Escudero at BSP: put in place policies to address the “weaknesses” of online banking systems

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MANILA, Philippines – Governor of Sorsogon and senatorial candidate Francis “Chiz” Escudero on Friday called on the Bangko Sentral ng Pilipinas (BSP) to put in place policies that will address the “weakness” of digital banking systems as he spoke of his concerns about what he said was increasing incidents of online fraud affecting Philippine banks.

In a statement, Escudero, who chaired the Senate Banking, Financial Institutions and Currency Committee, said breach of security in banks is a serious problem that requires the intervention of the BSP.

“As institutions steeped in the public trust, banks have a responsibility to protect the data and resources of their customers. But the breach of bank security systems, which we have seen repeatedly for several years now, shows that the digital infrastructure necessary to do so is sorely lacking, ”Escudero said.

“PASB must put in place policies that will address this weakness in banking systems if it is to promote financial inclusion through digital banking and digital payments. How can you expect people to try online banking and digital payments when they are unsure of the banks’ ability to protect them? ” he added.

He said the BSP should go beyond occasional fraud investigations and establish policies that will ensure that all commercial, rural, savings and digital banks have the infrastructure to protect their customers.

Nearly 700 clients of the local bank giant BDO Unibank have recently been affected by ‘sophisticated’ Single Code (OTP) fraud and have experienced unauthorized transactions. Their refunds are being processed.

the BSP, for its part, has already formed a working group to investigate the matter.

Escudero also noted past incidents where Philippine banks were either victims of a “sophisticated cyber attack” or suffered technical issues that affected their clients’ accounts.

“The way we do our banking has evolved, and the challenges have evolved as well. The BSP can and should consider long-term interventions, including incentives and penalties, that will push banks to strengthen their security and information systems. This should be a priority as we move to digital platforms, ”Escudero continued.

The BSP, the former senator said, is mandated by law to set standards for bank operations based on what it deems to be sound practices and necessary interventions.

“Now would be a good time for the BSP to consider how to make the bank work in a digitally driven age that comes with as many risks as there are benefits,” he added.


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