Target 8.10 calls for stronger domestic financial institutions and expanded access to banking, insurance and financial services.
SDG 9 – Industry, Innovation and Infrastructure: This goal promotes resilient infrastructure, technological development and innovation.
SDG 16 – Peace, Justice and Strong Institutions: Target 16.9 calls for legal identity for all, including birth registration.
These goals establish an international development framework that supports financial inclusion, stronger institutions and access to identity systems.
However, the Agenda does not specifically require Vietnam’s biometric banking rules or Japan’s IC-chip verification policies. Those are national regulatory decisions.
The distinction matters when examining the relationship between international development objectives and domestic financial policies.
The Future of Financial Privacy
As banking becomes increasingly digital, protecting financial information will become even more important.
Biometric information is particularly sensitive because, unlike a password, a person’s face or fingerprints cannot simply be replaced after a data breach.
Banks and governments therefore face an important responsibility: ensuring that identity-verification systems are secure, transparent and accountable.
Customers should understand what information is collected, how it is stored, who can access it and what options exist if verification fails.
There should also be clear procedures for challenging mistakes and restoring access to financial services.
Final Thoughts: Convenience, Security and Financial Freedom
Japan and Vietnam demonstrate how quickly banking systems are adopting digital identity technologies.
These changes may help prevent fraud and improve the security of financial transactions. At the same time, they highlight the importance of privacy protections, accessible banking alternatives and transparent regulations.
The real question is not whether digital banking will continue to expand. It is whether governments and financial institutions can ensure that technological progress protects the rights of ordinary customers.
Financial security and financial freedom should advance together.
What do you think? Are biometric banking systems making financial services safer, or could they create new challenges for personal privacy and access to money?
Sources and Further Reading
- State Bank of Vietnam: Safety, Convenience, and Protection of Legitimate Rights of Users of Banking Services on Digital Platforms
- Japan Times: Major banks in Japan accelerating shift to IC chip verification
- Japan Digital Agency: Japanese Public Key Infrastructure
- United Nations: 2030 Agenda for Sustainable Development
