With the proliferation of digital frauds in consumer and corporate banking, innovative mechanisms beyond bolstering the security of digital banking are required ameliorate the impact on consumers who have taken the necessary steps to ensure the safety of their digital environment and transactions. MAS' 'fair loss-sharing’ framework appears to be one.
March 01, 2022 | Siddharth Chandani- The recent SMS phishing scam at OCBC Bank accentuate the need for banks to do more than just strengthening infrastructure security measures
- High adoption of real-time and instant payments will make it more difficult to prevent digital frauds in future
- MAS' new loss-sharing framework provides innovative settlement mechanism but it will be a challenge to determine the ‘extent and ownership of responsibility’.
The frequency and magnitude of digital fraud continue to increase as fraudsters become more sophisticated in their attacks. While financial institutions (FIs) have taken efforts to minimise clients’ vulnerability by increasing communication through security advisories and alerts as well as deploying innovative fraud prevention methods such as two-factor authentication (2FA), one-time passwords (OTP) and use of digital identity and biometric authentication, consumers are still losing funds from their accounts. In the past two months alone, about 790 customers of OCBC Bank lost $10.18 million (SGD 13.7 million) in a series of short message service (SMS) phishing scams. In the Philippines, in mid-December, around 700 customers of BDO Unibank reported unauthorised fund transfers from their accounts. Perpetrators using phishing emails were able to intercept OTPs to bypass the bank’s security infrastructure.
In the last two years, around 4,200 companies, organisations and government institutions fell victim to ransomware attacks according to an estimate by cloud-based cyber security firm, Abnormal. In the United Kingdom (UK), an average of $5.4 million was stolen every day during the first half of 2021. Total losses from push payment scams rose by 71% to reach $480.6 million in 2021 alone.
Digital frauds are not just restricted to consumer payments. Corporate payments are just as vulnerable because large amounts of money are moved between systems, departments and banks. Wire frauds may be perpetra...
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Keywords:Cybersecurity, Risk And Regulation, Digital Fraud, Cloud, AI, Machine Learning, Data, Security
