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Bank Negara Malaysia (BNM) has introduced the National Fraud Portal (NFP) as a new initiative to strengthen Malaysia’s defense against financial fraud. The NFP will utilize artificial intelligence (AI) to conduct predictive analysis for detecting suspicious transactions and identifying potential fraud at an early stage. BNM Governor Datuk Seri Abdul Rasheed Ghaffour described the NFP’s modular design as a key feature, allowing for continuous improvements to the system’s basic infrastructure. Although current data shows that financial fraud losses are relatively small compared to the volume of domestic financial transactions, Abdul Rasheed emphasized that Malaysia cannot afford to be complacent.
The Fight Against Financial Fraud
During the launch, Abdul Rasheed pointed out that cybercriminals are constantly updating their tactics to take advantage of technological advancements. He acknowledged the long and complex journey ahead in combating financial fraud. He emphasized that Malaysia must continue to adopt cutting-edge technology to stay ahead of evolving scam tactics while highlighting that collaboration among various stakeholders is crucial in creating a unified approach for the entire nation.
Expanding Participation and Industry Collaboration
The NFP has received positive feedback with 16 financial institutions joining the initiative. BNM expects more institutions to join, which will further strengthen the digital ecosystem needed to effectively combat fraud. Abdul Rasheed welcomed new participants and expressed optimism about the portal’s growing network.
Another important aspect of the fight against financial fraud is the handling of mule accounts, which are often used to launder stolen funds. A new industry protocol on mule handling has been introduced to help financial institutions better identify and deal with these accounts, thereby reducing fraud risks.
Empowering Consumers as the First Line of Defense
Abdul Rasheed stressed the importance of empowering consumers in the fight against fraud. He emphasized that the public is the first line of defense and must be educated on how to spot and avoid financial fraud. It is also crucial for financial institutions to raise awareness and address mule accounts to prevent individuals from becoming unwitting participants in fraudulent activities.
To enhance fraud detection, the NFP will soon be upgraded to allow consumers to report suspicious transactions directly from their banking apps, making it easier and quicker to detect fraud.
Strengthening the National Scam Response Centre (NSRC)
The NFP will enhance the capabilities of the National Scam Response Centre (NSRC), established in 2022. By automating the NSRC’s ability to track stolen funds across multiple banks and payment platforms, the NFP will help prevent fraudulent funds from leaving the financial system. The NSRC’s 997 hotline and prompt responses from financial institutions will also increase the likelihood of recovering stolen funds. As of June 2024, over 12,000 investigation cases have been initiated, and RM72 million in funds have been frozen through police enforcement orders.
Protecting Financial Consumers
The Central Bank of Malaysia (BNM) will begin enforcing a revised Policy on Fair Treatment of Financial Consumers in October 2024. This policy aims to ensure fair treatment for victims of unauthorized electronic banking transactions. Key principles of the policy include transparency on the responsibilities of financial institutions and consumers, a thorough and timely investigation process for fraud cases, and measures to mitigate the financial burden of victims if investigations are delayed.
The revised policy is expected to offer greater protection for financial consumers while also holding financial institutions accountable for their role in preventing and addressing fraud. The launch of the National Fraud Portal (NFP) represents a significant advancement in Malaysia’s efforts to combat financial fraud. By utilizing AI-powered predictive analysis, enhancing public-private collaboration, and empowering consumers, the NFP will play a crucial role in safeguarding the integrity of the national financial system. With continuous improvements planned and a strong focus on consumer protection, Malaysia is strengthening its ability to combat evolving threats in the digital financial landscape.
