New platform to freeze scam payments in real time
The Australian Banking Association (ABA) has announced the launch of a new platform that will help banks act quickly to freeze money being sent to scammers by allowing the reporting of bank-to-bank scam payments in close to real time. The platform, called the Fraud Reporting Exchange (FRX), will facilitate the quick reporting of fraudulent payments as they are transferred to another bank. The move will boost “the likelihood that funds can be frozen and returned to customers”, the ABA said in a statement.
The new platform will give banks the ability to halt multiple fraudulent transactions taking place as part of the same scam, share intelligence to assist with loss-prevention efforts and offer a streamlined return of funds where possible. “Given every minute can be crucial in disrupting scams, the launch of the FRX is a major development,” the ABA’s chief executive, Anna Bligh, said. “It means more and more scammers are going to hit a brick wall and adds to the arsenal of anti-scam initiatives under way.”
So far 17 banks, including the big four, have signed up to the platform, with a trial showing the time to resolve scam cases dropped by more than half. Bligh said it is imperative that consumers report a fraudulent or scam payment to their bank as soon as possible. “The sooner that banks know about a fraud, the sooner they can take swift action to try to halt the payment before it gets to the scammers.”
Australians lose over $3bn to scams in 2022
The launch of the FRX comes amid growing concerns about banking fraud in Australia. According to recent analysis from RFI Global, a reputable insights provider, Australians lost over $3bn to scams in 2022 alone. Older Australians appear to be especially at risk, with about 63% having encountered communications with scammers who are feigning affiliations with official entities such as mygov.com.au and the ATO.
While hacking and identity theft top the list of concerns for most Australians, fears also extend to unauthorised access to card information and the pilfering of essential security and login credentials. RFI’s study reveals that one in five Australians have been victims of banking fraud. What’s more, a recent OAIC survey has also revealed that nearly half of the Australian population are already victims of data breaches – which further complicates the issue.
Banks enjoy high trust but face challenges
Despite the alarming statistics, banks continue to enjoy significant trust capital from their customers. RFI’s research draws parallels with the telecommunications sector, whose trustworthiness plummeted after the widely reported data breaches in 2022. However, maintaining this trust is a delicate operation. While a significant majority of customers endorse their bank’s security infrastructure and rely on their banks for protection, there’s a vocal demand for better fraud prevention education.
The ascendance of digital banking is undisputed. The convenience of mobile and online banking has made it the preferred mode of transaction for 75% of Australians. However, the human touch remains critical, especially in distressing times like after a fraud. Notably, customers continue to value the role of call centres for support during such adversities.
What customers expect: security and reassurance
RFI’s findings indicate a clear customer mandate: while they demand rigorous security, they also expect a seamless banking journey. The pinnacle of customer assurance in this space is a categorical pledge of monetary recovery post-fraud. Thus, while banks have the latitude to fortify their security frameworks, such augmentations need to be harmonised with a user-centric approach.
The government has also stepped up its efforts to combat scams by announcing $58m on Monday to fund a national anti-scams centre, which will report scams and distribute information to banks, law enforcement and vulnerable communities. The centre will also work with international partners to track down and prosecute scammers.
