The State Bank of Vietnam Proposes Draft Circular on AI Deployment in Banking
Vietnam’s State Bank of Vietnam (SBV) has released a draft Circular on the deployment of artificial intelligence (AI) in the banking sector, marking a significant step toward establishing a comprehensive regulatory framework for AI adoption in financial services.
The draft Circular is expected to be issued in 2026 and will apply broadly to SBV-regulated entities, including credit institutions, foreign bank branches, payment intermediaries, and other financial service providers.
Key highlights
1. Establishing a unified regulatory framework for AI
The draft Circular introduces a structured framework governing the safe and responsible use of AI in banking, with a strong focus on operational safety, governance, and customer protection.
It aligns with Vietnam’s broader regulatory push following the adoption of the AI Law, aiming to ensure consistent and effective deployment of AI technologies across the sector.
2. Enhanced safety and system governance requirements
Banks and financial institutions will be required to implement robust model management and monitoring systems, including:
Continuous monitoring of AI systems
Data logging and storage requirements
Incident detection and response mechanisms
Institutions must also ensure that internal users are fully informed about system capabilities and limitations to mitigate operational risks.
3. Risk-based approach to AI management
The draft Circular adopts a risk-based framework, requiring institutions to:
Classify AI systems based on risk levels
Apply appropriate levels of human oversight
Conduct impact assessments for high-risk AI systems
It also introduces lifecycle controls covering design, testing, monitoring, and decommissioning of AI systems, ensuring accountability throughout the AI value chain.
Importantly, institutions remain fully responsible for third-party or outsourced AI systems, including vendor oversight and supply chain security.
4. Pre-deployment conditions and operational readiness
Before deploying AI applications, regulated entities must meet several requirements, including:
Completion of risk classification and security testing
Establishment of incident response plans
Defined performance and accuracy benchmarks
Adequate human resources and staff training
Annual reviews of AI capabilities and governance systems are also required to ensure ongoing compliance.
5. Customer protection and transparency obligations
A key feature of the draft Circular is its strong emphasis on consumer protection and transparency.
Financial institutions must:
Clearly disclose when customers are interacting with AI systems
Provide explanations for AI-driven decisions affecting customers
Offer mechanisms for human review of automated decisions
The draft also explicitly prohibits the use of AI systems that result in bias, discrimination, or exploitation of vulnerable groups, reinforcing fairness and accountability principles.
6. Incident reporting requirements
Institutions will be required to report serious AI-related incidents to the SBV within 24 hours, followed by a remediation report within five working days after resolution.
Broader context
The draft Circular builds on Vietnam’s recently enacted AI Law (effective March 2026), which establishes a national framework for AI governance based on risk classification, transparency, and accountability principles.
Together, these developments signal Vietnam’s increasing commitment to balancing innovation with regulatory safeguards, particularly in high-impact sectors such as banking and financial services.
Implications for businesses
The proposed framework introduces significant compliance obligations for financial institutions and fintech players operating in Vietnam, particularly those deploying AI-driven solutions.
Key implications include:
Increased governance and compliance costs for AI systems
Greater accountability for outsourced or third-party AI providers
Heightened requirements around transparency and customer rights
The need for robust internal risk management and audit mechanisms
Financial institutions are encouraged to proactively assess their AI strategies, governance frameworks, and vendor arrangements to ensure readiness ahead of the Circular’s expected issuance.