Bankers unite in a $100m alliance to take on and defeat scammers

Australia’s banking sector will jointly invest $100m to head off the financial crimes of scammers in an operation which will begin immediately and progressively scale up over two years.

Australian Banking Association chief executive Anna Bligh. Picture: Jane Dempster

Australia’s banks have formed an alliance to crush scams, announcing an accord on Friday to share technology, introduce industry-wide changes to payments, and invest $100m to stop fast flowing financial crime.

In a deal sealed on Friday the peak bodies for Australia’s big banks and small, mutual, or customer-owned banks all agreed to comprehensive new rules across the industry in a bid to stamp out scams.

The accord will see banks share confirmation of payee technology between financial institutions, allowing people to see who they are sending money to before making a transaction. The Australian Banking Association and Customer Owned Banking Association said the design of the new system, which will be backed by a $100m investment from the banking sector, will begin immediately with a plan to implement the new technology over the coming two years.

ABA chief executive Anna Bligh said the accord between the banks marked a “new offensive in the war on scams”.

“It reflects the banking sector’s unwavering commitment to safeguarding every Australian,” Ms Bligh said.

“It outlines the actions every bank will take to protect Australian consumers and small businesses and to harden the system against scams.”

Under the terms of the deal all banks will be required to use at least one biometric check for customers seeking to open accounts.

Banks will also introduce delays on transactions to accounts customers have not previously dealt with and introduce warnings. The deal will also see limits imposed on transactions to “high risk channels”, including cryptocurrency exchanges.

Customer Owned Banking Association chief executive Mike Lawrence. Picture: Jane Dempster

The Albanese government welcomed the deal between the banks, with assistant treasurer Stephen Jones noting “we are glad to see the banking industry taking their own proactive steps”.

“Because of the work being done across government and industry, Australians are more aware and more likely to report scam activity,” he said. “Our new National Anti-Scams Centre is disrupting new scams every day, and now this accord adds to that momentum.”

Customer Owned Banking Association CEO Mike Lawrence, representing mutuals, credit unions, building societies and small banks, said the alliance was “a significant step forward and demonstrate the banking industry’s commitment to fight scams”.

“It doesn’t matter if someone banks with a regional mutual bank or the largest bank in the country, customers can be confident their bank is working hard to protect their money,” he said.

Banks have also announced an expansion of intelligence sharing across the sector, with plans to start acting on scams reported to the Australian Financial Crimes Exchange by mid next year. Banks will also join the Fraud Reporting Exchange. The aim will be to report information about scam s and recover stolen funds.

Mr Lawrence said banks, the government and law enforcement had a “shared responsibility” to act on scams. “As scammers work hard to devise new ways to steal money, it’s critical that governments, industry and consumers remain vigilant to make Australia a hard target for scammers.”

Several majors have stepped up the fight against scams. Westpac, ANZ, NAB and CBA have each introduced separate measures to block scams. Several banks have imposed restrictions on transactions to crypto platforms, while others have put the brakes on instant transactions.

In July the government announced it would bring the ACCC and ASIC together to run a National Anti-Scams Centre in a bid to disrupt scammers.

At ASIC’s recent annual forum chair Joe Longo said there was a “fundamental problem” in holding major corporations to account for scams on their platforms. But Mr Longo said regulators “can’t enforce your way out of some of those scam problems.”.