BSP wants more stable banks vs emerging risks

THE Bangko Sentral ng Pilipinas (BSP) vowed to intensify monitoring and surveillance of the financial industry amid various global and local risks.

In a recent speaking engagement, BSP Governor Benjamin E. Diokno said the local banking system has been one of the “pillars” of the economy during the Covid-19 economic disruption, noting that it remained “stable and resilient” amid external shocks.

In trying to keep the country’s banks stable, the Central Bank governor said they will aim to ensure these institutions are “responsive to emerging risks” amid changing financial conditions.

“The BSP will intensify its monitoring and surveillance over its supervised institutions to ensure that they remain responsive to emerging risks and to promote the stability, resilience and inclusivity of the banking system, particularly through the pursuit of enhanced digitalization,” Diokno said.

Cyber fraud

ALSO, as part of their digitalization call, Diokno issued a separate statement on Tuesday, calling on banks to adopt “robust control measures” against cyber fraud and attacks on retail electronic payments and financial services (EPFS).

BSP-supervised financial institutions (BSFIs) should regularly conduct risk assessments of their product features, business rules, as well as application controls and enforce appropriate enhancements and mitigation measures, the governor said, quoting BSP’s recently issued memorandum on cyber-attack measures.

Banks were advised to remove clickable links in communications sent to customers via electronic mail (email) and short message service (SMS) or text messages and to send notifications through registered mobile numbers or email addresses when requesting changes to customer information.

“After thorough risk analysis, BSFIs should implement mandatory notifications for fund transfers exceeding a predefined amount, delays in activating new soft tokens or new device registrations and a cooling-off period for key account changes,” the Central Bank said.

Financial institutions were also asked to personalize SMS messages and emails for banking services; restrict bank officers or representatives from obtaining critical information such as customer passwords, one-time passwords (OTP), or personal information numbers (PINs); create dedicated customer assistance teams for fraud cases; conduct education campaigns against online scams; and adopt strong fraud surveillance mechanisms.

“The BSP, likewise, encourages collaboration among BSFIs and the use of information sharing platforms such as the Bankers Association of the Philippines’s cyber incident database, to expedite fraud investigations and recovery of funds and proactively address emerging fraud schemes,” the Central Bank said.

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