Additional verification procedures will be necessary to transfer locked-up funds when banks roll out the optional tool next year
Hongkongers will be able to lock all or part of their bank account balances in a “Money Safe” starting next year in a move that aims to provide an extra measure of protection against fraud.
Additional verification procedures will be necessary to transfer funds that have been locked up using the optional feature. For example, a bank might require verification in person at a branch, creating a touch point between staff and customers as a safety measure, according to the Hong Kong Monetary Authority (HKMA).
“We have always aimed to empower customers to have additional options to defend themselves,” Arthur Yuen Kwok-hang, HKMA’s deputy CEO, said in a media briefing on Tuesday.
The effort comes as losses from scam and fraud cases surged 38.6 per cent to HK$5.82 billion (US$748 million) in the first eight months of this year, compared with the same period last year, according to police data. The number of deception cases rose 8 per cent year on year to 32,120 in the first nine months.
Twenty retail banks plus the eight digital banks will launch Money Safe in phases or trials, with a goal of full implementation by the end of next year, HKMA said. Banks will decide on the implementation details based on their own operational arrangements.
Sign up will be voluntary, and customers will be able to protect money in their checking and savings accounts, as well as time-deposit accounts in Hong Kong dollars and foreign currencies. The protected amounts will continue to enjoy the same interest and benefits that the accounts provide.
Customers will be able to cancel the feature at any time with “good reasons” verified by bank staff, said Yuen. There will be a three-day cooling-off period when a customer activates, cancels, or adjusts the amount under Money Safe.
In addition, banks are working to allow customers to turn off access to online banking if they do not plan to use it. Set to take effect in the first half of next year, the move aims to stymie fraudsters who manipulate customers or steal account information to gain access to online banking. A customer who chose this option would have to go to a branch to re-enable access.
Money Safe was first announced in September, followed by an industry consultation. It is part of a series of measures that the city’s de facto central bank introduced to fight against fraud and scams, including a proposal to share losses between victims and banks and widening the scope of fraud alerts for banking activities.
From this Sunday, 22 banks’ automatic teller machines will issue fraud alerts when transfers are being made to accounts marked as high-risk in a police database. This expands on existing alerts for transfers initiated using the Faster Payment System, through online banking platforms and at physical branches.
Meanwhile, by the end of this year, authentication of online credit-card transactions will be conducted solely via banks’ mobile banking applications, instead of less secure one-time SMS passwords. The move counters the rise of malware capable of harvesting passwords sent via SMS.
The HKMA said it is working with the financial industry to research more anti-fraud measures, including creating barriers to certain high-risk digital banking actions, such as adding new payees or increasing transfer limits.