NAB to add transaction friction to fight scams

National Australia Bank is calling for more ‘friction’ to stop scams, with the bank moving to slow transactions and add layers of approvals and permissions back into systems.

National Australia Bank is calling for more “friction” to stop scams, with the bank moving to slow transactions and add layers of approvals and permissions back into systems after years of stripping back barriers.

NAB personal banking group executive Rachel Slade – charged with overseeing the bank’s retail consumer arm – said the measures were being used to “make Australia really hostile to scammers”.

Ms Slade said the bank had been considering what steps it could take to stop scammers for some time and was introducing “friction”, alongside broader plans from the banking sector.

Australia’s big and small banks came together last week to announce a co-ordinated industry response to scams, committing $100m to developing a national account details confirmation system alongside a suite of other measures.

Ms Slade said despite years of pulling delays out of banking, with the rollout of the New ­Payments Platform allowing near-instant payments between accounts, many customers “will almost welcome that friction” NAB is planning.

But Ms Slade said there were limits to introducing friction back into banking, with a need to balance service against delays.

“I think stopping every payment to a new payee is potentially too much friction,” she said.

“Pausing and holding a subset of payments would make sense to me.”

But Ms Slade said she didn’t think the New Payments Platform (NPP), which had been pushed for by the Reserve Bank of Australia, had been poorly designed or implemented. Ms Slade said the NPP had made payments faster and allowed more data to be transmitted.

She said the NPP also allowed NAB to hold individual payments rather than the previous system, in which payments were batched with other transactions.

Ms Slade is set to speak at the Trans-Tasman Business Circle on Thursday about NAB’s response to scammers.

In her speech, Ms Slade will say NAB needs to weigh up “friction for friction’s sake that does nothing but annoy customers”.

“A one-size-fits-all, blanket approach, that’s baked into any payment process risks being glossed over,” she will say.

Ms Slade will say that NAB is considering slapping high-risk crypto platforms and exchanges with delays and transfer limits.

But Ms Slade will also say that NAB must take “customers with us on the journey” to help them understand the need to impose delays.

“We can’t risk the relationships we’ve worked so hard to build and undo years of work with blunt instruments,” Ms Slade will say.