The Monetary Authority of Singapore (MAS) announced, on Feb 4, that it is working with the banking industry to evaluate longer-term measures to bolster the security of digital banking in the coming months.
In addition, MAS said that it will develop a framework for equitable sharing of losses arising from scams.
Under the framework, all parties have to be vigilant and to be responsible in taking their own precautions against scams.
To this end, financial institutions have the responsibility to protect their customers, including through robust controls to safeguard their customers’ accounts. These institutions are also responsible for coming up with effective measures to detect and respond to suspicious transactions.
Meanwhile, customers themselves are also responsible for taking the necessary precautions, especially by not giving away their personal or banking credentials to anyone. Customers are also warned by MAS to not click on links in text messages or emails that are claimed to be sent by a bank; they should transact only through their banks’ official website or application.
This means that the proportion of losses that each party bears will depend on whether and how the party has fallen short of its responsibilities.
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“MAS expects financial institutions to treat their customers fairly and bear an appropriate proportion of losses arising from scams. At the same time, care must be taken to ensure that compensation paid to customers does not weaken their incentive for all to be vigilant,” reads the statement released by the central bank on Feb 4.
“OCBC’s recent goodwill payouts to fully cover customer losses were a one-off gesture by the bank in the circumstances, which included the bank’s consideration of how it had not met its own expectations of customer service and response. They do not set a general precedent for future cases,” it adds.
According to the central bank, the Payments Council has been working on a framework since July 2021.
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The council comprises the major providers and user groups of payment services in Singapore and is chaired by the MAS.
The framework aims to provide clarity on how losses arising from scams are to be shared among consumers and financial institutions.
Photo: Bloomberg
