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News

Australian banks to launch new system to fight scams

Friday 24 November 2023 12:03 CET | News

Australian banks have announced a new joint effort to fight a rise in scams, including major changes to customer payments.

 

The new Scam-Safe Accord is set to include USD 100 million investment by the industry in a new confirmation-of-payee system. This system will be rolled out across all Australian banks. This name-checking technology is expected to help reduce scams by ensuring customers can confirm they are transferring money to the person they intend to.

 Australian banks have announced a new joint effort to fight a rise in scams, including major changes to customer payments.

 

Customers can expect to receive more warnings and delays when paying someone new or increasing payment limits. The initiative is being led by the Australian Banking Association (ABA) and Customer Owned Banking Association (COBA). This new joint effort seeks to reflect the banking sector’s commitment to safeguarding every Australian. Moreover, it also outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams. 

To prevent misuse of accounts through identity fraud, all banks will improve technology and controls, and introduce unique identification measures known as biometric checks when opening new accounts. 

There are 15.4 billion transactions, worth USD 2.5 trillion, that occur every year across the banking sector. Australians have lost nearly USD 430 million to scams this year. As per the official announcement, work would commence immediately with the system rolled out over 2024 and 2025. 

Six key measures banks have agreed to implement 

  • An industry-wide confirmation-of-payee solution; 

  • Biometric checks to prevent misuse of bank accounts; 

  • Warning and payment delays to alert customers to potential scam payments; 

  • A major expansion of intelligence sharing across the sector; 

  • Limiting payments to high-risk channels such as cryptocurrency platforms; 

  • Implementing an anti-scams strategy. 

Some banks have already started rolling out the initiatives, such as Westpac, stating that it would also introduce real-time payment prompts and ask customers a series of questions for payments detected to be a higher scam risk. 

Officials from the country said that to keep up this effort, it is critical that government, banks, telcos, social media, and crypto platforms work together as part of an ecosystem to stay one step ahead of fraudsters. 

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Keywords: scam, fraud management, fraud detection, fraud prevention, identity fraud
Categories: Fraud & Financial Crime
Companies:
Countries: Australia
This article is part of category

Fraud & Financial Crime

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