Banking industry holds ‘huge role’ in fighting scams 

During a Customer Owned Banking Association meeting, the Assistant Treasurer and Minister for Financial Services Stephen Jones emphasised the pivotal role of the banking industry in combating scams, recognising the escalating sophistication of these fraudulent activities.

Australians incurred losses of $3 billion to scams the previous year, highlighting the urgency of addressing this issue.

“Technology is becoming more sophisticated and so too are the people who want to do harm in our economy,” Mr Jones said.

“It’s possible that some scam operations that are now targeting Australians could be more sophisticated and better resourced than some Australian banks.”

This isn’t a reflection on any specific bank; rather, it’s crucial to acknowledge the daunting challenge we face – confronting highly sophisticated, organised crime, he added.

The minister outlined two critical areas for focus.

Firstly, the implementation of an industry code for banks incorporating obligations such as having anti-scam business plans, enforcing stricter authentication for account applicants and customers, implementing methods to identify high-risk transactions, and establishing procedures for swift reporting and notification of suspicious transactions or compromised accounts.

Additionally, it addresses the issue of “mule accounts” that illicitly funnel stolen money, a predicament that transcends various industries and government portfolios.

“Sometimes, the account holder doesn’t even know their account is being used as a mule. Other times, they’ve sold their account to a scammer,” Mr Jones said.

“Either way, it’s a danger to the system.

“It’s an issue that crosses multiple industries and multiple government portfolios, but it’s something we have to address and something we in particular need to help customer‑owned banks to address.”

Acknowledging the substantial responsibility of the banking industry in combating scams, Mr Jones highlighted proactive measures taken by institutions such as Qudos, investing in customer awareness and digital ID technology and Orange Credit Union conducting anti-scams forums.

“And there is Beyond Bank, holding similar sessions, with bank staff out in the world, talking face to face with local customers,” Mr Jones said.

Noting the Australian populace’s concerns about scams, he emphasised the unique position of customer-owned banks in providing essential support and protection mechanisms.

He added both the government and the banks have a lot more work to do and most of it needs to be done together.

“In the budget, we announced an $86.5 million package to take on the scammers and protect Australians,” Mr Jones said.

“At the heart of it was $58 million to establish the National Anti‑Scam Centre, to bring together the best expertise and resources across government agencies, law enforcement and the private sector.”

The government is preparing to engage in consultations regarding stringent new obligations for banks, telecommunication companies and social media platforms in combating scams.

Additionally, acknowledging the financial constraints faced by COBAs (Customer Owned Banking Association) in investing in high-end IT systems and scam prevention software, the minister expressed understanding and willingness to provide support as needed.

[Related: Australians are becoming more scam aware: CBA]

Kate Aubrey is the senior content producer of Momentum Media's mortgages titles: The Adviser and Mortgage Business.

Prior to joining Momentum Media, Kate covered regional and breaking news for ABC Radio for more than three years.

She has a Master of Arts in Journalism from the University of Melbourne and a Bachelor of International Business and Business Management from Griffith University.

Email Kate at: This email address is being protected from spambots. You need JavaScript enabled to view it.