Banks to phase out SMS one-time passwords to reduce scams

The banking industry will stop using SMS One-Time Passwords (OTP) to verify financial transactions to stop consumers from being targeted by financial scammers.

Bank Negara Malaysia (BNM) Governor Nor Shamsiah Mohd Yunos (above) said banks will move to a more secure form of authentication as part of the industry’s measures to combat financial scams.

“Together with the financial industry, BNM will continue to ensure that banking and payment channels remain secure and equipped with the latest security controls,” she said when launching the BNM Museum and Art Gallery virtual exhibition on financial crimes.

This comes amid growing reports of consumers losing tens of thousands of ringgit in financial scams, where they are duped into either providing personal information or access to their mobile devices or bank accounts to cyber criminals.

They may do so after unwittingly clicking on a link or calling a telephone number sent to them in an SMS disguised to appear to be from a bank.

Besides migrating away from the OTP system, Shamsiah said other measures to be taken by the industry are:

• Tightening detecting rules and triggers to block scam-related transactions,

• A cooling-off period for first-time enrolment of online banking services and secure devices,

• Restricting authentication to only one mobile or secure device per customer, and

• Setting up a dedicated scam hotline at every bank.

Consumers should protect themselves, too

However, Nor Shamsiah added that customers, too, must ensure they do not easily fall prey to scammers.

“As consumers, each of us is responsible for protecting ourselves from the threat of scams.

“Our hope is that the Financial Crime Exhibition can help in this effort to educate members of the public in protecting themselves against scams,” she said.

The interactive virtual exhibition shows different types of financial crimes and allows the public to simulate scam scenarios, and learn safeguards against them.

Meanwhile, Inspector-General of Police Acryl Sani Abdullah Sani in his speech said cyber criminals take advantage of those who have poor awareness of possible scams.

“Therefore, the Royal Malaysian Police sees the need to disseminate as much knowledge as possible to the community so they can avoid becoming victims of such criminal activities,” he said.

This includes advising the public not to download files or applications from unknown sources onto their mobile devices and informing their banks of suspicious transactions involving their bank accounts.

They can also contact the commercial crime investigation department’s scam response centre at 03-2610 1559/1599 or Bank Negara Malaysia’s hotline at 1-300-88-5465.

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