Banks Introduce New Technology and Controls to ‘Shield Australians From Scams’

More intelligence sharing between banks, biometric identity scans, and double checks when you are paying someone new are among the changes

A man walks past a branch of the National Australia Bank (NAB) in Melbourne, Australia, on May 6, 2021. William West/AFP via Getty Images

Banks are planning more double checks when you pay someone new and extra identity checks including biometrics to stop scammers.

These extra checks, which also include intelligence sharing between banks, are designed to “shield Australians from scams.”

This comes after Financial Services Minister Stephen Jones called for banks and financial institutions to strengthen protections against scammers during an address to the National Press Club.

The two major banking associations representing the big four banks, community banks, and credit unions launched a campaign to advertise the push to stop scammers on August 12.

Australian Banking Association CEO Anna Bligh, a former Premier of Queensland, said Australians should have confidence their bank is working around the clock to “keep them safe from scammers.”

“Banks have a range of tactics and tools they deploy to shield Australians from scammers such as payment warnings and delays to the blocking of transfers to dodgy scam accounts,” she said.

Bligh added that too many people are being targeted everyday by scammers whose only objective is to steal money.

“Whether it is the middle of the day or the middle of the night, banks are deploying cutting-edge technology to identify potential scam activity and stop scammers in their tracks. Scams are a scourge on our society,” she said

The Albanese government is planning to legislate tough obligations on banks to stop scammers accessing their services.

What Are Banks Doing?

Banks have invested $100 million (US$66 million) in a new confirmation of payee system that enables people to confirm they are transferring money to the correct individual.

In addition, under the banking industry’s Scam-Safe Accord, banks are introducing extra warnings and payment delays to protect customers.

Further, the banking industry is implementing “further technology and controls” to prevent identity fraud. This includes at least one biometric check for new individual customers who are opening accounts.

It is also investing in a major expansion of intelligence sharing across the sector.

“Customers will start seeing more payment delays or warnings when transferring money to someone they haven’t paid before. This will allow banks to spot red flags and help them check that money isn’t going directly to a scammer,” Bligh added.

All banks will be implementing anti-scam strategies in a bid to comply with new mandatory codes and standards which are set to be implemented by the government.

The ABA noted progress continues to be made on the development of the industry wide confirmation of payee system.

The design phase is now done and the build is underway. Australia will be one of only a few countries globally with this capability.

In a radio interview, Bligh explained customers will get a warning or question that says “are you sure this is the right account, do you really want to do this?

“Now you know, ultimately, that’s a decision for each customer and for most people, most of the time, it’s going to be, yes, I’m paying my plumber or a new plumber I’ve never paid before, and I’ve checked the number, and it’s all okay. But sometimes it won’t be the right person, it’ll be someone that you shouldn’t be paying,” she said.

Meanwhile, Customer Owned Banking Association, which represents 55 mutual banks and credit unions, said scam prevention and detection is also a priority for these banks.

“Customer-owned banks are committed to deploying innovative and collaborative measures to disrupt unscrupulous scammers,” she said.

“Scammers are sophisticated criminals operating within a complex network, requiring cross-industry collaboration to disrupt their activities. Australia’s ecosystem approach shows promise, with scam losses decreasing for the first time in six years.”

Government Expecting Banks to Improve Controls

Financial Services Minister Stephen Jones revealed the government is spending $67 million in taxpayer dollars on the war against scams at a recent National Press Club address.

This includes plans to legislate a Scams Code Framework that includes new mandatory industry codes that will apply to banks, telcos and digital platforms.

“We will require the banks to strengthen controls around bank transfers. This will attack the most common payment method for scams head on,” he said. 

“This will attack the most common payment method for scams head on.”

Jones explained in his speech that companies including banks will “have a responsibility” to report and respond to scams.

“For example, banks will need systems that identify dodgy payments and accounts and then take action to protect members,” he said.

“Telecommunication companies will be required to block known scam numbers. Social media platforms will need to have stronger anti‑scam actions—including verifying advertisers and taking down scam pages.”

The minister added banks, telcos and social media companies would have the financial incentive to detect and disrupt scams.

“This will lead to a significant uplift in prevention and resilience measures across the ecosystem. Because this approach holds these institutions genuinely and appropriately accountable. And it will set out fair terms by laying out clear responsibilities in legislation.”