Bank Scams Are Taking a Major Toll on The Economy of Singapore & Malaysia
It is not difficult to overlook the rise in financial frauds over the past few years for companies and customers who conduct banking in Malaysian and Singaporean marketplaces.
Since 2020, when stay-at-home orders caused by the pandemic saw a wide swath of cybercriminals and fraud perpetrators emerge from the woodwork and carry out phishing scams, malware, and ransomware attacks, to name a few, the rise in financial data breaches has been very noticeable throughout the Asia Pacific (APAC) region.
According to Arthur Ng, the Country Manager for Malaysia of Check Point Software Technologies, new data from Check Point Research indicates an increase in scams that target the banking industry globally, with banks “attacked on average 700 times every week during the past year, a 53 percent year-over-year increase in comparison to the previous year.”
All firms and industries are subject to the threat of cyber risk, but some are more vulnerable than others due to the fact that they are targeted much more frequently. This puts those areas at much higher risk because more frequent attacks indicate a much higher possibility of successful breaches.
The financial and banking sector, out of all other sectors, “stands out” due to its wide attack surface for fraud, not to mention the attraction for criminals due to the potential financial rewards of a successful fraud or security breach in this highly regulated area.
Scammers are Becoming More Inventive Oriented And Resourceful in Tricking Unwary Customers
Malicious actors are becoming more inventive oriented and resourceful in tricking unwary customers or employees of businesses in the larger Southeast Asian economies like Singapore and Malaysia.
One example is email phishing campaigns that cleverly employ social engineering techniques to impersonate legitimate users and demand what might seem like genuine requests for money transfers and requests for sensitive personal information.
In addition to Malaysians, Singaporeans are also victims of the Macau Scam, which involves con artists posing as bank employees and tricking them into withdrawing their whole life savings. In an effort to counteract the growing risk, the Monetary Authority of Singapore and the Association of Banks in Singapore have announced further initiatives to further protect clients against digital banking scams.
For example, setting the default transaction limit for online funds transfers to S$5,000 or lower, requiring additional customer confirmations to process significant changes to customer accounts and other high-risk transactions identified through fraud surveillance; offering an emergency self-service “kill switch” for customers to suspend their accounts immediately if they suspect their bank accounts have been compromised; and facilitating rapid account freezing, among others.
Bank customers are strongly advised to use mobile banking apps rather than online browsers to reduce the danger of accessing fraudulent websites. Banks will keep improving the functionality of their banking apps while helping clients make the switch to more frequent usage. It may take longer for clients to complete some online banking transactions as a result of the increased anti-scam measures implemented by banks, but this is required to increase the security and protection of their funds.
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Proposed framework being developed by the government
A proposed framework being developed by the government aims to achieve equitable loss sharing between consumers and financial institutions. Before moving forward with the idea, this will be placed up for public discussion. A move deemed to be fairly advanced.
Singapore was rocked by frauds targeting OCBC banking accounts in late 2021 and early 2022, with a dramatic increase in “smishing” scams—phishing attempts made by SMS. Cybercriminals deceive their victims by sending SMSs that appear to be from the bank and claim there are problems with their credit cards or bank accounts.
A link to a bogus website posing as a legitimate bank website would be included in the SMS messages, asking for banking information and passwords. At least 790 people were tricked into parting with money, resulting in losses of at least SGD$ 13.7 million. And this was despite OCBC’s employment of a Fraud Surveillance System (FSS), the first bank in Singapore to use AI and machine learning to combat financial fraud, which last year was successful in recovering SG$8 million (US$5.95 million) in fraudulent transactions.
In the meantime, Maybank, a significant Malaysian bank, has warned its clients about the new “SMSSpy” operation that specifically targets Android users in Malaysia. Any SMS sent to a mobile device can be viewed by the SMSSpy spyware, including those that are used to access TAC numbers for online banking transactions.
These SMS-based cross-Causeway efforts highlight how mobile devices are a significant focus of frauds in the area, where smartphones account for the majority of internet banking access. And as can be seen, there are a variety of mobile device assaults that can occur at all levels, including network attacks, malicious apps, and exploitation of weaknesses in the operating system and mobile hardware.
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What Does the ‘Check Point Threat Intelligence Report’ Detect?
The Check Point Threat Intelligence Report notes that an enterprise in the region has an extremely broad threat surface, with attacks occurring on average 1,286 times per week in Malaysia over the past six months.
The study found that emails were used to deliver 87 percent of malicious files in Malaysia in the past 30 days, highlighting the prevalence of intrusive email scams as well as other common banking threats like disruptive Denial-of-Service (DDoS) attacks, which can swarm a system with sensitive financial data and are frequently the basis for a ransomware attack, as well as sophisticated attacks planned by nation-state sponsored operators.
A nation like Malaysia needs to rebuild its legal system in order to control such a sizable threat surface, according to Check Point’s Malaysia Country Manager. “The protection of consumers is a shared responsibility by the government, telecom companies, and banks. But for these plans to materialize, a lot of time, preparation, and funding is required,” Ng said. “A multi-layered, calibrated management system will be necessary for a long-term plan. The good news is that the government and banks have already begun to act to help with the problem.
By encrypting transactions using multi-factor authentication (MFA) and other levels of protection, Malaysian online banking is already reducing exposure to scammers. As a result, they will be less dependent on informing clients via less secure platforms like SMSes. Instead of disclosing private information to a third-party service provider, such as SMS systems, financial institutions should strengthen their own perimeter security.
Banks in the area must use additional security solutions that can be accessed through secured transaction gateways called application programming interfaces (APIs), which can help to further optimize security at the endpoints, sealing off both users’ devices and system software, in order to secure their networks and internal systems and prevent future attacks.
They must act quickly to implement the available security measures since, in this region of the world, both transaction data and users’ sensitive personal information are being exposed at an exponential rate.
- Author: Aaron Raj https://techwireasia.com/2022/06/banking-scams-are-wreaking-havoc-in-singapore-and-malaysia-why/
- Author: Editor https://www.businesstoday.com.my/2022/06/06/fraught-by-digital-banking-scams-singapore-is-considering-loss-sharing-between-customer-and-bank/
- Author: Ellen Yu https://www.zdnet.com/article/singapore-mandates-kill-switch-for-banks-as-safeguard-against-online-scams/
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