BOJ to roll out cybersecurity framework for financial sector
BANK fraud is on the decline, at least up to November 2022 when data on fraud activities were last published by the Bank of Jamaica (BOJ).
The success stems from a mix of combative measures adopted by financial institutions, particularly over the past two years, including the introduction of EMV chip and pin technology, the introduction of multi-step account log in processes, and the expanded use of push notification features such as transaction alerts via email or text message.
Last year alone bank fraud reportedly dipped 11 per cent over the comparative period ending November 2021, the BOJ said. But the central bank wants to further reduce fraud cases over the upcoming financial year and has already begun talks with players across the financial sector, particularly the banks, on how it will execute on that target.
The central bank’s plan includes the establishment of a cybersecurity framework that will guide how financial institutions operate moving forward, but the details around what the framework will entail are still in the developing stage.
“There are several things we are doing, together with financial institutions, to ensure they have a robust framework to manage cyber threats. A couple of initiatives that we are looking to launch in the near future include giving guidelines to financial institutions on how to strengthen their cybersecurity framework,” BOJ’s Deputy Governor Dr Jide Lewis said.
“These will be done through a consultative process — as we do with all our guidelines — and then once we get through that we will move into a standard for best practices which, of course, has binding obligations on the licensees,” he continued. The BOJ has supervisory and regulatory oversight of commercial banks and other licensed deposit-taking institutions.
Representatives from the BOJ met with the boards of all banking institutions over the past three months and the discussions largely concerned corporate governance as well as groundwork by the BOJ to help the banks understand that the weight of the responsibility is on them to ensure a robust financial environment.
The talks between the BOJ and the financial institutions come at time when consumer spending is expected to heighten in anticipation for the Yuletide season. Much of consumer spending is expected to be carried out using credit and debit cards, the segment that accounts for 81.4 per cent or $0.8 billion of fraud losses.
Additionally, Internet purchases — the segment with the third-highest fraud exposure among reporting institutions — typically trend upwards over the months of November and December.
“There is a suite of things that we intend to engage with the banks on over the ensuing months, to ensure that we don’t allow these criminals to take advantage of our financial systems and our financial institutions. It’s a matter that we take very seriously,” Lewis said.
Over the years the banks have worked to develop their own structure to educate consumers on safeguarding their money from fraudsters over the Yuletide season.
National Commercial Bank (NCB) have been pushing their Fighting Fraud Fridays campaign to keep consumers current on the types of fraud that exist, as well as the tactics used by fraudsters to lure consumers.
Just this week, Scotiabank began urging consumers to become the “first line of defence” in combating growing incidents of card fraud and cybercrime in Jamaica, amid data from the BOJ that Internet banking fraud has jumped by approximately 33 per cent since 2018.
Hughton Leslie, Scotia’s senior manager of digital banking channels, in a press release said, especially as the festive season approaches it is crucial that customers are able to identify red flags and be ready to contact their branch or customer care personnel to report any suspected fraud attempts.
Leslie also warned customers to be wary of increases in phishing — a broad term for scams initiated electronically; vishing — which involves phone or video-based targeting; and smishing — fraud perpetrated through SMS text messaging. Other fraud schemes include promises of free or discounted luxury items, investment schemes, charity and romance scams, and employment promises.
“Scotiabank is redoubling its efforts to prevent customers from falling victim to cybercrime schemes perpetrated by technically adept swindlers, some of whom operate across international borders. We are therefore using the opportunity to strongly urge customer education and the proactive safeguarding of financial information and other personal data,” he highlighted.