Malaysia’s banking industry successfully prevented over RM399 million in attempted fraudulent transactions in 2024, according to Bank Negara Malaysia (BNM). The achievement results from enhanced security controls implemented across the banking sector, supporting a broader regional effort to combat rising financial fraud in Southeast Asia.
The banking industry has implemented several key security measures, including the migration from SMS One Time Password (OTP) authentication to more secure verification methods. The change follows recent warnings from international security agencies about vulnerabilities in SMS-based authentication, which has become increasingly targeted by sophisticated phishing attacks. Banks have also strengthened their detection rules and triggers to more effectively identify and block suspicious transactions.
Additional security enhancements include a mandatory cooling-off period for first-time enrollment of secured devices and online banking or e-wallet services, the implementation of dedicated mobile/secure devices for authentication, and the establishment of dedicated scam hotlines and kill switches for rapid intervention in suspected fraud cases. These measures follow emerging industry standards for multi-layered security protocols in digital banking.
The effectiveness of these measures is demonstrated by the fact that the RM399 million in prevented fraud attempts is five times larger than the actual total losses from online fraud transactions reported to the central bank. The success rate indicates a significant improvement in fraud prevention capabilities across Malaysia’s financial sector.
The National Fraud Portal (NFP), launched in April 2024, has reduced the time required to obtain complete information on fund flow by 75 percent and increased case escalations to the Royal Malaysian Police by 41 percent. The portal represents a major advancement in Malaysia’s financial crime fighting infrastructure, enabling faster response times and more effective coordination between financial institutions and law enforcement agencies. Banks have also deployed AI-driven fraud detection systems to identify suspicious transactions related to mule accounts used in money laundering operations.
Dr. Azree Shahrel Ahmad Nazri, president of the Artificial Intelligence Society Malaysia, has emphasized the importance of proper training for police officers using AI tools. “We need to ensure our officers are properly trained to use these advanced systems,” said Dr. Nazri. He advocates for collaboration with Malaysian universities and AI experts to develop specialized training modules for Commercial Crime Investigation Department officers and cybercrime units, recognizing that technology alone is insufficient without properly trained personnel.
The integration of AI in commercial crime investigation is part of a broader strategy that includes partnerships with local fintech companies, cybersecurity firms, and AI research institutions. The collaborative efforts aim to develop advanced crime prevention systems while maintaining public awareness of emerging threats. The initiative mirrors similar efforts across Southeast Asia to leverage artificial intelligence and machine learning in combating financial fraud.
Sources: The Edge Malaysia, Asian News Network, Central Banking, The Vibes, New Straits Times
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