A MORE secure form of authentication for online transactions is needed as part of efforts to combat online scams, Bank Negara Malaysia said.

Central bank governor Nor Shamsiah Mohd Yunus announced several measures for financial institutions to take, including moving from the one-time SMS password (OTP), as statistics show a global rise in cybercrime.

“This is a concerning development which BNM takes seriously, especially where these cases concern financial scams,” Nor Shamsiah said at the launch of the central bank’s financial crime exhibition.

She added that major banks have started the transition away from the SMS OTP system for online opening of accounts, fund transfers, payments, and changes to personal information and account settings.

Nor Shamsiah added that financial institutions will further tighten fraud detection rules and triggers for blocking suspected scam transactions.

Customers will be immediately alerted when any such activity involving their banking accounts is detected.

“As an additional measure, financial institutions will block these transactions and customers will be asked to confirm that they are genuine before they are unblocked,” she said.

According to Nor Shamsiah, other measures to prevent online scams include a cooling-off period for first-time enrolment of online banking services or secure devices, where no online banking activity is permitted.

Customers will also be restricted to one mobile or secure device for the authentication of online banking transactions, while financial institutions will be required to set up dedicated hotlines for customers to report financial scams.

BNM said it has also directed banks to be more responsive to scam reports lodged by customers, as well as working harder to recover and protect stolen funds.

“Banks are required to provide customers with convenient ways to suspend their accounts if they suspect that they have been compromised.

“Customers will be able to reactivate them after a reasonable period to ensure that their accounts are secure.

“BNM will also continue to take appropriate action against financial institutions to ensure that the highest levels of controls and security standards are observed,” Nor Shamsiah said.

She added that BNM will also strengthen ties with the police, the Malaysian Communications and Multimedia Commission and the National Anti-Financial Crime Centre NFCC to strengthen the Commercial CID scam response centre’s role as a systematic information sharing platform to enable quicker action.

However, Nor Shamsiah added that customers can play a part in reducing online fraud by not installing suspicious apps.

“By implementing these measures, BNM and the financial industry will continue to carefully balance security considerations and customer convenience,” she said. – September 26, 2022.