COBA, ABA will include biometric checks
Australian banking industry bodies representing 76 banks, credit unions and building societies have joined forces to crack down on the growing scourge of scammers, whose crimes led to the loss of $3.1 billion last year.
The Australian Banking Association (ABA), representing 20 banks, and the Customer Owned Banking Association (COBA), which has 56 members including mutual banks, credit unions and building societies, have signed up to the new Scam-Safe Accord.
The accord, which was announced on Friday, November 24, is aimed at delivering a higher standard of protection for customers and put scammers out of business.
Among the high-level representatives attending today’s accord announcement at Westpac’s offices were Westpac CEO and ABA chair Peter King (pictured above left), federal Assistant Treasurer and Minister for Financial Services Stephen Jones, ABA CEO Anna Bligh (pictured above second from left), and COBA CEO Michael Lawrence (pictured above second from right) and COBA chair Elizabeth Crouch.
Banks united in COBA, ABA effort to fight scammers
According to a joint media statement from both COBA and ABA, the accord is a comprehensive set of anti-scam measures across the entire industry.
“This Scam-Safe Accord is a new offensive in the war on scams,” Bligh said. “It reflects the banking sector’s unwavering commitment to safeguarding every Australian. It outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams.”
It follows on from the ABA introducing a new campaign in April to raise awareness of scams and protect customers
Lawrence said the initiatives being launched today were a significant step forward and demonstrate the banking industry’s commitment to fight scams.
“It doesn’t matter if someone banks with a regional mutual bank or the largest bank in the country, customers can be confident their bank is working hard to protect their money,” Lawerence said.
Scam-Safe Accord includes new confirmation of payee system
The Scam-Safe Accord involves a $100 million investment by the industry to set up a new confirmation of payee system to be rolled out across all Australian banks.
Confirmation of payee will help reduce scams by ensuring people can confirm they are transferring money to the person they intend to.
In their joint media statement, COBA and ABA says with 15.4 billion transactions worth $2.5 trillion occurring every year across the banking sector, the design and build of an industry-wide confirmation of payee system is a major undertaking. Design of the new system will start straight away and it will be built and rolled out over 2024 and 2025.
Banks have committed to introducing new and higher protections into their systems, meaning customers should expect more warnings and delays when paying someone new or increasing payment limits.
Anti-scam measures to include new ID measures, such as biometric checks
Under the Scam-Safe accord, all banks will boost technology and controls to prevent misuse of accounts through identity fraud. All major banks will introduce unique identification measures known as biometric checks when customers open new accounts.
In addition, the accord includes a major expansion of intelligence sharing across the sector with all banks acting on scams intelligence from the Australian Financial Crimes Exchange by mid-2024, and joining the Fraud Reporting Exchange.
This means critical information will be shared across the banking sector at speed about scam transactions, improving the chances of preventing scams and recovering stolen funds.
“Preventing scammers from taking the hard-earned money of everyday Australians is a shared responsibility,” Lawrence said. As scammers work hard to devise new ways to steal money, it’s critical that governments, industry and consumers remain vigilant to make Australia a hard target for scammers.”
Bligh said recent data from banks showed that $600 million in stolen funds had been returned to customers over the last year.
“To keep up this effort it is critical that government, banks, telcos, social media and crypto platforms work together as part of an eco-system to stay one step ahead of sophisticated criminal gangs,” Bligh said.
ABA and COBA said banks would play a key role in fighting scams but were only one part of the solution – the two bodies looked forward to seeing details from other sectors about their plans to proactively address scams.
Scam-Safe Accord based on principles of disrupt, detect and respond
The accord applies to all members of ABA and COBA and its initiatives are based on the principles of disrupt, detect and respond.
Disrupt
Banks to deliver industry-wide confirmation of payee solution
- all banks will roll out this name checking technology so customers know who they are dealing with, mitigating the possibility of people being manipulated into paying a scammer when the name does not match;
- design of the new system will start straight away and it will be built and rolled out over 2024 and 2025.
Banks will take action to prevent misuse of bank accounts
- all banks will adopt further technology and controls to help prevent identity fraud, including major banks using at least one biometric check for new individual customers opening accounts online by the end of 2024;
- these checks will be either detectable to a person's behaviour or involve a check of a customer’s face or fingerprint, enabling banks to use these characteristics to verify their customer’s identity.
Banks will introduce warnings, payment delays to protect customers
- if a customer is transferring money to someone they haven’t paid before or raising payment limits, they can expect more questions, warnings and delays from their bank to protect them from falling victim for a scam. It will act as a mitigant when scammers put customers under pressure to act quickly to transfer funds;
- banks will work to introduce enhanced warnings and delays by the end of 2024.
Detect
Banks to invest in major expansion of intelligence sharing
- all ABA and COBA members will join the Australian Financial Crimes Exchange (AFCX) to be ready to use their scams intel to fight scams from mid-2024, and the Fraud Reporting Exchange over 2024-25 to help customers recover money faster;
- this means scams intelligence can be shared at speed between banks, helping banks prevent more scams and recover funds for customers faster.
Respond
Banks will limit payments to high-risk channels to protect customers
- banks will make these risk-based decisions when they identify high risk getaway vehicles being used by scammers to move money out of Australia;
- expect more banks to start limiting payments to high-risk channels such as some crypto currency platforms to protect customers from possible theft;
- once stolen funds are in a getaway vehicle to a high risk crypto currency platform it is virtually impossible to recover them.
Banks will implement an Anti-Scams Strategy
- all banks will implement an anti-scams strategy to enhance oversight of the bank’s scams detection and response.
Westpac supports Scam-Safe Accord
Westpac CEO and ABA chair Peter King said falling victim to a scam could have devastating and life-changing consequences.
“Today we are sending a clear message to these criminals that they have no business being in Australia and we are doing more to stop them from ripping off our customers,” King said.
“This will be one of the biggest technical uplifts for Australian banking in recent times and means Australians with bank accounts will be significantly more protected from scams.”
Westpac has already implemented or started rolling out protections for all six initiatives with additional measures coming in the following months.
Westpac said this would include becoming the first Australian bank to introduce real-time payment prompts, presenting customers with a series of dynamic questions for payments detected to be a higher scam risk, and enhanced account name checking capabilities through Westpac Verify.
“Westpac has continued to invest in uplifting its scam detection and prevention measures which has stopped customers losing $235 million in the last year and sees us now detecting over 60% per cent of all cases,” King said.
Bendigo and Adelaide Bank highlights collaboration
Bendigo Bank CEO and managing director and ABA deputy chair Marnie Baker (pictured above far right) said collaboration was important to reduce instances of scams and fraud.
“Cyber fraud is a complex, evolving, and ongoing challenge that we all must work together to combat,” Baker said. “Bendigo Bank continues to work with our peers in the financial sector, government, regulators, law enforcement agencies and others to stamp out this organised criminal activity.”
“Bendigo Bank has been proud to support the development of the Accord and its seven priority areas and looks forward to working with the ABA and other financial institutions to help further protect our 2.4 million customers.”
Bendigo and Adelaide Bank blocked $38.6 million in fraudulent transactions in FY23.
