26 September 2022

BNM: 5M and 3S to Combat Scams

Scams and cybercrimes have been on the rise of late, not just in Malaysia but all around the world. This is a concerning development which Bank Negara Malaysia (BNM) takes seriously.

This is especially so where these cases concern financial scams. Efforts to combat financial scams have been taken, including rolling out preventive measures, pursuing more effective and coordinated enforcement actions, and raising public awareness.

BNM requires banks in Malaysia to adopt high standards of security, especially for Internet and mobile banking services.

From time to time, BNM also issues security advisories to the financial industry highlighting the latest modus operandi (tactics) of scammers and additional security measures that banks need to implement to protect their customers' savings.

The reality, however, is that methods used by criminals will continue to evolve. BNM therefore continuously intensifies efforts and take steps to combat scams by introducing additional controls and safeguards from time to time.

So, BNM would like to announce the following measures which BNM has instructed financial institutions to take, to further strengthen safeguards against financial scams.
    • First, financial institutions are required to migrate from SMS One Time Passwords (OTP) to more secure forms of authentication for online activities or transactions relating to account opening, fund transfers and payments, as well as changes to personal information and account settings. The major banks have already started this process of migrating to more secure forms of authentication;

    • Second, 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 such transactions, and customers will be asked to confirm that such transactions are genuine before they are unblocked;

    • Third, a cooling-off period will be observed for the first-time enrolment of online banking services or secure devices. During this time, no online banking activity is allowed to be conducted;

    • Fourth, customers will be restricted to one mobile or secure device for the authentication of online banking transactions; and

    • Fifth, financial institutions will be required to set up dedicated hotlines for customers to report financial scam incidents. Financial institutions have been directed to be more responsive to scam reports lodged by customers. Financial institutions have also been directed to facilitate efforts to recover and protect stolen funds, including to work with relevant agencies to prevent further losses.

    In addition, financial institutions are required to provide convenient ways for customers to suspend their bank accounts if they suspect that their accounts have been compromised as a result of a scam. Customers will also be able to subsequently reactivate their accounts after a reasonable period to ensure that their accounts are secure.

    In short, BNM and the financial industry will continue to ensure that banking and payment channels remain secure and equipped with up-to-date security controls.

    Users should also be vigilant and ensure that their devices, such as mobile phones, run up-to-date software and operating systems. They should ensure that their devices are secure, free from suspicious apps which might carry malware and spyware. This means being careful with what you install on devices used for online banking transactions.

    There are many ways we can protect ourselves from scams, but in my mind, they boil down to three steps, what we call “3S - Spot, Stop and Share”:
    • Spot – Look out for signs of scams. Question, investigate and enquire to ensure that you are about to engage in a legitimate transaction;
    • Stop – If anything looks doubtful or suspicious, it’s probably a In such cases, stop engaging with the suspected scammer. It is important that you do not provide any banking or payment details;
    • Share – Share your knowledge of scams with friends and family, and help protect others by reporting scams to relevant authorities so that they can take action.

    This 3S concept is also in line with the theme of the virtual exhibition which is ‘Semak Sebelum Diperdaya’.

    This is an excerpt of the speech from the BNM governor. Click here to read the full article/speech here: https://www.bnm.gov.my/-/financial-crime-exhibition-speech-en

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