Malaysian banks leverage advanced technologies to fortify defences against fraud

KUALA LUMPUR: Malaysian banks are leveraging advanced technologies to combat fraud and safeguard accounts, reinforcing customer confidence in a rapidly changing financial landscape.

Recognising the importance of a collective effort to combat financial crimes, the National Task Force to Combat Fraud (NTF) was set up to drive and coordinate holistic efforts by banks in fighting scams.

United in their mission against financial scams, member banks from The Association of Banks in Malaysia (ABM) and the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) participate in regular discourse on anti-scam measures in the country, together with partners such as Malaysian Communications and Multimedia Commission, CyberSecurity Malaysia, Royal Malaysian Police and other relevant agencies.

NTF chairman Syed Ahmad Taufik Albar said, “We recognise that the fight against scams requires a collaborative approach. For instance, the recently launched National Fraud Portal has proven essential to combatting fraud, enabling real-time knowledge sharing between banks so that fraudulent activities are swiftly identified, and the chances of recovering customers’ funds in mule accounts are higher.”

Taufik, who is also Maybank’s group CEO of community financial services, told SunBiz, “Equally important is prioritising educating customers on security best practices by empowering them to recognise and avoid potential threats.

“With the assistance of ABM and AIBIM, the anti-scam efforts of member banks were consolidated and amplified through the #JanganKenaScam initiative, a concerted national scam awareness campaign led by ABM and AIBIM. This collaboration has empowered banks to deliver a consistent anti-scam message, amplifying its impact in the public sphere.”

Taufik said banks are playing a more proactive role by empowering customers to respond swiftly to potential threats, providing real-time alerts through SMS, email and mobile app notifications.

Since July 2023, member banks of ABM and AIBIM have implemented five key anti-fraud measures, including replacing SMS one-time passwords with more secure authentication, tightening fraud detection rules, introducing a cooling-off period for first-time online banking registrations, limiting accounts to a single registered device, and launching a 24/7 dedicated fraud channel.

More recently, some banks have commenced implementing malware-shielding technology on their mobile banking applications in further efforts to protect customers from malware scams.

When asked about steps financial institutions are taking to protect customer data, Taufik said protecting customer data is a top priority for banks, which employ stringent measures to prevent misuse or unauthorised access.

“Adhering to the principle of least privilege, only designated employees access necessary information based on their roles, with senior management approval required for sensitive data. Comprehensive training and awareness programmes further ensure employees handle customer information with care, reinforcing the commitment to confidentiality and security.”
Taufik said scammers are becoming increasingly sophisticated in the modern age, posing challenges for banks, law enforcement, telecoms, e-commerce platforms, courier services and other service providers.

Fraudsters build trust with their victims by adapting their tone, language, and tactics to suit different demographics. Using psychological tricks that exploit emotions such as fear and anxiety, they often manipulate individuals into acting impulsively, leaving countless unsuspecting victims at risk.

Taufik said, “This is where banks play a critical role in empowering customers to recognise and avoid scams, as they are often the first line of defence against financial fraud. By educating the public on the latest scam tactics and providing clear, accessible guidance on safe banking practices, banks help protect their customers’ finances and reinforce trust and confidence in digital banking.

“In today’s rapidly evolving scam landscape, proactive education from banks is essential to equip customers with the knowledge and tools needed to stay vigilant and secure in their financial transactions.”

Banks are using artificial intelligence-powered fraud detection and eKYC technology to swiftly identify suspicious activities and securely verify customers, ensuring safe and convenient digital banking, Taufik said.

While added security measures may introduce minor inconveniences, he added, they are essential to safeguarding customers’ financial interests.

Taufik said with support from Bank Negara Malaysia, banks remain committed to collaborating with enforcement agencies and partners to enhance security and counter evolving fraud tactics.