The impact of corporate governance on cross-border payment fraud: Evidence from Vietnamese commercial banks

Type of the article: Research ArticleAbstractThe rapid expansion of cross-border payments driven by digital banking and e-commerce has increased banks’ exposure to payment fraud, intensifying governance challenges in emerging-market financial systems. This study investigates the impact of corporate governance structures on cross-border payment fraud in Vietnamese commercial banks. The study applies Feasible Generalized Least Squares (FGLS) estimation to an unbalanced panel of Vietnamese listed banks over the period 2015–2024, examining a constructed bank-level cross-border payment fraud index in relation to key board-level governance characteristics. The empirical results show that board independence (β = −0.0009, p lt; 0.01), board meeting frequency (β = −0.0008, p lt; 0.01), directors’ financial or technological expertise (β = −0.0014, p lt; 0.01), and female board representation (β = −0.0006, p lt; 0.05) are significantly associated with lower fraud exposure, indicating that stronger monitoring intensity and governance-related expertise reduce fraud vulnerability. In contrast, CEO duality increases fraud risk (β = 0.0025, p lt; 0.01), suggesting that concentrated leadership weakens oversight effectiveness. These findings confirm that effective board independence, active monitoring, and governance expertise play a critical role in mitigating cross-border payment fraud in emerging-market banking systems.