Financial Crime World

Banking Sector Fraud Cases in Malaysia: Robust Measures Safeguard Customers’ Financial Wellbeing

Introduction

Kuala Lumpur, January 24, 2024 - The banking industry in Malaysia has made significant strides in preventing fraudulent transactions worth RM351 million from January to October 2023. This achievement demonstrates the sector’s commitment to robust fraud prevention measures and its vigilance against financial scams.

Prevention of Fraudulent Transactions

Thirteen member banks under the Association of Banks in Malaysia (ABM) and Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) detected and prevented fraudulent transactions through various schemes such as:

  • E-commerce scams
  • Job application scams
  • Investment scams
  • Impersonation scams
  • Phishing scams

The detection and prevention actions by banks saved customers from being defrauded of their funds.

National Scam Awareness Campaign

The banking industry launched the National Scam Awareness campaign in October 2022, implementing five key measures to combat financial scams:

  • Migrating from SMS one-time passwords (OTP) to a more secure authentication method
  • Tightening fraud detection rules
  • Introducing a verification and cooling-off period for first-time enrolment of e-banking services or secure devices

Awareness and Education

Customers have been informed about various types of scams and corresponding scam mitigation actions through messages from banks on:

  • Social media platforms
  • Mass media
  • Bank touchpoints

The industry’s efforts to create an environment that is more alert to and able to avoid scams reflect its collective dedication to creating a secure banking environment where customers can trust the safety of their financial transactions.

Quotes from Industry Leaders

  • “The united efforts in creating an environment that is more alert to, and able to avoid scams by ABM and AIBIM reflect the associations’ and member banks’ collective dedication to creating a secure banking environment, where customers can have trust in the safety of their financial transactions.” - Dato’ Khairussaleh Ramli, ABM Chairman
  • “Through our collective initiatives, customers have also proven to be positively impacted by the banks’ efforts through enhanced security measures in financial fraud prevention - ultimately helping them save significant amounts from being lost to scammers.” - Dato’ Mohd Muazzam Mohamed, AIBIM President

Survey Highlights

A recent survey conducted by Rakuten Insights highlights that:

  • 63% of Malaysians have links to a scam either directly or indirectly
  • 17% have been direct victims of banking or financial scams
  • 76% of the scam cases they are aware of were due to victims revealing their banking credentials by mistake, allowing scammers to gain access to their finances

Conclusion

The banking industry will continue to work closely with law enforcement agencies and financial regulators to spread awareness about the importance of remaining vigilant and exercising caution while conducting financial transactions. Individuals are urged to report any suspicious activities promptly to their respective banks or alert the National Scam Response Centre (NSRC) by calling the NSRC hotline at 997.