MAS imposes additional capital requirements on OCBC Bank over phishing scams

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 MAS imposes additional capital requirements on OCBC Bank over phishing scams

SINGAPORE - The Monetary Authority of Singapore MAS on May 26 said it has imposed an additional capital requirement of S $330 million on OCBC Bank due to deficiencies in the bank's handling of SMS phishing scams last year.

A multiplier of 1.3 times will be applied to its risk-weighted assets for operational risk, according to a media release by MAS on Thursday.

MAS reported financial statements as at Mar 31, 2022 indicate an additional amount of about S $330 million in regulatory capital.

Capital requirements are a set of regulations that determine how much liquid capital banks must hold for a certain amount of assets.

A higher capital requirement, according to Investopedia, may inhibit an institution's ability to invest.

A total of S $13.7 million was lost in the spate of phishing scams that affected 790 customers, according to an update in January by the OCBC Bank.

After the scams, OCBC engaged an independent firm to review its systems and processes.

This revealed deficiencies in the bank's mitigation of identified risks, pre- and post-transaction controls, incident management and complaints handling, which resulted in delays in containment measures and customer response time, said MAS.

The findings were in line with MAS' own assessment, said the regulator, adding that OCBC is in the process of addressing them.

The additional capital requirement takes into account OCBC's efforts to strengthen its controls and approach to resolving customer complaints after the incident, said MAS.

When MAS is satisfied that OCBC addressed all deficiencies identified in the review, the additional capital requirement will be reviewed.

Marcus Lim, MAS' assistant managing director of banking and insurance, said financial institutions have a duty to put in place robust measures to prevent, detect and respond to scams.

This means that their controls are effective against evolving scam tactics and prompt actions are taken as soon as a scam is detected.

Consumers should be vigilant against attempts to deceive themselves into divulging their log-in credentials or initiating transfers themselves. He said that MAS is working closely with the industry to strengthen the sector's collective defences against scams.